Welcome to another installment of Swamponomics: Liberty Nation’s dive into the week’s morass of top news stories and the stream of economic fallacies that have been accepted as conventional wisdom by swamp creatures for years.
A Real Steel
Tariffs would rejuvenate America’s steel industry, they said. U.S. steel plants would lead the world as it did in the 1950s, they said. Well, they were wrong.
U.S. Steel Corp., a key beneficiary of President Donald Trump’s tariffs on imports, announced that it is putting three blast furnaces on ice. The Pittsburgh-based giant confirmed that blast furnaces in IN, MI, and Europe will be on standby. Until “market conditions improve,” they will be idle. This move will effectively slow down production amid sluggish demand, a common industry trend in recent months.
U.S. Steel, as well as other major steelmakers like Nucor and Steel Dynamics, reported lower-than-expected demand and decreased profit expectations in the second quarter of 2019. After receiving a life raft in the form of protectionism from President Trump last year, companies raised domestic prices, leading to a slump in demand and a 57% decline in stock prices over the previous 12 months. During any other time, this would not be a significant development. However, the president has repeatedly proclaimed that the nation’s steel industry is undergoing a renaissance because of his trade war. He has justified the $900,000 spent to create or save every steel job by stating that “If you don't have steel, you don't have a country.”
Of course, it’s the steel-consuming industries that have been hit the hardest by the higher prices. If these companies imported foreign steel, they would have paid the steep import levies. If they purchased domestic steel, they forked over higher than normal prices. It has been lose-lose.
A Beautiful Day in the Neighborhood
The federal government is in the television business because it knows what is best for you. Without rules and regulations, according to statist proponents, cable television would be engulfed in vulgarity, naked women, drug consumption, and dank memes. To believe this is to neglect the power of the free market, competition, and choice.
While not exactly a move that would allow a free-for-all in the television landscape, the Federal Communications Commission (FCC) plans to ease requirements for television broadcasters to air children’s educational programming.
In 1996, federal regulators ordered TV broadcasters to air an average of three hours of content weekly, aimed at educating children between 7 a.m. and 10 p.m. regularly. CBS, Fox, and NBC lobbied for changes to this two-decade-old rule and requested some flexibility.
Under the new proposal, children’s programming could be shown an hour earlier at 6 a.m., and one-third of the programming can appear on secondary digital channels. Opponents say that this would hurt low-income households across the country because access remains an issue for these families. The vote is scheduled for July 10.
The real discussion being omitted in this issue is government intervention. Why should the state be in the business of what is and isn’t aired on cable television? If NBC wanted to broadcast nothing but Seinfeld episodes all day long, then why is that the business of the FCC? If the Fox News Channel desired to dedicate its 24-hour programming to monitoring Rep. Alexandria Ocasio Cortez (D-NY) developments, then it is a private company and it can adopt this strategy. If a kid-dedicated broadcaster only showcased all episodes of Recess or Max and Ruby, then that it is its prerogative.
If consumers didn’t like what these channels were presenting, then they would search elsewhere. Eventually, a business would see a demand for genuine educational programming, then invest in such an enterprise. If It were successful enough, other brands would create competing shows that teach kids arithmetic, the alphabet, and the laws of diminishing marginal utility or Carl Menger’s Principle of Economics: The Theory of Exchange, as read by Snagglepuss.
The FCC has ditched the disastrous Net Neutrality. So, why not get rid of television intervention?
Nuts and Bolts About Food
To say that farmers endure quite a bit would be an understatement. Agricultural diseases, currency patterns, natural disasters, poor crops, and trade wars; these developments can destroy businesses and hurt families. Consumer prices are also affected by these events, sending produce at the supermarket higher or lower depending on what is happening in Mississippi or Mexico.
Could indoor farming solve a lot of the world’s food and farming woes? In Silicon Valley, robots are beginning to tend crops inside a warehouse operated by Plenty. This company aims to deliver fresh greens any time of the year, and robotic farm workers can optimize growing conditions to ensure the freshest and most delicious vegetables. The way it achieves this is truly a remarkable example of human innovation and the power of technology.
In a corner of the warehouse, robots are packing trays with soils and seeds to transfer to another room for germination. Somewhere else, robots are planting seeds and autonomous equipment is adjusting the software to get the perfect light, water, and temperature for these plants. In another area of the building, a yellow robot picks a leafy green and places it on a conveyor belt, where a spinning wheel proceeds to trim these greens to harvest them.
Today, a small percentage of Americans consume the fruits and vegetables recommended each day. Plenty believes it is possible to increase this number by offering high-quality produce in the middle of winter in Wisconsin rather than relying on inventories from California that spent a week inside of a truck that eventually wilt and lose flavor. Plenty isn’t the first company to test indoor growing. Other businesses are not only partaking in indoor farming, but they are also trying out other crops, too, like strawberries and tomatoes.
Luddites will inevitably and irrationally fear that it could replace millions of farmers worldwide. But this concern is unfounded. What will likely take place is that indoor planting will complement outdoor farming, since many crops are better suited for outdoor environments, no matter how controlled interior conditions may be. And, this could be great for farmers to expand their operations and no longer rely on one or two crops to survive. This is good for the global food supply because it is always preferable to have more food at a cheaper cost, even if it is wasted and chucked in the garbage.
I’m Walkin’ Here
Stay calm and let the market do its thing. That should be the message on one of those popular t-shirts hip kids wear that emulate the motto in the U.K. during the Great War. Worried about insufficient food inventories? The market will solve it. Do you think children’s minds will be poisoned by television content? Let the market sort it out. Think the U.S. is no longer a steel king? Technology has allowed America to sit comfortably in the top five of global producing countries. The government only gets in the free market’s way, so to quote Dustin Hoffman in Midnight Cowboy, “I’m walkin’ here!”
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