More than 2,000 U.S. corporations have market capitalizations larger than U.S. Steel, which has fewer employees (21,800) than Krispy Kreme, which manufactures doughnuts. The U.S. military requires a minuscule portion (in 2017, 3 percent) of domestic steel production. Japan is a steadfast ally that, while Nippon’s $14.9 billion purchase is being blocked, is purchasing vital U.S. weapons systems. Biden is allergic to such facts, as is his successor, who also opposes the sale even though:
Nippon has promised to pay $5 billion more than the company’s market capitalization. And to keep U.S. Steel’s headquarters in Pittsburgh. And to give $5,000 bonuses to the company’s steelworkers. And to abide by all union contracts. And to let the U.S. government reject any reductions in U.S. Steel’s production capacity. And to spend $2.7 billion modernizing what Biden delusionally calls “this vital American company,” which has withered by becoming dependent on U.S. government tariffs, subsidies and “Buy American” rules.
TikTok, the Chinese-owned video-sharing app, has approximately 170 million American users. Granted, TikTok is inescapably beholden to an adversary nation’s sinister government. But in 1965, a unanimous Supreme Court overturned a law that burdened Americans’ “right to receive” propaganda from such a nation: the Soviet Union.
Sixty years and many technological developments later, it is increasingly urgent not to acquiesce in the U.S. government’s insinuating itself even deeper than it already is into the sinister business of superintending Americans’ access to information and ideas. The government is preemptively banning TikTok. There has been no precipitating event, not even a measurable change wrought by TikTok in U.S. public opinion regarding China. (Not that controlling public opinion is Congress’s job.)
…..
During the pandemic, Biden said insufficient censorship by social media companies was “killing people.” His administration pressured all-too-compliant companies to suppress content, much of it true. The pandemic has gone. Other excuses for censorship (racism, hate, climate change, disrespect for “science,” a public health crisis, etc.) are coming.
Stefan Bartl explains that “Biden expanded executive power to kill the US Steel-Nippon merger.” A slice:
In the late 1990s, the Cato Institute released research about the steel industry and the protectionist measures undertaken by the Reagan Administration (1981-1989). Authors, Brink Lindsey, Daniel T. Griswold, and Aaron Lukas questioned steel protectionism effectiveness in job retention declaring, “Employment in the steel sector has declined by more than 60 percent since 1980 largely because of rising productivity, and employment will continue to fall even if trade barriers are imposed.” In addition, the Voluntary Restraint Agreements, amongst other protectionist measures, cost the US economy roughly $7 billion in the 1980s.
The Biden administration will leave America’s core economic and national-security interests less secure than it found them. By blocking what could have been a transformational investment in a critical U.S. industry weeks before his term ends, President Biden has saved some of the worst for last.
His intervention against the acquisition of U.S. Steel by Japan’s Nippon Steel subordinates America’s economic and security interests to the politics of organized labor. But in its public justification, his administration seems to expect us to believe the opposite—that, if not for Mr. Biden’s action, the proposed investment might threaten “to impair the national security of the United States.”
The American people, along with U.S. allies and trading partners, are waiting to see the “credible evidence” on which the administration says this claim rests.
Samuel Gregg and Richard Reinsch eloquently make the case for saving free markets. (HT Dominic Pino) A slice:
America is now in a moment of choosing. Our markets are under siege from interventionist proposals on both the left and right, coupled with impending fiscal, entitlement, and regulatory crises bequeathed by a legacy of such policies. They also face threats from identity politics as manifested in environmental, social, and governance (ESG) investing and the push for diversity, equity, and inclusion (DEI). Despite recent setbacks, these movements have set down deep roots in corporate America, academia, and government. Failure to confront these challenges on the level of political economy will turn America into a different kind of nation. The country will still exist, of course, but absent a dynamic capitalist economy, the republic of freedom and opportunity it has represented for two and a half centuries will be lost.
The problems plaguing free markets today come in different forms. There are the conventional afflictions of an overweening state, which include government overspending, excessive and arbitrary state interventionism, and out-of-control deficits and public debt. These issues curb American ambition and independence, imprisoning us in our failure to control our government as it spends money far beyond its revenues.
Other afflictions facing American markets are of a moral and cultural character; they weaken the entrepreneurial spirit upon which market capitalism relies. Entitlement spending, for example, has ballooned over the past four decades, particularly in the means-tested category. This raises the question: Have we effectively decided that the fundamental norm of standing on one’s own two feet no longer applies to entire segments of the American citizenry? If so, then America will continue its slide into becoming just another European-style social democracy opting for managed decline.
The research on the subject is hardly ambiguous. Nations “with high levels of trade with their allies are less likely to be involved in wars with any other countries (including allies and non-allies), and that an increase in trade between two countries correlates with a lower chance that they will go to war with each other,” the abstract of a 2015 study published in Proceedings of the National Academy of Sciencesread. While that’s not always the case, the exceptions prove the rule. “Free trade, and not just trade, promotes peace by removing an important foundation of domestic privilege—protective barriers to international commerce—that enhances the domestic power of societal groups likely to support war,” University of Texas, Austin, professor Patrick McDonald determined in 2004 debunking the socialist myth that World War I was a byproduct of “commercial liberalism.”
Put simply: “Open trade makes war a less appealing option for governments by raising its costs.” We can debate whether the U.S. would derive more strategic benefits from the formal acquisition of Greenland than it draws from the military basing rights Washington already enjoys in that territory. Certainly, the notion that the development of Greenland’s rare-earth minerals — a daunting logistical feat — cannot be acquired through mutually beneficial commercial means is a baseless assertion (particularly since it will be commercial interests that will develop the technology necessary to do so). There is no question that the resources sacrificed in a hostile engagement with the interests who would oppose American expansionism exceed the possible rewards. That inescapable conclusion should compel those who value their authority to admit what they know to be true: This is a silly thing to talk about.
Trump is not “thinking big.” Rather, the president-elect and those who have entertained his thought bubble as though it was a serious proposition have demonstrated their adherence to a dangerous fallacy. It’s no coincidence that the renewed popularity of protectionist thinking has made the prospect of war more thinkable.
The situation has reached a critical juncture. Social Security and Medicare costs are projected to rise dramatically as the baby boomer generation keeps retiring, adding further pressure to an already strained federal budget. Politically, it would be easy to extend Donald Trump’s 2017 tax cuts without offsetting the lost revenue, which could worsen our fiscal trajectory.
There’s also Trump’s foolish determination to impose growth-slowing tariffs. Some of the negative effects would be offset if the administration is successful in deregulating the economy, and the energy sector in particular. These reforms would boost productivity and economic growth without requiring additional federal spending, strengthening the economy while maintaining fiscal discipline. However, this will be remarkably hard and slow work.
Here’s David Henderson on Hannah Ritchie on Julian Simon’s 1980 bet with Paul Ehrlich.
