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. AnonyMouse Inactive
    AnonyMouse
    @AnonyMouse

    One phone call 1,000+ jobs, 45 minute meeting 50,000 jobs. Not bad for an hour’s work. Keep working Mr. Trump.

     

    • #31
  2. Paul Dougherty Member
    Paul Dougherty
    @PaulDougherty

    Look, we can’t be concerned with every undercapitalized Mom and Pop operation that refuses to see the writing on the wall. If these ” Too Medium to Fail” organizations don’t get with the program and fire a few estimators/engineers and hire a publicist or lobbyist, then they can’t be helped. Might I suggest contacting The Polling Company, they seem to do good work.

    • #32
  3. Man With the Axe Inactive
    Man With the Axe
    @ManWiththeAxe

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

    Rule 1: Trump can do no wrong.

    Rule 2: If Trump does wrong, see rule #1.

    • #33
  4. The Question Inactive
    The Question
    @TheQuestion

    TKC1101: 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.

    Of course companies are going to seek out the best deals from the government that are available.  The question is whether we want the government structured in such a way that businesses need to please the government.  I would prefer a system where companies are trying to satisfy the consumers, rather than trying to satisfy the government.

    • #34
  5. The Question Inactive
    The Question
    @TheQuestion

    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.

    I hope this is true.  I’m keeping an open mind.

    • #35
  6. Man With the Axe Inactive
    Man With the Axe
    @ManWiththeAxe

    TKC1101:

    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.

    The Carrier deal was not about a shakedown of a state for a piddling $700,000 per year for 10 years. It was about the many $billions in UT contracts that Trump may have threatened to pull. So, they kissed his ring and kept enough jobs in the US to give him his public relations victory.

    • #36
  7. Jamie Lockett Inactive
    Jamie Lockett
    @JamieLockett

    AnonyMouse:One phone call 1,000+ jobs, 45 minute meeting 50,000 jobs. Not bad for an hour’s work. Keep working Mr. Trump.

    The SoftBank stuff is the kind of thing Trump should be working on. The statement from their CEO cited deregulation and the business-friendly environment he expects from a Trump Administration. That is exactly the kind of effect we want a conservative President to have.

    • #37
  8. Man With the Axe Inactive
    Man With the Axe
    @ManWiththeAxe

    This thread got me thinking again about the thread the other day regarding kiosks at McDonald’s and how they and other technological advances were going to put so many low wage people out of work.

    Maybe Trump should threaten one big company with the loss of its government contracts if it replaces workers with technology. It would certainly help to broaden the appeal of the Republican Party. It would be the “party with a heart.”

    • #38
  9. EJHill Podcaster
    EJHill
    @EJHill

    The Question:  I would prefer a system where companies are trying to satisfy the consumers, rather than trying to satisfy the government.

    Then does that mean you would prefer the Justice Department to begin a new and vigorous campaign to break up large corporations from their subsidiaries? Because if the government can man handle a manufacturer of air conditioners because it has $6.7B in defense and aerospace contracts, then perhaps we need to lessen the hold they have on each other by spinning unrelated companies apart from each other.

    • #39
  10. Jamie Lockett Inactive
    Jamie Lockett
    @JamieLockett

    EJHill:

    The Question: I would prefer a system where companies are trying to satisfy the consumers, rather than trying to satisfy the government.

    Then does that mean you would prefer the Justice Department to begin a new and vigorous campaign to break up large corporations from their subsidiaries? Because if the government can man handle a manufacturer of air conditioners because it has $6.7B in defense and aerospace contracts, then perhaps we need to lessen the hold they have on each other by spinning unrelated companies apart from each other.

    That’s your solution?

    • #40
  11. The Question Inactive
    The Question
    @TheQuestion

    EJHill:

    The Question: I would prefer a system where companies are trying to satisfy the consumers, rather than trying to satisfy the government.

    Then does that mean you would prefer the Justice Department to begin a new and vigorous campaign to break up large corporations from their subsidiaries? Because if the government can man handle a manufacturer of air conditioners because it has $6.7B in defense and aerospace contracts, then perhaps we need to lessen the hold they have on each other by spinning unrelated companies apart from each other.

    The government should make its defense contracting plans based on the best bids, not based on what other parts of the corporation are doing.  I understand realistically that political decisions are going to happen, but I’m not going to cheer for them.

    • #41
  12. goldwaterwoman Thatcher
    goldwaterwoman
    @goldwaterwoman

    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.

    Exactly.

    • #42
  13. Quake Voter Inactive
    Quake Voter
    @QuakeVoter

    Is Trump proposing to save one job at a time?  Or is he scoring a few more small-bore economic but big-bore political victories which shore up the remarkable level of support from working class voters in the former industrial union heartland for a 15% corporate tax, penalty free profit repatriation and an all cylinders acceleration in domestic energy exploration and extraction?

    Evaluating Trump’s moves here apart from their counterpart policy proposals is simply obtuse.

    Will the Congress push back against lower taxes, restrained regulation and pro-energy policies?  Not likely.

    Will Congress modify Trump’s call for 35% tariffs?  Certainly.

    Yet, Pethokoukis and his pen pals at AEI and CATO are right to be concerned.  The days of rubberstamps for 900 page trade agreements replete with set asides, exemptions, qualifications and exclusions is over.

    As are the days when Scott Lincicome could give the first and last word on trade agreements on nearly every conservative podcast and talk show with no objections ever raised.  And no one questioning, of course, why simple applications of comparative advantage require the neverending $750 per hour employment of White and Case partners like Lincicome.

    The idea that a little more fairness for American workers cannot be negotiated into these deals is preposterous.

     

    • #43
  14. Jamie Lockett Inactive
    Jamie Lockett
    @JamieLockett

    Not for nothing, but Carrier is raising its prices:

    https://www.bloomberg.com/news/articles/2016-12-05/carrier-raises-prices-after-trump-talks-alter-plant-closure-plan

    • #44
  15. V the K Member
    V the K
    @VtheK

    Well, today, that deplorable Trump fellow secured $50B in investments from a Japanese banks, good for another 50,000 jobs. Stop him, Mr. Pethokoukis, he’s an economic wrecking ball.

    I see the Carrier deal as a PR win Trump can leverage for broader tax and regulatory reform. Kvetching about it is just that… kvetching.

    As for “Well… those Carrier jobs are nothing compared to the other great jobs the economy is creating.” Well, let’s just say one manufacturing job is not exactly equal to one job waiting tables at Buffalo Wild Wings.

    • #45
  16. Jamie Lockett Inactive
    Jamie Lockett
    @JamieLockett

    V the K:Well, today, that deplorable Trump fellow secured $50B in investments from a Japanese banks, good for another 50,000 jobs. Stop him, Mr. Pethokoukis, he’s an economic wrecking ball.

    I see the Carrier deal as a PR win Trump can leverage for broader tax and regulatory reform. Kvetching about it is just that… kvetching.

    As for “Well… those Carrier jobs are nothing compared to the other great jobs the economy is creating.” Well, let’s just say one manufacturing job is not exactly equal to one job waiting tables at Buffalo Wild Wings.

    The Softbank situation is almost the polar opposite of the Carrier deal. I think it’s fair to criticize Trump when he does bad things and praise him when he does good things.

    • #46
  17. AnonyMouse Inactive
    AnonyMouse
    @AnonyMouse

    Man With the Axe:This thread got me thinking again about the thread the other day regarding kiosks at McDonald’s and how they and other technological advances were going to put so many low wage people out of work.

    Maybe Trump should threaten one big company with the loss of its government contracts if it replaces workers with technology. It would certainly help to broaden the appeal of the Republican Party. It would be the “party with a heart.”

    The McDonald’s kiosk is nothing compared to what Amazon is introducing, Amazon Go. Other grocery chains will have to copy to compete. It will be transformational. But automation and other technological progress is definitely not something the government should seek to impede, even in the name of jobs. Standing behind a cash register scanning items all day long is soul-killing work. Automating this will free up these low-cost workers to do something else that is far more productive and in need of human beings.

    Another way to look at it: Today there are tasks that only human beings can do, but hiring human beings to do them is too expensive, so those tasks go undone. We don’t even know what these tasks are yet, because the cost has been too high for them to be revealed. Once Amazon Go has transformed the retail industry to the point there is no such thing as a “cashier” anymore, the task that these people should be doing will be revealed. For example, maybe it is elder care. Today it is far too expensive to hire someone to give proper care to older people. But at $7.25 per hour, maybe this will finally be possible. And there are many other things like this.

    • #47
  18. Manny Coolidge
    Manny
    @Manny

    Did Trump say it was policy?  It was additional personal effort.  Policy will be following.  I would rather have a president that took the time and effort to help Americans – in addition to policy – not one that sat on his lazy behind.

    • #48
  19. goldwaterwoman Thatcher
    goldwaterwoman
    @goldwaterwoman

    Manny: Did Trump say it was policy? It was additional personal effort. Policy will be following. I would rather have a president that took the time and effort to help Americans – in addition to policy – not one that sat on his lazy behind.

    The PR is great for him, and it’s a very effective use of the bully pulpit to influence businesses who are considering a move outside the country. He’s also done this without  a single piece of legislation.

    • #49
  20. Joe P Member
    Joe P
    @JoeP

    AnonyMouse:

    <SNIP>

    Standing behind a cash register scanning items all day long is soul-killing work. Automating this will free up these low-cost workers to do something else that is far more productive and in need of human beings.

    Another way to look at it: Today there are tasks that only human beings can do, but hiring human beings to do them is too expensive, so those tasks go undone. We don’t even know what these tasks are yet, because the cost has been too high for them to be revealed. Once Amazon Go has transformed the retail industry to the point there is no such thing as a “cashier” anymore, the task that these people should be doing will be revealed. For example, maybe it is elder care. Today it is far too expensive to hire someone to give proper care to older people. But at $7.25 per hour, maybe this will finally be possible. And there are many other things like this.

    This optimism you express about technology replacing human beings is not consistent with your prior attitude about saving all jobs possible from moving to China. Their effect on Americans is exactly the same.

    What in your mind is the difference between Amazon Go replacing a cashier and a Chinese factory worker who is willing to work for $10/day replacing an American who cannot work for less than $60/day?

    • #50
  21. Joe P Member
    Joe P
    @JoeP

    AnonyMouse:Another way to look at it: Today there are tasks that only human beings Americans can do, but hiring human beings Americans to do them is too expensive, so those tasks go undone. We don’t even know what these tasks are yet, because the cost has been too high for them to be revealed. Once Amazon Go Foxconn has transformed the retail manufacturing industry to the point there is no such thing as a “cashier American manufacturing line worker” anymore, the task that these people should be doing will be revealed. For example, maybe it is elder care. Today it is far too expensive to hire someone to give proper care to older people. But at $7.25 per hour, maybe this will finally be possible. And there are many other things like this.

    Those words are still true with the substitutions I just made, right?

    • #51
  22. Joe P Member
    Joe P
    @JoeP

    Trinity Waters:

    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.

    Exactly what is the difference between Solyndra and Carrier? They’re both examples of corporate welfare. The only difference was that Solyndra was conceived as a corporate welfare queen and that Carrier is only now a welfare queen.

    • #52
  23. TKC1101 Inactive
    TKC1101
    @TKC1101

    Jamie Lockett: The Softbank situation is almost the polar opposite of the Carrier deal. I think it’s fair to criticize Trump when he does bad things and praise him when he does good things.

    And if you want the tax cuts passed, you use the public support for the Carrier move to stare down congress to pass your package.

    It is politics, not ideology. You use all tools to accomplish the goal.

    • #53
  24. James Lileks Contributor
    James Lileks
    @jameslileks

    goldwaterwoman: He’s also done this without a single piece of legislation.

    A phrase that would trouble us if it was applied to a Progressive PE, no? If President-Elect Hillary had personally quashed the North Dakota pipeline through personal intervention, would we be upset about extra-legal authority?

    The bully pulpit is a means to persuade, not enact.

    • #54
  25. James Lileks Contributor
    James Lileks
    @jameslileks

    TKC1101: And if you want the tax cuts passed, you use the public support for the Carrier move to stare down congress to pass your package.

    Good point. but:

    It is politics, not ideology. You use all tools to accomplish the goal.

    “Tools” can be broadly defined. If the President can usurp power over immigration with executive orders, should he be able to set tax and tariff policy by the same?

    Trumpism is an ideology, inasmuch as it has certain precepts, but it wishes to be called something else because “ideology” smacks of inflexible ivory-tower egghead theories that do not reflect the needs of the  Real World. Trumpism is pragmatic, and hence requires responses to immediate needs without consulting the sclerotic institutions that have failed in the past. But doesn’t this grant license to subvert anything that stands in the way of the Good Things?

    We have the Presidency and the Congress. Are these not tools enough?

    • #55
  26. TKC1101 Inactive
    TKC1101
    @TKC1101

    James Lileks: We have the Presidency and the Congress. Are these not tools enough?

    I was referring to the tools of persuasion.  You use every advantage you can muster to cut a deal. I expect Trump understands he will need to sit down with Chuckie and his minions and work some stuff out.  The more street cred you have , the better that kind of meeting works.

    Carrier is street cred.  It was the perfect media package. The equivalent of a nice big baseball bat in a street confrontation.

    You might not remember the old days when the parties actually sat down and figured out how to wrestle the pig to the ground and both come up looking like they won. I expect you might, or ask your Dad.

    Those days are back.  Trump and  Chuckie both know some stuff has to happen. Trump wants the working class voters and Chuckie wants them back.  Chuckie does not have a Carrier. Capiche?  Two  gangs, working out the rules for the territory.

    We have the Presidency , we have Congress, but we also have Politics.  We are moving from an era of gridlocked trench warfare and posing in Opposition To Things with two sides glowering at each other to  one of mobility, deals and action.

    We could see the construct of Win Win emerge every once in a while on something larger than a resolution declaring strawberries to be wholesome food.

    • #56
  27. Franco Inactive
    Franco
    @Franco

    James Lileks:

    goldwaterwoman: He’s also done this without a single piece of legislation.

    A phrase that would trouble us if it was applied to a Progressive PE, no? If President-Elect Hillary had personally quashed the North Dakota pipeline through personal intervention, would we be upset about extra-legal authority?

    The bully pulpit is a means to persuade, not enact.

    I fail to see how this wasn’t persuasion, mainly because nothing was “enacted”.

    For those who were bouncing around in the media echo-chamber of the latest discovery of a decades-old off-mic remark by Trump; Trump met personally with Carrier employees early in the primaries and made it something of an example and a cause. He mentioned it quite often on the campaign trail.

    As to the conter-example provided, one is a drag on jobs and economic progress, while the Carrier decision is a net gain of jobs and investment. Had Hillary done the same in the case of Carrier, I would not have objected myself.

    The example also shows a mind-set that we are not in a political war, that we forever must set fine examples and explain to everyone from the virtual pages of NRO, Ricochet and the Weekly Standard (and not Breitbart, ahem) all 25,000 of them –  the precepts of free-trade and government noninterference (as though there isn’t massive existing government ‘interference’ basically forcing these companies offshore!)

     

     

     

    • #57
  28. Franco Inactive
    Franco
    @Franco

    After we explain our vaunted principles, we tell these 1000 families they should suck it up and use their Christmas vacay to retrain themselves for another job. Something in the service sector perhaps….

    As EJ says “this is why voters have been running away from the GOP like a scalded cat.”

    • #58
  29. V the K Member
    V the K
    @VtheK

    Just the fact that the “free traders” seem to be remorseful that jobs are not being sent to Mexico goes a long way to explain why Trump won and why the more Establishment candidates lost. It is difficult, if not impossible, to imagine a Jeb Bush working out a deal like this.

    • #59
  30. V the K Member
    V the K
    @VtheK

    The tone of this piece, rather than “The Carrier deal is a good, symbolic first step if it leads to broader tax and regulatory reform,” seems to be, “Those jobs should have gone to Mexico, my elegant theory of international trade and comparative advantage demands it.” They have become so enamored with an idealized construct that they are in denial about its real world shortcomings. Laid-off workers are a kind of blasphemy against the Temple of Open Borders/Free Trade economics.

    It’s a bit like Obama’s dogmatic foreign policy: America will set aside its national interests and instead behave like a good global citizen, and then everyone else will do the same. This has not worked well in practice because instead of behaving like “good, global citizens,” countries like Iran, Cuba, Russia, and China have taken this as an opportunity to push their national interest.

    Likewise, in the real world, when America idealistically, naively, altruistically opens itself up to “free trade” with Mercantilist China, or corrupt Mexico it’s more than a bit callous to treat American workers as acceptable collateral damage in service to economic dogma.

    • #60
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