Posted on 12/05/2016 7:18:50 AM PST by reaganaut1
No one ever doubted Donald Trump’s talent for theater, a gift he is exercising with some flair in the matter of the Carrier air-conditioner company’s facilities in Indiana.
Carrier had planned to move a furnace operation to Mexico and to shutter a plant in Huntington, Ind., where it manufactures electronic controls. After the intervention of President-elect Trump and Governor Mike Pence, Carrier has agreed to keep the furnace operation going in Indiana, albeit with several hundred fewer employees. It still will close the electronics plant and offshore those 700 or so jobs. It will move about 600 jobs from the furnace facility to Mexico as well, though it will keep 800 of them in Indiana. It has also promised to keep 300 research-and-development positions in Indiana — jobs it had never planned to relocate in the first place.
There are two aspects of this to consider: The first is a question of principle, the second is a question of competency.
We are not very enthusiastic about government-run economic-development programs that rely on industry-specific — or firm-specific — tax breaks, grants, or other concessions. In the long run (and generally in the short run, too), these programs are almost always corrupt in themselves and a source of corruption in others, with the benefits going mainly to politically influential and well-connected companies, whether that means Solyndra during the Obama administration or Carrier in the Trump administration. Inevitably, what happens is this: The government creates a set of incentives to encourage certain kinds of business activity, from “green” energy to manufacturing, and then, after a few years pass, complains mightily that companies are responding to the incentives that the government created.
(Excerpt) Read more at nationalreview.com ...
It is utterly amusing to me to see supposed “Libertarians” and self styled “True Conservatives” busy mouthing the Marxist economic dogma that all economic output is property of the State and any time the state takes less it is a “Government subsidy”.
That is the base for this absurd “crony capitalism” argument. This dogma that any reduction in government taxation MUST be “paid for” by increased taxation on others is utterly absurd nonsense completely at odds with our system of Government.
No you foolish children. In our system, the State is granted revenues by the people as a collective good. It is their property granted TO the Government not vice versa. It is up to the voters in IN to render the judgment on their Representatives at the voting booth if this was a wise move or a foolish move for the collective to reduce tax burdens on Carrier in exchange for the collective good of keeping the 1100 jobs.
The other glaring error in this absurd argument is the assumption that the economy is a zero sum game. Thus a reduction here means an addition in taxes there. NO children it does not.
The Five on Fox ran the numbers. By keeping the 1100 jobs the State gets a net gain of $2.5 million in taxes from the 1100 jobs maintained. In addition, the State does NOT have to pay out mandated retraining, unemployment and welfare costs of having 1100 productive highly paid workers taken out of the the work force. The economy is a dynamic force not static as you try to make it be in your “Crony Capitalism” argument.
The final lesson here is, again, we see the reason the “Movement Conservatives” have been the least effective political force in US History.
Letting people keep their OWN money rather then taxing it way from them is GOOD. It is the heart of Conservatism.
We are not going to undo 100 years of creeping socialism by stamping out feet and holding our breath demanding ideologically perfect political dogmas. Yet here we go again with the usual “Movement Conservatives” trying desperately to spin a win as a defeat because it does NOT fit their ivory tower dogmatically pure political fantasies.
That mindset is EXACTLY why “Movement Conservatives” have been the most political ineffective group in US History. They all are so busy whining about everything not being dogmatically ideologically perfect they have accomplished nothing politically since 1980.
Rather the cling to these day dreams of some mythical perfectly ideologically pure fantasy land, it time Movement Conservatives learn to live in the REAL world of poltical incrementalism rather then their ideologically pristine ineffective bubble world.
Quit lying to yourselves and admit you know NOTHING at all about economics, business or trade and, instead, are merely still nursing your butt hurt that Cruz lost to Trump
Imagine being a competitor of Carrier (such as Trane) and seeing the President Elect do an infomerical for free at Carrier.
I wonder how much President Elect Trump would have cost to do a similar infomerical in ‘14?
Trump is proposing to do just that, but until such happens, this is a net positive.
Two entirely different scenarios. Not comparable at all.
No comparison and you know it.
Again...the Indiana tax break was from before the deal. Trump made the deal by cutting regulations that were killing the company
Curious if any “Movement Conservative” can comprehend the difference between cutting someone future taxes (i.e. Carrier) and taking money out of the Federal Treasury to make grants and loads to a crony (i.e. GM or Solyndra)?
But of course, this isn’t about fact and principals at NRO. It is still about #Never Trumpers clinging to their butt hurt that Cruz lost to Trump in the Primary.
at least you stayed away from “corporate welfare”.
They really need those H1B’s
Curious if any of you “Movement Conservative” can comprehend the difference between cutting someone future taxes (i.e. Carrier) and taking money out of the Federal Treasury to make grants and loads to a crony (i.e. GM or Solyndra)?
Thank you for your excellent post and explanation. Bingo!
It's just that he's not President yet.
They are still suffering terminal butt-hurt from Cruz’s demise.
Agreed!
The Indiana economic development organization that puts these tax breaks together said they'd been offering this deal to Carrier for several years, but Carrier had no interest in it. If this is the case, then clearly the Carrier decision was based on much more than just a $7 million tax break spread over ten years. In addition -- Trump isn't even in office yet, and even when he is in office he won't have the authority to offer a company $7 million in state tax incentives.
I say let's get all the details of the Carrier decision out on the table before we go through a silly exercise that may have no relevance to the issue at hand.
Da, Comrade! Collectivism, good! Free Enterprise, bad!
Collectivism is the heart of any civil society. We collectively agree on the laws we will live by. All civil societies are collectives of citizen’s interests.
Better go back to 1st grade and take basic reading comprehensive over again. You obvious failed it the 1st time. Either that are you a moron level IQ.
A simplistic view of crony capitalism is the exercise of government power in a manner not applied across the board in exchange for something that benefits those in government exercising said power.
I suppose the Carrier deal fits this simplistic view as it is solely directed to Carrier. What Trump gets in return is a win. (Hmmm, not seeing any government contracts being doled out or grant money, but I suppose there is definitional crony capitalism and the real stuff ala Solendra)).
Most of us agree that we have a tax code and regulations that choke businesses off and force them to move, never to return. State governments make deals to lessen those burdens in order to entice businesses to stay or move on in. They make them all the time.
The point of my rambling is that all crony capitalism isn’t equal. Providing relief from something that should never have been in place in a free market system just doesn’t seem like crony capitalism. Caveat, so long as your goal and intention is to provide every business with such relief.
All of these types of arguments are falsely combining the federal and state and attributing the state action to Trump.
On a federal level Trump offered future lower taxes, lower regulations and threatened an additional tax on goods coming into country. He did not offer the tax break on current taxes, Indiana did. He did precisely what he said he would do. He is not giving special tax breaks to Carrier.
Rolling forward even if Trump changes the laws, companies will still have to deal with state and local taxes. In that they compete with each other and other countries it will be probable that they will continue to offer some form of tax break to keep or attract business.
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