The Carrier deal and the law of unintended consequences
Re-Regulation and Big-Business Favoritism: It is both obvious and subtle that this deal is inconsistent with Mr. Trump’s avowed goal of reducing the regulatory burden. Such deals obviously can be cut only with big firms, as equivalent negotiations with hundreds of thousands of small- and medium companies over location decisions and the like are impossible. And so the looming Trump administration, perhaps without realizing it, has taken the same path well-traveled for the last eight Obama years: The large firms in important industries (health care, financial services, energy) are to be cartelized by massive legislative and regulatory burdens, while the small- and medium-sized businesses that are the backbone of American capitalism are left to fend for themselves.
Rent-Seeking: Will other large firms now find it advantageous to threaten (or hint) at relocation plans merely to obtain the same kind of benefits that Carrier/United Technologies has won?
.. However small the effect, the preservation of the Carrier industrial operation in Indiana will yield a dollar stronger rather than weaker, meaning that other exporters will find it more difficult to compete in international markets. And so in the end, the Carrier deal will shift employment among sectors rather than preserve it.
.. The Carrier deal, to adapt a famous phrase, is a small step for some workers and a giant leap backwards for the economy as a whole. That the losers do not know who they are is an endemic part of the age-old problem of government incentives to bestow benefits upon concentrated interests.