AHC: Carter saves the U.S. Steel Industry

Discussion in 'Alternate History Discussion: After 1900' started by History Learner, Aug 1, 2019.

  1. History Learner Well-Known Member

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    Recently while reading some old articles on the American steel industry, I came across this rather interesting tidbit:

    Source

    So, what would be needed to back the publicly funded modernization plan for the steel industry at the least as well as the financing for the Youngstown plant too? If both are done, in particular the modernization plan since that has industry wide implications, would it be enough to prevent the American decline in that sector?
     
  2. Johnrankins Well-Known Member

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    It might have helped a little but not that much in the long run. The main problems were twofold and were related to the fact it was not 1952 anymore 1) The various European and Japanese economies were no longer recovering from being bombed to hell and back, they were already recovered. For a long time US industries were artificially strong because its competitors were either rubble or still recovering from being rubble just a short time before. 2) Material substitutions which were basically replacing steel with modern plastic.

    The two things that might have helped somewhat is changes in the tax code and high tariffs against countries that had high steel subsidies. The US government should have raised the tariff on steel to double the extent it was subsidized by said country. If a country subsidized steel production by 20% slap a 40% tariff on it. This would have greatly discouraged foreign subsidies. I don't think it would have eliminated it but it would have mitigated it. Even with this, I think steelworkers probably would have still had to take a pretty steep pay cut. Germany and Japan were no longer a mess.
     
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  3. History Learner Well-Known Member

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    Carter and Reagan both tried measures, such as minimum pricing and quotas, which failed. Having done some more research, it definitely seems like the proposed modernization plan was the way forward:
     
  4. interpoltomo please don't do coke in the bathroom

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    Too late imo. Someone on SHWI once mused about truman breaking up us steel in the late 40s.
     
  5. Mad Bad Rabbit Well-Known Member

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    Nationalize them and put Deming in charge?
     
  6. History Learner Well-Known Member

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    In terms of staying globally dominant, yeah 1978/1979 was too late; the question here is more a matter of preventing such a steep decline with associated loss of jobs that we saw IOTL.

    Truman tried that in 1951 during Korea and it got shot down by the Courts; add the contemporary issues in Britain as an example and I don't see it as likely. Carter did IOTL do a bailout of sorts for Chrysler in 1979, so doing a public financing of some form for a modernization plan seems possible.
     
  7. GeographyDude Well-Known Member

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    Yes, but it would have avoided the smell of betrayal in the air.

    And that in itself would have made a huge difference.
     
  8. Johnrankins Well-Known Member

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    Public financing would also be far less politically problematical than out and out nationalization. A large portion of the US public really hates that idea. There is a reason the government sold off its GM stock fairly quickly.
     
  9. Laxault2020 Like making new friends

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    Better leadership of steel companies that invests in more modern technologies, strategies, and techniques to gain comparative advantage would help. In addition, more domestic and regional (Latin America & Carribean) demand would make US steel mroe cost-competitive with lower shipping costs.

    Essentially, have US Steel be better at its job.

    Don't know how Carter would help with this, but this would have the most direct positive impact.
     
  10. Barry Bull Donor

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    However, modernisation would likely reduce the need of manpower, reducing the job creation effect.
     
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  11. Laxault2020 Like making new friends

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    True, but better to have some jobs rather than all of them shipped away, I guess.
     
  12. GeographyDude Well-Known Member

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    To me, that’s the slow-motion crisis of automation.
     
  13. Mad Bad Rabbit Well-Known Member

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    If high-quality steel becomes cheaper and more abundant, won't that generate more jobs in the industries that consume it?
     
  14. GeographyDude Well-Known Member

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    This is about Youngstown, Ohio, in the late 1970s. And as this points out, you have to both buy and modernize, and you can’t do it on the cheap.

    But Wow, a community coalition which includes religious leaders, it would be exotic to say the least! :)
     
    Last edited: Aug 7, 2019
  15. GeographyDude Well-Known Member

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    The smell of betrayal in the air.

    And/or being abandoned, which if anything is even worse! It's one thing being stabbed in the back, but in some ways that's preferable to being on the receiving end of a person you thought you could count on and finding out that they just don't particularly give a shit one way or the other. These are our elected officials, and they're not finding a way to be there. At best, they're choosing ideology in rather clunky fashion, instead of the real, live human beings right before them.
     
    Last edited: Aug 7, 2019
  16. Johnrankins Well-Known Member

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    Was there anything realistic they could do except kick the can down the road for a few years? Also if you bail out the steel industry every industry will want you to bail them out when they have hard times. Even the US can't bail out every industry that makes stupid mistakes or an industry that is no longer needed. It was probably too late to save the steel industry by the 1970s. More likely than not the government would have poured in money, it would have gone broke a few years later anyway and all you wind up with is more government debt.
     
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  17. The Gunslinger NQLA agent

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    They needed over $200 million to buy and refurb the mills, that wasn't exactly chump change in those days.
     
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  18. Pesterfield Well-Known Member

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    My Republican father was all for the government keeping the GM stock.

    Maybe emphasize that the American people own the steel industry now, and give every citizen some dividend returning stock to make their ownership a direct benefit and something they can relate to.
     
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  19. Johnrankins Well-Known Member

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    The "Government Motors" moniker hurt by all polls taken. Like I said there is a reason why it was dumped.

    The other problem with the US government nationalizing the steel industry is that it now owns it. I have little doubt it would add 5 layers of bureaucracy, pad the rolls enormously, drive down efficiency and have its subsidies go up every year. The only way that the US public is getting a dividend out of it is if it comes out of the General Treasury.
     
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  20. GeographyDude Well-Known Member

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    Not chump change at all! And from the above, the $200 plus million is just for one mill (although hopefully, a pretty big mill!)

    Well, you do what you can. The federal government provided loan guarantees for Lockheed in the early '70s, for Chrysler in the late '70s, and steel's pretty important. Not to overplay the card, but it is involved with national security and we should be matter-of-fact about that.
     
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