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.
I’m tearing up. Nobody loves me.
Statism is the last refuge of failed capitalist.
so, how many companies have you ever run? Owned?
I know, I know......none
Would Carrier lower their prices if they moved to a lower cost labor market. Maybe. Or maybe they would just book it as higher profits. Then it would ultimately flow to the stockholders.
I'm just saying that preventing companies from moving to lower cost labor markets has positive and negative benefits to you and me, employees in both countries, the government and the owners of the companies. We think keeping jobs at home even if by arm twisting by the government is a good thing. I mostly agree but not completely.
What I would prefer would be for the Tax Code to be designed to incentivize corporations in the direction of staying home because it lowers their costs and ultimately their prices.
Oh, so then what is globalism?
It is a nation-stripping fail. It’s like locusts. It’s like grazing the grass bare with no replanting then flitting on from place to place till there’s no more grass and then the cattle die... karma!
Juxtapose this: the purpose of voting is to get politicians to reign in the excess of "Free Trade" and global labor arbitrage.
All's fair.
Idiots like you ruined the Republican Party.
What does that have to do with anything?
It used to be that golden American age companies weren’t trying to artificially peak THIS YEAR if they knew that would cripple their progress for decades since. Now they don’t care... a reckless government will print more and more money and basically impose a currency dilution tax on us.
The citizens of Indiana have decided that they want the state to provide certain services. Those services are of value to the citizens and the state's businesses.
They need to be paid for and the citizens accept that.
The state now wants Carrier to pay less but they haven't reduced the services they're providing. They're shifting the cost to all the other citizens.
You might have an argument if Carrier and their employees stopped using state services, but they aren't.
I think sensible and non sensible may agree with me. And though I am flattered that you’re concern about who are the types of folks who may agree with me, I believe agree-ers-with-me is off topic. Just sayin’ can we stick to the topic.
One factory closing is a tragedy. 70,000 closing is a statistic.
TOUCHE... you have proven that rednecks (good thang) are even in Virginia still. So I don’t have to revise my song....
Well you chewed on that fat.
The winner was already picked the minute the company accepted a government contract. It’s only natural to expect that your company has to adopt pro-American policy if you want to do business with America.
If you do business with Walmart but your CEO keeps going on TV talking about how Walmart sucks and should be closed down, do you expect to keep them as a customer?
But what if they are still generating something net for the state compared to if their former territory was but an empty field?
Ooh, good additional point...
Auto-bailouts and “clean energy” subsidies are PAYOUTS from the government to businesses. A tax break is not “crony capitalism.” It’s letting them keep the money they legitimately earned. Night and day difference from the government sending money to companies who may not have earned anything.
I’m just warming up. Free Traitors™ can KMA.
"When a people lose the courage to resist encroachment on their rights, then they can't be saved by an outside force. Our belief is that people always have the kind of government they want and that individuals must bear the risks of freedom, even to the extent of giving their lives." - A.E. van Vogt
It’s not an artificial concern. It’s like what I said, locusts, or overgrazing grass.
I guess companies could be free to suicide a country. But they got their reward of mere money, to parallel a bible principle. Asking for heaven for them is another story. And Trump was just one of the ways that those bent on such an existence have been told to go to hell. Let Mexico buy their stuff if they have to be in Mexico. But not us.
What globalism is or is not is not my forte. Economic nationalism in its extreme can lead to autarchy. That’s not working well for North Korea. Property rights where folks move their money in the international arena to maximize profits may seem unpatriotic to some. I understand. Automation and efficiency has minimized pushed out some of the jobs lost in manufacturing. And, to be sure, I don’t see Americans as weak, stupid, or unable to compete with other nations and needing the government to protect them. In fact, I’m pretty sure that’s the definition of a Democrat policy.
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