President-elect Donald Trump got a head start implementing his economic policy last week when he intervened to save jobs at a Carrier facility in Indianapolis, Indiana,
Trump offered Carrier generous incentives to keep at least 800 in the United States. The early estimates have Indiana providing United Technologies Corp., the parent company of Carrier, $7 million in tax breaks over the next 10 years, which comes to about $7,000 per job.
As expected, Trump supporters heralded the deal while critics — both on the right and the left — picked the plan apart. Those on the left blasted Trump for cronyism and not saving enough jobs. Those on the right hit Trump for his apparent departure from laissez-faire, free-market principles by using the power of government to influence economic decisions.
Away from the ideology-based criticism and from a purely cost-benefit perspective, Trump’s plan seems reasonable. Seven-million dollars is not chump change, but over 10 years, given the economic activity created by those “saved” jobs — not to mention savings from keeping the would-be laid-off from needing unemployment and other safety-net benefits — is likely a net benefit for the taxpayer.
Keep in mind, this deal took place before Trump was even sworn into office, and these types of gestures matter.
Throughout the Obama presidency, we have been told the economy is getting better. Government statistics seemed to prove it. Obama’s Labor Department says unemployment is at its lowest level since 2007. His Commerce Department tells us growth is picking up because GDP expanded over the last quarter at 3.2 percent. And the stock market has soared to record highs.
However, for a lot of Americans, these markers of prosperity do not resonate. Despite what the government might say about an improved economy, a lot of people just do not see the proof in their pocketbooks and personal bottom lines.
Trump’s Carrier deal, albeit only 800 jobs, is tangible evidence that he’s keeping jobs in the U.S. Just weeks before Christmas, actual employees of Carrier who heard they were keeping their jobs were paraded out in the media, generating tons of publicity.
People will remember this. These types of signals will have an impact on Trump’s approval rating. Should he continue to “save” these jobs, those efforts will make their way into our public consciousness.
And here is how Democrats overplay their hand — they are often fond of pointing to the sob story.
For example, they show the poor person who now has health care coverage because of Barack Obama’s 2010 health care law. He may have lost control of Congress because of it, but some of the country’s poorest people have health care now.
That is certainly an honorable endeavor — health care for the poor!
But if you are the average blue-collar American and you compare a big government program that in actuality makes our health care system progressive like our tax code to people keeping the real jobs they have had for decades from being outsourced, that voter is likely to side with the one saving the jobs.
In the run-up to the 2012 election, Democrats, including Vice President Joe Biden, made a rallying cry out of bin Laden being dead and General Motors being alive. That worked in 2012.
If you look back at the 2016 election, Hillary Clinton never seemed to be willing to tout Obama’s economic policies in that way. Instead, it was more about penalizing those at the top and making things “fairer.”
That was to her detriment in the states she should have won — Pennsylvania, Ohio, Michigan and Wisconsin.
It is the big disconnect the modern Democratic Party has to overcome to win those states. Many — particularly working-class Americans — do not want a handout or WPA New Deal-era type job, they want to keep or get a stable job that has a built-in incentive of advancement. If you stay here for x amount of years, you will get have benefits in place like health insurance and retirement.
Trump’s Carrier deal was laden with showmanship. Given he was able to pull that off prior to his inauguration is its own storyline. But what if he is able to promote these sorts of economic deals throughout his first four years?
Think of it — a thousand jobs here or there, in the right the places.
In 2000, Vanity Fair closed facilities in Jackson, Monroeville and Atmore. Thousands of people lost their jobs in southwest Alabama because the company opened facilities throughout Latin America.
Keep in mind, it is not cheap to create new manufacturing facilities in developing nations, but Vanity Fair did it. And those facilities led to an exodus of jobs out of Alabama. Did NAFTA make it too easy? Many in Monroe and Escambia counties think so.
In 1993, Congress approved NAFTA. Sens. Howell Heflin, D-Alabama, and Richard Shelby, D-Alabama, voted against it. Alabama’s first congressional district congressman, then-Rep. Sonny Callahan, R-Alabama, voted for it.
What if there had been a President Trump at the time? NAFTA wouldn’t have happened.
Companies are free to go as they please, but why make it easy for them? Why not give them a reason to think twice before they pick up and move? That is what you are likely to see with Trump economics.