Pro­tect Amer­ica from its pro­tec­tors

The Washington Post Sunday - - SUNDAY OPINION - GE­ORGE F. WILL georgewill@wash­

At their post-Civil War apogee, 19th-cen­tury Repub­li­cans were the party of ac­tivist gov­ern­ment, us­ing pro­tec­tion­ism to pick com­mer­cial win­ners and promis­ing won­drous ben­e­fits from gov­ern­ment’s deft in­ter­ven­tions in eco­nomic life. To­day, a Repub­li­can ad­min­is­tra­tion prom­ises that wisely wielded Wash­ing­ton power can re­ar­range com­mer­cial ac­tiv­i­ties in ways su­pe­rior to those pro­duced by pri­vate-sec­tor cal­cu­la­tions in free mar­ket trans­ac­tions.

Ac­cord­ing to the Fi­nan­cial Times, which in­ter­viewed him, Pe­ter Navarro, head of the pres­i­dent’s Na­tional Trade Coun­cil, in­di­cated an ad­min­is­tra­tion pri­or­ity is “un­wind­ing and repa­tri­at­ing the in­ter­na­tional sup­ply chains on which many U.S. multi­na­tional com­pa­nies rely.” This will make life in­ter­est­ing for, among many oth­ers, Amer­ica’s third and 24th largest cor­po­ra­tions, Ap­ple and Boe­ing, re­spec­tively.

The tiny print on the back of iPhones ac­cu­rately says it is “as­sem­bled,” not man­u­fac­tured, in China. The Amer­i­can En­ter­prise In­sti­tute’s James Pethok­oukis notes that parts come from South Korea, Ja­pan, Italy, Tai­wan, Ger­many and the United States. Com­po­nents of Boe­ing air­lin­ers’ wings come from Ja­pan, South Korea and Aus­tralia; hor­i­zon­tal sta­bi­liz­ers and cen­ter fuse­lages from Italy; cargo ac­cess doors from Swe­den; pas­sen­ger en­try doors from France; land­ing-gear doors from Canada; en­gines and land­ing gear from Bri­tain.

Navarro’s “un­wind­ing and repa­tri­at­ing” is, to say no more, part of an im­prob­a­ble project: making Amer­ica greater by making Ap­ple, Boe­ing and many other cor­po­ra­tions much less ef­fi­cient and less com­pet­i­tive. This will fur­ther slow eco­nomic growth, making even more unattain­able the 4 per­cent (more than dou­ble the econ­omy’s av­er­age growth this cen­tury) or higher growth that the ad­min­is­tra­tion says will en­able it to spend $1 tril­lion on in­fra­struc­ture (in­clud­ing a $15 bil­lion or so wall on the Mex­i­can bor­der, be­gun af­ter nearly a decade of net neg­a­tive im­mi­gra­tion from Mex­ico), while sub­stan­tially in­creas­ing mil­i­tary spend­ing, leav­ing en­ti­tle­ments un­re­formed and de­liv­er­ing enor­mous tax cuts. Cuts that, ac­cord­ing to the Com­mit­tee for a Re­spon­si­ble Fed­eral Bud­get (whose co-chairs in­clude Repub­li­can Mitch Daniels and Demo­crat Leon Panetta, both for­mer di­rec­tors of the Of­fice of Man­age­ment and Bud­get), will re­duce rev­enues by $5.8 tril­lion over 10 years. This, as the Con­gres­sional Bud­get Of­fice projects that even with­out any of the ad­min­is­tra­tion’s pro­posed spend­ing spree and tax cuts, un­der cur­rent law the na­tional debt would in­crease by $9.4 tril­lion.

Speak­ing of sup­ply chains: In her book “The Trav­els of a T-Shirt in the Global Econ­omy,” Ge­orge­town University’s Pi­etra Rivoli re­counts a con­ver­sa­tion with a man from Shang­hai who said that if she would come to China he would help her see var­i­ous places in­volved in pro­duc­ing the in­ex­pen­sive T-shirts ex­ported to the United States. She would see where the yarn is spun, the fab­ric is knit and the shirts are sewn. Asked if she could see where the cot­ton is grown, the man from China said he could not show her that be­cause the cot­ton prob­a­bly is grown in “Teksa.” Rivoli spun a globe around to China and asked him to point to Teksa. “He took the globe and spun it back around the other way,” Rivoli writes. “‘Here, I think it is grown here.’ I fol­lowed his fin­ger. Pa­trick was point­ing at Texas.”

To­day’s Repub­li­can ad­min­is­tra­tion prom­ises pro­tec­tion against the de­struc­tion of Amer­i­can jobs by the Chi­nese, Mex­i­cans and other for­eign­ers. The re­ally pro­lific de­stroy­ers are: Amer­i­cans. As Rea­son’s John Tamny says, Amer­i­cans stream­ing movies from Net­flix (based in Los Gatos, Calif.) erase Amer­i­can jobs in movie the­aters and DVD rental stores. Amer­i­cans buy­ing books from Seat­tle­based Ama­zon have caused many Amer­i­can book­stores to do what Bor­ders (399 stores, 11,000 em­ploy­ees) did: dis­ap­pear. (Jef­frey P. Be­zos, founder and chief ex­ec­u­tive of Ama­zon, owns The Post.) Amer­i­cans us­ing San Fran­cisco-based Uber are de­stroy­ing many taxi driv­ers’ jobs.

Ev­i­dently our pro­tec­tors in the ad­min­is­tra­tion must be­lieve this: The de­struc­tion of Amer­i­can jobs be­cause Amer­i­cans buy goods or ser­vices of some Amer­i­can com­pa­nies rather than those of other Amer­i­can com­pa­nies is be­nign. But the de­struc­tion of Amer­i­can jobs be­cause Amer­i­cans buy goods or ser­vices of for­eign com­pa­nies is in­tol­er­a­ble.

An ad­min­is­tra­tion con­fi­dent about con­duct­ing in­ter­ven­tions in the econ­omy should demon­strate care when bandy­ing numbers. But in de­fend­ing the sen­si­ble idea of re­duc­ing gov­ern­ment reg­u­la­tion of the fi­nan­cial sec­tor, Gary Cohn, di­rec­tor of the pres­i­dent’s Na­tional Eco­nomic Coun­cil, said this would save “lit­er­ally hun­dreds of bil­lions of dol­lars of reg­u­la­tory costs ev­ery year.” For­mer trea­sury sec­re­tary Lawrence Sum­mers notes the im­plau­si­bil­ity: “To­tal bank prof­its last year were about $170 bil­lion.” Dereg­u­la­tion will more than dou­ble prof­its?

As to­day’s Repub­li­cans cel­e­brate a pro­tec­tion­ist ad­min­is­tra­tion that is con­fi­dent that Wash­ing­ton’s su­pe­rior wis­dom can im­prove upon the mar­ket’s al­lo­ca­tion of eco­nomic re­sources, Democrats must re­sent Repub­li­can pla­gia­rism. Who will pro­tect Amer­i­cans from their pro­tec­tors?

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