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.
“Populist economics”? We must have that? What do you mean?
James, two companies:
1. Solyndra
2. Fisker Automotive
Now, shut up.
Read the article. Did I miss the author’s economic argument? All I see is hyperbole, anti-Trump rhetoric, and hand wringing.
I’ve heard rumors economics can be more optimistic if you can get a job.....?
This guy is a classic Free Traitor™.
“... Imagine business after business, year after year,
making decisions based partly on pleasing the Trump White House ...”
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Imagine the Trump White House, year after year, making decisions based partly on pleasing business after business.
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There, fixed it for you.
Well, that explains it. Let’s see if Larry Kudlow had James on this weekend. Pretty sure Kudlow will ask him “What’sa matter with you?”
“Cajoled”?
Did Trump write a book, “The Art Of The Cajole”?
If Obama even had an inkling to save jobs, he would have pulled another “Solandra”, and GIVEN Carrier $500,000,000.
Trump saved hundreds of jobs, for working Americans.
cost: 7 mil
investment: 16 mil
employees income taxes: unknown
contractors/subcontractors jobs saved: unknown
unemployment payouts saved: substantial
it’s only bad economics when you don’t quantify the benefits of those 1100 people working, and the effect upon society of the addition of their salaries to the economy versus the detriment of the unemployment from society.
Your mind is a garden, your thoughts are the seeds.
You can grow flowers, food or you can grow weeds!
Haven’t you planted a lifetime of weed seeds this past year?
What is the problem with the State of IN allowing Carrier to keep their more of their own profits, instead of taxing it away from them for the next 10 years, in order to keep the jobs here?
Face it. This is just more Never Trumper butthurt in action.
Author demonstrated he is a total moron with ZERO understanding of business.
Letting Carrier KEEP THEIR OWN MONEY, rather then have the State of IN tax it away from them is a VERY Conservative position.
Face it, this is just more of the usual #Never Trumper whining butt hurt.
I would say to this gentlemen that “market driven economics” are “good” until they get out of “balance”............................kinda sort of like my first wife! The marriage started off good and then got out of balance.
I just object to “market driven economics” being solely determinative as too often “MDE” means the big guys get richer and the little guy gets fired and sent to “retraining”
aka “welfare” while his family agonizes.
The Republican is returning to its protectionist roots.
1924 Repub platform
We reaffirm our belief in the protective tariff to extend needed protection to our productive industries. We believe in protection as a national policy, with due and equal regard to all sections and to all classes. It is only by adherence to such a policy that the well being of the consumers can be safeguarded that there can be assured to American agriculture, to American labor and to American manufacturers a return to perpetrate American standards of life. A protective tariff is designed to support the high American economic level of life for the average family and to prevent a lowering to the levels of economic life prevailing in other lands.
In the history of the nation the protective tariff system has ever justified itself by restoring confidence, promoting industrial activity and employment, enormously increasing our purchasing power and bringing increased prosperity to all our people.
The tariff protection to our industry works for increased consumption of domestic agricultural products by an employed population instead of one unable to purchase the necessities of life. Without the strict maintenance of the tariff principle our farmers will need always to compete with cheap lands and cheap labor abroad and with lower standards of living.
The enormous value of the protective principle has once more been demonstrated by the emergency tariff act of 1921 and the tariff act of 1922.
We assert our belief in the elastic provision adopted by congress in the tariff act of 1922 providing for a method of readjusting the tariff rates and the classifications in order to meet changing economic conditions when such changed conditions are brought to the attention of the president by complaint or application.
We believe that the power to increase or decrease any rate of duty provided in the tariff furnishes a safeguard on the one hand against excessive taxes and on the other hand against too high customs charges.
The wise provisions of this section of the tariff act afford ample opportunity for tariff duties to be adjusted after a hearing in order that they may cover the actual differences in the cost of production in the United States and the principal competing countries of the world.
We also believe that the application of this provision of the tariff act will contribute to business stability by making unnecessary general disturbances which are usually incident to general tariff revisions.
I would LOVE to see the day when publications like The Week and others where Pethokoukis and his ilk work (like the WSJ, Nat. Review) decide to fire these numbskull writers and pundits and give all the paid assignments for writing & punditry to third worlders from South America and Asia.
They sure as hell aren’t as valuable to the country as a steelworker or a CNC operator. In fact, they are more like leeches on the economy.
The author is right on a lot of these points, but I suspect that Carrier’s decision involved a lot more than just a state tax incentive. Time will tell, but I truly believe that the biggest impact of Trump’s election is a general recognition by these companies that a real adult is going to be in charge soon.
what if also part of the deal was to lift restrictions / remove regulations and have a dept of commerce that might help them expand contracts to overseas? what say you then?
People are less likely to want to work if they believe it useless.
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