December 2, 2016

Tired of Winning

Hmm, that would've a better category title than "Trump Agonistes."

I must weigh negatively on the Carrier "save." Hell, for $7million, I'll move "" to Indiana. But a lefty friend posted a link the other day saying "I'm waiting to hear my Republican friends decry this abuse of the free market." My response started with "You should get out more, bro..."

I'll let my pals and intellectual superiors at the WSJ Ed Page say it:

A giant flaw in President Obama's economic policy has been the politicized allocation of capital, from green energy to housing. Donald Trump suffers from a similar industrial-policy temptation, as we've seen this week with his arm-twisting of Carrier to change its decision to move a plant to Mexico from Indiana.

Carrier announced Wednesday that it will retain about 1,000 jobs in Indianapolis that would have moved to Mexico over the next three years, and on Thursday Mr. Trump held a rally at the plant and claimed political credit. The President-elect had made Carrier a piñata for his trade politics during the campaign, and post-election he lobbied Gregory Hayes, the CEO of United Technologies Corp. (UTC) that owns Carrier, to reconsider.

Everyone--even the Obama White House--is hailing the move as a great political victory, and in the short term it is for those Indianapolis workers, who make more than $20 an hour on average. But as U.S. auto workers have learned the hard way, real job security depends on the profitability of the business. Carrier wanted to move the production line to Mexico to stay competitive in the market for gas furnaces. If the extra costs of staying in Indianapolis erode that business, those workers will lose their jobs eventually in any case.

Trump has a much better play to #MAGA. His superb energy policy will keep energy costs down and make the US incredibly attractive for manufacturing. No cronyism necessary.

UPDATE: Tyler Cowen, interviewed on NPR

Trump Agonistes Posted by John Kranz at December 2, 2016 11:39 AM

Along with reduction of the corporate income tax. But those things must wait until the MAGA Administration is actually sworn in. The Carrier "deal" was actually sweetened by Indiana's governor, using Indiana policy provisions. Astute readers will recognize that Indiana's governor is the President Elect's Vice President Elect.

May we* please refrain from blaming the incoming president for bad policy until he is actually sworn in as president? There will be plenty of time and, surely, plenty to [rightly] criticize.

* The "royal" we, not implicating my favorite blog brother.

Posted by: johngalt at December 2, 2016 3:07 PM

I leap to my own defense on this one. Am I wrong that the President-Elect is taking something of a victory lap for this? His supporters -- excepting perhaps my favorite blog brother -- seem to be.

Posted by: jk at December 2, 2016 3:20 PM

No, you aren't wrong. It was a campaign promise, and because of the persuasive words of the "world's greatest dealmaker" it has been fulfilled, at least in part, at least at one factory. A factory that he made an example of in said campaign.

I call it "watered-down cronyism" because it uses targeted tax relief, rather than the 100 percent evil government subsidy. I have called it a "transitional act" elsewhere. It was an expedient way to satisfy his supporters, even if it doesn't please market purists. It's nothing that isn't done every day, in cities and towns across the country, in their misguided attempts to attract industry (and thus jobs and tax revenues.) Which doesn't excuse the president elect from criticism, but does leave open the possibility that it is the momentary exception to the pending administration's rule.

Pollyanna much? Yeah. Quite a bit.

Posted by: johngalt at December 2, 2016 6:58 PM | What do you think? [3]