Posted on 03/05/2002 5:19:23 AM PST by Valin
Edited on 04/13/2004 3:36:16 AM PDT by Jim Robinson. [history]
WASHINGTON -- President Bush will impose tariffs of up to 30 percent on steel imports in a bid to aid the ailing U.S. steel industry, White House officials said Tuesday of a move certain to draw opposition from American allies.
(Excerpt) Read more at startribune.com ...
The "dumping" of steel - and any other product - is illegal.
The primary reason why that the U.S. steel companies are in trouble is that the unions and the companies continually increased wages and particularly pension benefits. Now there are so many pensioners and so few workers, that the companies are near bankruptcy. It is Social Security in miniature - a Ponzi scheme.
This might be a good move, politically, for President Bush, but we will all lose in the end. Or get it in the end.
And now we'll see who is next in line asking for tariffs.
If I want to sell you a $1 lighter for 50 cents, that's my damn right. And if my country is giving me 25 cents per lighter as a subsidy, its none of your government's business.
And it is nothing new. I worked making 48 strand wire rope for U.S. Steel out of HS in 1971. The machine was built in 1914 to help Britain defeat the Kaiser (blame the IRS for antiquated equipment, USS did better putting money in the bank than buying new machines). We were on piece work.100% of your quota and punch out. I'ld work from 7Am to 1PM, 6 hours, and pocket $75. According to the inflation calculator, what costs $75 in 1971 costs $328.99 in 2001. Kids were buying full size new trucks after 6 months on the job. For cash. Friend of mine bought a Volvo sports car and put it up on blocks as an investment.
More than once, someone would get drunk and be sent home. Had to be two people on a machine so I would sit there and watch someone else work and get double time.
The Unions, the IRS, the EPA and OSHA killed the US steel industry. Not foreign competition.
I agree, good observation.
Uh, they are here.
It was reported tonight on Fox News that there are 3 to 4 "steel worker retirees" for every working steel worker. That's a formula for disaster.
And what's this "Victims of Unfair Trade" crap? It sounds like a slogan created by a bunch of socialists (read: democrats).
What about the Victims of Protectionism, like the consumer ... or the downstream workers who will become unemployed because it increases COGS?
The steel industry doesn't give a rat's rump about anyone or anything except itself.
Let's save a few thousand steel jobs. Screw correcting our bloat and inefficiencies. Screw the downstream worker! And Screw the consumer!
Thanks for nothing, "W".
I agree that the country needs some steel in order to secure our defense. What we disagree on is the level that we need. If I haven't misunderstood your position, you are saying that we need even more domestic steel production than currently exists. I, on the other hand, think we could do with far less. I recently read that the U.S. military uses much less than 1% of domestic steel deliveries. Even if domestic steel production was reduced by two-thirds, we would still have more than enough steel for national security.
As for the social benefits of the jobs provided by the protected steel industry, they come at the expense of jobs in other industries. When other industries have to pay more for steel, that means they have less to spend on hiring additional labor (or increasing the pay of existing workers).
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Then there is the question of why on earth would companies set up business in such a Godforsaken place? Small, impoverished, backwood places are usually that for a reason.
Because it's cheap?? Does that compensate for the level of workers you're likely to find? Does it compenstate for the lousy (if any)roads? The lack of (reliable) telecommunications and/or electricty and/or plumbing and/or sanitation and/or supply of petrol...or even police for that matter? Good grief, the workers might be cheap but that's about it. Everything else would cost a fortune.
That's why companies set themselves up in cities, and many companies mean that workers have a choice. And the fact that "a worker is worth his wages", meaning that even in the Third World employers will bid -- via wages-- for the extra-ordinary worker.
And kids can, and do, hop a bus or hike to Bomby. For better or worse, they have no "Cult of the Child" as we here in the West do.
I really have no position on the total output the US should be able to produce, because I have not looked at the numbers.. at present it is not suprising the military uses very little steel, given perpetual downsizing, relative peace and budget cuts. This however is not guaranteed to always be the case.. from a national security standpoint we must be able to produce enough materials to support not 1 but 2 major conflicts, we cannot do that if the steel industry is wiped out.
I do believe that it is foolish to allow an industry such as steel to die... especially when one of the factors driving it under is foreign dumping. The industry has its problems, no doubt, and there are pleanty of other things that can be done to help as well... but I believe Tarriffs are good and neccessary and the US needs to return to the pre WWII days of using them effectively... free trade is a scam.
Dumping may be illegal, but that doesn't mean its not happening... I can show you tons of illegal activity going on all over america... Everyone knows steel is being dumped and has been for at least 6-8 years, but Clinton wasn't going to do a damned thing about it.
Now as to the industries problems, there are more than enough to go around, there is no single cause... and more needs to be done on other fronts as well, but Tariffs, are a good historical thing and should be used effectively as part of foreign and trade policy, free trade is a suckers game.
I don't know how old you are but I lived through the results of the Smoot-Hawley Tariffs. It was called the Great Depression. Want to revisit that one?
Are you suggesting the great depression was a result of tarriffs? Interesting... the great depression was a result of the same thing that cause the 2000-2001 plummet! Bubble investing in industry with little control on the market... same thing just happened with the internet/tech sector. Only difference was there already was worldwide depression in 1929 for the most part, and more rules to prevent another exist today.
Tarriffs don't cause depressions... economics do.
The stock market crashed in October 1929.
Smoot-Hawley wasn't passed until June, 1930.
The notion that Smoot-Hawley caused the Great Depression is preposterous.
I believe that you will find that most economists agree that Smoot-Hawley exacerbated the depression and contributed to its longevity. It didn't end until WWII.
At the time of the Great Depression, Imports formed only 6 percent of the GNP. With average tariffs ranging from 40 to 60 percent (sources vary), this represents an effective tax of merely 2.4 to 3.6 percent. Yet the Great Depression resulted in a 31 percent drop in GNP and 25 percent unemployment. The idea that such a small tax could cause so much economic devastation is too far-fetched to be believed.
Senator John Heinz III, who died tragically in a plane crash in 1991, had developed a national reputation for his expertise in international commerce. During his years of serving in Congress, Senator Heinz III was appointed to the Chairmanship of the Subcommittee on International Finance and Monetary Policies. He had this to say about the Smoot-Hawley myth in 1985:
“It gravely concerns me that every time someone in this administration or the Congress gives a speech about a more aggressive trade policy, or the need to confront our trading partners with their subsidies, barriers to imports and other unfair practices, others in Congress immediately react with speeches on the return of the Smoot-Hawley Tariff Act of 1930, and the dark days of blatant protectionism and depression...It seems that for many of us that Smoot-Hawley has become a code word for protectionism and, in turn, a code word for the depression. Yet, when one recalls that Smoot-Hawley was not enacted until more than 8 months after the October, 1929 collapse, it is hard to conceive how it could have led to the Great Depression...the changes supposedly wrought by this single bill in 1930 appear fantastic.”
The following is from an article by FRANZ SCHURMANN - a sinologist, historian, and sociologist. He has taught at the University of California, Berkeley, for more than thirty years:
In 1930, the impact of the most protectionist legislation ever passed in the U.S. was devastating. Most people believe the Depression was triggered by the financial crash of October 1929. In fact, by the spring of 1930, both the American and European economies had weathered the storm, thanks in large part to robust international trade which had remained brisk despite the crash. By the end of 1931, however, Smoot-Hawley had set off a wave of retaliatory tariff measures in twenty five other countries, crippling the trade boom., By early 1932, the Great Depression had set in, paralyzing economies in Europe and America.
By the way, when quoting someone, unless you're Doris K. Goodwin or Stephen Ambrose, it is appropriate to attribute. In case you didn't back-track to see where the paragraph that you quoted came from, it's from the late "Steve Kangas" (gun-shot suicide). Someone has mirrored his web site and the quote came from:
Liberalism Resurgent: A Response to the Right -- This is my award-winning political site, which includes the long and short FAQs on Liberalism, the Reagan Years, the Great Depression, Government Success Stories and Free Market Failures, and much, much more. My goal is to turn this into a one-stop reference source for almost any common political arguments you need.
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