Posted on 03/07/2002 11:27:12 PM PST by JohnHuang2
In slamming 30 percent tariffs on imported steel, President Bush did more than keep his word to U.S. steelworkers. He sent a Reaganite message to the world: "I'm a free trader, but I put America first."
Just as Ronald Reagan imposed quotas on steel being dumped in the United States in the 1980s, Bush has decided that U.S. national interests and America's steel industry will not be the next sacrificial lambs thrown up on the altar of the Global Economy.
Though threatened with a trade war, the president did not buckle or back down. Good for him. Economic patriotism may just be back in style. And if the European Union decides to haul us before the World Trade Organization for a caning, the president should tell the WTO to take a hike. If Europe wants a trade war with the United States, let it begin here.
For, no matter the pain, these annual $300 billion trade deficits in manufactured goods must stop. We cannot sustain them; we cannot survive them. They will sap our dynamism, gut all of our industries, put an end to our economic independence and undermine the foundations of our military power. As Holland, Spain and Britain can all testify, Great Powers that chronically import more than they export soon cease to be Great Powers.
Look at the numbers: From 1990 to 2000, the United States ran a cumulative trade deficit in manufactured goods of $1.6 trillion. And what were the returns from the celebrated trade deals negotiated by Bush I and Bill Clinton – NAFTA, GATT and MFN for China?
Between 1990 and 2000, the U.S. merchandise trade deficit with all the WTO nations, including the EU, grew 300 percent. Our merchandise trade deficit with China grew 700 percent. Our merchandise trade deficit with Mexico exploded by 1,900 percent. Those who cut and sold these deals will one day have to answer before the bar of history for what they did to America.
Justice, as well as the national interest, supports Bush's stand in defense of the U.S. industry. In each of the last five years, steel imports have exceeded 30 million tons, as 31 U.S. steel companies have had to file for bankruptcy. In the last two years alone, 46,000 more steel jobs disappeared and another 19 percent of our capacity was lost.
To pundits who sniff that the U.S. steel industry is inefficient and should be allowed to die, Rep. Peter Visclosky, D-Ind., replies: "Since 1980, the industry has spent $60 billion to increase efficiency. Productivity has increased 156 percent, and man-hours per ton have declined from 10 to 3.5. Today, no one produces a ton of steel more efficiently than American steelworkers do."
While U.S. steel mills are creations of free enterprise, most overseas mills would not even exist were it not for state subsidies. And in finding that illegally traded foreign steel created the crisis, the U.S. International Trade Commission was unanimous. As for threats from across the pond, the EU will be hammered if it starts a trade war – for at risk would be the entire $49 billion trade surplus in manufactures the European Union ran with the United States in 2001.
Will U.S. consumers suffer from these tariffs? Writes Visclosky: "Even under a 40 percent tariff, the average cost of a $25,000 car would have risen only about $25; the average cost of a refrigerator just $3."
But if imports were allowed to kill our industry, scores of thousands of steelworkers would have to file for unemployment, as the United States became as dependent on foreign steel as we are on foreign oil.
For Bush, it was a moment of truth. All the big-name economists, editorial writers, corporate lobbyists and think-tank scholars were demanding that he stand by "free trade." But, like a Texas Ranger, the president decided to stand alone, beside the U.S. steelworkers whose numbers were few but whose cause was just.
It was a brave decision, and in taking it the president made a statement the Financial Times did not miss. "Bush's move marks U.S. trade policy turning point," read its warning headline. Indeed, it does. For the president said with his decision that there are U.S. national interests that supersede any and all claims of free trade.
Bush's decision was not in the Wilson-FDR mold, but it was in the tradition of Washington, Hamilton, Madison, Lincoln, McKinley, T.R., Coolidge and Reagan, the last of whom intervened again and again to block flood tides of imported steel, autos, computer chips, machine tools and motor bikes. And if the president's father disapproves of his decision, his grandfather surely would not. For Sen. Prescott Bush stood with Barry Goldwater and Strom Thurmond to oppose the free-trade policies of JFK that started the de-industrialization of America.
Shhhh.....don't tell Willie Green. He thinks a tariff will fix everything right up.
Oh yeah, he'll also quote Jefferson saying we shouldn't trade with those damn foreigners.
The numbers I posted refute your assertion. International trade greatly increased while American shipping died under protectionism. I know you ignore the facts but there they are staring you in your protectionist face. International trade in no way became less important. That's a hillarious assertion by the way.
Poppycock. The numbers you posted show that between 1860 and 1887, seagoing trade barely doubled in volume. In contrast, with population growth & westward expanison, our domestic production quintupled!!! (Source: U.S. Index of Total Physical Production 1863-1921).
U.S. shipbuilding languished because there were MUCH greater investment opportunities landward, NOT because of tariffs. Tiny, backwater island nations such as Britain however, had no such expansion opportunities other than to focus on meager seafaring trade. And even then, it was largely devoted to facilitating mass emigration TO the U.S. -- "the land of opportunity".
Your whiney, myopic, false-paradigm about tariffs hurting the shipbuilding industry has been refuted.
You're completely missing the point. The economy was in good health. We went from having a very large merchant shipping built by the U.S. to Shipping virtually all goods on ships made abroad and on foreign flagged vessels.
That's what protectionism did. It killed our shipping. Killed it dead. Ignore those facts at your peril.
The reason they had no need to do so was because they were protected from competition.
Apparently not since by your own arguement they lost market share to the British.
The falacy of your theory is contained in your self-contradiction.
Protected from competition domestically. The results speak for themselves.
There was no competitive pressure. That's the point. That's what ALWAYS happens when you protect industries. It's what happened to the Steel industry in the 70's and 80's. It's what happened to the Auto Industry in the 70's and it will be the virutal death of American steel again. Been to Pittsburgh lately?
Companies that are protected from foreign competition have absolutely no insentive to keep their companies lean and on the cutting edge of technology.
So they stay with the tried and true and the foreign compettitors eat their lunch in the world market but domestically their companies remain sound and profitable.
There is no "both ways" about it.
Then they shouldn't have lost market share as your facts indicate they did.
That's the fallacy in your theory that tariffs caused the damage.
That's a pile of erroneous poppycock.
You really are quite dense.
If they were "protected", then they wouldn't lose market share.
If they lost market share, then they MUST have been subjected to market forces to which they failed to respond.
You're the "dense" one who can't keep these simple principles straight.
Your false paradigm has been exposed!!!
So they stay with the tried and true and the foreign compettitors eat their lunch in the world market but domestically their companies remain sound and profitable.
Loss of market share in the international market is in no way related to the domestic market protection.
You're comparing apples to oranges to create a false paradigm.
Right....That was the point. But they are related in other ways.
If you want to have the Soviet style of production control where there is no external market to the US and the internal companies produce crappy products because they can you can have it.
However, you forget that such things affect other industries. And by placing such protectionist tarrifs on one industry or another you are denying the average Joe from getting the best value out there. Thus, those who use the products of the protected industry to create their own products will lose market share externally because they don't have the best resources available.
When internal industries are forced to compete with other nations companies, they thrive. And the consumer gets the benefit.
The problem with the WTO is that it is a global protection racket. Somebody else sets the rules by which companies can compete with each other (if you can call it that).
Furthermore, the level of federal and state restrictions on industry also prevent companies from expanding innovation. When the state makes the rules, we all lose. And all of those rules are generated not to help you but to favor the coporation that has donated the most money.
Protectionism helps nobody. Especially not you or I.
Nah, the Soviets made crap because the Government controlled the means of production and distribution. I'm sure they would have loved to have sold some of their crap. They reason they couldn't sell their crap was because noone wanted to buy crap. The government was limiting the market through its control of the means of production and distribution.
I doubt the Soviets had much in the way of tariffs, but I don't know for certain. However, I am now curious enough to research, and you are welcome to share any info you have.
The problem with the WTO is that it is a global protection racket. Somebody else sets the rules by which companies can compete with each other (if you can call it that).
The key here is the rules and the enforcement mechanism to the rules; since neither the rules nor the enforcement mechanisms are in favor of the US (in favor of global trade), we (the US) should provide our own rules and enforcement mechanisms. Such as tariffs.
Furthermore, the level of federal and state restrictions on industry also prevent companies from expanding innovation.
That is absolutely true.
Protectionism helps nobody. Especially not you or I.
Or me. Noone is advocating pure protectionism. How about balanced trade?
The rules don't matter. If it's cheaper it's better. Anything so that they can lay their track that goes nowhere. The mindless hysterics of a third rate Nietzschean who pandered Tocquevillean acquisitiveness as the only virtue.
The redeeming quality of most Randians is that they usually don't adhere to her grotesque caricature of the good life, but Brian seems to imitate her too well, even her gross disdain for courtesy and her profound ignorance of and hatred for anything good or beautiful.
Hardly. Wanniski was a scribbler for the WSJ, not an economist working for President Reagan. Martin Anderson and other economists designed the Reagan economic program.
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