As of now, I am in control here, in the White House

The Dark Side of the Carrier Jobs

So Donald Trump was able to “convince” Carrier to keep 1,000 of the jobs it planned to send to Mexico in the United States. It’s good that these people will be able to stay employed.

But let’s be clear about what this also was: Bribery and extortion.

I get the new populism, and its goal of helping those in the middle class who are plunging into joblessness, hopelessness, and in some cases, drug addiction. I’ve had to rethink my past support of free trade, wondering to what extent it was simply a mechanism for big business to cut its costs by gaining access to cheap labor overseas and reducing the price of imports it wants to sell here or use to construct finished products.

There never was free trade anyway: trade agreements come with all sorts of caveats. The question is whether we give away too much in these deals, and that’s something Trump legitimately wants to address.

Make no mistake, Trump is going to negotiate free trade deals. He’ll just make them better for the United States.

What I don’t support is the government bullying private companies and deciding what is best for their businesses. That is a recipe for disaster. The government, in its stupidity, will end up putting companies out of business and costing jobs.

In the early 1980s, Japan, with its Ministry of this and Ministry of that guiding industrial policy, was billed as the future of capitalism. Well, Japan’s economy has been in the toilet since about the early 1990s.

As the Wall Street Journal puts it, Trump made the CEO of Carrier’s parent company “an offer he couldn’t refuse.” The Journal wrote:

The state of Indiana threw in $7 million in tax incentives, but those weren’t decisive. Mr. Trump’s real hammer is his threat to impose a tariff on Carrier imports to the U.S. Carrier has a 30% share of the U.S. gas-furnace market, and a 35% tariff could kill the business. That’s the same sword Mr. Trump previously held over Ford Motor Co.

Trump’s bullying of Carrier is contrary to everything I’ve believed in as a conservative. It’s not free market economics, it’s not justice, and it’s not good for businesses or workers. It’s what liberals do. That is, have an emotional reaction that leads to brute force government action that wrecks the economy.

There will be many things Trump will do to make America great again. Dictating from the Oval Office how companies should run there business is not one of them. It’s Obama-style economics, and it doesn’t work.

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73 Responses to The Dark Side of the Carrier Jobs

  1. Okay Then Obama shut down or severely regulated many industries. Forcing us into a green generation? Who makes all these batteries? Not the USA. No coal? No problem? Double the mpg? What does it cost in price and jobs. Even if you believe Trump is badgering, he has to start somehow with something. America is in a mess on several areas. We all wanted a overhaul on the Federal level. This will not be easy, or without criticism. Trump had a job, he was on easy street. Gave it up to be beat up? I believe he believes there is a different way the Federal Government can do business..

  2. So then the impending tax decrease on businesses is a bribe?
    Trump is in favor of FAIR TRADE.
    Free trade is what we have now, free for other countries.

    How about the reduction in onerous regulations?
    Ask anyone that is trying to start a new business about regulations.
    It is damn near impossible to get one off the ground, unless of course it is someone like Solendra where the government subsidized it with taxpayer money and then it went belly up.

    Or how about the bailout of GM and Chrysler?
    Again, taxpayer money to keep the companies afloat and the bond holders were told to pound sand.

    What Trump did with Carrier is peanuts compared with what Obama has done.

    My God, the man hasn’t even been sworn in yet!

    What’s wrong with looking out for the American worker?

    And the WSJ said that that was “the same sword Mr. Trump previously held over Ford Motor Co.”
    What about the sword the CEOs held over the workers?

  3. Keith. You are young. It took me a while to really realize there is grey. Not just black and white…. calm down..companies can continue to do what they wish…just don’t stick it to your home country if you choose to do business elsewhere

    • By Trump stating that he was going to put a tariff on products produced in other countries he is only doing what other countries do to us.
      I call that fair.

      7 million to save 1000 jobs is very reasonable to me.

      Let’s get beyond that and start working on the 20 trillion in debt now shall we?

    • Patty, your remark about “gray” is true words of wisdom. Doesn’t it take us a while to realize this? I wish I had understood it sooner. Gray actions can be good actions.

  4. Actually, there were nearly 400 jobs that were never scheduled to go to Mexico. That leaves 700 jobs that were saved.
    Additionally, there are 1300 workers at two separate plants in Ohio that ARE going to Mexico.

    United Technology has over a BILLION $$$ in military contracts with the US govt. Ironically, as a businessman Trump would be the first one to move to Mexico if he was the CEO of UT. Carrier was reportedly going to save 65M on this deal. Trump must have made it worthwhile for them.

    • Do you have a source for that info?

      Bottom line is Girly1 the workers are out of a job, not the CEO.
      I don’t think Trump gives a crap about the CEO.
      The CEO isn’t the one out of a job.

      • Heard the info on CNN from a Union boss who was involved with the Carrier/Trump negotiations.

        I wasn’t referring to the CEO. Just saying that prior to his new job, Trump didn’t give a hoot about his workers either. The shoe is on the other foot now, ironically. I wish him good luck!

        • I’d like to see some evidence that Trump didn;t give a hoot about his workers either. Companies with unhappy workers generally have high turnover. I don’t think this is common to the Trump organizations.

          • I should have said ‘American’ workers. His brand name products are
            are outsou
            rced.

            Also, he is, or at least he was against raising the minimum wage.

            He also uses foreign workers at his golf courses and hotels.
            As far as construction is concerned, illegals account for most of the unskilled labor force.
            Trump probably has no clue as to the legal status of his crews.

          • I am opposed to the $15/min wage as well. As for foreign workers, I am not defending him or anyone who employs them But assume he, like most legit businesses I know of, ask for and receive documentation. The issue of whether the documentation is real or not is one of the problems we need to resolve. And I suppose that like most companies he has dissatisfied workers.

            And although I do not know this for sure, but guess if you went back 30 years there would be a small percentage of Trump workers picketing , protesting etc. Without union encouragement. Bottom line , no better no worse than most American companies.

        • I’m tired of management taking the heat for moving their business offshore. No, I’m not fond of fatcats, no, I am not one of them, no, I don’t think it’s ok to send jobs overseas.

          But these guys (generally) are trying to maximize their profits, that’s all. It’s safe to say that the vast majority of these companies are in extremely competitive markets, and any inefficiency could kill them. They sometimes have NO CHOICE but to go overseas.

          It is the federal government’s job to provide the economic environment such that companies don’t have to leave the US.

          Maybe we do need 35+% tariffs on many things. Bring these jobs home.

        • Girly1, what you’re saying is that Trump played the hand that was given him as a business owner. To be competitive he used companies who had already sent jobs overseas, he probably contracted with businesses that had already stolen advantage by hiring illegals. The situation was set up by globalist and illegal-alien supporters. I’d like you to point out business owners of any size who did differently before you criticize Trump.

          Now, it’s not “ironic” that Trump is now trying to undo these situations — that’s why he ran for President.

          It would make your life more difficult, but perhaps more rewarding in the long-term if you began to pay thoughtful attention to what is going in instead of vomiting what you hear from superficial sources.

  5. My oh my. Such angst among those who have never been in business, who have never had to go to city council/state regulators or the Feds to get a carve-out or a relief from some awful conditions.
    Here in my city, the Town Fathers gave Walmart (yes, Walmart) relief from taxable income for 10 years, promised to install a cut-out in the road and install a red-light at their location. We love our Walmart!
    We see on TV ads that New York State is offering special tax benefits to new industry if they move their operations to upstate NY.
    Our little business asked for tax relief for 6 months from our city revenue collectors and they agreed. Saved our bacon, yes it did.

    These kinds of business/government deals are done all the time, all over and there’s nothing nefarious, illegal, or whatever the libs are trying to make it sound like.
    Relax. We’re not going all socialist, or into a oppressive state – it’s just business.

  6. It worked. I doubt that many of those 1,000 job holders are sitting around crying because their company may have been bullied.

    Life is sometimes hard. Suck it up and own it.

  7. I have seen this argument made throughout the media today.

    I am not crazy about it, but in no way, did I see it as bullying. Nor do I see any brute force down the road.

    I think there should be incentives for businesses to do business in the US versus overseas. The real problem is one that can and should be solved with changes to the tax system. Penalties for repatriation are harsh.

    I am not defending it, especially since I was a heavy critic of Obama’s Solyndra (which was considerably different), but in many ways this is what state economic development departments and governments do when they are trying to woo a business to their state. I don’t hear too much protesting about that.

    Nor is there a lot of grumbling about what the government does to attract foreign companies to the US.

  8. There might be one other item in Trump’s calculations.

    The recount is proceeding in Wisconsin, and it’s the circus of nightmares that you’d expect. Now, pace Scott Adams, there may also be a “don’t steal my election” message being sent here: Carrier is keeping these jobs here, and these workers would be the first victims to get shafted if Cankles steals the election.

    Look at all sixty-four squares.

    • Not all 64 squares are in play tho. The entire recount, as we well know, is a farce and will end that way. Michigan and Wisconsin officials are meeting early next week to decide if this kabuki theater should continue. I hope they come to their senses.

      • It is a farce, I agree.

        But Trump is putting a human face on the consequences.

        See, we’re no longer dealing with a bunch of abstract ballot numbers, in a state few others care about if the Green Bay Packers aren’t on the opposite sideline. We’re dealing with concrete persons, who will be harmed if the shenanigans drag on.

        I hate to use the phrase “political human shields” here, but it’s not entirely inaccurate. It’s a canny move, and so shrewd it’s almost at evil-genius level.

        He’s using their lives as bargaining chips, and with their full consent. It’s a daring play, and with a hostile lame duck White House and a global elite still out for the steal, it’s forgivable under these specific circumstances.

        That said…if he makes a habit of this once in office, that could be most problematic, no?

  9. Keith, Mexico has constantly used tariffs to target individual Congressmen and Senators that don’t toe the line for policies Mexico wants. Mexico has also used NAFTA to extort billions from the US in “losses”. Canada used $3 Billion in tariffs and NAFTA extortion to thwart country-of-origin labels for US meat in 2013.

    For instance, the disastrous NAFTA mess with Mexico’s lousy trucks. Here’s a summary from, of all places, the “Public Citizen Foundation” (which is a Ralph Nader project funded by Soros’s Open Society), so this is the globalist progressive slant!:
    “In March 2009, after years of congressional pressure, President Obama signed into law a bill that ended Bush’s 18-month NAFTA truck program. A few days later, Mexico announced that it would impose sanctions against the United States – tariffs on $2.4 billion in U.S. trade – as retaliation. The sanctions targeted exports from the states of House and Senate members that had voted in favor of the measure to forbid access until safety and environmental improvements were made, including oranges, grapefruits, pork, cheeses, and heavy machinery. In August 2010, Mexico announced that it would “rotate” its retaliatory tariff list to hit new, additional U.S. products.

    “In April 2010, 78 members of Congress, including Rep. Peter DeFazio (D-Ore.), then-Chairman of the Highways and Transit Subcommittee of the House Transportation and Infrastructure Committee, sent a letter to Department of Transportation Secretary Ray LaHood and U.S. Trade Representative Ron Kirk urging them to negotiate with Mexico to remove the cross-border trucking provisions from NAFTA.

    “They asked the administration to swap improved access in another sector to “buy back” the policy space to maintain U.S. highway safety. Such negotiated compensation is allowed under NAFTA.

    “The Obama administration refused, instead allowing the sanctions to remain in place while it worked on complying with NAFTA rather than fixing the unreasonable NAFTA rules. Even as safety and environmental issues continue, in October 2011 the Obama administration began a program to allow access to all U.S. roads for Mexico-domiciled trucks. Under this program, American taxpayers will purchase electronic monitoring systems for Mexican-domiciled trucks so drivers’ hours of service can be monitored. A private Mexican association of truck drivers also has filed a case demanding $6 billion in compensation from U.S. taxpayers under the investor rights provisions of NAFTA for losses caused by failure to implement the NAFTA “open-border” trucking policy. “

  10. In the scheme of things, in this crazy world, if Trump has saved one decent paying job in this great USA he has made my vote count. I am so tired, Make America Great Again. OVER OBAMA

    • And I work at a car dealership paying the 100 plus employees and I just bought a new truck and we are going to our Christmas Party tomorrow and it’s going to be GREAT!!! :))

      • Woohoo! I hope your Christmas party – and your Christmas – is the best ever! :-) Here’s to MAGA!!!! :-D

        We remember the 100,000 car dealership jobs that the Obama Administration destroyed when his Car Czar forced more than 1,700 GM & Chrysler dealerships out of business in 2009. The TARP IG later found that most of the closures were needless, that race played a part: “minority owned” and “women owned” dealerships got to keep their contracts regardless of performance, and that half of those were in rural counties coincidentally, counties that voted against Obama)

  11. Keith, I’m disappointed. You think calling a company and pointing out that future tariffs will be very high and offering some tax relief is bullying?

    It must be nice to be as secure as you are in your income. Hundreds of workers are thanking God now for Donald Trump and his understanding of how business works.

  12. Trump will be an un-orthodox president with many un-expected moves and as I am so thankful for his help to strengthen the rise of new politics and the wrecking of a lot of bad politics and the MSM , I will go very far to defend him. I believe he needed some signature victories and did what he did to get them. This tariff-politics is probably to be expected when he is president, we will find out how it will work. I guess Trump will be very market-sensitive, he has a good team .
    I read that US-media is trying to whip up some fury because of Taiwans leaders phone call to Trump. But the Chinese simply called it a Taiwanese trick, nothing more, they did not “blame Trump”. Only the US media blames Trump.
    And, talking about bullying, in my country we really feel bullied. All municipalities are forced by the government to make rooms for a quota of migrants, housing etc. Old people, disabled people, move over, here comes the migrants. Otherwise, sanctions. That´s real bullying politics. Trump would never ever do something like that to his people. Can we borrow him for a while ?

  13. Which is a better example of bullying: convincing a major employer to stay here by incentive or keeping a sky high corp tax rate?

    In my eyes we have been bullying corprate America for years…

    In time, the reduction in tax rate will incentivize employers and the strong arm technique will not be necessary

    H

  14. I’m really disappointed Keith. This is much ado about nothing. Would you rather Carrier had moved those jobs?

    You’re exactly right about “free trade”. In our world it doesn’t exist, what with how regulated each deal is in order to prop other nation’s economies at the expense of the American taxpayer.

  15. As others have said here, sweetening the pot (creating tax incentives, offering land to build a manufacturing facility, investment credits, etc–many, many other methods of inducing a company to invest in a local community or create more jobs–is extremely common. State legislatures and local governments spend a lot of time and effort creating such attractive incentives to convince a company to stay or expand in a community. It becomes part of a competitive bid process used to attract businesses (and jobs) to your city instead than the city 30 miles up the road.

    • Yep!
      And now the MSM are decrying the fact that he has picked billionaires for his economic team.
      Ah yes,….experts at what they do as opposed to eggheads who have accomplished nothing.

      Let’s all just stand back and watch the man work.

      • Someone pointed out there were few welfare recipients in Obama’s cabinet.

        Haven’t the past 8 years shown us that academics are not the people to run anything? Academics with tenure understand the real world? No.

  16. From the Governor’s office in TX:

    “Both the state and local communities offer a variety of tax incentives and innovative solutions for businesses expanding in or relocating to Texas. Programs include Enterprise Zone sales tax refunds, manufacturing sales tax exemptions, property tax value limitation, and “freeport” inventory tax exemptions.”

  17. “Dark Side?” Really??

    You’re the man, Keith, but that headline reminds me of all the MSM stuff I’ve been reading/seeing/hearing the past three weeks…everything Trump does is either “troubling,” “worrisome,” “chilling,” or “disturbing”…or all of the above!

  18. Keith does have a point here, though.

    Yes, Trump needed a good result, fast, so he can hit the ground running next month.

    Yes, America’s taxes on business are too high, and yes, with Obama still standing in the tax office door a la Bull Connor, for now, Trump lacks options he’ll have later on.

    But the theater-level questions of what this does, long term, to individual liberty, and whether this action may have unforeseeable adverse consequences in the future, is a fair point, and one that deserves reflection.

    I remain optimistic about how the Trump years will turn out, but my optimism is a bit more guarded than it has been.

    • I think the burden we live with as citizens is that we really don’t know, after all is said and done, how a new President will act, what the true priorities are or how they will be implemented, how the President will administer the Office of Chief Executive, until that person officially sits down for the first time in the Oval Office. It’s the chance we take, of course, the bet we make toward what we hope will be good fortune when we cast a vote. Time will tell.

  19. I read this blog with an open mind.
    But, not once was the “bullying” detailed or mentioned. I have been busy and purposely avoiding news last two days, but this sort of post can’t me made while surrendering simple journalist standards.

  20. If these companies weren’t choked with taxes and regulations these deals wouldn’t need to be made (hopefully)

    If Trump works on those issues it will possibly persuade (some of) these companies to stay here without having to throw money at them.

    Also Carrier is part of United technologies who does gvt work, how about a law that prohibits companies with gvt contracts to outsource?