By David L. Brown
Oops, today we learn that the stimulus bill that just passed the House of Representatives won’t allow stimulus money to be spent on imported steel. That’s like slamming the door on world trade, which is going to create a huge backlash from trading partners and lose American jobs through loss of exports. Oh, how wise the gurus in Washington are! (Not).
Here is an excerpt from a news item tonight from FoxNews.com:
U.S. businesses and trading partners are resisting a new “Buy American” provision in the $819 billion economic stimulus package making its way through Congress.
The provision, included in the House bill that passed on Wednesday, generally prohibits the purchase of foreign iron and steel for any stimulus-funded infrastructure project.
The goal is to boost the U.S. iron and steel industries, which have been pummeled by the current recession. Shipments in the steel industry, for example, fell 40 percent last year.
Yet John Murphy, vice president of international affairs at the U.S. Chamber of Commerce, said 50 million Americans whose jobs depend on exports would pay the price.
Think this could be a problem? Umm, no — the word “problem” isn’t anywhere near a bad enough word to describe what this will be. And then there is the fact that our steel industry is almost completely moribund and has been for decades. Pittsburgh’s fabled mills have long been shuttered and turning into rust buckets. The remaining mills are generally unable to compete with foreign producer.
Is this what we want to do — attempt to rebuild out-dated industries whose time has come and gone? Revisit the Industrial Revolution? We need to concentrate on developing alternative energy, a cleaner environment, a sustainable economy, not dump billions into developing new steel mills. And even if we should want to do so in order to stimulate the economy, it would take years to ramp up efficient iron and steel production. That’s not likely to contribute to our immediate economic problems until well after the Obama administration is over, if ever (although it is a fact that the economic crisis may go on forever in the post-Peak Oil world). If we continue to sink into a depression without end, what stimulus will it take to create a new steel industry to replace the cheap foreign imports we now enjoy? And, what kind of sense would it make to do so?
Meanwhile, American steel users “benefiting” from the stimulus (which by the time Congress is done will be just about everybody) will be struggling with severe shortages, which means higher prices, inability to produce end products, and ultimately a domino effect sweeping through every steel-using manufacturer down through retailers and to consumers. Meanwhile, steel exporting nations are going to boycott American goods like there’s no tomorrow. They’ll use the cheap and abundant steel to produce more consumer goods at lower prices to sell to each other and everyone except America.
But how important could this be. From what nations do we buy our steel? Glad you asked: Oh, probably nothing all that important: China, India, Mexico, Korea, Turkey, the European Union, Japan, Canada, Australia, places like that. Heck, there’s no problem with ticking off those countries and causing them to slam the door on our exports is there? Nah! We’ll still be able to export lots of stuff to, er, ah, Antarctica, that’s it. Yeah, Power to the Penguins! And we’ll have no worries because we won’t be able to produce many export items anyway due to shortages and the high prices for domestic iron and steel. So we’ll be able to easily meet and even exceed demand (those Penguins will require some excellent salesmanship to get them to buy those refrigerators, freezers, ice makers and other Antarctica-appropriate export trade items).
Don’t these people in Washington have any common sense about how economics works? Well, apparently not. They are, after all, mostly lawyers. There are many good, honest, hard-working lawyers (I have been privileged to know and work with several of them) but for the most part they are generally not the greatest paragons of wisdom and ethical purity.
Hey, let’s enjoy a lawyer joke to lighten things up in the face of the impending economic doom that is being hatched out in Washington:
Riddle: “What’s the difference between a lawyer and a catfish?” Answer: “One is a scum-sucking bottom feeder and the other is a fish.”
That was fun. Let’s have another: “What’s the difference between a dead lawyer on the highway and a dead rattlesnake on the highway?” Answer: “There are skid marks in front of the snake.”
And finally, a faux factoid: “99 percent of lawyers give the rest a bad name.” Heh.
Lawyers should NEVER be entrusted with creating and administering the law. That should be the job of patriotic American citizens in possession of a firm grounding in science, philosophy, history and economics, none of which seem to appear on Law School course lists. Instead we get a pack of critters who if they weren’t in Congress would be suing people and companies for every imaginable sin and pocketing as much as half or more of anything collected.
And let’s face it, the kinds of lawyers I’m describing are exactly the ones that would tend to go into politics, being greedy egomaniacal morons. And once in office, they surround themselves with, what else? More lawyers. One out of every twelve residents of the District of Columbia is a lawyer, 42,000 of them in all, more per square mile than many other nations have as a total. Washington is like a vast hive of lawyers, something out of a bad horror film such as Night of the Living Dead or a drug-enhanced nightmare.
So, yeah, as long as we’re going to create a new Greater Depression, let’s start out big by sticking it in the eye of our trading partners to create a huge trade war over steel, something we can barely produce any more anyway. That’s smart all right. Bring those foreigners in line right quick, won’t it? Smoot and Hawley will be smiling down from Heaven, er, rather, smiling up from down there below, at the ongoing reenactment of their famous bill that plunged America into the Great Depression by placing huge tariff barriers on imported goods in 1930.
That sure fixed things up, didn’t it? If it hadn’t been for World War II we’d still be in the Depression if Smoot, Hawley and their successors had their way. How soon they forget the past, those who do not read history or ever learn how to think rationally or master common sense. And how fast the nation can fall if it continues down the road it has now set foot upon.