Louisiana’s chief economic development officer, Don Pierson, was recently named to a national committee overseeing foreign investment in the United States.
Not a surprise, perhaps, for those watching the petrochemical industry in Louisiana: Pierson has worked to bring giant investments in plants along the Mississippi and Calcasieu river corridors, setting records in the administrations of Govs. Bobby Jindal and John Bel Edwards.
Unfortunately, Louisiana’s success has not been emulated across the United States, despite President Donald Trump’s desire to “bring home” manufacturing jobs from China.
From Wall Street to Washington, most independent analysts argue that there is little to show for deficit-raising tax cuts and new tariffs, not imposed at this level since the late 1920s, despite Commerce Secretary Wilbur Ross’ assertion that positive effects of steel and aluminum tariffs “can be measured on the factory floor.”
In fact, even here, despite the success of Louisiana’s petrochemical industry and its significant foreign investment, costs for construction are raised by steel and aluminum tariffs.
As with soybeans and other agricultural products, tariffs have hurt many Louisiana businesses and industries. Further, such government interventions in the economy — once criticized by Republicans — are creating a system where obscure officials in Ross’ department make or break businesses’ prospects.
The stock market has been in gyrations lately, leading pessimists to argue that the tariffs are destabilizing and perhaps recession-inducing. However, governments are driven more often by politics than policy: The president’s promised new round of tariffs on electronic devices and toys — toys! — are to be delayed so as not to hurt pre-Christmas imports.
Can there be a more transparent bankruptcy of an economic policy overridden by shallow political concerns? And it’s not as if the Chinese government can’t read the papers.
Louisiana’s success in foreign direct investment, to use the technical phrase, is in large part because of a generally welcoming attitude toward petrochemical manufacturing. It’s almost routine to hear of another billion-dollar-plus facility either being announced or appearing on the radar of Pierson’s department.
That is not the case elsewhere in the United States.
Typically, though, most folks may be more closely watching the stock markets. An 800-point fall in the stock indexes on Wednesday should have gotten everyone's attention.
The pessimists look at market disco-dancing in August and wonder if the disruptions inspired by tariffs might be the harbinger of an end to the party, as the August 2007 problems with mortgage loans presaged a terrible recession.
Let’s hope the Ides of August are more positive for the national economy.