800 jobs saved at a cost of $7 million? $8,750 per job.
Some might suggest that those employees are not going to pay that back in taxes. The employer is
not going to pay that back. They tell you it's a shake-down - that you've allowed a company to hold
employees hostage and was paid the ransom.
Others might suggest that President-elect Trump brandished both a carrot and a stick. The offer of incentives and the threat of jeopardizing the $5 to $6 billion in federal contracts held by United Technologies (Carrier's parent). The amount saved by moving jobs from Indiana to Monterrey was dwarfed compared to the amount at risk.
For sure it is a political win but not without some risk of moral hazard. Perhaps business executives will threaten to offshore jobs in order to extract concessions, other may chose to circumvent a public battle with a future president and others may conclude that this is precedent for a future president to meddle directly in the corporate affairs of a specific company. Heretofore, republicans have abhorred government interference in private enterprise.
So I dunno. Are we watching a new paradigm unfold? Time will tell. What's missing in the news today is the fact that 1300 jobs are still going to Monterrey. The truth is somewhere in the advertising.
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Ham-handed pandering. I expect this to be the new norm. Why try to understand and the nuance of global trade, labor, etc when you can go to Indiana for a photo-op. A free market purist might say that this situation required neither a stick nor a carrot. I get you need to put the thumb on the scale here and there in certain markets, but the president shouldn't be doing it at this level.
ReplyDeleteIn an apparent jab at Trump, whom she famously endorsed in a rambling speech earlier this year, Sarah Palin asked: “Republicans oppose this, remember? Instead, we support competition on a level playing field, remember? Because we know special interest crony capitalism is one big fail.”
ReplyDelete“When government steps in arbitrarily with individual subsidies, favoring one business over others, it sets inconsistent, unfair, illogical precedent,” she asserted.
This may actually be one of the rare occasions that I agree with Governor Palin.
Cheers!
Now Taiwan. Someone needs to set these misteps to the 12 days of christmas. "7 unqualified appointments, 6 international goofups, fiiiive flip flops on campaign promissssesssss"
ReplyDelete