U.S. Steel put itself on the auction block this summer and sought to strike a deal while the irony is hot. Trillions of dollars in Washington spending on public works and green energy are goosing domestic demand for steel while tariffs protect U.S. manufacturers against foreign competition. U.S. Steel’s best assets are political creations.
President Trump in 2018 slapped 25% tariffs on foreign steel under the pretense of protecting national security. Domestic steel producers lobbied for the tariffs, which they said would protect American workers from cheap foreign imports. Yet U.S. Steel’s workforce had shrunk to 22,740 at the end of 2022 from 29,000 in 2018.
The evidence shows that the tariffs have resulted in fewer downstream manufacturing jobs and raised prices for consumers, all while padding the bottom line of domestic steel makers. Washington’s industrial policy is also helping to boost demand for domestic steel and U.S. manufacturers’ profits.
In Chapter 4 of Hillbilly Elegy, the Rust Belt memoir that launched his political career, Sen. J.D. Vance (R–Ohio) relates a story about the time that Kawasaki bought out Armco, the steel-making company that once employed Vance’s “Papaw.”
Kawasaki is, of course, based in Japan. At first, Papaw and the other residents of Middletown, Ohio—described by Vance as “a town full of World War II vets and their families—react to the news as if “General [Hideki] Tojo himself had decided to set up shop in southwest Ohio.” Once the initial fervor dies down, however, Papaw and the rest of the Middletown community recognize that the foreign company’s investment in their local community can be a good thing. “The Japanese are our friends now,” Papaw tells Vance.
“The Kawasaki merger represented an inconvenient truth: Manufacturing in America was a tough business in the post-globalization world,” Vance writes. “If companies like Armco were going to survive, they would have to retool. Kawasaki gave Armco a chance, and Middletown’s flagship company probably would not have survived without it.”
There’s another lesson that a reader might draw from Papaw’s reaction to the Kawasaki takeover as well: It doesn’t make much sense to apply geopolitical thinking to the world of business. Yes, the Japanese are “our friends now,” but there’s also a world of difference between an imperial war machine and a multinational corporation that wants to pay you wages for work.
Wall Street Journal columnist Jason Riley argues that Harvard can’t fire Claudine Gay because “to admit she has performed poorly is to raise basic questions about the entire ‘diversity’ enterprise.” Two slices:
Anyone suggesting that Ms. Gay deserves the same treatment as [ousted U. Penn president] Ms. Magill stands accused of racism by liberal elites who maintain that all black people not named Clarence Thomas are off-limits to criticism. The head of the NAACP, Derrick Johnson, insisted that disapproval of Ms. Gay’s leadership is “nothing more than political theatrics advancing a white supremacist agenda.” More than 80 black faculty members at Harvard signed a letter stating that “any suggestion that her selection as president was the result of a process that elevated an unqualified person based on considerations of race and gender are specious and politically motivated.”
Ms. Gay’s defenders pretend that her qualifications for the job are indisputable and that her being hired had nothing to do with race. That’s baloney and they know it. Bill Ackman, the hedge-fund manager and Harvard megadonor who has led calls for her ouster, said he was told that the search committee that chose Ms. Gay “would not consider a candidate who did not meet the DEI office’s criteria,” using the acronym for diversity, equity and inclusion. There is little reason to doubt him.
The truth is that Ms. Gay’s defenders don’t want to acknowledge that her administrative experience and scholarly credentials don’t begin to match those of other people in similar posts. The same can’t be said of Ms. Magill, who was dean of Stanford Law School, provost of the University of Virginia and a clerk for Justice Ruth Bader Ginsburg before being tapped to run Penn.
Ms. Gay wasn’t hired for her academic chops, and her problematic publishing record has become an additional embarrassment. Harvard has been forced to acknowledge multiple instances of “inadequate citation,” which is more commonly known as plagiarism. By some counts, close to half of Ms. Gay’s academic output contains instances of copying word-for-word from another source without using quotation marks.
Phil Gramm and Mike Solon write that “Social Security was doomed from the start.” Here’s their conclusion:
Whoever becomes president on Jan. 20, 2025, will be forced to address the funding crisis of Social Security’s trust fund, which will be depleted in the last year of the mandatory 10-year budget the president must submit in the spring of 2025. No matter how the government handles the mandatory benefit cuts the depletion of the trust fund will trigger, any cash surpluses generated in the process should be invested in real assets, which must be the private property of those who have paid into the system. Pay-as-you-go systems always go but never pay. Only with private investments and the power of compound interest is a sustainable Social Security program possible.