When Presidents Defy Economic Gravity, Gravity Usually Wins
Donald Trump is going to learn what his predecessors did: strong-arming a job revival is easier said than done
In fact, it’s become 10% cheaperto manufacture in Mexico thanks to the plunge in the peso that followed his election.
.. when Mr. Obama imposed tariffs on Chinese tires in 2009: Chinese imports plummeted while other countries’ jumped. The action saved at most 1,200 jobs, a study by the Peterson Institute for International Economics found, at a cost to consumers of $900,000 per job because of higher prices.
.. The gas furnaces Carrier builds in Indianapolis are a low-tech product in which the U.S. has no comparative advantage, in contrast to the sophisticated aircraft engines that Carrier’s affiliate, Pratt & Whitney, builds in Connecticut for which it plans to add 8,000 jobs in coming years.
.. “I was born at night but it wasn’t last night,” Chief Executive Greg Hayes told CNBCMonday. When United Technologies bids for its next Pentagon contract, wouldn’t it want last week’s deal weigh in its favor? And if a competing bidder has outsourced jobs, wouldn’t United Technologies want that to count against it?
.. Virtually every business that locates in Puerto Rico gets its own tax break, with the result that the effective corporate tax rate is a pitiful 5%
.. If Mr. Trump really wants to boost manufacturing employment he would figure out how to train workers to fill some of the 334,000 manufacturing jobs that are now vacant. If he doesn’t have the patience for that, he should just raise tariffs across the board. It would hurt consumers and could start a trade war, but at least they’d be transparent.