Friday, October 19, 2007

The Fruits of Protectionism

As a pro-free-trade Republican, I will frequently disagree with 'fair traders' -- both Republican and Democrat. Therefore it's no surprise that I disagree with representatives English (R-PA), Altmire (D-PA), Visclosky (D-IN), and Hayes (R-NC) on the use of Chinese steel in the border fence:

House members allied with the domestic steel industry blasted the Department of Homeland Security (DHS) on Thursday for building a fence on the Mexican border with steel products from China.

“By allowing the use of Chinese pipe, DHS is allowing the U.S. taxpayer to subsidize Chinese production at the expense of the American workers,” Rep. Phil English (R-Pa.) said at a press conference. “This is completely unacceptable.”

“This is outrageous, it’s offensive and it’s unacceptable,” charged Rep. Jason Altmire (D-Pa.).

“It is beyond outrageous that we’re using Chinese steel to build a border fence to protect us against illegal immigration,” said Rep. Robin Hayes (R-N.C.), who also joined the press conference...

DHS’s Office of Congressional Affairs indicated to English’s office that it had waived so-called Buy American rules, which normally require the use of U.S. steel in such projects, in order to use the Chinese pipe and tube, English said.

This is the funniest part of the piece:
Rep. Pete Visclosky (D-Ind.) said he was concerned about the safety of Chinese steel. However, when pressed, he and other lawmakers could not cite any specific safety problems that might result from the use of foreign pipe in a fence. Visclosky did note other safety issues that have recently come up with toys from China, while English said the use of Chinese inputs in U.S. infrastructure prompts broader concerns.
The safety of the steel? Can someone describe the potential safety concerns with a steel fencepost? Are they afraid it might explode? Or is the concern that it will collapse without warning -- potentially... bruising the head of the illegal immigrant attempting to bring down that section of fence?

Does the American steel industry need the help? It's enjoyed an unprecedented run of success since 2004 -- partly because the federal government helped bail the industry out of its overly generous pensions. US steel companies enjoyed record revenues and profits in 2006. Why aren't we treating steel like oil -- and imposing windfall profit taxes on the industry, to punish it for taking advantage of a highly-regulated market to gouge domestic consumers? After all, high steel prices damage the competitiveness of American industries that depend on steel -- such as autos. Aren't we trying to help the American auto industry?

More importantly, isn't there a strong public interest in ensuring that American taxpayers get the most 'bang for the buck' when it comes to spending their hard-earned tax dollars? Don't we want to buy the most border fence we can with limited revenues? Democrats are livid about deficit spending to fund the war in Iraq; why do they want us to add to the federal deficit to purchase more expensive steel from producers enjoying record profits?

I better not see any of these Members of Congress issuing press releases complaining that federal agencies are wasting taxpayer dollars, given that they favor wasting it here.

1 comment:

Anonymous said...

The domestic pipe and tube industry which is being replaced by Chinese pipe in this story has been hurting of recent years. Yes Big Steel has been making big money but the two are different industries. Please read the stories not just the sound bites.