… is the title of my latest column in the Pittsburgh Tribune-Review. In it, I discuss some of the many problems with Trump’s recently announced scheme to punitively raise the taxes of Americans who buy foreign-made steel and aluminum. Take note: Trump isn’t draining the swamp; he’s stocking it with bottom-feeders. A slice:
And what happens to American steel and aluminum producers’ incentives to innovate? These coddled companies’ executives want you to think tariffs that protect them from competition will prod them to become more innovative and cost-conscious. But who in his or her right mind believes such a claim? Would your favorite local restaurant work harder to improve its menu and keep its prices low if government prevented you and its other customers from dining at competing restaurants across the street?
Protected from competition, steel and aluminum makers have more room to be lazy and less attentive to customers. And how will less innovative, less efficient steel and aluminum companies improve America’s national defense?
Perhaps the worst result of Trump granting special privileges to steel and aluminum makers is that it opens the door much wider to a pernicious form of competition — for government-granted privileges. Businesses unable or too lazy to succeed in the market are now more likely to trek to Washington — with hordes of lobbyists — to plead for political favors. More energy and resources will be diverted from producing goods and services that please consumers (who spend their own money) to producing political cover and electoral support that please elected officials and bureaucrats (who spend other people’s money).