Subject: Re: Trade deal with China reached
We weren't energy independent, that's the point. The fact that we weren't exposed the US economy to a large exogenous shock.

Right, but that wasn't a choice made by the U.S. government. It was the result of the natural market outcomes of consumer and producer preferences that existed at the time. If anything was going to be materially different, the U.S. government would have needed to forcefully intervene in the market to force consumers and producers to behave differently. But there was no political will to make that kind of intervention - and if the government had tried, it would have been the conservative side of the political spectrum that would have strongly opposed it.

That's right. Would you agree that it's probably a bad idea to have *zero* domestic production of steel?
The government does things all the time to ensure that - just in case - we have things we need.

It depends on what the tradeoffs are in order to have non-zero steel production. If the tradeoffs are very large and the foreign sources of steel are dependable, stockpiles may be sufficient.

But yes, I think it is generally a good thing to have the government intervene in private markets when those markets will result in outcomes that are dangerous for the good of the country, even if they are the preferred outcomes by the market participants. However, that's generally a more liberal view than a conservative one.

You mean like tax breaks and subsidies out the wazoo? We've never done those, right? :)

And they're generally promoted by liberals, and often pilloried by conservatives. That's the point. Any subsidy that would be large enough to get, say, the PPE industry to materially relocate back to the United States would be heavily criticized by conservatives as being "waste, fraud or abuse" or government "picking winners and losers" among firms or industries.

There's a very large distinction between directing the entire economy and encouraging certain industries to relocate here.

True, but "encouraging certain industries to relocate here" involves a massive amount of government direction of the economy. In just the course of this thread, you've identified semiconductors, medicines and medical equipment, PPE, shipbuilding, steelmaking, oil and gas, and auto manufacturing as industries that the government should now (or should have in the past) forcefully intervene in. Which means having to intervene in an even larger number of subsidiary and enabling industries as well - you can't build something as complicated as a ship without a constellation of component and equipment suppliers. If you want more shipbuilders to build materially more ships for private purchasers in the U.S. than it makes sense to do under current market conditions, you're going to let the federal government step in and heavily intervene.

Is this acceptable to you?

That's the wrong question. It doesn't matter whether it's acceptable to me, because if it's better than the alternative, it's what we should go with whether I like it or not. So the relevant question is whether the status quo is better or worse than the measures that would have to be taken in order to get a materially different outcome. And I'm not the relevant person to decide which is acceptable, but whether you could get the U.S. Congress to agree that an alternative was better.

So, what's the alternative you're proposing? Surely not having the U.S. government pay private U.S. companies to engage in makework projects building commercial vessels that aren't needed, just to stay in practice (and in business) - the optics of that are just too terrible. But subsidizing unnecessary construction of commercial vessels here ends up being largely the same thing, and you'd probably never get it through Congress in the first place (the Freedom Caucus would tear it to shreds). Progressives might support it, since using the power of the federal government to change market outcomes to advance common and collective goals is consistent with their political philosophy - but the right flank of the Congress would be apoplectic at this. You can't shrink government so that you can drown it in a bathtub if you're setting up an entitlement program for commercial shipbuilders to suckle at the government teat indefinitely!