Last week, with the characteristic style and showmanship that won him the election, President-elect Donald Trump swooped into Indiana to take credit for keeping around 1,000 jobs that Carrier was planning to move to Mexico. It was another effective populist move for the masses.
Sadly, Trump was merely delivering one more economic Twinkie to a national economy that needs real nourishment.
With the Carrier deal, the president-elect effectively executed what new CEOs often strive for — an early, tone-setting and popular-with-the-employees win. Props and points to Trump’s business skills and his team’s ability to execute.
The situation played to his campaign promises of fighting for the little guy, making good deals and protecting U.S. manufacturing jobs. Like a good Twinkie, the Carrier deal was sweet to the taste and had great packaging and a perfect marketing campaign.
Also like a Twinkie, the deal had little substance and no nutritional value, and it is most likely to produce a sugar high of hyperactivity followed by a crash when real substance is required.
The Carrier deal also sends the message that if you are a big business and politically connected, you can extort subsidies from taxpayers and boost your profits by threatening to outsource blue-collar jobs.
Backroom deals between big business and big government are simply empty economic calories that rarely create the new jobs necessary to strengthen middle America and jump-start the economy. We saw this repeatedly in the Obama administration’s sugary deals within health care, solar and a host of other industries.
Within Carrier’s corporate cronyism, the calories amount to about 1,000 jobs that are staying in Indiana, but no new jobs are being created and Carrier is still going to outsource about 1,100 jobs to Mexico. The post sugar-rush crash will come — with taxpayers in Indiana picking up the empty Twinkie wrappers and the tab.
Feeding the public with this kind of economic Twinkie always ends up hurting the poor and the middle class the most — and the very blue-collar workers they are claiming to help. I wonder how the employees of Carrier's competitors feel today, knowing that their rival has an extra $7 million with which to compete, market and innovate. Congress should pursue policies that apply equally and fairly to all employers in a given industry, instead of telling some Americans their jobs are valued while telling the rest that they have been chosen to be the economic losers.
Corporate cronyism is not only unfair, but it also artificially distorts the market and incentivizes companies like Carrier to sacrifice sound long-term business growth for short-term gain in the form of taxpayer-funded corporate welfare. When you are full of Twinkies, going out to cultivate the broccoli and spinach isn’t all that appealing. The country really does need to invest in some serious economic gardening projects instead of picking up more economic-policy junk food at the local gas station.
We simply cannot afford a corporate-welfare arms race filled with sweet favors for big business. It stunts the type of real economic growth, including activity sparked by international trade, that produces job opportunities for working Americans.
Many in Washington are already lining up at the Twinkie trough. Vice President-elect Mike Pence and a stunning number of conservative lawmakers have started to awkwardly justify abandoning lifetime commitments to free markets and free trade. They say, in effect, “The voters want Twinkies and don’t like spinach.” In other words, “The political price of delivering the policy nutrition the nation needs is too high for me as a politician.” I repeat, the sugar-rush crash will come.
What America really needs is an army of elected leaders who act less like politicians and more like physicians willing to drive a healthy economic agenda based on real nutrition. A great place to start would be to level the playing field for all companies. Trump, and all elected officials (including those right here in Utah), should resist the temptation to pick winners and losers by bestowing taxpayer-funded benefits and tax breaks on some businesses but not others.
Lowering federal corporate taxes, which are some of the highest in the developed world, for all companies would help level the playing field. Above all, lawmakers must focus on eliminating regulations that needlessly make it more expensive for entrepreneurs and small- and medium-size businesses to compete and employ hardworking Americans.
Trump can help “Make America Great Again.” He can strive to transcend politics, unite the nation and lead a resurgence of jobs and opportunities for every American. Trump will achieve that and more if he chooses to ditch the political Twinkies and instead focus on and vigorously promote the substance and economic nutrition of a truly pro-growth agenda.
Boyd C. Matheson is president of Sutherland Institute, a conservative think tank that advocates for a free market economy, civil society and community-driven solutions.