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Hard Times for U.S. Steel Industry
Members
of Congress and presidents love to focus exclusively on expected
benefits. Their heads must
be swollen with the belief that they can get the results they desire if
only they concentrate hard enough.
The reasoning isn't difficult to fathom when you think about it.
Let's be generous and make a huge assumption that the average
politician has a brain and is actually willing to use it.
Our unlikely pol would then be forced to weigh all
potential outcomes resulting from the stroke of his pen.
In doing so, he might come to the conclusion proposal X is a big,
fat zero--meaning that his pen stroking caused an unexpected mess to
erupt. Not a sexy
proposition. On the other
hand, the pol could have a lot more fun by trumpeting the blessings that
X will bestow on an eager and excited constituency.
Hence, we have Mr. Crutsinger's "no-brainer." It's pure coincidence the benefits just so happen to make
excellent campaign ad copy. Recent
years have seen profits of U.S. steel manufacturers go limp as they
faced stiff competition from abroad.
No matter what the Americans tried, foreign steel companies kept
coming back with a cheaper and more enticing product.
Sales of imported steel swelled.
This just wouldn't stand. Though
U.S. steel industry representatives didn't want to talk about their lack
of performance, they realized they weren't alone.
The problem they were suffering from could happen even to the
best industries from time to time.
So they did the "patriotic" thing and asked the
President to handle the situation. Bush,
confident from reports detailing how American military might had saved
the U.S. from another mad mountain goat farmer, didn't back away either.
He put on his protectionist gloves and went to work. To
set the mood, Bush laid the case before the (totally impartial) U.S.
International Trade Commission (ITC) last year.
The ITC was sympathetic to the symptoms afflicting the steel
industry, having witnessed similar performance problems among U.S.
sugar growers. In June,
they ruled that the steel industry's difficulty stemmed from a lack of
protection, but the ITC panel couldn't agree on a prescription to remedy
the embarrassing problem. They
instead decided to wait awhile, perhaps hoping the problem would go away
on its own, and scheduled a reexamination for March 6, 2002. The
erection of steel trade barriers has become a hot topic with the
deadline now looming. Steel
manufacturers were seeking a magic pill to assist them.
Some might claim that no such pill exists, but I suspect elder
statesmen such as Bob Dole would rise in protest.
According to Bob Dole, "Bob Dole thinks the doubters are
wrong. Sometimes all it
takes is a little help to reinvigorate things.
Just look at me." Then,
apparently too reinvigorated at the chance to speak, he added
quickly. "Easy
boy." Other domestic
manufacturers were turned off by the U.S. steel industry's overt push to
receive special favors, which meant they weren't going to take it lying
down. For them, partnering
with overseas suppliers was an acceptable alternative.
It kept both raw material prices and, ultimately, consumer
products prices lower. Suddenly
the administration is feeling its way gingerly. "The administration is in a no-win situation
politically," said Brink Lindsey, a trade expert at the libertarian
Cato Institute, a Washington think
tank. "Whatever it
does will be extremely unpopular with some very vocal group of
people." A horrific
prospect for a politician. Thus,
pundits believe Bush will try to pull out part of the way.
Even though the practice of pulling out is notorious for its past
failures (no one is ever fully satisfied with the outcome), Bush may be
convinced that he can prop up the entire U.S. steel industry without
causing too great an impact on other industries and consumers.
This is pure folly. Watered
down trade restrictions are just as harmful as the rest.
The only difference is that they may not help the performance of
domestic steel producers quite as much as the producers would have
liked. Nevertheless, in the
end that hardly matters, as Bush will probably embrace it.
After all, it is a no-brainer.
discuss this column in the forum Emmett Harris lives upwind of the Kennedys on Cape Cod. |
Citing
the chance to save numerous jobs, AP reporter Martin Crutsinger wrote in
a 
