By Kevin D. Williamson
Monday, December 26, 2016
The strange thing about bailouts, such as the one Donald
Trump and Mike Pence just organized for the Carrier air-conditioner company, is
that they are detested in theory but relatively popular in practice, at least
when they are put together by your guy. When Barack Obama boasted of having
saved GM, he wasn’t scoffed at as a meddling know-nothing who used other
people’s money to save incompetent corporate managers and rapacious union goons
from their own stupidity and excesses — he was considered a friend of the
working man, or at least a well-intentioned would-be friend.
The automaker bailouts were never generally popular. A
small majority of Americans disapproved of them, but that majority was
lopsided: Sixty-three percent of Democrats approved of the bailouts, while 73
percent of Republicans opposed them. Political tribalism is strong here: The
Trump-Pence Carrier handout is supported by 40 percent of Democrats, 54 percent
of independents, and a remarkable 87 percent of Republicans, according to a Politico poll.
Carrier, it is worth noting, is not a bankrupt,
struggling dinosaur manufacturer like GM: It turned a handsome profit of $4
billion last year.
United Technologies, a large manufacturing conglomerate
that owns Carrier along with Otis elevators and Pratt & Whitney engines,
operates a few facilities in Mike Pence’s home state of Indiana. While the
presidential campaign was under way, it announced that it was going to relocate
one of those facilities, a furnace plant, to Mexico, along with the jobs
associated with it. A second facility was to be relocated as well, affecting a
total of about 2,000 jobs. That this was happening in his vice-presidential
nominee’s backyard was embarrassing for Trump.
Trump likes to talk tough about trade and outsourcing,
but his actual strategy with Carrier was the usual political approach:
showering the firm with other people’s money. In exchange for at least $7
million in tax incentives, Carrier will . . . do almost everything it was
planning to do anyway: It will close Indiana facilities, and it will move
manufacturing and manufacturing jobs to Mexico. The fig leaf is 800 jobs that
will be “saved” in Indiana, a figure that includes at least 300 positions that
never were scheduled for offshoring to begin with. Carrier will be using those
tax incentives to improve the automation in its U.S. facilities, i.e., to
replace Indiana workers with robots instead of Mexicans.
United Technologies, like General Electric and Lockheed
Martin, is deeply enmeshed in government. It derives at least 25 percent of its
revenue from government contracts, 10 percent of it from the Department of
Defense alone. It is not a company that can afford to have an enemy in the
White House or the Pentagon. Which is to say that Trump, who prides himself on
his negotiating skills, entered the negotiation with a very strong hand.
Spending a few million dollars a year on more expensive labor in Indiana is
chump change compared with the $5.6 billion in aircraft engines and components
United sold to the federal government last year.
Set aside, for the moment, the fact that using those
federal contracts as leverage is kinda sorta technically illegal. It is
difficult to imagine that a mere matter of law would prevent Trump from playing
that card, and knowledgeable players such as former Indiana lieutenant governor
John Mutz, who sits on the board of the Indiana Economic Development
Corporation, are frank about the larger financial stakes for United, as indeed
is the firm’s CEO, who told Jim Cramer that the possibility of losing its
government contracts weighed on his decision to give Trump a win in Indiana,
however symbolic. In fact, Mutz’s organization had put together a similar
proposal and was rejected by the company. Trump’s deal was substantially the
same, but it was coming from the president-elect.
So, why didn’t Trump get more?
The answer is probably straightforward: He didn’t need
more. Trump began his public life as a creature of the tabloid press in New
York and is now a creature of social media. He was an incompetent casino
operator and hotelier, but he understands publicity and has a genuine gift for
it — without that, he’d just be another Fifth Avenue doofus who inherited a
$200 million real-estate portfolio from his dad. There will be a day or two of
headlines with the words “Trump,” “deal,” “Indiana,” and “jobs,” and that suits
Trump. The emptiness of the deal will be documented and lamented by the 0.4
percent of Americans who follow these things closely.
The Carrier bailout is awful, of course. It is a case of
two politicians’ using public funds to bribe a business into doing things that
benefit them personally and politically while creating no real long-term
economic value. Pence, who dropped his free-market principles like the world’s
hottest potato once he got within sniffing distance of presidential power, can
burnish his populist credentials at the taxpayers’ expense, and Trump can get
ready to flit on to the next publicity stunt.
But the emerging “Superman” politics here are truly
poisonous. One of the genre conventions of superhero stories is the compression
of all the world’s drama into the immediate presence of the hero — only his
actions and intentions are relevant. People may be dying all over the world,
but Superman saves Lois Lane. (Comic-book movies have lately subverted that
convention by focusing on the collateral damage done by superheroes to the
cities in which they live.) What that means in the context of our contemporary
presidential politics is that no one takes any note of the fact that Carrier is
not the only HVAC company in the United States or the only industrial concern
in Indiana. Carrier has competitors that employ Americans, pay taxes, and
produce real economic value, and they have been put at a relative disadvantage
by the political favoritism extended to Carrier. What about them? They’re not on
the stage, so they do not matter.
What is important to understand here is that this is not
part of an economic-development agenda: It is theater. It is an adolescent
fantasy of political power, and wherever Superman happens to land is where the
action is. Nothing else is relevant. It does not matter that there is no
broader logic at work: Small displays of efficacy can work to create an
illusion of general efficacy. It is busyness as business.
This is, by his own account, Trump’s conception of the
purpose of the presidency: to go from situation to situation and “make deals.”
But a long-term economic program for the United States — one that accounts for,
e.g., that big automation investment in Indiana and what it means for the
future of the American work force — is not a deal to be made. Preventing a
single symbolically important act of offshoring is a fundamentally different
thing from understanding the underlying economic forces that make that
offshoring attractive — as the Germans will tell you, it isn’t just about low
wages — and governing in a way that puts those forces to work in Americans’
interests.
Trump’s big idea so far is spending $7 million of other
people’s money to delay an embarrassing headline. Some deal. Some deal-maker.
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