Some eleven hundred people are going to keep their jobs at the Carrier heating and air conditioning plants in Indiana, an early Christmas gift from president-elect Donald Trump, and we’re happy for them. We can’t help worry, though, how it will work out for the rest of us.
Trump can rightly boast that he hasn’t even taken office yet but has already saved those eleven hundred jobs from being shipped off to Mexico, having negotiated the deal that offered Carrier a compelling mix of tax incentives and veiled threats to only cut 300 to 600 jobs at the plant and 700 at another facility, so naturally he boasted at length Thursday during his “Thank You Tour” of ongoing campaign rallies and photo opportunities in the heartland. Even The New York Times and The Washington Post and all the alphabet television networks were obliged to run shots of Trump beaming in the company of grateful workers, and to quote his bold claim that “Companies are not going to leave the United States any more without consequences. Not gonna happen. It’s not gonna happen.” For the moment, at least, Trump’s populist economics seems triumphant.
As the great Frederic Bastiat observed about economic policies, however, “it almost always happens that when the immediate consequence is favorable, the ultimate consequences are fatal, and the converse.” One would have to be very hard-hearted not to feel good for those presumably hard-working Hoosiers whose jobs were spared, yet one would also have to be very soft-headed not to wonder what happens when every American company in search of tax incentives starts making veiled threats of their own.
Perhaps they can all be tax incentivized and otherwise bullied into unprofitable arrangements with their employees, but it’s hard to see how that works out for anybody over the long run. Perhaps the co-author of “The Art of the Deal” will make such great deals, such beautiful, huge deals that everyone winds up getting rich, but that’s not the way it worked out with Trump Mortgage or Trump Network or Trump University or Trump Steaks or the Trump Taj Mahal casino-and-strip-club or numerous other Trump-branded businesses, not to mention the New Jersey Generals of the United States Football League, although we hear that the made-in-China Trump ties are still selling briskly, so we’re skeptical that Trump can run every other business in the country any better. Perhaps all those foreign markets that Trump has promised to protect America from won’t decide to protect themselves from Trump and all his business partners in the American economy with retaliatory measures, too, but we think you’d find a better bet and at least a pair of bare breasts at a Trump casino if there were any left.
For the moment, though, Trump is indeed triumphant. It’s hard to argue with a front page picture of smiling Indiana furnace-makers, and corporate big-wigs in fancy offices shipping jobs off to Mexico are such central-casting villains that even Ayn Rand would have a hard time rising to their defense, and old quotes from long-dead French economists, no matter how time-tested, are now easily shouted down. The Democrats have been peddling protectionism and central planning for as long as we can remember, and although the self-described socialist and almost-Democratic-nominee Sen. Bernie Sanders is grousing about the tax breaks involved in the Carrier deal we expect that most of his congressional colleagues will be happy to make similar deals on behalf of certain of their constituents. We also expect that most of the Republicans who once stood steadfast against such nonsense back when President Barack Obama was picking the winners and losers will now be incentivized and bullied into going along as well, and those hardy few who resist will be angrily “tweeted” about and face difficult re-election races. For now most of America seems quite happy about having someone in the government run the entire American economy, even if they’re rather angrily divided about who that person should be, and Bastiat’s wise warnings about the unseen consequences of well-intentioned economic policies will go unheard, and for that matter the consequences will be mostly unseen.
You’ll be seeing lots of pictures of Trump posing next to grateful workers whose villainous boss has been incentivized and bullied into letting them keep their jobs, but none of the workers who would have been employed if free people and free markets had been allowed to continue along the circuitous and often bumpy route that has led to the past many years of rising global prosperity and relative peace and rapid technological and scientific advancement and widened scope of glorious liberty. The progress has been slowed by the past eight years of Obama’s meddling, indeed the past 90 or so years of varying degrees of government meddling, and Trump might slow it further yet. He’s also promising deregulation and tax cuts and all the other free market notions that Republicans have traditionally peddled, and he might incentivize and bully enough Democrats to make that happen, but we do hope he’ll refrain from trying running every business in America with American workers and American materials, the way he didn’t run his, no matter how tempting the photo opportunity might be.
— Bud Norman