America’s Has-Been Economy

Chronicles ^ | Friday, March 18, 2005 | Paul Craig Roberts

[Willie Green]

It's some sort of myopia. If you follow their argument (I'm being generous) to it's logical conclusion, they contradict themselves.

2000 National Productivity of Steel Production

Country	Steel Production  (million metric tons)	Employment  (thousands)	Productivity (tons/employee)
Australia	8.5	21	404
Austria	5.7	12	475
Belgium	11.6	20	580
Brazil	27.9	63	443
Canada	16.6	56	296
Finland	4.1	8	512
France	21.0	37	567
Germany	46.4	77	602
Italy	26.7	39	684
Japan	106.4	197	540
Luxembourg	2.6	4	650
Netherlands	5.7	12	475
South Korea	43.1	57	756
Spain	15.8	22	718
Sweden	5.2	13	400
United Kingdom	15.2	29	524
United States	101.5	151	672

The US steel industry employs the most productive technology on the face of the planet.
Minimill operators, such as Nucor, are capable of productivity levels exceeding 1000 tons/employee.
The national average is reduced only by the necessity of larger, integrated mills which produce steel from ore instead of scrap metal. Unlike the minimills, this provides us the ability to produce more sophisticated alloys with greater control over the quality.

America's enemies undermine our national security with trade policies that emphasize importation of cheaper, crap steel.

[dervish]

Huh??

http://www.csmonitor.com/2005/0201/p07s01-woeu.html

http://europa.eu.int/rapid/pressReleasesAction.do?reference=IP/03/1594&format=HTML&aged=0&language=EN&guiLanguage=en

[malakhi]

Next step would be national debate on the creating intelligent long term national economical policy.

Can you share your proposals for the first Five Year Plan?

[A. Pole]

Can you share your proposals for the first Five Year Plan?

Igoring your sarcasm, no - national policy should be worked out by the Congress and President and with the public debate.

[malakhi]

While GM is dying.

Maybe GM deserves to die. No company should be "too big to fail", particularly if "saving" it requires tax dollars taken from more profitable businesses.

[malakhi]

national policy should be worked out by the Congress and President and with the public debate.

Economic central planning has failed everywhere it has been tried.

[A. Pole]

national policy should be worked out by the Congress and President and with the public debate.

Economic central planning has failed everywhere it has been tried.

This is not true. Pragmatic (not ideological) national policy combining market and well calibrated government intervention usually worked very well. This is how USA, Japan, China and many other countries grew their economies.

Radical free market is almost as harmful as Soviet style central planning.

[phil_will1]

"How is this going to fix the problem with trade/budget deficits, with rising costs of health care and with the workers losing ground?"

I think that I already addressed how the FairTax would help alleviate the trade deficit. As for the federal budget deficit, the primary factor is that economic growth has declined. The most effective way to reduce the (federal budget) deficit would be to accelerate the rate of economic growth. That is exactly where the FairTax comes in. The primary study conducted on the economic impact of the FairTax indicates that GDP growth would be a smoking 10+% in year 1, gradually declining in subsequent years, until the economy is 1/4 to 1/3 greater than it would have been under a continuation of the current system. That would go a long way toward alleviating the budget shortfall.

If you are suggesting that we should not address the tax system because there are other contributing factors relative to the trade and federal budget deficits, I think that is a difficult position to sustain.

[malakhi]

Do you recognize the difference between monetary policy and central planning?

[A. Pole]

I think that I already addressed how the FairTax would help alleviate the trade deficit.

Where?!

If you are suggesting that we should not address the tax system because there are other contributing factors relative to the trade and federal budget deficits, I think that is a difficult position to sustain.

I said we SHOULD address the tax system. VAT is being used as disguised tariff by the other countries, that is why USA must to imitate it in order to compete or to restore tariffs to the comparable degree. (Tariffs are the form of taxation and the main one established by the Founding Fathers).

National sales tax is not going to reduce trade deficit because it will be applied equally yo the American and foreign products.

[A. Pole]

Do you recognize the difference between monetary policy and central planning?

Yes. Do you recognise the difference between national economical policy involving market mechanisms and Soviet style central planning?

[chimera]

I don't know about those speculative articles. All I know is what I see, every day, working in the trenches. We've got more and more foreign nationals filling out the ranks in advanced degree programs, and fewer American students. There is a reason for that. Students aren't stupid. If their home country, its political and business leaders, value what they do and what they are learning to do, they will find employment in those fields. If not, if the persons who do those things are considered expendable, if those jobs are sent overseas or completely eliminated, then the students considering those fields will look elsewhere. There are any number of free traders who will applaud that and say, good, we don't need those things anyway, it behooves us to remember that history shows that others have had the same ideas ("La République n'a pas besoin de savants") and things didn't turn out too good for them. It wouldn't be the first time that a society devoured it's own children.

[phil_will1]

"National sales tax is not going to reduce trade deficit..."

Incorrect.

"...because it will be applied equally yo the American and foreign products."

Exactly! IOW it totally eliminates the bias of our current tax system which actually favors foreign producers over and above our own. It puts US producers on a level playing field and, unlike a tariff, could not be opposed by the WTO or our trading partners since it is not discriminatory (unlike a tariff).

Using tariffs to mask the bias in our corporate income and payroll tax system is a very inefficient way to go.

[BureaucratusMaximus]

What field would you recommend to the students?

Walmart Greeter, Walmart Cashier, Walmart Stockboy.

And if all else fails...you'll always have a stable job as a diversity trainer.

[Toddsterpatriot]

The US steel industry employs the most productive technology on the face of the planet.

Then why do you need to protect them from less productive producers?

America's enemies undermine our national security with trade policies that emphasize importation of cheaper, crap steel.

So, you'll protect steel consumers who want "cheaper, crap steel" because you're smarter than they are? If the cheaper steel is lower quality, some consumers will accept that price/quality trade off and some won't. You know, the free market. People coming together to voluntarily trade goods and services. Without Willie standing between them saying, "Wait, I don't think this is good for America"

Now please explain again, if you can, how expensive steel is good for America?

[Toddsterpatriot]

Funny how that works.

[Toddsterpatriot]

This is not true. Pragmatic (not ideological) national policy combining market and well calibrated government intervention usually worked very well.

Yeah, how well has that worked for Japan since 1989?

[SwankyC]

Lots of cars, for one example. Toyota, Nissan, Honda, BMW, and Mercedes-Benz all come to mind as manufacturers with significant American operations.

That's just assembly. The parts still come from overseas.

[A. Pole]

IOW it totally eliminates the bias of our current tax system which actually favors foreign producers over and above our own.

What is the purpose for the society to have its own state and government if they are not to be biased in the nation's favor?

It puts US producers on a level playing field and, unlike a tariff, could not be opposed by the WTO or our trading partners since it is not discriminatory (unlike a tariff).

And it puts US workers on a level playing field with China or India. Producers will manage fine in short term as they will fire Americans and move production where the cheap labor is.

If WTO is so sacred that it is more important than national interest than VAT can be used to substitute for the tariffs (other countries use VAT for this purpose).

[Toddsterpatriot]

That's just assembly. The parts still come from overseas.

100% come from overseas? 80%? 50%? Do you have a source for your theory?