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.
It certainly directly applies to you. Can you see consequences beyond next week?
Do you favor a $15 or $20 minimum wage? for fast food chains or other business? If not, why? I really don’t know what your answer might be. But I suspect you’d say no. I suspect you’d say, it’s not the government’s job to choose the hourly cost of labor. Possibly, if you think it through, you’ll see how economic nationalism is as bogus as liberal voodoo economics for hourly wages. Government proscriptions on wages and such have nothing to do with supply or demand. It has nothing to do with markets. And economic nationalism to push back against globalis is a propaganda tool for empowering the state, bureaucrats and lobbyists.
I agree. Trump is right on the money when it comes to the economy. He wants to cut red tape and cut taxes. I think cutting red tape and thereby increasing productivity would do much more for the economy and job creation than tax cuts. Although I’d like a helping of both, please :)
What a maroon
Tariffs are to us industry as immigration enforcement and
Deportation are to us citizens
Fortifying and necessary
Look at the tariffs other countries place on our
stuff like us cars in the ungrateful South Korea
that should by rights like other nations we
liberated be a freaking wholly owned subsidiary
subsidiary
Why of course I don’t favor a minimum wage like that, or even wish there could be one at all.
I do favor whatever measures are intended to stop the burn of the country’s static treasure.
America tolerated that while it envisioned a pax Americana. It would expend its own treasure in order to keep the world peaceful, especially when it had militant military rivals.
This is an obsolete model now.
Certainly we get more red tape than 3M could manufacture... to mix a metaphor. And people have to be PAID for that red tape.
your anti business drivel will take us down that path
What a reality-inverting lie you utter.
“Static treasure?” Auto correct or did you mean something else.
Let marketing be free INSIDE, INSIDE, INSIDE the USA.
The tantrum kiddies can not play outside the playpen. Sorry!
But when you export your static treasure (each dollar is a share in that static treasure) for things you are going to be throwing away, you get just what you deserve.
Static treasure. The resources which cannot renew (by the way, there is excellent reason to believe that petroleum undergoes abiogenesis, but I digress)
Oh, like the inelastic supply of oil. Do you want government to prop oil prices to save jobs in the USA?
Except when oil IS elastic, of course. So throw away that irrelevancy.
However one thing that is not elastic is real estate. We’re shipping enough money to China for it to buy California, so to speak. Maybe it SHOULD buy California. It would then impose its nationalistic rules on California, which would do better.
But remember again, being such a libre hombre means you are also libre to commit harakiri. You can! But don’t expect kudos when you do.
“... But then you can’t complain about the environment ...”
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You are right.
Our environment (and labor, safety, etc.) will be great as long as
everything on the store shelves is made in India, China, Mexico, etc.
...and our petroleum comes from Canada, Mexico, and Saudi Arabia, etc.
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My point was that nothing is free, everything has a cost...
but I guess it went over your head.
Someone should outsource James Pethokoukis’s job. Outsourcing is the hollowing out of the American economy for larger corporate profits.
It’ll be an awesome museum piece, as it overgrows with wilderness. Congratulations to the American Indians: you won. The White Devil committed suicide.
Larger corporate profits, for which a bloated government gets vigorish in. Ain’t that wonderful. Till it Venezuelas itself.
Nonsense and bafflegab! Do the employees contribute anything to Indiana’s tax revenue? Do the unemployed?
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