Saturday, December 3, 2016

Trump and Carrier

This is a somewhat quick post without all the thought I'd like to place into it before publishing, replete with references.
On a personal note, I am, and have been, very busy for the last few months.
We are in the middle of a product launch at work, besides the regular stuff that demands my attention there day and night.

Trump became President-elect, of the United States.
On the campaign trail, he talked about arm-twisting companies to not abandon manufacturing in the United States.

Soon after the election, Ford chose NOT to move production of a Lincoln SUV to Mexico.
Trump took credit for this.
We never saw the mechanism for this.

Next, Carrier decides, after state tax incentives (not federal), to heep 1100 jobs in Indiana, and not move them to Mexico.
Trump took credit for this.
I've been saying that if anybody should get credit, it would be Mike Pence, as governor of Indiana, arranging the tax state incentive that kept Carrier their.
What did Trump do?
Now it seems Pence's hand is being seen in it, while he gives credit to Trump.

In a constitutional republic, what could President Trump do?
Propose legislation and promise to sign it.

What can President-elect Trump do? 
Threaten to propose legislation and promise to sign it.

One of Trumps promises was to lower corporate taxes (federal taxes) to attract and keep manufacturing in this country.
That's a noble effort.

When you start offering incentives to individual companies, you start to look like you are picking winners and losers.
Why should Carrier get a break that is not available to every other manufacturer in Indiana (or the U.S.)?

Sounds about right to me. Not the "help my campaign donors" Solyndra style of the Obama administration, or the National Socialism of Hitler's Germany that benefitted Siemens, et al, etc., but a picking of winners and losers nonetheless.

We've been doing tax incentives on a state level in this country for years.
Most often to keep a company from moving to another state, or to entice a company to move from another state.
It seemed like a good move by that state, willing to forego tax revenue to promote it's manufacturing base at the expense of another locale, but it should have caused the larger discussion of 
  1. Are taxes, in general, so high that they are driving away business?
  2. Is it fair to the mop manufacturer to pay higher taxes on his operation with 100 employees than the automotive manufacturer that employs thousands?
  3. Do we care what is fair or not?


  1. we didn't like it when obama did it, but apparently using the strong arm of the government is ok for some folks if its done by someone wearing the right jersey.

    BTW, busy is good. Me too.

    1. I'm curious exactly what if anything was done by Trump.
      I hope someday to hit the range with you, and not golfing, either.

  2. First thing to remember is that we have no idea why Carrier stopped the move. It was not due to a $700,000 a year for 10 years tax break. Something else is involved so best to hold fire till you know.

    Six hundred Carrier jobs are still moving.
    The nearby Rexnord plant with 300 jobs is moving.

    So this looks like a one off and not the start of any effective policy.

    In other words, so far we have no reason to believe it is anything but kabuki for the press. Mark my words -- It has NOTHING to do with tax policy.

    1. oh, neglected to mention Carrier also still plans to close a second plant in Huntington, Ind., shifting another 700 jobs to Mexico.

      The liberal(LMAO) media doesn't seem to be reporting the full story.

    2. I wasn't aware and I appreciate you bringing it up.
      I find it hard to believe tax policy (state level) did not affect the one plant, may not have been enough for the second. And if the Rexnord plant didn't get a break, well, see my comment on mop factory vs auto plant.
      We need a consistent tax policy, not a reactive one.

  3. I hear today that Trump is warning Rexford not to move out of Indiana and move to Mexico. 300 jobs.

    If he warns all businesses, are these measures still crony capitalism?

    1. His "warning" gives me pause.
      I do not want a "Mussolini".
      But I do want consistent tax policy that deals with ALL businesses fairly.

  4. I see no problem with STATE tax incentives at all....if ALL get them. Obviously, companies had better well show their obvious preparation for a move to Mexico before they come with their hands out.
    This could also just get companies to think's possible.

    That Sarah Palin calls it anything makes me believe in Trump's policy all the more. I believe the best thing about her criticizing this is that she might have talked herself out of a possible cabinet position (thank the Lord)..unless Trump continues to court those who most roughly criticize him?

    We need to stop guessing, even acting like we know more than Trump or Carrier or Indiana, on this deal...see what happens the next time a company speaks up.

    I'm glad so many Carrier employees have their jobs to look forward to. No down side to that.

    1. We shouldn't have to be guessing. There should be some transparency, and consistency.
      I'm glad these Carrier folk kept their jobs, too.
      But tax incentives that are not across the board for all players means that one company's taxes (no incentive) are subsidizing another's (incentive), perhaps their competition.

  5. Well, it seems to me that You can give a break to all companies some of the time, some of the companies all the time, but you can't give a break to all the companies all the time.

    Anyway, Other than corporate tax cuts I don't know of a situation where all companies in a state were given state incentives. It seems like this is SOP. ?

    1. "but you can't give a break to all the companies all the time."
      I think you can. And should. Otherwise it smell and looks fishy.

    2. So-called "free trade" as it's been employed for the past several decades hasn't been free at all -- according to one of my brilliant, non-blogging friends. She maintains that it's been pretty much crony capitalism.

      We should have trade that benefits us instead of propping up foreign entities, IMO.

      It's gonna take a while to dig through all the fog and ascertain the reality.

  6. You could be right Ed. I just don't see it happening often. I'm looking at it as a need situaion. If a person needs unemployment pay for aw while, you don't send everyone a check. This industry may need a hand up while someone like Apple, Inc, has cash squirting out their ears.

    1. Indiana has a number of ball bearing companies.
      Say one, Rexnord, doesn't get a break, but pays full tax.
      That tax money then becomes a larger competitive burden to them than the burden on Hoover.
      It could be said that Hoover is now subsidizing Rexnord by government fiat. And Rexnord is moving.
      Gee, I wish I knew a former ball bearing sales rep from Indiana that could comment on this.

    2. Well Ok, but they're both ball bearing companies.

  7. Replies
    1. I saw the Eric Bolling argument I think, where he was showing Juan Williams a whiteboard. It's true that the Carrier deal is helpful but the point is that it's not fair to Carriers competitors in the state, if they exist.

  8. Who knows what the reality of the situation is? Bottom line is 800-1000 jobs are staying in the US. That is a good thing for those people.