No. of Recommendations: 14
I'll refer back to my ants and grasshoppers parable.
The parable doesn't work, because we're not talking about either the ants or the grasshoppers. We're talking about the government. The country is filled with ants and grasshoppers. If the ants and grasshoppers are individually making choices that result in an outcome that isn't advancing the collective needs of the country as a whole, should the government intervene in what the ants and grasshoppers are doing? That's the question.
The scenario is that the steel is coming literally next door from the adversary who may decide to blow it all up one day. Is that an acceptable level of risk?
The US government btw doesn't think so....
No - the Democratic Administration of Joe Biden didn't think so. Every Republican in the House (other than Don Young) voted against the CHIPS Act; nearly 3/4 of the GOP Senate did as well (including all the real free market conservatives). Trump wanted to repeal it.
Again, the question isn't whether it's an acceptable level of risk - the question is whether it's more acceptable than the alternative. If Vietnam were in fact producing steel at five cents a ton, instead of the $800-900 per ton it costs to make it here, it's almost certainly not a smart decision to try to keep domestic producers alive. The costs would be astronomical. No tariff would protect them - you'd have to embargo Vietnamese steel altogether, and that would basically destroy the U.S. economy's competitiveness with the rest of the world. Every economy on earth has basically free steel, and we're the only ones still paying $800-900 per ton? They'd all bound ahead of us. Ironically, the more essential a product is to your economy, the more damaging a protective tariff is. Or the alternative, the government would have to provide a 100% subsidy for steelmaking - basically paying 100% of the cost of the steel being produced. In which case you no longer have any steelmaking industry, but a nationalized Federal Department of Steel that makes its steel. Which you can do, but then there's no real need to have that nationalized steel industry producing steel at a loss for any private uses.
So in that scenario, efforts to try to protect a steel industry that had been completely rendered irrelevant by whatever the Vietnamese discovered would likely leave the country worse off than just accepting the situation and stockpiling massive amounts of steel for defense purposes.
If you looked at the CDRSalamandar post you will have seen a photo of a shipyard in Portland that used to build Liberty ships. The picture from WWII shows more hulls in that particular place that the US put in the water all of last year. Much of the raw work has already been done; it needs moderinization, which was the point of the piece.
Here's a suggestion - stop thinking of these issues using the passive voice. "It needs modernization." Think of who is going to take the action that results in modernizing a shipyard for which there is no commercial demand for their products. Who is going to bear that expense. Then it becomes clear that you're not saying, "it needs modernization," but instead are saying "the federal government should pay for a private party to be able to make money selling commercial ships" - and that they need to commit to paying that money for long enough to induce people to make long-term investments in an otherwise unnecessary shipyard.
See if that stands up to the Freedom Caucus or DOGE. Government handouts to profitable ship-building companies? That's not MAGA. Get Musk's boys on them - delete, delete, delete!
