Do not read his lips, read his actions, which will incite protectionist clamors from other industries
(timber and textiles, for starters) and invite retaliation from penalized nations.

Bush's measures probably will neither force nor facilitate the restructuring the industry needs. Economically indefensible, these measures will destroy perhaps 10 jobs in the steel-consuming sector of American manufacturing for every steel-making job they save. Some manufacturers will move out of the country to avoid the tariffs.

Bush's measures are new taxes on American consumers - approaching $1 billion annually just on purchasers of cars and trucks - and are purely political measures. Think of them as an $8 billion contribution coerced from manufacturers and consumers of steel products, for the benefit of about six Republican congressional candidates in steel-producing districts, and for Bush's re-election campaign.

A week ago, Leo Gerard, head of the steelworkers union, spoke with more passion than hope as a bowl of uneaten raisin bran went soggy in front of him.

He said with asperity that European labor leaders were urging him to back a 20 percent tariff because it would have negligible effects on exports to the United States - European steel companies would absorb the cost.

But Gerard is pleased by Bush's plunge into industrial policy, so discount Gerard's prediction of a "meltdown" of America's steel industry absent a 40 percent tariff to push steel prices high enough to give companies access to affordable capital needed for modernization.

Gerard says government assumption of at least $10 billion of the companies' "legacy costs" - the costs of retirees' pensions and health care (there are 600,000 retirees and dependents, four times more than active steelworkers) - is a prerequisite for the necessary consolidation of steel companies.

Emboldened by Bush's conversion to economic interventionism, Congress may do what Bush did not do regarding legacy costs.
Gerard knows that "national security" is the incantation that currently trumps common sense in Washington debates, and he conjures a nightmare of U.S. dependence on a few foreign steel companies - an OPEC-like cartel - conspiring in Geneva hotels.

By next week, timber and textile interests will have honed their national security arguments for Bush-era protection.
Unfortunately, Bush's policy will delay needed restructuring of the steel industry.
Fortunately, it will fail to "save" the industry as it is.

Bush's economic advisers are too intelligent to believe what others in the administration say when, defending protection of steel, they adopt the time-worn protectionists' patois about "fair" trade on a "level playing field."

The economic advisers understand the fecundity of free trade, the logic of nations' comparative advantages, the inevitable escalation of inefficiencies under protectionism, the resilience of American industry when forced to accommodate market forces, and the catastrophic costs of any trade war.

So this policy reflects the triumph of the Bush political advisers who trumpet their admiration for President McKinley, that paragon of Republican protectionism - compassionate conservatism for government-addicted corporations.

Bush's steel policy is what results when intelligent people take up intellectual slumming - abandoning proven free-trade principles - for the pleasure of political opportunism.