Ricochet is the best place on the internet to discuss the issues of the day, either through commenting on posts or writing your own for our active and dynamic community in a fully moderated environment. In addition, the Ricochet Audio Network offers over 50 original podcasts with new episodes released every day.
Open For Business
President elect (almost, EC hasn’t voted yet) Trump went on a Twitter rant this weekend. High on the praise of Carrier only losing half the jobs it had in Indiana, The Donald took to his iPhone to warn American businesses that a firm cannot move manufacturing outside the U.S. without “retribution or consequences.” Here’s a picture of the tweetstorm.
The rant starts and ends well. Trump proclaims that taxes and regulations will be reduced resulting in the nation being open for business. The problem, of course, is that the president does not have the constitutional authority to carry out either his threats or his promises. He can do much in the way of reducing the regulatory burden through executive orders which rein in the executive agencies, but where taxation is concerned he must seek the cooperation of Congress. The state of that relationship is still rather unclear at this point. I wonder if he realizes his limitations in this area.
Cartoonist Scott Adams explains such pronouncements as being part of “The New CEO’s First Moves.” With Ford, Carrier, and to some extent this Twitter rant, Trump is taking hold of something that is “visible, memorable, newsworthy, true to his brand, and easy to change.” He is essentially signaling strength and ability to accomplish — creating a psychological effect of confidence in his ability to do good things. The thing is not the thing, as Adams explains:
Political writers will interpret this situation as routine credit-grabbing and exaggerated claims. But business writers will recognize Trump’s strategy as what I will call the “new CEO Move.” Smart CEOs try to create visible victories within days of taking the job, to set the tone. It’s all about the psychology.
If you are looking at Trump’s claims of success with Ford and Carrier in terms of technical accuracy and impact on the economy, you will be underwhelmed. But if you view it through a business filter and understand that psychology is the point of the exercise, you’re seeing one of the best new CEO moves you will ever see.
This is less about the jobs saved or the economic outcomes but more about the optics. Trump gets things done. If he says he is for you then you are on the winning team. If he stands against you, prepare to lose. I work with a guy like this (and have for over 20 years) who is a great ally and a terrible enemy — even down to the small things like making a fresh pot of coffee if you take the last cup.
Not everyone is so pleased with the Carrier move, and I doubt those same people will take well this open threat to businesses. Writing in the G-File this weekend Jonah Goldberg said:
As a political act, it is very, very easy to exaggerate the economic importance of the Carrier intervention. It’s less than a thousand jobs. Save for the workers and families directly involved, it’s all symbolism.
And while the politics of this are great for the incoming Trump administration, they are absolutely terrible for free-market conservatives. The former president of AEI and a veteran of the Reagan administration, Christopher DeMuth, used to argue that perhaps the most important thing Ronald Reagan did was fire the air traffic controllers. In isolation, it was not that big a deal. But the message it sent was hugely important at a time when Eurosclerosis was spreading in America. Reagan let it be known that the public-sector unions no longer had the whip hand and the government couldn’t be extorted.
Trump’s Carrier intervention may just send an equally loud, but nearly opposite signal: that the White House is going to pick winners and losers, that it can be rolled, that industrial policy is back, that Trump cares more about seeming like a savior than sticking to clear and universal rules, and that there is now no major political party in America that rejects crony capitalism as a matter of principle. After all, don’t expect the GOP to recycle the language it used for the bailouts, Cash for Clunkers, Solyndra, etc., when it comes to Carrier. The RNC belongs to Trump.
The editors of National Review (also not fans of Trump or his ideas) were equally critical of the Carrier deal.
We are not very enthusiastic about government-run economic-development programs that rely on industry-specific — or firm-specific — tax breaks, grants, or other concessions. In the long run (and generally in the short run, too), these programs are almost always corrupt in themselves and a source of corruption in others, with the benefits going mainly to politically influential and well-connected companies, whether that means Solyndra during the Obama administration or Carrier in the Trump administration…
The Trump administration will no doubt get political juice out of the Carrier deal, whose symbolism will be particularly welcome in the Rust Belt that just delivered Trump the presidency. In the long run, though, corporatism is no substitute for a healthy overall economy and a subsequently strong labor market, which we hope the Trump White House and Congress will encourage with a new policy direction beginning in January.
The one thing everyone seems to agree on is that this is all symbolism, all show. The question we must answer as conservatives is whether it symbolized good or bad policy. These things will surely gain Trump popularity, which from his populist standpoint might just be the primary goal, but what cost will the nation pay?
With both Carrier and the Tweets we see the carrot and the stick. Trump lacks the authority to fully deliver on either, but the message he is sending is loud and clear. Obey, and you will be rewarded; disobey, and you will be punished. This is undoubtedly a very familiar business tactic, but I have difficulty accepting it as the right way to run a government. As citizens we are not in the employ of our elected leaders. I fear that Trump is headed down a path in which he reverses the Reaganism, “We are a nation that has a government—not the other way around.”
Published in General
That and the fact that the deal didn’t have to happen. It is a small deal that has small consequences on either side. So it seems, to many of us, like grandstanding with no real gain in terms of public policy. Just more showmanship from the political class. And I get that Trump says he’s not part of the political class, but he really is.
Seriously @thekingprawn cough it up. You were some sort of secret agent international man of mystery type, weren’t you?
I hear he used to run a Pizza Parlor with Hillary Clinton.
I heard he was with Lee Harvey Oswald just before the incident in Dallas….
The president-elect’s seminal experience–which presumably shapes his view of what’s normal–of a business climate was real estate development in 1970s NYC. That doesn’t fill me with optimism…
He must know Rafael Cruz.
Explains why he wanted her to win. Which you know he did. Otherwise why would he constantly be criticizing Trump?
I thought I knew the man (KP, that is). I mean, really. I guess I was wrong.
That’s interesting.
I think that when you’re in an unprincipled political environment, that’s the time to stick to your principles. Indeed, it is the only way to navigate.
There’s a local crane & rigging training company we use whose motto is “We rig it right!” I think Trump may be stealing that.
It’s not “rigging”, it’s just “seed money”.
I’m not going to go on about support for Gary Johnson here, but I hope it is obvious to everyone why I would chuckle at this.
What I find interesting about Franco’s argument in support of Trump, is that Trump was supposed to be the guy who was going to clean all this up. Doesn’t that sort of mean that he himself must stick to his principles? I guess maybe he has, in some sort of way. I’m just spit ballin’ here…
You’ve become repetitive, boring and tedious. Every single comment you make here is this exact same theme.
Try some new material once in a while.
Note:
Personal attacks.You can navigate all you want and shipwreck on the media rocks and lose, like before. And before that. [redacted]
I thought the point of the anti-establishment thing was that the establishment was being too much like the dems. I’m confused. If it works out ok then it’s fine?
Franco, you didn’t win anything. Reading this post is like hearing someone bragging at a party about his fifth cousin winning two tickets to the Super Bowl: fat chance it’ll do him any good. Politics in a Republic should be about creating stable and predictable laws–that is what leads to growth in the long run. If and only if Trump leads the country in that direction will anyone “win” anything through his election.
A modest prediction: The dead-ender Never Trump contingent at National Review and elsewhere will never get over their hurt feelings and bruised egos from having their august counsel rejected by the voters who elected Donald Trump. They will be kvetching about Trump for the next 4 to 8 years. My plan is to ignore them.
I think you misrepresent them. Their objections are not feelings based. But, if we’re to play that game, what feelings would you attribute to those who elected Trump? Or, is it only rational to support Trump and emotional to oppose him?
“Sore Loser KP whines about making American Great Again! So typical!” – Probable Trump Tweet
I spent some time in parts of Central America about 11 years back. The only cars with any connection to the US we’re Ford. There weren’t many of them.However they were made in Brazil not the US. On the rare occasion you would see a Jeep. It’s doubtful that cars can be made in the US and sold third world. There are exceptions like the BMW made in SC but it is a specialty car on the high end.
They only needed one reason. He fights! Against whom or for what doesn’t matter.
Out of curiosity, is there a point at which we can criticize Trump on the merits of his words and actions, and that criticism won’t be disregarded as simply hurt feelings?
How much money did Trump promise them?
What did he promise them that he didn’t promise the whole business community?
Yes, and is the Constitution a suicide pact, too?
$7M in tax credits and training money according to this article.
And 1300 jobs still go to Mexico.
I consider suicide more honorable than being a leftist…
Your family and fellow countrymen probably don’t.