Posted on 12/01/2016 1:04:51 PM PST by SeekAndFind
There's no doubt Team Trump is delighted by Carrier's decision to keep in Indiana roughly half of the 2,100 jobs that the maker of heating and air conditioning equipment had planned to shift to Mexico. As Steven Mnuchin, Trump's pick for treasury secretary, told CNBC yesterday, "This is a great first win without us even having to take the job."
Actually, it's their second win. Trump also lobbied/nudged/cajoled Ford into changing its mind about shifting a sport utility vehicle production line to Mexico from Kentucky, not that doing so actually would have cost American jobs. But Carrier, especially, had become a potent symbol of Trump's economic nationalism after video of Carrier's initial offshoring decision went viral. And in response to Carrier's reversal, Trump took a victory lap on Twitter: "Big day on Thursday for Indiana and the great workers of that wonderful state. We will keep our companies and jobs in the U.S. Thanks Carrier."
But how many Trump "wins" can the American economy afford? By themselves, the moves by Ford and Carrier are inconsequential — maybe even to Carrier's workers over the longer term. It's hardly an uncommon practice at the state level to offer incentives to lure corporate relocations or to keep firms from leaving. But the practice has mixed results. For instance, Dell closed a North Carolina plant in 2009 just five years after receiving millions in state tax incentives to open it. Production then moved to Mexico.
But more broadly, this is all terrible for a nation's economic vitality if businesses make decisions to please politicians rather than customers and shareholders. Yet America's private sector has just been sent a strong signal that playing ball with Trump might be part of what it now means to run an American company. Imagine business after business, year after year, making decisions based partly on pleasing the Trump White House. In addition, Trump's hectoring on trade and offshoring distracts from the economic reality that automation poses the critical challenge for the American workforce going forward.
To be fair, exactly why Carrier reversed course is still something of a mystery. Carrier says state "incentives" were an "important consideration," along with Trump's commitment to creating a more pro-business climate in the country. Those would be the carrots. Then there are potential sticks, which may have been far more critical than tax incentives or other potential subsidies. Carrier's parent company, United Technologies, is a large federal government contractor and perhaps views the potential costs of keeping those factory jobs — a small fraction of the company's 200,000 employee workforce — in America as the price of doing business with Trump's "America First" administration. Indeed, one Indiana official, Politico reports, thinks the deal was driven by concerns United Technologies "could lose a portion of its roughly $6.7 billion in federal contracts."
Of course it wasn't so long ago that Republicans were attacking the Obama White House for its "crony capitalism," including the auto bailouts and clean energy investments in firms like Solyndra. Republicans, on the other hand, were supposedly stalwarts for competitive capitalism and vehemently against government "picking winners and losers." Some even said they were "pro-market" rather than "pro-business."
Now, not so much. Which makes you wonder if either party is willing to strongly fight for free enterprise and market-driven economic policy anymore. In her 1998 book, The Future and Its Enemies, Virginia Postrel saw the major dividing line in American politics as less left vs. right than the "dynamists" vs. the "stasists." The former values change and experimentation, as messy as those things can be. Dynamists live in anticipation of the future because they just know it will be a great place. The stasists often are nostalgia-ridden and willing to use top-down control to keep things as they are or try to shape them into familiar forms. Today they fight globalization, tomorrow it might be robots and artificial intelligence in order to "save jobs."
This time, at least, score one for the stasists and the cronyists.
He is going to bring the corp tax for everyone down to 15%..congress has to pass it though. Trump couldn’t get a deal based on tax cuts, subsidies and tariffs that Congress has to approve
This is about what Trump and Pence can do without congress. Indiana offers the tax break, Trump can take out the regs at the executive level and has leverage because of the govt contracts
You are still missing it. You keep assuming your opinions are facts. As I demonstrated, they are erroneous opinions not based in anything factual.
Until you grasp that your intellectual construct here is based on erroneous assumptions and an imprinted political dogma at odds with fact, you are not worth of any response but scorn.
At this point you are simply acting out of ego rather then admit your error which is simply a waste of everyone time.
A perfect question from a tax and spend liberal.
For the most part states can't run deficits. If they have a revenue shortfall for any reason, including granting special tax breaks, they can cut services or collect more taxes.
Simple.
More broadly, United Technologies realized they were rolling the dice with their government contracts, including from other divisions. The Carrier decision was made to satisfy fiduciary responsibilities to their stockholders.
The state will give up tax benefits (via abatements), but....will MORE than make up for them with the YUGE economic benefit of the folks who’ve jobs have been saved....that will be buying new homes, remodeling, Christmas shopping, sending their kids to community colleges, etc, etc.
"Simply put, being permitted to keep your income is not the same as taking it from competitors.
This is certainly true, provided that you cease using the services that others, who are contributing their income, are paying for.
If you're using the services paid for by the taxpayers (e.g. public roads, employees educated in public schools, the court systems, etc) but not paying taxes, you're being subsidized.
Of course the subsidy may be for the public good, but people who tie themselves in knots trying to avoid using the "s" word are acting silly.
.
;-)
The problem with this argument is that the state is already getting the benefit of those people being employed.
The state will now get $7M less in revenue but no new jobs. Unless the state cuts services that is a $7M tax increase on the citizens.
It may well be that this is better than the alternative of letting the jobs leave, but it certainly isn't without cost.
These folks had been told back in March that there jobs were moving to Meheeco.
I don’t think I’m ranting. Was Adam Smith ranting in his book WEALTH OF NATIONS? Was Milton Freidman ranting in his book FREE TO CHOOSE?
Do you speak with anyone without insulting them? Are all different ideas expressed in rants by rabid people?
No, it isn’t.
Yours is a good point. And if CARRIER gets special treatment, then why not its competitors?
The Republican Party today is the dominant party, largely thanks to Obama’s manifest failures. How is it that you call another freeper an idiot and claim he ruined the party?
Don’t complicate this discussion with facts!
I’m not sure what this guy’s problem is. Offering them tax incentives and less burdensome regulations to stay is exactly the right thing to do.
Forget manufacturing.
Agriculture has crashed! In 1910, 31% of the labor force were farming (in 1790, it was 90%). Today, it's less than 1.5%. What are we to do about America's moribund agriculture industry?
Seriously, do you want to be a clod hopper? Or would you rather have an interesting job and be a consumer?
I think some people have stumbled unwittingly onto coporatism and decided that it’s a good idea, especially if it’s executed by people they admire.
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