Trump’s Carrier play is smart politics. But it’s not sustainable economics.

December 1st, 2016 at 9:19 am

Over at WaPo. If there’s anyone who still thinks this Trump guy doesn’t have uniquely acute political instincts, this Carrier incident should finally disabuse you of that notion. OTOH, if you think this is a sustainable strategy to revitalize US manufacturing, I strongly disagree.

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3 comments in reply to "Trump’s Carrier play is smart politics. But it’s not sustainable economics."

  1. Smith says:

    Readers, don’t misunderstand or misinterpret. Krugman has written the French are just as productive per hour as Americans. Per capita earnings are lower because of less hours worked. Thus an economy can offer subsidies for boutique enterprise and small shop owners and still be efficient. But of course the story was actually not meant to characterize the entire French economy.
    Preventing the wholesale closing of factories in the U.S. is sustainable, but not in the ad hoc fashion on display in Indiana. Just pass a law saying you can’t move jobs out of the country when a factory is profitable. You could pass tariffs selectively but broadly as James Madison did to protect textile workers from cheap goods made in India. You ban products from countries without labor protections, similar to the US. Most favored nation status for China? That’s a joke. Even Mexico is known for sweetheart unions that belie any notion of true collective bargaining. Finally, citizens (because unions are banned by Taft Hartley from secondary boycotts) can boycott, sanction and divest from countries and U.S. firms that don’t enforce labor rights. That pretty much covers every country not a Western European style democracy. Then there is still the problem of trade with Germany and Japan, big imbalance, mostly cars, stupid U.S. auto executives haven’t a clue. Cliche is look at the parking lot of GM, Ford auto factories. Peaceful disengagement of trade that destroys the American economy is the answer. Wage differentials for the next 20 years due to foreign exploited labor demand it. Labor rights are not coming to China anytime soon. Wake up America. This is a liberal solution.

  2. Tom in MN says:

    Really “acute political instincts”? He did not remember making the promise and was surprised that people believed him.

    Long term solution is to have standards of living in other countries, and hence labor costs, catch up to those in the US. Anything else done to in an attempt to stop flows of jobs to the cheapest source is just prolonging this process.

  3. Deplorable says:

    I’m not going to read it, Jared.

    Let’s punch the numbers around a little bit.

    The press has no idea why this deal was made. The only thing that made the news was the incentives given to Carrier, which any CEO would have turned out flatly. They are not what caused Carrier to stay in the US.

    What did cause them to stay? Well, it isn’t public fodder. You don’t have the real economic picture in this case.

    Try again.