I’ll admit that perhaps I’m picking on Mr. Stone. And, really, it’s in quite a cowardly way. If I had any chutzpah at all, I would actually write a reply to The Rapid City Journal. Regardless, it does ease my mind to vent my irritation. The US steel industry is a touchy subject for me, as one will find with most economists or, in my case, econ junkies. Prepare yourself:
Recently the World Trade Organization judged the U.S. guilty of unfair trade practices regarding our protection of American steel-making companies. Which begs the question: Since when did we delegate to Japan, Germany, and the European Union the authority to determine U.S. productive capability of material necessary for our national defense?
As I recall, our steel manufacturers produced the necessary steel that created millions of small arms, tens of thousands of Jeeps, tanks, and artillery pieces, thousands of fighter planes and bombers, and hundreds of ships, all of which defeated Japan, Germany, and Italy, the same nations that now want to limit our steel-producing capacity.
Some of the countries now trying to decimate our steel-making capacity were instrumental in killing 500,000 American servicemen. America should never forget history to placate nations who tried to destroy America.
I can tolerate equitable free trade, but jeopardizing our national defense in the name of free trade is sheer stupidity. Reducing our defensive capability to benefit Japan, Germany, and Italy would be beyond stupidity – it would be treasonous.
First of all, Mr. Stone seems to have a somewhat glorified view of the steel industry in the United States. Perhaps the US was at the cutting edge of steel manufacturing at the time of WWII, but then again — THAT WAS IN THE 1940s. I’m guessing the industry uses much the same technology today, a situation which has put it in the dire straits in which it finds itself. What does outdated technology and resistance to change mixed in with competition from highly technologically and structurally advanced foreign companies create? A crumbling mess. But a mess that refuses to change, yet can lobby the government for special interests like no other. In fact, for all of our claims of free trade, the US is not actually among the most globablized countries of the world.
The big picture of the US’s protection of the steel industry spans the entire country. The thirty-three percent raise in steel tariffs caused a direct raise in prices of steel products of approximately 33%. So, to save a few thousand jobs, every Jones family that wants to buy a house, will pay more. Car manufacturers are facing huge red profit margins as they have had to take the price increase (couldn’t plausibly pass it along to the consumer). Think of the Caterpillars, home builders, and other manufacturers of intermediate products utilizing steel that must either pass the increase in production costs on to us the consumers or cut jobs, etc. THAT AFFECTS EVERYONE IN THE UNITED STATES. Call me heartless, but I’m not going to pay more for products to save a few thousand overpaid jobs in a decrepit industry that refuses to change. But that’s just me.