Trump's Carrier Deal a Loser for America

This should come as no shock to anyone- Donald Trump is celebrating an achievement of his own creating today. He's been talking about a Carrier plant in Indiana that was going to ship jobs to Mexico for a while now, and he promised to intervene to save the jobs. He has done so, sort of, and now he's actually flown to Indiana to toot his own horn. Of course the compliant press is covering it as a win, too.

This deal is a loser for everybody though, particularly the American people. First off, it's crony-capitalism at it's worst. In exchange for Carrier keeping 1,000 jobs there, out of the 2,000 that were in danger, they are getting $7 million over the next ten years. Break that out, and it's $700 a job, per year, for the next decade. Is it breaking the bank? No, but it is taking revenue away from the state. United Technologies Corporation, the parent company of Carrier, certainly doesn't need $7 million in tax breaks. Go look up their revenue.

Second off, while we should all be happy for the people at that factory who get to keep their jobs, it's important to note that you would have to do a job deal like this every day for a couple of decades to match the kind of job savings you got from the much-maligned auto-bailout of 2009. You can't piece-meal your way through the micro-economy to stem manufacturing job losses. This is not an economic strategy for a nation the size of our's.

The third problem is the awful precedent this just set moving forward. Literally every manufacturer in America is looking at this and wondering if the simple threat of going to Mexico could land them a grab-bag of goodies from the Trump Administration, and the thing is, they are probably right. Trump has made this such a part of his political identity that he has to do it. Even more so though, he has to also lower taxes, as he promised that to his cronies. He has set up a dangerous system, where threats like this are rewarded. It's either extortion or bribery, you take your pick.

The fourth and maybe scariest thing is the way leverage was probably used in this deal. United Technologies Corporation is a major defense contractor. They simply couldn't afford to risk those contracts, and i'm sure the Transition team knew that. Welcome to the era of open thug government. That this factory happened to be in Indiana, where Vice-President-elect Mike Pence is still governor, probably made this even worse yet. Sure, LBJ did this, and frankly most of us support that he did. Donald Trump is no LBJ. Lord only knows what kind of sick, twisted threats he'll make.

Here's the last, and maybe most important part to remember amidst Trump's chest-pounding today- the workers aren't really winning either. Sure, 1,000 of them keep their jobs, for now. At least several hundred, if not an actual 1,000, will lose their jobs in the coming weeks. Those that keep their jobs will probably see some changes to their compensation in the coming months (since that's not being mentioned anywhere). Still others will see their jobs disappear in the future, either when the company finds a loophole to make more money without this deal, or when the deal runs out. Many will lose their jobs now. All will probably see changes to their compensation. None of them receive any real security.

Keep your eye on the prize here. Trump has laid bare his economic principles. Yes, he does want to keep manufacturing jobs here, which is good, but it's the tip of the iceberg. He wants to cut taxes, and cutting these types of deals and using compliant state legislatures is easy for him. He also believes wages are too high, and he'll probably cut them with this deal. You can't stop globalization just by hunting around for individual cases of job losses and trying to fix them, which is essentially what Trump's strategy is. He's setting a false narrative, where it's not about enforcing regulation on trade partners, and it's not about automation, because it's convenient for him. This is a loser for the rest of us.