Capitalism and Its Current Respectability

Lately the reports from The New York Times and The Washington Post and the rest of the respectable press have a strange new respect for the old-fashioned Republican sort of free markets economics, which we attribute entirely to president-elect Donald Trump.
Although Trump won’t take office for another five weeks or so, he’s already made news by cajoling the Carrier heating and air conditioning company into keeping 800 jobs that were slated for Mexico in Indiana, “tweeted” the cancellation of an order with Boeing for a new Air Force One fleet over alleged cost overruns, and once again threatened any company that’s considering a foreign work force with a 35 percent tariff. All of which is news that poses a dilemma for the respectable press.
The current operational definition of a respectable press is its instinctive opposition to anything that any Republican might do, and especially Trump, but the president-elect’s unorthodox style of Republicanism is not susceptible to the usual criticisms. Trump’s meddling in Carrier’s affairs is precisely the sort of industrial policy that Democrats have long championed, and although they usually prefer the stick of punitive tax hikes to such carrots as the $7 million in tax abatements that the state of Indiana will offer it’s not enough to hang a scathing critique on. Boeing and the rest of the military-industrial complex are usually cast as the villains, and any attempt to shortchange them is usually cheered. All the tough protectionist talk that got Trump elected isn’t much different from what self-described socialist Vermont Sen. Bernie Sanders eventually forced Democratic nominee Hillary Clinton to embrace.
Compelling arguments against Trump’s policies can only be found on the right, in the free market theories that until recently defined the Republican party’s economic platform, and in its desperation the respectable is suddenly willing to go there. All the stories now feature lengthy explanations of Trump’s inefficient market distortions by economists from such capitalist think-tanks as the Cato Institute and the American Enterprise Institute or the University of Chicago or some similarly red-in-tooth-and-claw economics department, and without the usual characterization’s of “right wing” or mention of any funding they might be receiving from the Koch brothers. They’re the same names that have been in the respectable press’ rolodex the past eight years, quoted briefly in the tenth or eleventh paragraph for the sake of balance, but suddenly they’re showing up right after the lead and getting a chance to rebut the Trumponomics that is now being added for the sake of balance somewhere in the ten or the eleventh paragraph.
We’re glad to see it, being red-in-tooth-and-claw capitalists and no fans of Trump ourselves, but it seems a case of much too little and far too late. The respectable press wasn’t making such a fuss about Trump’s Republican heresies back during the Republican primary, when it might have done some good, and these days the respectable press doesn’t seem to have much influence even with with Democrats. Such disreputable Democrats as the party’s newest congressional leader, New York Sen. Chuck Schumer, have long been the beneficiaries of Trump’s political donations, and they’ve always come through for him in the past, it’s hard to see how they’re suddenly going to be swayed the think-tank theories of a suddenly swept away Republican party to oppose the same sort of tax-abatement-dealing and corporate strong-arming and old-fashioned protectionism they’ve always wanted, and the respectable press will also have a hard time with that news.
The old tried-and-true ideas will surely stick around to denouement, with all the variations from those think tanks and economic departments and the help of such respectably anti-Trump conservative presses as National Review and The Weekly Standard and The Central Standard Times, even if it is eventually relegated to the tenth and eleventh paragraphs. Eventually they’ll get another try. In the meantime we’re glad to see the likes of The New York Times and The Washington Post helping out, however begrudgingly.

— Bud Norman

What’s Seen on the Front Page, and the Unseen Consequences

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