Bush's steel tariff

This Politically Dissident column originally appeared in The Exponent (University of Alabama in Huntsville), Vol. 33, No. 24 (March 14, 2002). Digitized issue: UAH LOUIS archive. Reproduced here courtesy of that archive.

Tax Me More Fund donations as of 2002/02: $5.

George W. Bush: neither compassionate nor conservative. Discuss amongst yourselves.

The president recently made the very bad move of imposing a thirty-percent tariff on imported steel. The Constitution authorizes the federal government to impose tariffs and duties on imported goods (this was the source of the federales’ income before we were hit with the income tax), but this punitive tariff is not a judicious or even conservative use of that power.

One problem is that our government has been busily surrendering little pieces of our sovereignty—our right of self-government—to anti-American organizations such as the UN and the WTO (World Trade Organization). Various European nations have threatened to file charges against us in the WTO, so President Bush’s decision may not even stick. This tariff could set off a trade war where everyone jacks up their tariffs on everyone else’s goods in a flurry of retaliation, meaning higher prices for you and me.

Slapping on a thirty-percent tariff is not conservative: conservatives (at least when they are speaking) repeatedly insist that the government should not interfere with the market. This tariff isn’t compassionate either because the higher prices that may result will have the most significant impact on the wallets of low-income earners and the folks on fixed incomes such as our grandparents collecting Social Security.

Bush’s new tariff amounts to a bailout of the steel industry. In the time leading up to the tariff, we heard a lot about the plight of the American steel worker. Maybe it’s only coincidental that steel is a big part of the economies in several politically important “swing states” such as Pennsylvania and Ohio. Where do we draw the line? Which industries get this welfare, and which are left to tough it out?

Again, this market interference is not conservative. Further, coming to the rescue of these swing states gives the strong impression that the president has sacrificed principle for political expediency. It’s not compassionate either. Rather than leaving people to pursue their own self-interest, the tariff encourages people to stay in an industry that doesn’t have much of a future.

Fleischer spins it as giving the steel industry time to adjust, but no one will adjust; they’ll just want more and more federal protection. I can identify: I’m in software, and that means that I’ll be perceived as less and less valuable as I age. That doesn’t mean the government owes me something. Instead, it’s my responsibility to develop new skills and save like crazy while times are good. Government-created illusions that I’ll always be able to find work at a forever-increasing salary will hurt, not help. Being part of a dynamic economy is not a free ride.

The president has a degree in history, but maybe he didn’t study much American history. Many of the elements that led to the Great Depression are in place. We’re suffering an economic hangover from the massive Internet build-out of the ’90s, just as we were from the massive railroad build-out in the ’20s. Bush has imposed enormous protectionist tariffs as did Hoover.

The Democrats are threatening to raise federal taxes, and state and local taxes are certain to rise because most states are faced with budget deficits after the big slowdown. Tax hikes in the ’20s further damaged the US economy and pushed us toward the Depression. We don’t have Hoover’s wrong-headed wage controls that artificially inflated wages and destroyed jobs (unless you count the federal minimum wage), but that’s probably on the way too.