In the 1995 teen dramedy Empire Records, a posse of workers in Delaware schemes to keep its beloved music store independent after learning that ownership has an offer in hand from a “lame” corporate buyer. Harebrained hijinks ensue. In the end, store manager Joe saves the day, keeping Empire local.
Another Joe from Delaware—the one finishing up his final days in the White House—apparently sees himself in the same light, having stepped in to nix a $15 billion deal between U.S. Steel and Japan’s Nippon Steel. Like the corporate buyer in the movie, Nippon Steel came calling with terms U.S. Steel’s controlling interests couldn’t pass up. And, like the plucky independent music store, U.S. Steel has long inspired feelings of loyalty and identity in its communities, customers, and workers.
But President Biden is no hero in this story. Whereas the store manager devised a plan, feverishly raised capital, and made a bid of his own, the U.S. president has offered nothing that will make any party better off. He hasn’t even been forthright about his reasons for killing the deal.
Biden argued in his January 3 executive order that a Nippon Steel purchase would damage U.S. national security. Does he think Nippon Steel’s ownership of U.S. Steel assets would dissolve America’s defense-industry supply chains? Given that Japan itself is dependent upon the U.S. defense industry and armed forces, the implication doesn’t add up. But as the Brookings Institution’s David Wessel has pointed out, a national security claim is the only path by which the president could stop the sale legally. Wessel describes the president’s order as “a largely political decision,” and the two firms filed a legal challenge to that effect January 6.
Biden’s blocking of the steel deal is pure nostalgianomics. He yearns for the economy of the 1940s and 1950s, prioritizing not national security but his own conception of the national story. In the America of Biden’s memory, domestic workers mined the ore, rolled the steel, and fabricated the matériel that defeated fascism and faced down Communism. Yet this conception serves neither economic nor national security ends today.
Recognizing the mutual benefit that results when countries with shared interests and similar legal frameworks cooperate and trade freely, Treasury Secretary Janet Yellen championed partnership and commerce with allies throughout Biden’s presidency. That view seems to align with the conclusion at least some members of the Committee on Foreign Investment in the United States reached in the review they delivered to the president in late 2024. Though their review has been kept from public eyes, remarks this week from Yellen, the committee chair, hint that the president diverged from their recommendation.
Instead, Biden has opted for a superficial muscularity that will weaken U.S. Steel and worry its customers, including American auto and construction firms. In contrast to Empire Records’s feel-good camaraderie, President Biden doesn’t even have the workers on his side. While national union bosses might have been talking in his ear to stop the sale, the rank-and-file mostly wanted it to go through. Local union leaders at U.S. Steel’s Irvin plant said 95 percent of their members were in favor of the merger. Hundreds of workers even demonstrated outside Pennsylvania’s Mon Valley Works to demand such an outcome in December. In their minds, the purchase by the larger, more modern Nippon Steel would have put their jobs on solid footing. (The $5,000 bonuses Nippon Steel promised didn’t hurt, either.) Now, however, U.S. Steel is expected to phase down that plant, lacking the resources to make it profitable.
Though Biden has fancied himself the worker’s president, he has not adapted to the changing landscape of labor politics. As Dani Rodrik, a left-wing critic of the outgoing administration, has argued, “(b)y focusing on manufacturing, old-style union power and worker organizations, and geopolitical competition with China, [the Biden administration] paid too little attention to the changing structure of the economy and the nature of the new working class.” Nostalgianomics underperforms empirically and electorally—something that Donald Trump would be wise to consider as he prepares to enter the White House. As Manhattan Institute research director Judge Glock wrote in December, “it’s no surprise that blue-collar voters are looking elsewhere.”
The blocked sale is not only an economic loser but will also harm American national security interests in the long run. Though Biden is correct about steel’s importance, he fails to recognize how far behind U.S. Steel has fallen. In decline for the better part of a century, it now lags global standards in facilities and technology. Nippon Steel, by contrast, remains on the cutting edge. While U.S. Steel came in at 24th globally in output in 2023, Nippon Steel ranked fourth. Meantime, six Chinese firms ranked in the top ten, including the world’s top producer, Baowu. Depriving U.S. Steel of the much-needed shot-in-the-arm that Nippon Steel was ready to provide reduces American plants’ likelihood of advancing to the technological frontier and precludes the development of industrial economies of scale to rival China’s.
Biden’s interventionist economic mentality may prove most analogous to Empire Records in its failure to win public support. With its formulaic plot, the $10 million film made just $300,000 at the box office. In the waning days of his presidency, Joe Biden is faring no better, garnering an approval rating of just 36 percent.
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