Last updated on July 17th, 2023 at 09:37 pm
Donald Trump has been patting himself on the back ever since it was announced that he and his team supposedly struck an agreement with Carrier to keep 800 of the company’s jobs from going to Mexico.
The more we learn about this so-called “deal,” though, the more it sounds like Trump, led by Indiana governor and Vice President-elect Mike Pence, bribed the company with taxpayer dollars – $7 million to be exact – so the company wouldn’t move all of its jobs elsewhere.
Remember, the corporation is still moving about 1,300 jobs to Mexico, despite being given a massive government handout funded by Indiana taxpayers.
Economists have been quick to pounce on the agreement, calling it a bad long-term strategy that will only encourage large companies to shake down the government whenever they want some money.
Every savvy CEO will now threaten to ship jobs to Mexico, and demand a payment to stay. Great economic policy. https://t.co/t2WAJOgh8F
— Justin Wolfers (@JustinWolfers) November 30, 2016
Nobel Prize-winning economist Paul Krugman also put the Carrier deal into perspective by comparing it to President Obama’s successful auto rescue, which saved over a million jobs. Back then, the same people applauding Trump for “saving jobs” attacked the current president for moving in to save a vital American industry.
If we used Trump’s Carrier strategy, it would take 30 years to save the number of jobs President Obama was able to save in one swoop, Krugman tweeted:
Another metric: Trump would have to do one Carrier-sized deal a week for 30 years to save as many jobs as Obama’s auto bailout
— Paul Krugman (@paulkrugman) November 30, 2016
What’s also missing in the discussion around this deal is just how much larger the manufacturing problem is in the United States – and how little Trump’s PR stunt did to help it. Throwing tax incentives at one company to save a couple hundred jobs does nothing to change the overall outlook for the manufacturing industry.
Steve Rattner, who led the Obama auto task force, underscored this reality in a tweet earlier today:
Total Carrier jobs saved: 1,100
Carrier jobs saved from going to Mexico: 800
Manufacturing jobs lost this year alone: 62,000— Steven Rattner (@SteveRattner) December 1, 2016
Rattner also pointed out just how much the economy has improved in Indiana during Obama’s time in office, despite those now saying “finally we have a president (Trump) who will stand up for workers.”
Tweet:
For all those questioning what Obama ever did for Indiana, here’s Indiana’s jobless rate since he took office: pic.twitter.com/C5ehHzM0Pi
— Steven Rattner (@SteveRattner) December 1, 2016
Justin Wolfers also noted that six times the number of jobs saved in the Carrier deal were likely lost in the two-hour flight Trump took to Indiana to brag about it:
My latest: In the 2 hours Trump spent flying to Indiana to boast of saving 1,000 jobs, another 6,000 were destroyed.https://t.co/Wp6OBO3vPW
— Justin Wolfers (@JustinWolfers) December 1, 2016
Ultimately, Trump and Pence’s – okay, mostly just Pence’s – deal with Carrier amounts to little more than a post-election PR stunt. From a purely political standpoint, it was pretty clever.
But as an overall economic policy, as many economic thinkers have pointed out, it’s not clear how smart it was. In fact, in the long term, it could do more damage than good.
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