Cedric Chang wrote:

>> So a situation arises: Steel becomes vastly cheaper overseas (reasons
>> are complex, but let's ignore that for now).  Now we have a choice - we
>> can either allow tens of thousands of American workers lose their jobs,
>> allow hundreds of millions of dollars leave America to be sown into
>> another country's economy, and allow all the side effects to occur
>> (trickle down, trickle up, etc.).  These are sectors that if hit hard
>> enough will significantly shake the economy.
> 
> Cheaper steel helps the economy ( See Caplan book )  Workers lose jobs
> and other citizens benefit.  An improving economy requires workers to
> upgrade their skills.  Money is not lost to other countries.  

The problem may be that after a few years, when there's no relevant steel
production anymore, the other country could raise the price substantially,
or -- for strategic reasons -- may not sell at all anymore. It is usually
much quicker to shut down production (could be immediately) than to take it
up again (may take a decade).

Similar thoughts go for food supply. It's a tricky thing.

Gerhard

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