CARRIER HAD PREVIOUSLY REJECTED A STATE TAX PACKAGE TO STAY IN INDIANA

…The president-elect visiting Carrier in Indianapolis

 

The Carrier deal was not made between the president-elect and Carrier.

 

OK, just what can we say about the deal that was made with United Technologies (UT) for keeping their Carrier division in Indiana?

 

Well, first it was a deal made between the Governor of Indiana / vice president-elect, and UT, it was not made between the president elect and Carrier.

 

Yes, the deal is for the state of Indiana to give millions of dollars in tax incentives to Carrier for keeping 1,100 jobs in Indiana.  It was not a deal made between the new president-elect and Carrier, even though Donald Trump is taking credit for the deal. 

 

On the campaign trail, Trump had mocked those politicians who offered low-interest loans and tax abatements to keep factories in the United States, yet that’s exactly what was done at Carrier.  In addition, since his “thank you” trip to Carrier was covered by every major news outlet: foreign, domestic and cable, that gave Carrier millions of dollars of free advertising and public relations promotion.

 

It must also be noted that regarding the deal that was cut with UT, there’s no way that kind of deal can be made with all the companies in the country that are going to be moving off-shore for saving on their manufacturing costs.

 

One interesting part of the deal and some interesting results from Trump’s “thank you” trip to the Carrier plant was a Trump comment that he made during the election campaign.  While on the campaign, Trump had vowed that “We’re not going to let Carrier leave.”  When Trump had been reminded of that, Trump said that he didn’t think he had ever said that.  But when he was shown a video clip showing that was exactly what he had said, Trump was shocked that the Carrier workers had taken him literally.

 

That doesn’t bode well for all of Trump’s many ridiculous promises.

 

But Trump then repeated that American companies are not going to leave the United States without serious consequences,” Trump had declared while at Carrier: “It’s not gonna happen.”

 

Of course the deal he made with Carrier represents a sharp break with the free-market wing of the Republican Party, including senior congressional leaders.  Top Republicans have offered careful responses to the Carrier deal.

 

“I think it’s pretty darn good that people are keeping their jobs in Indiana instead of going to Mexico,” said House Speaker Paul D. Ryan (R-WI), emphasizing that the party is hoping to pass comprehensive tax changes that would be great for all businesses.

 

However, up until Trump had won the election, there is no way you would have previously heard a comment like that from Ryan about the Carrier deal.

 

Senator Bernie Sanders of Vermont, who ran for the Democratic presidential nomination, accused Trump of reversing course on a pledge to punish companies that outsource manufacturing jobs. In the case of Carrier, Trump had said he would force the company to “pay a damn tax” if it closed the plant.  “Instead of a damn tax, the company will be rewarded with a damn tax cut,” Sanders wrote in an op-ed for The Washington Post. “Wow! How’s that for standing up to corporate greed?”  Privately, some key business leaders were also unnerved.

 

“It is uncharted territory for a president-elect to get involved personally in social engineering with a single company,” said an adviser to major corporations.  (The adviser spoke on the condition of anonymity in order not to anger the incoming administration.)  Now that Carrier “is no longer Trump’s political piñata,” the adviser added, chief executives “are asking, ‘Who’s next?’ ”

 

Already the word has gone out that some companies might threaten to leave the US, just to get a good deal for staying, even if they had no intention of leaving. 

 

Another idea is that maybe a company will go for getting some good PR just by saying that they were going to send 4000 jobs overseas, when they were previously only going to send 2000 jobs overseas.  But then they will say they have been convinced to leave 2000 jobs in the US, and will only send 2000 jobs overseas, which is what they were going to do anyway.  They will get lots of free news coverage and lots of positive public relations.

 

The Carrier deal is very interesting because in Indianapolis, Carrier has been a staple of the business community since the 1950s, and they were convinced to build there by receiving tax incentives way back then.  Now they are receiving even more tax incentives to stay in Indianapolis.  Not a bad deal, and it gives the “Trumpster” the symbolic example for keeping American jobs in America, regardless of what it costs the state of Indiana.

 

In fact, Carrier had previously rejected a tax incentive package the state had offered earlier in the year to keep the Indianapolis plant open. But that was before Trump had won the election and before Indiana Gov. Mike Pence, had become the vice president-elect.

 

Timothy Bartik, an economist at the nonpartisan W.E. Upjohn Institute for Employment Research, has said that vague threats from the ­president-elect could stymie corporate investment.  Most firms will seek to avoid decisions that could upset the new White House.  “What are these consequences to the corporations that Trump is threatening? Who’s is going to be in charge of them?” Bartik asked.  “One of the worst things for corporate investment is uncertainty,” he added. “You would hope that the government would not add to all the uncertainty.”

 

There are already major signs as to how the voting public took seriously what Trump had to say during the campaign.

 

Jennifer Volheim, a bartender at Sully’s Bar and Grill, which is just down the street from the Carrier factory.  She said “she was heartbroken” when the factory was on track to shut down. But, she said, she voted for Trump and knew he would make a difference.  “We knew Trump was on it,” she said. “He’s not even in office yet and he’s saving . . . jobs.”

 

But in fact, in Trump’s own words, he had previously said he had no plans to intervene in the Carrier case until he watched an evening news segment.  The news featured a worker who expressed confidence that the ­president-elect would save the Indianapolis plant. But Trump had said his campaign vow to save the Carrier plant was only “a euphemism” for other companies

However, what is even more interesting is that Trump’s aggressive stance toward outsourcing comes despite the fact that his own companies profit from low-wage laborers around the globe who produce Trump-branded merchandise. Even his own daughter Ivanka has her own separate brand of jewelry, shoes and clothing, much of which is produced in China.

 

Having Trump as the US president is going to provide the nation with many confusing situations as to how the president feels about any issue at any given time.

 

Copyright G.Ater  2016