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Steel is still strength, but do we make enough?

One of our friends and partners in the Bring Our Jobs Home effort found this story Op-Ed in the Philadelphia Inquirer

Sunday, October 5, 2014

Steel is still strength, but do we make enough?

By Robert W. Patterson,
Robert served in the administrations of President George W. Bush and Gov. Corbett

Steel is power. Any nation that expects to project strength and resolve must produce steel.

Throughout U.S. history, steel has been an irreplaceable underpinning of our economic and military might. It's why Abraham Lincoln insisted on building steel plants to supply the biggest infrastructure project of his time: the transcontinental railroad. Eschewing cheaper British imports, the 16th president insisted that the Union, even after winning the Civil War, would not prosper without a robust iron and steel industry.

During World War II, Franklin D. Roosevelt knew that becoming the Arsenal of Democracy would not happen without eliminating gaping steel shortages. As Arthur Herman documents in Freedom's Forge: How American Business Produced Victory in World War II, domestic steel output had hit a 20-year low in 1939, plummeting to less than half the 63 million tons forged in 1929.

"A nation at war," the historian noted, "was going to need at least 80 million tons." The country would meet the challenge; wartime production totaled 434 million tons.

America is in an eerily similar place today, as we face a generation-long conflict with Islamic jihadists - and Chinese and Russian rivals aggressively building their military-industrial complexes. Yet the nation, and Pennsylvania in particular, have suffered a Depression-like contraction of steel production. After peaking at 141 million tons in 1969, the nation's annual output has rarely hit 100 million since 1990; it was a puny 87 million in 2013, just 11 percent of China's 779 million tons. Globalists, environmentalists, financiers, and free traders welcome this emasculating deindustrialization. We have transcended industry, they claim. But to world powers, and especially our enemies, this retrenchment signals weakness.

In spite of the sector's wrenching consolidation in the face of global overcapacity, and the rise of innovative specialty companies and mini-mills like Nucor in place of the old vertically integrated giants like Bethlehem and U.S. Steel, domestic steel capacity nowhere near satisfies demand for U.S. transportation infrastructure - bridges, tunnels, and highway overpasses - or defense needs, from carriers and submarines to armored vehicles and other weaponry.

Instead, America lies vulnerable to foreign competitors that not only maintain national steel industries at our expense, but also dump subsidized products into U.S. markets. That steel often suffers quality. Faulty welds yielded massive construction delays and cost overruns on the 12-year replacement of the eastern span of San Francisco-Oakland Bay Bridge after California outsourced to a state-owned Chinese steel fabricator. More recently, New York City fell into the same trap with renovation of the Verrazano-Narrows Bridge, the country's longest suspension span.

This reliance on foreign-made, often-subsidized steel would make Lincoln and FDR roll over in their graves. Following Alexander Hamilton, these nation-builders understood that the founders risked their lives, fortunes, and sacred honor for not merely political but also economic independence. As Hamilton wrote in 1791: “Every nation ought to endeavor to possess within itself all the essentials of national supply,” lamenting that “the extreme embarrassments of the United States during the late War, from an incapacity of supplying themselves, are still a matter of keen recollection.”
The Keystone State is especially reeling from the failure of America's ruling class to value steel as a foundation of national strength. Half the state's steelworkers lost their middle-class livelihoods during the 1980s, and primary-metal manufacturing jobs were cut in half again between 1990 and 2010.

That's a staggering reversal of the previous century when Pennsylvania was the steel capital of the world, and U.S. and Bethlehem Steel became America's No. 1 and 2 producers. The latter's operations forged girders for the Ben Franklin, George Washington, and Golden Gate bridges. In 1943, its shipbuilding division was outfitting a warship a day.

Today that prime industrial property in Bethlehem hosts the Sands Casino Resort. How can a country that trades steel-making for a parasitic industry defend itself, much less call itself a superpower?

Indeed, Loren Thompson reports in Forbes that only one plant in the country, the old Lukens Steel Co. in Coatesville - ironically owned by ArcelorMittal, the European multinational that also holds the remaining Bethlehem Steel assets - had the capacity to produce the high-quality steel to build armored vehicles needed for the 2007 Iraq War surge. Even then, the Pentagon had to wait in line because the facility was at overcapacity.
This is no way to run Lincoln's railroad, much less maintain the Fortress of Freedom that conquered the Axis menace and consigned the Evil Empire to the ash heap of history.

To reverse course, both political parties must ensure that all defense and transportation-infrastructure projects employ only steel forged at home by American firms using U.S. workers - and that no subsidized steel enters U.S. markets.

Until America redevelops a backbone of steel, our cherished independence remains at risk.

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