Saving One Factory Job at a Time Is a Non-Policy Pretending to Be an Actual Policy

 

So Donald Trump is taking credit for saving nearly half of the 2,000 Carrier manufacturing jobs that were headed to Mexico. The manner in which this happened troubles me greatly. And now he has his sights set on another Indiana manufacturer:

trump_tweet-e1480953922232

I think it is also important to put this all in context with the massive monthly job churn in the US economy. From the Bureau of Labor Statistics:

Large numbers of hires and separations occur every month throughout the business cycle. Net employment change results from the relationship between hires and separations. … There were 1.5 million layoffs and discharges in September, a decrease of 218,000 from August.

And some further context:

120516bls-1

I actually had to really juice up the green Carrier bar because, compared to the monthly job churn number, it really didn’t register visually. It was imperceptible. One might have also compared the 800 jobs saved to the 178,000 net new jobs created in November, or 223 Carrier Units.

Of course those Carrier jobs are pretty darn important to the workers themselves. Obviously. But rather than ad hoc presidential interventions, I would much rather create a better domestic growth environment, while making sure workers can ably transition to new jobs, even in other regions. That would seem the better long-run path both for US workers and their children who will some day be entering the labor force. As I wrote last week:

Workers have a responsibility to make sure they are preparing themselves to prosper in a modern, technological advanced, dynamic economy with no promise of lifetime employment at one firm. After all, Trump, in his Carrier speech, said he wouldn’t penalize firms for moving factories within the US. The goal should be an economy of maximum competitive intensity with workers helped by a modernized safety net.

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  1. James Lileks Contributor
    James Lileks
    @jameslileks

     After all, Trump, in his Carrier speech, said he wouldn’t penalize firms for moving factories within the US

    Hate to be ungrateful for small favors, but he imagined he had the power and the right to do this in the first place because . . . ?

    • #1
  2. Paul Dougherty Member
    Paul Dougherty
    @PaulDougherty

    El Ingenioso Hidalgo Don Pethokoukis de La Mancha!

    (an alternative title to this sane post)

    Sure the economics of this course of action are questionable but the politics are genius. He is the man of action, bringing forth jobs  like fire to the tribe.

    • #2
  3. Mike-K Member
    Mike-K
    @

    More NeverTrump commentary.  I swing by every day to see what is new. This is not new.

    • #3
  4. DocJay Inactive
    DocJay
    @DocJay

    Still not understanding what’s happening eh?  All the degrees and book learning can’t make an intelligent man smart.

    America wants to work.   America wants some optimism.  Lead, follow or get out of the way to quote Idiocracy.

    • #4
  5. Tony Sells Inactive
    Tony Sells
    @TonySells

    Mike-K:More NeverTrump commentary. I swing by every day to see what is new. This is not new.

    The one thing I can’t stand is when an expert in their field is commenting on policy, or political posturing masquerading as policy.

    • #5
  6. Fritz Coolidge
    Fritz
    @Fritz

    The complaint is that Trump’s effecting small changes is not yet making a policy? Well, he hasn’t been inaugurated yet, so there’s that.

    More to the point,  I think this is all about doing what he can to show he is serious about goals of business revival, to continue dominating the media, and getting these stories up front, and to fend off their relentless attacks as they try to delegitimize his election as much as possible before January 20th.

    Signals now, policy later. (Not all that different from Bill Clinton’s winning office in the 1992 election and moving immediately to try to introduce open gays serving in the military . . . the pushback was huge, but over time it became policy. Different times, different issues, similar tactics.)

     

    • #6
  7. EJHill Podcaster
    EJHill
    @EJHill

    Pethokoukis is why people flee from the GOP like a scalded cat. His repetition is mindless. We created 178,000 jobs to replace the 800! And? How many of those pay the same? How many are viewed as entry level and therefore off limits to midlife workers?

    And then comes the scolding. “You should have seen this coming. If you’re out of work it’s your fault for not being prepared! I don’t care if you have commitments! Smother your elderly parents and move!”

    Now, let’s talk about how we’re going to make this party more attractive to millennials, minorities and women, shall we?

     

    • #7
  8. Arahant Member
    Arahant
    @Arahant

    He is not even President yet. Watch what he does, not what he says. He says many things, most are PR.

    • #8
  9. Sweezle Member
    Sweezle
    @Sweezle

    EJHill:Pethokoukis is why people flee from the GOP like a scalded cat. His repetition is mindless. We created 178,000 jobs to replace the 800! And? How many of those pay the same? How many are viewed as entry level and therefore off limits to midlife workers?

    And then comes the scolding. “You should have seen this coming. If you’re out of work it’s your fault for not being prepared! I don’t care if you have commitments! Smother your elderly parents and move!”

    Now, let’s talk about how we’re going to make this party more attractive to millennials, minorities and women, shall we?

    I was disturbed by the ‘blame the victim’ tone of this comment from the column “Mike Pence: “Free Markets …….”

    Workers have a responsibility to make sure they are preparing themselves to prosper in a modern, technological advanced, dynamic economy with no promise of lifetime employment at one firm.

    The rust belt is not the fault of  workers not being prepared. It is the fault of decades of elites changing trade policy, over taxing businesses and heaping on regulations that drive corporations to other countries. We have been doing that for decades and the results are hurting workers all over the U.S.A. .

    • #9
  10. CM Member
    CM
    @CM

    I just figured Trump’s tweets were the precursor to @tkc1101 being named press secretary…

    • #10
  11. TKC1101 Inactive
    TKC1101
    @TKC1101

    CM: I just figured Trump’s tweets were the precursor to @tkc1101 being named press secretary…

    I do not appear on camera or film. Something about a family curse…

    • #11
  12. Joe P Member
    Joe P
    @JoeP

    Arahant:He is not even President yet. Watch what he does, not what he says. He says many things, most are PR.

    He’s using Mike Pence’s governorship of Indiana and the public knowledge that he will certainly be President next year to shake down a bunch of manufacturing companies so he can tweet about it.

    How exactly will this get better when he has the full power of the Executive Branch and can shake down everybody in the United States?

    • #12
  13. kovo62 Coolidge
    kovo62
    @kovo62

    The Carrier negotiations were never intended to viewed as “policy.” It is one very small victory intended to be symbolic. The policy will come later, and so far Trump’s indications have been that the coming policy will be a combination of carrots and sticks, namely a 15% business tax for all firms and 35% tariff on firms fleeing the USA when they try to import their products. My gut instinct is that such a policy will be wildly popular and will help grow the Republican Party.

    • #13
  14. Aaron Miller Inactive
    Aaron Miller
    @AaronMiller

    James Lileks:

    After all, Trump, in his Carrier speech, said he wouldn’t penalize firms for moving factories within the US

    Hate to be ungrateful for small favors, but he imagined he had the power and the right to do this in the first place because . . . ?

    It’s just bluster, I expect. If so, it is still irresponsible amd harmful bluster.

    If he revises the tax code to favor factories here over setting up overseas, that’s not so bad. But our companies overseas shouldn’t be penalized now for avoiding past taxes and regulations.

    • #14
  15. Aaron Miller Inactive
    Aaron Miller
    @AaronMiller

    James Pethokoukis: I actually had to really juice up the green Carrier bar because, compared to the monthly job churn number, it really didn’t register visually.

    It was a PR stunt and professional investors were not the target audience.

    • #15
  16. AnonyMouse Inactive
    AnonyMouse
    @AnonyMouse

    In what universe is one call to save 1,000+ jobs not worth it, no matter who makes the call? He should make 10 of these calls per day. He can do it in 1 hour, say from 12pm to 1pm ET on his lunch break. That would be 3.65 million jobs saved in one year.

    But he wouldn’t actually have to make so many calls. Another 100 calls and business will get the message. Or he can just Tweet. Keep jobs in the USA, or else. Done. America is great again.

    • #16
  17. EJHill Podcaster
    EJHill
    @EJHill

    @sweezle And Pethokoukis was so enamoured by it himself that he felt compelled to repeat it again in this column.

    I am, as I said yesterday, in a state of confusion. All through the summer there was an uninterrupted medley of themes from our side, to wit:

    • Trump’s populism will kill the GOP. Not only will he get buried in a landslide he’s going to take the down ballot Party with him. We’re going to lose the House, the Senate, Governorships, and State Houses.
    • Furthermore, if we are to avoid 50 years in the wilderness we better learn how to appeal to women, minorities and millennials educated in our neoMarxist universities.

    And then… when Trump delivers the White House and most of the down ballot races we continue to attack, attack, attack – to join with the leftists – not in policy – but in the act of cutting the new administration off at the knees and to squander whatever political capital that comes with winning and flushing it down the toilet even before the inauguration! 

    And to top it off, we’re doing it in a manner that reinforces the worst caricature conservatives have been painted with – uncaring and greedy bastards who only care about the bottom line of their stock portfolios.

    You can keep telling yourself that Trump didn’t win and that it was only that Hillary was unlikable and a horrible candidate and she lost it. Yeah, that and a healthy Cleveland Indians pitching staff means the Cubs aren’t World Series champs, either.

    Maybe this is Darwinian. Maybe we do deserve to die off.

    • #17
  18. TKC1101 Inactive
    TKC1101
    @TKC1101

    EJHill: And then… when Trump delivers the White House and most of the down ballot races we continue to attack, attack, attack – to join with the leftists – not in policy – but in the act of cutting the new administration off at the knees and to squander whatever political capital that comes with winning and flushing it down the toilet even before the inauguration! 

    Center Right aint what it used to be. Smells like Left overs.

    • #18
  19. Dan Hanson Thatcher
    Dan Hanson
    @DanHanson

    This post is right on the money.   A government that strong-arms businesses into making decisions that are not in their best interest will soon find the rate of business startups falling and GDP growth stagnating.  This happens when left-wing governments do it to ‘save the environment’ or to force diversity or otherwise impose their values on business, and it happens when right-wing populist governments do it ‘for the workers’.

    When Reagan forced Japan to impose ‘voluntary’ quotas on auto imports,  it might have temporarily saved some auto workers’ jobs.  But it also took the competitive pressure off the auto industry and allowed them to continue making sub-standard cars using sub-standard manufacturing processes.   In the long run, that did a lot of damage to the domestic auto industry and it wasn’t until the tariffs and restrictions were eased that the auto makers finally made the investments required to modernize production and design and build world-class vehicles.

    If Trump stops the outflow of jobs to Mexico by improving the general economic condition of the U.S. by reducing regulations and taxes across the board,  then yay, go Trump.  But if he does it by threatening individual companies,  carving out crony capitalist exceptions for companies ‘too big to move’, or by slapping tariffs on imports,  then he’s going to be a one-man economic wrecking crew.

    I am withholding judgement until I see how he behaves once in office.  This may be just PR and/or reflect the limits of what he can do until he wields the power of the Presidency.  But it’s certainly a worrying development.

    I say this, by the way, as someone who has really enjoyed just about everything Trump has done since the election.

    • #19
  20. Karl Nittinger Inactive
    Karl Nittinger
    @KarlNittinger

    Joe P: How exactly will this get better when he has the full power of the Executive Branch and can shake down everybody in the United States?

    Perhaps there’ll be a more efficient method devised…I’m thinking maybe of the implementation of a drive-thru window in the new Banana Republic-an Trump® White House. Each CEO or chairman of every company looking to claim he’s moving a couple of hundred jobs can simply drive up, place his order, sign his consent commitments, complete the transaction and move on. Maybe there could also be the option of automatic dispensing of Administration-provided board members….Solyndra/Chrysler bad! Carrier good!!!

    What a great future of dynamism and innovation awaits our economy now that Obama-nomics is being further enshrined….

    • #20
  21. SpiritO'78 Inactive
    SpiritO'78
    @SpiritO78

    kovo62:The Carrier negotiations were never intended to viewed as “policy.” It is one very small victory intended to be symbolic. The policy will come later, and so far Trump’s indications have been that the coming policy will be a combination of carrots and sticks, namely a 15% business tax for all firms and 35% tariff on firms fleeing the USA when they try to import their products. My gut instinct is that such a policy will be wildly popular and will help grow the Republican Party.

    So do I. We don’t really expect Trump to “negotiate” or even weigh in on every company moving jobs overseas. The tone is what matters and he seems prepared to offer tax deals. What better way for American businesses to sell themselves to the public by keeping certain jobs here. The tax plan is the best part though.

    • #21
  22. Tony Sells Inactive
    Tony Sells
    @TonySells

    AnonyMouse:In what universe is one call to save 1,000+ jobs not worth it, no matter who makes the call? He should make 10 of these calls per day. He can do it in 1 hour, say from 12pm to 1pm ET on his lunch break. That would be 3.65 million jobs saved in one year.

    But he wouldn’t actually have to make so many calls. Another 100 calls and business will get the message. Or he can just Tweet. Keep jobs in the USA, or else. Done. America is great again.

    In the universe that another workers company competes with Carrier.  Sure it’s not as large, but now Carrier has a tax break that another mom and pop air conditioner manufacturer doesn’t have.  So now those workers jobs are at risk.  Or in the universe that my taxes are going up to pay for the lost revenue that Carrier is not paying.  

    I miss the days when the “right” discouraged government intrusion into business.  I guess we only do that when a democrat has power and makes these type of deals.

     

    • #22
  23. EJHill Podcaster
    EJHill
    @EJHill

    Tony Sells: In the universe that another workers company competes with Carrier. Sure it’s not as large, but now Carrier has a tax break that another mom and pop air conditioner manufacturer doesn’t have.

    Mom and Pop A/C manufacturers? Really? Please fill us in on the details!

    • #23
  24. Trinity Waters Inactive
    Trinity Waters
    @TrinityWaters

    Karl Nittinger:

    Joe P: How exactly will this get better when he has the full power of the Executive Branch and can shake down everybody in the United States?

    Perhaps there’ll be a more efficient method devised…I’m thinking maybe of the implementation of a drive-thru window in the new Banana Republic-an Trump® White House. Each CEO or chairman of every company looking to claim he’s moving a couple of hundred jobs can simply drive up, place his order, sign his consent commitments, complete the transaction and move on. Maybe there could also be the option of automatic dispensing of Administration-provided board members….Solyndra/Chrysler bad! Carrier good!!!

    What a great future of dynamism and innovation awaits our economy now that Obama-nomics is being further enshrined….

    Did I log into Salon?  Not picking on you in particular, Karl, but comments like this mystify me.  In what universe can Carrier’s minor-league tax incentive juggling that was facilitated by Trump, saving so many jobs creating profitable hardware, be compared to a Marxist boondoggle like Solyndra?   By the way, there is no such thing as Obamanomics; his ploy was to simply rip off the middle class and distribute “his” loot to his friends.  Please.

    • #24
  25. Tony Sells Inactive
    Tony Sells
    @TonySells

    EJHill:

    Tony Sells: In the universe that another workers company competes with Carrier. Sure it’s not as large, but now Carrier has a tax break that another mom and pop air conditioner manufacturer doesn’t have.

    Mom and Pop A/C manufacturers? Really? Please fill us in on the details!

    http://www.arzelzoning.com/

    • #25
  26. TKC1101 Inactive
    TKC1101
    @TKC1101

    EJHill: Mom and Pop A/C manufacturers? Really? Please fill us in on the details!

    I truly am amazed at the people who live in theory land  here. All information come fourth hand from articles read online summarizing research done by someone else to draw conclusions by people who have never seen a factory much less worked in one.

    I sure do miss the little HVAC manufacturer down the lane, with their handmade compressors and the coolant farm in the backyard, like in olden days.  I believe they sold them door to door  and at the county fair.

    Any company that does not know how to shake down a state or county for tax breaks deserves to go away. Most of them have full time staff to arrange those, in 24 hour chat lines.

    • #26
  27. TKC1101 Inactive
    TKC1101
    @TKC1101

    Tony Sells:

    EJHill:

    Tony Sells: In the universe that another workers company competes with Carrier. Sure it’s not as large, but now Carrier has a tax break that another mom and pop air conditioner manufacturer doesn’t have.

    Mom and Pop A/C manufacturers? Really? Please fill us in on the details!

    http://www.arzelzoning.com/

    Do you even follow your own link? They make thermostats and zoning controls. They do not sell heat pumps or AC units.

    • #27
  28. Tony Sells Inactive
    Tony Sells
    @TonySells

    TKC1101:

    Tony Sells:

    EJHill:

    Tony Sells: In the universe that another workers company competes with Carrier. Sure it’s not as large, but now Carrier has a tax break that another mom and pop air conditioner manufacturer doesn’t have.

    Mom and Pop A/C manufacturers? Really? Please fill us in on the details!

    http://www.arzelzoning.com/

    Do you even follow your own link? They make thermostats and zoning controls. They do not sell heat pumps or AC units.

    http://www.addison-hvac.com/

    Here you go cowboy.

    • #28
  29. David Foster Member
    David Foster
    @DavidFoster

    kovo62: Trump’s indications have been that the coming policy will be a combination of carrots and sticks, namely a 15% business tax for all firms and 35% tariff on firms fleeing the USA when they try to import their products.

    If the 35% tariff only applies to “firms fleeing the US”…and not to foreign firms…then all this will do is create a huge competitive disadvantage for US companies versus non-US companies.

    If the 35% tariff only applies to “firms fleeing the US”….and not to firms that are *already* manufacturing outside the US…then it will create a ‘grandfathering’ situation than acts in favor of established firms and against new/growing ones.

    Hopefully Trump understands this point and his harping on “firms fleeing” is a marketing banner rather than the total policy.

    • #29
  30. AnonyMouse Inactive
    AnonyMouse
    @AnonyMouse

    @tonysells Trump’s sell to Carrier was, Hey, look what I’m going to do for *all* businesses that keep jobs in the country, and to *all* businesses that leave. Carrier believed what Trump said he would do and changed their mind and took the small tax incentive that the state of Indiana had already offered and Carrier had previously rejected. States do this all the time to compete for manufacturing jobs. In fact, any company planning to build a factory can always count on getting a tax incentive from a state — if they don’t, the CEO of that company should be fired.

    Trump in no way altered the competitive landscape in favor of Carrier. He simply sold them on his promise of a carrot and stick for all businesses.

    • #30
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