Friday, December 2, 2016

About That Carrier "Win" For Trump

The recent news that United Technologies/ Carrier Corp. cut a deal with the State of Indiana (overseen by Gov. Mike "Dense" Pence) to keep about 1,000 manufacturing jobs in Indiana has been touted by neo- fascist plutocrat Donald "Rump" Trump and large swaths of the accommodating, normalizing media as a big p.r. "win" for Rump's style of dealmaking.  Now that the dust has settled a bit, the details of the deal, and its potential as a template for future "deals" are being called into question.

First, what's actually going to happen to the roughly 2,000 jobs that Carrier was threatening to move from Indiana to Mexico?  After Rump and Dense made their victory tour through the Carrier plant yesterday, here's what happened:
Not long after Mr. Trump and Mr. Pence departed for the airport and to another rally in Ohio to celebrate his victory, workers coming in for the night shift received a letter titled “Company Update on Indianapolis Operations.” 
“While this announcement is good news for many, we recognize it is not good news for everyone,” the letter stated. “We are moving forward with previously announced plans to relocate the fan coil manufacturing lines, with the expected completion by the end of 2017.”  (our emphasis)
That's at least 1,300 workers right there.

So, the deal that United Technologies/ Carrier got to keep less than half of the 2,000 jobs in the U.S. included $7 million annually over ten years (h/t Jerry in comments) in corporate welfare tax breaks courtesy of Indiana taxpayers.  Is there must be more to this "great" deal.
“Every penny counts, but if we step back and I’m looking at earnings of $6.60 per share this year, 2 cents is an easy concession if the president-elect listens to some of the company’s bigger concerns,” said Howard Rubel, a senior equity analyst with Jefferies, an investment banking firm in New York.  (our emphasis)
Listening to "the company's bigger concerns" means Rump essentially gave United Technologies/ Carrier future leverage in seeking corporate welfare tax breaks on its other businesses, or other forms of corporate welfare incentives.  Tax breaks themselves create perverse incentives, leading to a race to the bottom between states and increased potential for replacing jobs through automation.

Rump had also dangled the possibility of canceling government contracts with United Technologies, a threat no doubt taken seriously given Rump's private business model of stiffing contractors.

Sen. Bernie Sanders cuts to the chase on what this "win" for Rump actually portends:
In essence, United Technologies took Trump hostage and won. And that should send a shock wave of fear through all workers across the country. 
Trump has endangered the jobs of workers who were previously safe in the United States. Why? Because he has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives. Even corporations that weren’t thinking of offshoring jobs will most probably be reevaluating their stance this morning. And who would pay for the high cost for tax cuts that go to the richest businessmen in America? The working class of America(our emphasis)
Rump, the friend of the Forgotten Man and business genius, will be snookered into doling out corporate welfare tax breaks and other incentives by every predatory corporation in America.  Eugene Robinson illustrates how they'll game him:
So imagine you’re a CEO who wants to send, say, 5,000 manufacturing jobs overseas. Having learned from the Carrier example, you might begin by announcing that unfortunately you are forced to eliminate 10,000 jobs because of the crushing tax burden. Even if you really want to move the jobs to Vietnam or Kenya, just say you’re looking at possible sites for a new plant in Mexico. That’s sure to get Trump’s attention. 
When Trump calls offering tax breaks or enterprise zone incentives or free rounds of golf in Scotland, whatever goodies he tosses in, hold out for a while — then reluctantly, in the spirit of patriotism and Making America Great Again, announce you’ve agreed to cancel half of the 10,000 job cuts. You’d still be meeting your original goal of eliminating 5,000 jobs, only now you’d also have a lower corporate tax bill and a tee time at Turnberry.

So, we can look forward to this weaselheaded f*cknugget businessman, who's mostly adept at declaring his own companies bankrupt and getting huge tax write- offs, lending his magic touch to making great deals for the American worker and economy, and the puerile, slavering media will applaud. Start stuffing your cash in mattresses.

BONUS:  Gene has more of what's to come at Disaffected and It Feels So Good.

BONUS II:  Andy Borowitz has his sarcastically accurate take, expressed in this headline - TRUMP WARNS THAT COMPANIES SHIPPING JOBS OVERSEAS WILL BE SLAPPED WITH ENORMOUS BRIBES.


(Photo: Rump's favorite picture - use "liberally.")


Jerry Critter said...

"So, the deal that United Technologies/ Carrier got to keep less than half of the 2,000 jobs in the U.S. included $7 million annually in corporate welfare tax breaks courtesy of Indiana taxpayers."

Let me make one minor correction. That is 7 million per over TEN YEARS, or $700,000 per year.

W. Hackwhacker said...

Thanks, Jerry. We'll correct! Good to have you watching us!