
How the U.S. Squandered Its Steel Superiority - jseliger
https://www.bloomberg.com/view/articles/2018-03-05/steel-history-shows-how-america-lost-ground-to-europe
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torstenvl
It's astounding to me how Republicans can be so schizophrenic about the free
market.

Healthcare? "Let the market decide!"

Investment in public infrastructure? Net neutrality? "Let the market decide!"

But give Republicans control of the Presidency and all the sudden we're
talking about putting tariffs on steel because the U.S. steel manufacturers
don't want to have to contend with market forces.

To be fair, there are plenty of Republicans resisting the President's
proposal, but if tariffs (tariffs!) are being considered then, you know, maybe
some other less intrusive measures shouldn't be so anathema?

~~~
Chris2048
healthcare and public infra are both internal markets, where as steel is
global.

Global "market forces" are not natural already, as other countries manipulate
them; national manipulation _is_ market practice. Comparing inner/intra and
inter national trade is apples and oranges.

~~~
voidmain
The old counterexample to this claim (I got this from David Friedman, but I
don't know if it's original to him) is that there are two ways to make cars in
the US: build them in Detroit, or grow them in Iowa. The way the second
technology works is: you plant wheat seeds, harvest wheat, put the wheat in
ships, and sail them into the Pacific, and they return with Toyotas. The fact
that there may be Japanese involved in the second process is irrelevant from
the perspective of the US economy.

If the exchange price of Toyotas in wheat is "unfairly" good because of
government manipulation in Japan, so much the better for the Iowan car
farmers. And if the government of Japan intends to reverse its manipulation in
the future, there's no reason US markets can't take that into account in their
capital allocation decisions, just like they would mines that might run out or
climate that affects the wheat crop.

~~~
Chris2048
Is "so much the better" for car farmers, also better for America? I'm not sure
I understand that point.

But in any case, how does the USG allocate capital - How does that relate to
tariffs? Seems to me predicting a roughly global, nonsentient thing like
climate, or internal, controllable nonsentient variable like mine depletion,
is entirely different to prediction foreign, advisarial governments with
similar prediction power.

~~~
voidmain
If you view trade as just another production technology, it's pretty easy to
see that foreign goods being cheaper is isomorphic to an improvement in
technology, and therefore presumably good for overall welfare.

Foreign governments could be harder to predict than "nonsentient variables",
but if you think financial markets are better at prediction than governments
(which is roughly the premise of the original comment) there's still no reason
to think they aren't the best available solution to this difficult problem.

Edit: maybe I missed your actual question. Viewed in this light, a tariff on
steel is exactly an attempt to command that there shall be more steel made in
Pittsburgh and less in Iowa or wherever. Domestic production is the only thing
USG _can_ command, unless they are going to send the Marines.

~~~
Chris2048
But technological advances are fairly static. If you lead in some kind of
technology, that tech won't suddenly cut you out, or cut you off. Plus,
government does tinker with its internal economy, protections etc.

Another question is _why_ goods are cheapet; cheap labour is often associated
with poorer working conditions, and fewer consumer protections, relying on the
"market" to deal with legal issues (e.g unsafe products) diesnt really cut it.

Financial markets cherry pick their domains, heavily structured
representations thereof - and they ate _still_ known for being irrational and
prone to panics etc. The point is "the wisdom of crowds" doesn't work against
strategic trade attacks.

Your answer to my question is based on your own metaphor of "steel produced in
Iowa". There is no steel produced there, only a dependency on foreign steel.
If an external country needs X that they would trade for steel, they still
need X if they won't trade the steel; but maybe the US can use it's own steel.

------
pasbesoin
Amongst everything else, the Trump Administration is living 20-30 years in the
past. In other words, serving entrenched interests seeking to artificially and
locally sustain the value of their capital. (It's not about "the workers";
it's about the owners.)

Aluminum. What's the number one cost input? Energy. Either we jack up the U.S.
carbon pollution (and all the other pollution that goes with it, e.g. heavy
metals and soot particulate and...). Or we move towards "next generation"
technology, having that product and expertise to sell in addition to lessening
cost inputs to domestic electrolysis and smelting.

A few years ago, Iceland -- yes, Iceland -- was moving towards being a major
producer of aluminum. Why? Cheap, in its case geothermal, energy.

I agree that domestic, or certainly continental, reliable sources are
important.

However, it seems that the way to those, at this point, is energy policy and
also a progressive environmental policy (not destroying your environment and
the rest of your economy and health that are dependent on it). And, the
inevitable automation -- jobs are going away from this production activity,
regardless.

Instead, we've got the corporate mafia.

30 years ago -- maybe more like 40 -- the U.S. might have been able to protect
its domestic metals industry while incentivising it to modernize.

What remains has modernized and found ways to keep up. We need to help it move
and expand into the future, not devolve to some era of cheap, dirty energy and
corrupt politics.

