Gary Hufbauer and Erika Wada ["Steel: Look Who'll Hit the Jackpot," op-ed, June 22] miss the point about why the U.S. steel industry is in trouble and what should be done to help it. The steel crisis results from the glut in the global steel market because of slow growth or recessions in large parts of the world as well as from chronic excess capacity abroad (much of it maintained by government subsidies and dumping) that have artificially depressed steel prices.

What is at risk in the present situation are not just the 1,700 jobs calculated by Mr. Hufbauer and Ms. Wada, but the U.S. steel industry. Since the late 1980s, steel producers have invested massively in efficiency-enhancing equipment and technology, leading to steady growth in productivity in both minimills and integrated firms, contrary to what these authors assert. But this investment will go to waste if steel firms cannot make a decent rate of return on their investments.

If steel firms go bankrupt and plants are shut down, many more jobs will be lost in steel firms, steel suppliers and affected communities than those calculated in the authors' economic model, which counts only steel jobs lost directly as a result of imports. Typical unemployed steel workers lose more than 30 percent of their weekly compensation even if they find jobs elsewhere. When all these considerations are factored in, the cost-benefit analysis of saving the U.S. steel industry looks quite different from the way Mr. Hufbauer and Ms. Wada's study makes it appear.

This does not mean that the recently defeated quota bill would have been an ideal solution. But U.S. steel firms and their workers should not bear the brunt of failed policies in the global financial system, and letting the U.S. steel industry die -- as Hufbauer and Wada implicitly advocate -- would not be in the long-term interest of the U.S. economy as a whole.