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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsDont miss the fine print in Trumps Carrier news
Posted with permission.
http://www.msnbc.com/rachel-maddow-show/dont-miss-the-fine-print-trumps-carrier-news?cid=sm_fb_maddow
Dont miss the fine print in Trumps Carrier news
11/30/16 08:40 AMUpdated 11/30/16 08:52 AM
By Steve Benen
Over the summer, during a campaign rally in Indiana, then-candidate Donald Trump made a specific vow: Were not going to lose Carrier air conditioning from Indianapolis. And with this in mind, the news out of the Hoosier State yesterday seemed very encouraging, at least at first blush.
Carrier had planned to move production from a key factory in that state to Mexico, taking with it the roughly 1,400 jobs of those who work at the Indiana plant.
But shortly after CNBC revealed that Donald Trump was expected to travel to Indiana on Thursday to reveal that a deal had been reached, Carrier itself confirmed the agreement.
Details of the agreement are scarce, and the Indianapolis Star reported overnight that many workers will very likely still be laid off.
But for the workers whose jobs appear to have been saved, its still unambiguously good news. The president-elect will head to Indiana tomorrow to celebrate the deal, take credit for the negotiations that began earlier this year (long before he even won the Republican nomination), and point to the progress as proof of Trumps ability to boost American manufacturing.
There is, however, an important catch.
In this case, Trump didnt use his self-professed expertise in negotiations to reach a compromise with Carrier. Rather, he and the state of Indiana gave Carrier lots of money through state incentives and tax breaks in order to convince the company to stay.
That, in and of itself, isnt especially controversial. Cities, counties, and states do this all the time to keep companies happy before they pick up and go somewhere else. But its not the basis for a sustainable, national manufacturing strategy: the Trump administration cant run around throwing grants and tax breaks at every CEO whos thinking about moving production jobs out of the country.
Indeed, theres an Economics 101 problem: if companies are led to believe the government will give them money to stay in the United States, every employer, whether they have outsourcing plans or not, will have a strong incentive to call up the Trump White House and say, Give us a sweet, taxpayer-financed deal or were out of here.
There is no scenario in which the Republican administration says yes to each of them.
Dont get me wrong, Im happy for those Hoosiers wholl keep their jobs. I also understand the benefits of a political p.r. campaign: Trump will hail himself as a hero for effectively bribing Carrier to only lay off some of its Indianapolis workforce.
But if youre suddenly optimistic that the hapless president-elect knows what hes doing when it comes to manufacturing and job creation, its probably best to lower expectations.
TheCowsCameHome
(40,168 posts)true, it sets up a very slippery slope.
Watch other businesses line up for a freebie payout if all they have to do is threaten to move outside our borders.
Wellstone ruled
(34,661 posts)We now have most Companies asking this question,I want a the same deal. My question is this,how much does this cost the Taxpayers of Indiana,and BTW,how much did the state give Caterpillar to stay,now what is your budget short fall.
These Idiots just started a Trade War between the States.
moondust
(19,993 posts)The WH phone will be ringing off the hook:
"Save our jobs!"
"Let's talk...'incentives.'"