Donald Trump Bribes Carrier Into Still Moving Some Jobs To Mexico
OR WAS IT?
Donald Trump and Mike Pence are headed off to Indiana Thursday to celebrate the fantastic job they did in scaring United Technologies to keep 1000 jobs in the USA at its Carrier air-conditioner manufacturing plant in Indianapolis. During the campaign, Trump made some really tough-sounding threats against the company, fantasizing how he'd punish companies that dared to move U.S. jobs to other countries:
"I will call the head of Carrier and I will say, I hope you enjoy your new building," Trump said. "I hope you enjoy Mexico. Here's the story, folks: Every single air conditioning unit that you build and send across our border — you're going to pay a 35 percent tax on that unit."
So now Carrier has announced that of the 2000 jobs it was going to move to Mexico, it's now going to keep 1000 jobs in Indiana. So we bet Donald Truimp made that call to the head of Carrier and threatened 'em with a 35 percent tariff on every single unit, didn't he? Hahaha, you don't even need to read any details of the actual deal to know that never happened, because presidents do not set tax or tariff rates, Congress does. While the exact details of the deal haven't been released yet, we can pretty much guarantee the agreement to keep some of the jobs in Indianapolis had NOTHING, ZERO, ZIP, ZILCH, NADA to do with threats, and everything to do with sweet, sweet incentives from the state of Indiana -- whose governor happens to be Vice President-elect Mike Pence.
And as the Washington Post points out, it's not even clear how many jobs the new deal "saved":
It was unclear whether 1,000 new jobs were being saved in the U.S. or whether that figure included 400 jobs the company agreed to preserve earlier this year under pressure from Indiana officials.
So maybe the deal "saved" another 600 jobs, not 1,000, although 1,000 is a good round number to boast about. And remember, the other thousand jobs are still going to Mexico. As Wonkette alumnus Gary Legum tweeted, it's exactly what Trump promised during the campaign, except completely different:
[wonkbar]<a href="http://wonkette.com/608680/trump-takes-credit-for-saving-ford-plant-that-wasnt-going-to-mexico-also-keeps-earth-from-falling-into-sun"></a>[/wonkbar]It's also not clear whether Trump was personally involved in the deal, or is just taking credit for it, like he did for Ford's decision not to close a manufacturing plant in Kentucky that it never had any intention of closing.
So is this a model for how Donald Trump is going to "bring back" all the jobs that have gone overseas? That's not terribly likely! As lots of states have learned, it's really easy to give tax incentives to attract or keep a business for the short term, but really hard to make those deals stick, as there's always another right-to-work state willing to screw its taxpayers over with similar sweetheart deals to woo the company away in a year or two, and it's doubtful whether communities or states even break even on such deals. If they have to cut taxes to keep a plant in the area, do the resulting jobs and revenues make up for the outlay?
Also, as both WaPo and Mother Jones note, these kinds of deals are virtually always done at the state level, because states are the ones setting the property taxes and zoning variances and other corporate-fellating that results in one-by-one deals like this. And strangely enough, Mike Pence isn't currently the governor of every state where a plant might close. No, really, he's not! Keeping a thousand (or 600) jobs in Indiana -- which may still evaporate somewhere down the line -- isn't something you can replicate at a national level. MoJo's Keven Drum puts it in blunt bottom line terms that ought to make sense to a guy who pretends to know all about the art of the deal:
Needless to say, showering incentives on manufacturing companies to stay in America is not a sustainable national manufacturing strategy. And anyway, aren't Republicans opposed to the government picking winners and losers?
Also, Drum notes, while it's nice that Trump and Pence saved 1000 or 600 jobs, remember that with the terrible horrible automotive bailout, Barack Obama "saved something like 250,000 jobs at GM and Chrysler, and 1-2 million total jobs throughout the entire automotive supply chain. Just sayin'."
Nonetheless, everyone agrees this is a hell of a PR move. Trump's not even in office yet, and he's already gotten tough with Carrier, by showering it with goodies to keep half (or less) the jobs they were planning to move to Mexico. As one smart commenter replied to Gary Legum's tweet, "Every corporate board in America is meeting in emergency session to discuss and announce their 'move to Mexico' plan."
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We bet they're going to be lining up for as much taxpayer-funded punishment as the Trump/Pence can possibly dish out. Now Trump just needs to figure out a way for Chris Christie to persuade Nabisco to hire a few people in New Jersey, so Trump can eat Oreos again.
Doktor Zoom's real name is Marty Kelley, and he lives in the wilds of Boise, Idaho. He is not a medical doctor, but does have a real PhD in Rhetoric. You should definitely donate some money to this little mommyblog where he has finally found acceptance and cat pictures. He is on maternity leave until 2033. Here is his Twitter, also. His quest to avoid prolixity is not going so great.