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.
You may feel that way but in every state I know of we the people have collectively agreed that the state should provide certain services and that we will pay for those services via taxes.
Where isn't that the case?
This is NOT about how I 'feel'. Not everyone who votes for a local tax, or a tax raiser will pay said taxes raised. There is a 'collective' mentality that taxation is the remedy to punish those that earn a dollar. I am pure 'tea party' mentality. NO taxation/mandates or regulation without representation. As a property owner within this county, I have NO say over what bilge gets taught as the local school district. But the county will take my property IF I do NOT pay their assessed taxation.
The 'collective' government has by design picked which businesses they will bail out and we the people be damn. Carrier is small pocket change, and that 7 million, you keep itching out that unfairly got graced upon the 'employees' of Carrier, is not even a measurable amount in the grand scheme of the national hurt. I take Carrier as symbolic national 'stand' that 'we the people' have had our fill of big daddy government's redistribution of this nation's wealth.
You vote in your state and local elections? If so, you have representation. If not, I can't help you.
I have NO say over what bilge gets taught as the local school district.
Your local school board isn't elected? Really?
The 'collective' government has by design picked which businesses they will bail out and we the people be damn.
Right, and this week it was Carrier.
No offense, but it sounds like you're confusing being outvoted with lack of representation.
At least you are aware you are offensive. My former liberal congressman did NOT represent 'tax' payers. He saw tax payers as his cash cow. The majority of his voters followed his 'collective' mentality.
You misunderstood my point.
The passionate Trump supporters at Free Republic believe that well paid manufacturing jobs will return to the USA if we cancel free trade treaties and put political pressure on USA corporations.
That is not going to happen.
Just like in USA agriculture, the USA manufacturing work force will continue to shrink because of improved technology.
The number of USA manufacturing jobs actually declined slightly over the last 24 months.
But, during the same period, USA industrial production actually increased by 2%.
Okay. Education... Not paid for by corporate taxes, but very much paid for by property taxes, paid by those Carrier employees who now still have jobs. How about we talk about all the state provided “services” you didn’t mention.... The waste, the unearned benefits payments, the fat state pensions... The point being, there’s more tax revenue now than if the plant moved to Mexico, not to mention the earned income returned to the community.
I agree.There's also less than before the deal was done.
My only point in this whole thing is that the state is cutting revenue and not cutting expenses, which means the taxpayers are picking up the difference.
It's up to the good people of Indiana to decide if this is a good use of their money, and if I lived there I may well think it is, but let's not pretend it's without cost.
I can agree,except that continuing the status quo wasn’t on the menu. I also admit that I personally get
miffed whenever someone presents a cops and firemen first argument when the discussion of tax cuts comes up. My personal baggage, YMMV.
How so? I basically agree with you.
I was simply pointing out that what's happening to manufacturing is similar to what happened to agriculture — more output, fewer workers, much improved productivity. Because of technology.
Of course, in manufacturing, the effect of foreign competition is more pronounced. But competition is competition, whether from inside our border or from outside. We'd better get used to it.
The passionate Trump supporters at Free Republic believe that well paid manufacturing jobs will return to the USA if we cancel free trade treaties and put political pressure on USA corporations.
That is not going to happen.
No. And trade wars are very dangerous, as we saw with Hoover.
what did I tell you?
You just proved it again
washington was a farmer and not relevant to current world trade
I thought your “clod hopper” remark was directed at me, and that you mistakenly thought I was anti-technology.
I am passionately pro-technology.
However, I also think one of the unanticipated consequences of better and better technology is that there will be less and less international trade.
I think technology will eventually equalize production costs everywhere in the world.
Perhaps there will be a few outliers, such as costs for scarce raw materials or energy, but only a few.
But most of the time, factories will be located as close as possible to customers to minimize shipping costs.
Ah, when you purvey childish taunts, you cease claim on the adult. Let the adults in the room now carry on.
“That is not going to happen.”
2% is anemic, historically, considering the growth in population size (due in part to illegales, actually).
We adults are willing to let upcoming history tell the story.
Come back in a year or so.
There were also “unbails” — orphans left in the cold by the burden of the nannies, leaving the nanny “bails” to save the others.
Carrier didn’t stick around just because of the state offer, in fact it was saying it was going to Mexico IN SPITE of it.
Donald didn’t negotiate the state offer to be one penny bigger. Donald DID provide credibility that the ghastly list of nanny burdens would go bye-bye if he had anything at all to say about it.
Can’t you see, in essence, that Indiana was heroically attempting to undo the Federal nanny damage, but they could only do it with their own bails.
Donald is coming around and saying he’s going to roll back the Federal nanny damage, and people believe or at least have strong hope in him, because they know he is a businessman and they have watched him mean business.
There’s a lot that “the state” (notably including the Fedguv, so let’s not exclude the elephant in the room from our view by means of quibbles) does that the people really didn’t so much agree to as acquiesce in, under the drubbing of the illiberal liberals.
We have climate change now; political climate change. The hot air emitted by the lefties has brought on a greenhouse punishing its source, so to speak. “Put a brake on the leftiness” but in the form of “Make America Great Again.”
... and a lot of that was the crypto-welfare program of government sinecures.
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