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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
Again, from a policy standpoint this thing is crap. From a narrative standpoint he scored a decent win (so long as people don’t let facts interfere with feelings.)
Trump promised this? Or did the state of Indiana?
Which entity did what of those two things?
Good thing following one’s political principles is not equivalent to suicide, so we should probably stop using that analogy as it is stupid on stilts.
Since Trump is in charge exactly jack and [expletive] right now, this actually came through the state. Which means he’s claiming credit for things he didn’t do, but I didn’t want to harsh the mellow by pointing that out. The point of the exercise is to hash out whether or not paying off companies to stay (or allowing them to blackmail government for incentives, both are true ways of phrasing it) is good policy at the national level, especially coming from the oval office and being accompanied by blatant threats of punitive taxation.
I only want things correctly stated. I’m sure Trump gets credit for this and so his promoting it makes it easier for the state to do these things. So, I get your message here, KP. But, there is reason to show how this actually took place. This nuance is important right now.
I’m very curious, too, what actions he will take for implementing a brand of federal crony capitalism. That is where conservatives can take issue with him. However, I do think that Franco’s points are important and I don’t like suicide pacts for the sake of principles that lose on the key activating principle of getting control of the levers of power in the country — or at least wresting control from wreckers like Obama and Hillary.
And more important for #95: the Dems and the left have learned how to game the GOP simpletons and get them to step down over things that a Dem would not have to. For example: in 2004, Jack Ryan should NEVER have stepped down against Obama’s evil tactics to get an easy election. He should have fought back like Clarence Thomas and Trump. And fought back hard and ignored the pansies in his own party as necessary.
FIFY.
Good. That is the primary question of the post.
I’ve never been convinced it’s this binary. I think it possible to both maintain principles and win. Trump represents (in my mind at least) either an abandonment of certain normally conservative principles or a reordering of their priority.
Do you know for sure he just wimped out, or is it also plausible he was scum who got caught?
Win what?
Hillary’s in charge and we win — what a weird formulation.
The election is over, Larry, time to move on.
Never said I wanted Hillary to win, that’s your formulation. This misattribution of motive keeps cropping up to the point of becoming offensive.
Was Ryan worse than Obama? If he was scum he would not have been embarrassed and would have stayed in the fight. Also, if he was strong and decent he would have been embarrassed (perhaps) but stuck to the principle that you do not let scummy people do illegal things to embarrass you and damage the country — you fight scummy people who cheat the state out of a good senator. I bet that Ryan was visited by some old “principled” GOP pol who told him that he should step down.
Obama is not our standard on the right.
It is not misattribution. You are defining it as a win — I only ask: how?
Just better than the democrat should never be our threshold.
I defined sticking to principles (in this instance nominating an actual republican with conservative values, positions, and beliefs), yet you seem to think that is a losing strategy, ergo you think we need to be the left to beat the left.
It has been the case that occasionally the Government will inform a defense contractor that the G is no longer happy with the stated terms of a contract. This has been known to result in the contractor adjusting the terms to please the contracting entity.
Is that in concordance with free market principles? Oh hell no. It happens though, and those who sell to the government are well advised to keep Uncle Sugar sweet or face the consequences later on.
The Donald does not have a magic wand that shoots 35% tariffs, but that isn’t the only stick in the bundle either. It is amusing to see the green eyeshade wearing myrmidons of the marketplace — always ready to tell the defcons and the socons that they have to come to terms with reality — get a whiff of it themselves from time to time.
Its different for everyone who voted for him. For me (“Conservative” pro-Trump), it was reordered priorities more than sold abandonment (at least for my adopted pillars of conservative… I’m not laissez faire).
Here’s the thing about “winning” on principles. Every election I could vote in, the mantra of the party was “nominate the guy who can win”. Which was Bush, McCain, and Romney. Some lukewarm, middle ground, weak conservative who was pushed as someone who could get Independents and minorities. NO. You vote for who best lines up with your principles and can sell it.
Well, we got those three and 2/3 lost. Now, my priorities are different because of Obama and the possibility of Hillary. Now, we actually needed someone who could win without destroying Ammendments 1 & 2 (free trade is not in the constitution, doncha know) and maybe do some good until we could find a good principle guy who can win. (my priorities: someone who would not attack my free exercise of religion)
But GOP/Conservative wonks don’t understand that what sells them doesn’t sell everyone and regardless of bonafides, a winnable candidate is going to sound like a shallow idiot on the campaign trail.
I might make the same complaint against you, except I can’t recall a single thing you’ve ever written.
In any case, if my comments displease you, don’t read them.
I didn’t say you did. I said the GOP and its establishment philosophy- demonstrated in this thread by the folks who believe a $7 million tax credit from the state of Indiana proves Trump hates capitalism, or something- has failed miserably, and is now bitterly unpopular.
The Trump victory should be sign enough for the neverest of the nevertrumpers to notice. But I note also how quickly the most prominent GOP governors were washed out of the race, mostly in favor of Trump and Cruz.
That’s a sign of that bitter unpopularity I mention.
Let me note again that all this controversy is about a $7 million tax credit over ten years, from a mere state government.
This is the sort of thing states do all the time, like it or not- and apparently Carrier had earlier rejected a similar deal offered by Indiana, before the demon Trump won the election.
Thus, I conclude that Trump rightly takes some credit for this deal- and the folks raving about it are doing so because of Trump’s involvement, not because of their oft-cited principles.
Hence, I stand by my assertions.
Many of us were very against the last 2 and argued vociferously against them right up until their losses. This whole thing does have me wondering if Trump was the only choice to beat Hillary. Of course, in my mind the question is phrased as “have we really sunk this low as a nation?” I think Hillary was so bad we could have beaten her even with McCain, and we had far superior options. I think we took the hardest road to get to where we are today, but I still fear it leads to a place other than where we desire to go.
Or a sign of the gullibility of the voters. Both are equally plausible explanations.
Come on, Larry. You don’t get it both ways. You don’t get “See, look at how Trump is doing and he isn’t even President yet!” and “Trump didn’t do it! The state did!”
This thing is “The Trump Carrier Deal”, so he get’s a political bump, but he is also outed as the inside the beltway player we always knew he was.
There’s like a 50% tariff if you try to import stuff into Brazil. So. Brazilian car production is done domestically.
The result is that the cars are so expensive that far fewer people own them.
Durty!
I spent a little time in Jordan several years ago. I had brought an issue of Motor Trend with me to read on the plane, but one of our hosts turned out to be a “car guy.” He explained to me that every car in Jordan had a 100% tariff on it, based not on the actual sale price, but on the SRP. So if you bought a used Honda for $900, you didn’t pay $900 to the government (yes, I know they use dinars, I didn’t want to look up the exchange, but now as I’ve typed it out I might as well have. Anyhoo….). You paid to the government 100% of whatever the car sold for new. Unlike Brazil, I do not think the manufacture cars in Jordan. The result is similar, though: not a lot of people own cars. They borrow and share.
Of course, how does this apply to America, and Trump’s anti-competitive rants? Ford, Chevy and Dodge make decent cars today, in my opinion. But for 30, maybe 40 years their cars were utter crap, with a handful of exceptions. Why did they change? One word: Toyota. And if you’ve never read the history of Toyota, specifically around lean manufacturing, you should.
Yet another attack on the electorate, by someone plainly aligned with the nevertrump fringe.
KP, your opinions are intrinsically yours, and I can’t honorably fault you for having them.
But I can certainly note that blaming the voters for not supporting any given candidate isn’t political success, and won’t lead to political success.
Events of the recent campaign are well known. What interpretation should be derived from those events is a matter of dispute.
We differ, as many do.
Trump either is a shyster or an honorable man who wants to do great things for the nation as an objective fact. I don’t know that we have the data to determine which is the truth yet. His history would lead toward one conclusion, but things like his appointments so far lead to the other. Only time will tell. Every data point such as the Carrier deal or the twitter rant is valuable for discerning the truth.
I agree completely.
My point is that cars mass marketed to thirdly world countries can’t be made in the US. Ford makes cars in Brazil and sells them in places like Costa Rica and Panama and the like, however you are correct a large percentage of cars in Central America are Toyota.Fords in Made in Brazil don’t face a tariff because they’re made there.