Mallaby on Evan Bayh
I don't know what Bayh's position is on candlemakers.
With Mark Warner out of the 2008 Demstakes, the chief anti-Hillary centrist is Sen. Evan Bayh of Indiana. This is a depressing commentary on the state of the Democratic Party. Bayh may have cleared his schedule to woo Warner supporters on Thursday. But he has yet to prove himself a real contender -- and he may not be a real centrist, either.
Two weeks ago Bayh circulated a preposterous letter to his Senate colleagues. It urged them to oppose what Bayh called "documented unfair trade" in a type of steel that's used in vehicles. It noted the Commerce Department's finding that lifting the tariff on this steel would lead to dumping by foreign producers. That would hurt U.S. steelmakers, the letter continued; so when the fate of the tariff is considered at a sunset review tomorrow, it should on no account be lifted.
Presidential aspirants are supposed to champion the national interest, not special interests. Someone should tell Democratic hopeful Sen. Evan Bayh of Indiana. This is not a policy that protects workers, as Bayh's letter pretended. It's a sellout to a self-serving lobby. It would help the steel guys at the expense of the car guys, even though the car guys are hurting more and they employ more workers.
The tariff that Bayh wants to preserve is one of more than a hundred that protect the steel industry. These fortifications were erected on the theory that the steel business is inherently unfair because every nation in the world wants its own steelmaker. The creation of these national champions guarantees global oversupply of steel, or so the argument used to go. Therefore the United States had to protect itself from dumpers' unfairly low prices.
This argument was always flawed. If foreigners wanted to sell artificially cheap steel, the United States should have been happy to pocket the subsidy. But the protectionist argument is now worse than flawed, because the steel industry has changed substantially. A wave of mergers has rationalized some of the old national champions, and the alleged oversupply of steel has disappeared in the face of exploding demand from developing countries.
By the way, the sentence I put in bold is a standard argument which, I have learned, convinces most economists but almost no one else.