In an already turbulent year the country’s political establishment got another shock in early December when the President-elect announced he had negotiated a deal that would save over 1,000 jobs in a Carrier plant in Indiana from being outsourced to Mexico. To his blue collar supporters who rallied around him and delivered traditional Democratic Rust Belt strongholds like Michigan and Pennsylvania to his electoral college victory it seemed to confirm that he was the savior of manufacturing that he had campaigned as. To his detractors the initial reactions ranged from disbelief to questioning what the catch was.
The “catch,” as it turned out, was that saving the jobs would cost the state of Indiana $7 million dollars in rebates and tax cuts, (secured by Trump’s running mate and the state’s governor, Mike Pence) and that the jobs saved were significantly less than Trump announced. While he initially claimed to have saved 1,100 of the 2,000 layoffs, the actual number was revealed to be 730. Nevertheless the deal still shook the conventional economic wisdom of both parties.
To Democrats the deal amounts to a corporate giveaway, for every job Carrier agreed to keep the company will receive nearly $10,000 in benefits from the Indiana government. Senator Bernie Sanders denounced the deal in an oped for the Washington Post:
In essence, United Technologies took Trump hostage and won. And that should send a shock wave of fear through all workers across the country. Trump has endangered the jobs of workers who were previously safe in the United States. Why? Because he has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives. Even corporations that weren’t thinking of offshoring jobs will most probably be reevaluating their stance this morning. And who would pay for the high cost for tax cuts that go to the richest businessmen in America? The working class of America.
Among Republicans the response was more mixed. To those who rode the 2010 Tea Party wave by promising to block what they said was the Democrat’s excessive and damaging interference in the private sector, the idea of using the power of government to counterbalance the free market incentives to outsource does not seem reconcilable with Ronald Reagan’s assertions that government is a problem, not a solution, in economic matters. Forbes published several pieces critical of the deal, with one stating:
What’s so shameful about some of the support on the right for Trump’s alleged ‘coup’, Trump’s actions vis-à-vis Carrier sent a strong signal that the U.S. will no longer be as hospitable a locale to the very investors who create all jobs. As Trump so obnoxiously and chillingly put it, “Companies are not going to leave the U.S. anymore without consequences. Leaving the country is going to be very, very difficult.” Where is the outrage? Trump didn’t signal help on the way as much as he signaled retaliation against the companies that don’t do as he wishes.
The Conservative Review even compared Trump’s logic to Obama’s. (A huge insult by their standards.)
But there was still some support, especially from one particularly important group. Polls show support for the deal among average Americans, with one finding 60% of them had a more favorable view of the President-elect after it was announced. And after an election dominated by anti-establishment sentiment, maybe that’s the opinion worth listening to.