Monday, December 5, 2016

Is Subsidizing Those Carrier Jobs A Good Idea?

                                                                       

Well, the liberal media and Congressional Democrats are in a tizzy about Donald Trump's "jawboning" that Carrier plant down in Indiana who were planning to move to Mexico.  The Democrats cried foul, and asked "just how is it free economics when the state of Indiana grants $5 million in incentives over ten years, just to get Carrier to keep those 1300  jobs at home.

The Washington Post was the first newspaper to file a story about this.  WaPo was outraged that Trump supports giving corporations like Carrier a good deal.  (Keep in mind that the Post had no problem with Obama had no problem giving solar firm Solyndra a $500 million dollar federal grant, or hundreds of millions to electric battery maker Beacon Power, both of which went bankrupt.)

While I'm all for free markets and allowing capital to flow where it will, I believe, if Trump wishes to keep jobs at home, he's going to have to continue this sort of jawboning, at least until the corporate tax code is changed, reducing the corporate tax from 35% to the proposed 15%.  When we reduce the highest corporate tax in the industrial world, and begin to compete with Ireland's 13 percent corporate tax rate, or the lower corporate rates in much of Europe, we won't need government intervention in order keep jobs at home.

But, for the interim, I believe we are going to need artificial interventions of free markets.  While on the macro level, far more will be needed.  Jawboning and reducing corporate tax rates will not solve the job export problems.  We are also going to need relief from overbearing EPA and OSHA interference.  And we're going to have to do a better job of re-training workers whose jobs are being lost due to technology advances.

But, for now, we have to support what Trump is doing to protect jobs.  Trump saved 1,000 of those 1,300 hundred Carrier jobs that were headed to Mexico.  The average salary for those Carrier jobs were $31.90 an hour....certainly a good living wage in the state of Indiana.  And those thousand workers certainly have no problem with Trump's breech of business ethics...they're just happy to keep being able  to put food on the table.  I personally, being a rampant fan of free markets, am at least more willing to help subsidize a job than I am to subsidize someone sitting on their ass at home, collecting food stamps and an unemployment or a welfare check.