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>I think the real reason Wall Street made the decision to move US steel production This is quite the statement, Wall Street didn’t do anything. Foreign countri

>I think the real reason Wall Street made the decision to move US steel production This is quite the statement, Wall Street didn’t do anything. Foreign countries developed their own steel industries and the US couldn’t compete. This had little to do with Wall Street. The largest steel companies aren’t US subsidiaries that moved production offshore. Chinas steel industry is dominated by large state owned enterprises.

photochemsyn 4y ago
Wall Street is where the decisions are made about whether to invest in domestic steel production or whether to direct corporations to import more steel. (2014): > "U.S. steel imports increased from 28.5 million net tons in 2011 to 32.0 million net tons in 2013, an increase of 12.3 percent. Imports have increased not only in absolute terms, but also relative to domestic production and consumption, seizing more of the U.S. market and thwarting the domestic industry’s efforts to recover from the Great Recession... The import surge has depressed domestic steel production and revenues, leading to sharp declines in net income in the U.S. steel industry over the past two years (2012–2013), layoffs for thousands of workers, and reduced wages for many more." https://www.epi.org/publication/surging-steel-imports/ https://www.epi.org/publication/surging-steel-imports/ Note this hides the real level of steel imports, since a lot of steel goes into things like imported vehicles, which are counted separately. For example, the Ford Focus (2017): https://www.nytimes.com/2017/06/20/business/ford-focus-china-production.html https://www.nytimes.com/2017/06/20/business/ford-focus-china... > "Last year, the company said it planned to shift Focus production to a plant under construction in Mexico, primarily because of lower labor costs... Ford’s head of global operations, Joe Hinrichs, said the company would save $1 billion by building the Focus in China instead of Mexico."
- kragen 4y ago
  if production of steel in the usa were competitive, barring chinese protectionism†, those fords built in china would be built with steel imported from the usa †there is a lot of chinese protectionism
kragen 4y ago
arguably wall street shifted to investing in other hot sectors like computers (this was the 01960s and 01970s) and made capital more expensive for the steel industry, but then again the steel industry wasn't really posting the kinds of profits it had in the days of carnegie
- comte7092 4y ago
  You make a fair point, however I don’t think “wall street chose not to subsidize the US steel industry” is quite the same thing as “Wall Street chose to move steel production outside of the US”. Wall Street isn’t a vehicle for national industrial policy, if anything that lies at the feet of Congress.
  - kragen 4y ago
    well, wall street didn't expect high returns from the steel industry in the us one of the things that distinguishes capitalism from other economic systems is that national industrial policy (in the sense of allocation of scarce resources to future productive endeavors) is determined by private investors, not the state

photochemsyn 4y ago

Wall Street is where the decisions are made about whether to invest in domestic steel production or whether to direct corporations to import more steel. (2014): > "U.S. steel imports increased from 28.5 million net tons in 2011 to 32.0 million net tons in 2013, an increase of 12.3 percent. Imports have increased not only in absolute terms, but also relative to domestic production and consumption, seizing more of the U.S. market and thwarting the domestic industry’s efforts to recover from the Great Recession... The import surge has depressed domestic steel production and revenues, leading to sharp declines in net income in the U.S. steel industry over the past two years (2012–2013), layoffs for thousands of workers, and reduced wages for many more." https://www.epi.org/publication/surging-steel-imports/ https://www.epi.org/publication/surging-steel-imports/ Note this hides the real level of steel imports, since a lot of steel goes into things like imported vehicles, which are counted separately. For example, the Ford Focus (2017): https://www.nytimes.com/2017/06/20/business/ford-focus-china-production.html https://www.nytimes.com/2017/06/20/business/ford-focus-china... > "Last year, the company said it planned to shift Focus production to a plant under construction in Mexico, primarily because of lower labor costs... Ford’s head of global operations, Joe Hinrichs, said the company would save $1 billion by building the Focus in China instead of Mexico."

kragen 4y ago
if production of steel in the usa were competitive, barring chinese protectionism†, those fords built in china would be built with steel imported from the usa †there is a lot of chinese protectionism

kragen 4y ago

arguably wall street shifted to investing in other hot sectors like computers (this was the 01960s and 01970s) and made capital more expensive for the steel industry, but then again the steel industry wasn't really posting the kinds of profits it had in the days of carnegie

comte7092 4y ago
You make a fair point, however I don’t think “wall street chose not to subsidize the US steel industry” is quite the same thing as “Wall Street chose to move steel production outside of the US”. Wall Street isn’t a vehicle for national industrial policy, if anything that lies at the feet of Congress.
- kragen 4y ago
  well, wall street didn't expect high returns from the steel industry in the us one of the things that distinguishes capitalism from other economic systems is that national industrial policy (in the sense of allocation of scarce resources to future productive endeavors) is determined by private investors, not the state