The Wall Street Journal‘s Editorial Board decries Biden’s hostility to Nippon Steel’s proposed purchase of U.S. Steel. Three slices:
Everyone knows the Trump-Biden election campaign is going to be nasty, brutish and not short enough, but the unknown is how much policy damage it will do. One unfolding example is the fiasco of self-destructive opposition to Nippon Steel’s proposed acquisition of U.S. Steel.
The American political consensus used to be that foreign investment is a sign of U.S. economic strength and a source of good-paying jobs. Protectionists focused on blocking imported goods that compete with American products. But now they’re targeting even investment in U.S. manufacturing from friendly countries.
That’s the case with Nippon Steel’s non-hostile $14.1 billion offer to buy U.S. Steel, a venerable American name that has fallen well down the ranks of world producers. Nippon Steel executives plan a major capital infusion to make U.S. Steel more productive. But the merger is opposed by Cleveland-Cliffs, a U.S. Steel competitor, and the United Steelworkers, and the politicians are following like sheep.
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The world is awash in steel, so it isn’t clear why steel must be made in the U.S. But if steel is made in U.S., why is it “vital” that it be “domestically owned”? Nippon Steel is the world’s fourth-largest steel maker and far more efficient than U.S. Steel’s aging plants. Nippon Steel’s expertise and capital would enhance U.S. economic strength by making U.S. Steel’s operations more competitive.
Nippon Steel already employs some 4,000 Americans, and it has wanted to expand here for some time. One reason is the 25% tariff on steel imports that Donald Trump imposed and Mr. Biden hasn’t lifted. Manufacturers are moving to the U.S., especially from Europe, to avoid U.S. tariffs and take advantage of lower-cost American energy and the vast subsidies for green energy. The U.S. needs more steel to meet this demand.
But the political opposition to Nippon Steel isn’t about the economic merits. It’s about Cleveland-Cliffs, the steelworkers union and the electoral competition for blue-collar workers in November.
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Mr. Biden as President is supposed to represent the national interest, and maintaining America’s reputation for inviting foreign capital really is a “vital” interest. So is treating allies well, and mistreating a Japanese firm as hostile won’t make friends in Tokyo. Mr. Biden has already jolted allies with his recent decision to stop approvals for liquefied natural gas export projects. Barring Nippon Steel for political reasons sends a rotten message to friends—especially since it would be a boon to Chinese steel makers that compete with Nippon.
Robby Soave argues that “banning TikTok would give the Feds way too much power.” A slice:
It is easy to see how this legislation creates a blueprint for taking future action against social media companies beyond just TikTok. In the wake of the 2016 election, Democratic lawmakers, mainstream media pundits, and national security advisers all accused Facebook of being complicit in Russia’s various schemes to sow election-related discord online. Former Director of National Intelligence James Clapper said Russia was more responsible for Hillary Clinton’s loss than Trump was. The thrust of this argument was that Facebook CEO Mark Zuckerberg had allowed his platform to be compromised by Russian misinformation.
Jimmy Alfonso Licon offers a heap of understanding about government indebtedness.
Juliette Sellgren talks with David Henderson about the late MIT economist Robert Solow.
My intrepid Mercatus Center colleague, Veronique de Rugy, is not in favor of monetary loosening.
Pierre Lemieux wisely recommends that you read the late Anthony de Jasay.
Martin Kulldorff talks with John Tierney about his (Kulldorff’s) firing by Harvard.
