American ... producers who rely on subsidies or trade barriers are stealing twice
True, but there's more to the equation than price.
For national defense and security purposes, it is important to maintain some key domestic industries even though it costs more.
Let me start by saying that I am far from a protectionist. I abhor corporate welfare and corporate bailouts. I think they are antithetical to our values, taking from the poor and giving to the rich.
Now let me tell you about a subsidized industry I know fairly well, domestic shipping. In times of war, the US private shipping industry is used by the military to transport men and cargo - the Merchant Marine.
My great uncle served in the Merchant Marine during WWII and had two ships shot out from under him. It was more dangerous than being in the Navy.
The only way to maintain US flag vessels is to subsidize them, so the US government provides construction loans, pays construction differentials, and subsidizes the industry in other ways. The coastwise trade, which is from US port to US port, only US flag vessels may operate.
The reason our shipping industry can't compete with foreign shipping is that we have higher standards for construction, operation, and maintenance than, say, Liberia. You probably see rustbuckets in the Pacific all the time, so you know what I am talking about. We don't allow rustbuckets, which are far cheaper to operate than clean, strong, well maintained American ships.
We aren't the only country to subsidize our maritime industry, pretty much all countries with a maritime industry do the same thing, for the same reason.
We need the steel industry and the farmers for the same reason. In times of war, we need to be able to rely on domestic supplies of essentials.
So the issue doesn't revolve around price alone.
Maybe I should write to that Reason economist and ask him to throw national security into the calculator, but for now we have to rely on Congress and the President to muddle through.
I do think Bush made the wrong decision about the steel tariff, it punishes US companies which are competitive by rewarding those US companies which aren't. |
