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.