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Hawley’s Folly

Summary:
. Josh Hawley is a man of system. In a guest essay in the October 29 New York Times titled “The Only Way to Solve Our Supply Chain Crisis Is to Rethink Trade,” US Senator Josh Hawley (R-Missouri) challenges what he sees as a dangerous reliance on imports from other countries. He claims that Washington politicians from both parties have “helped build a global economic system that prioritized the free flow of capital over the wages of American workers, and the free flow of goods over the resiliency of our nation’s supply chains.” He proposes that the Departments of Commerce and Defense be given the power to determine which goods and inputs are “critical for our national security and essential for the protection of our industrial base.” Once these goods and inputs are

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Hawley’s Folly

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Josh Hawley is a man of system.

In a guest essay in the October 29 New York Times titled “The Only Way to Solve Our Supply Chain Crisis Is to Rethink Trade,” US Senator Josh Hawley (R-Missouri) challenges what he sees as a dangerous reliance on imports from other countries. He claims that Washington politicians from both parties have “helped build a global economic system that prioritized the free flow of capital over the wages of American workers, and the free flow of goods over the resiliency of our nation’s supply chains.” He proposes that the Departments of Commerce and Defense be given the power to determine which goods and inputs are “critical for our national security and essential for the protection of our industrial base.” Once these goods and inputs are designated, Hawley would have the US government require that at least 50 percent of the value of the goods be made in the United States. He would have this requirement enforced by allowing domestic producers to petition the US International Trade Commission to take enforcement actions against violators.

Hawley claims that local-content requirements “will bring jobs back to America, help to revitalize the nation’s depleted manufacturing sector, and foster the domestic production so essential to our economic independence.”

Some of what he claims is true. His proposal, if implemented, would bring some jobs to America—and would cause America to lose other jobs. It would revitalize parts of our manufacturing sector—and would hurt other parts of manufacturing. It would foster domestic production of some goods but, ironically, this could actually make us less independent.

These are the opening paragraphs of David R. Henderson, “Hawley’s Folly,” Defining Ideas, November 4, 2021.

Note the quote from Adam Smith, The Theory of Moral Sentiments.

Read the whole thing.

David Henderson
David R. Henderson (born November 21, 1950) is a Canadian-born American economist and author who moved to the United States in 1972 and became a U.S. citizen in 1986, serving on President Ronald Reagan's Council of Economic Advisers from 1982 to 1984.[1] A research fellow at Stanford University's Hoover Institution[2] since 1990, he took a teaching position with the Naval Postgraduate School in Monterey, California in 1984, and is now a full professor of economics.[3]

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