he practices the calculus by which Washington reasons, the political asymmetry between dispersed costs and concentrated benefits. The damages from government interventions are cumulatively large but, individually, are largely invisible. The beneficiaries are few but identifiable, and their gratitude is telegenic.
.. Vice President-elect Mike Pence said, “The free market has been sorting it out and America’s been losing,” Donald Trump chimed in, “Every time, every time.”
.. Indiana’s involvement in the Carrier drama exemplifies “entrepreneurial federalism” — states competing to lure businesses.
.. about the sufferings and pathologies of the white working class, largely of Scots-Irish descent, in Appalachia and the Rust Belt. This cohort, from which Vance comes, is, he says, one of America’s most distinctive subcultures, particularly in its tenacious clinging to traditional mores, many of them destructive.
.. Vance casts a cool eye on the theory that “if they only had better access to jobs, other parts of their lives would improve as well.” His primary concern is with “lack of agency” and “learned helplessness” — the passive acceptance of victim status.
He ‘lied his a– off’: Carrier union leader on Trump’s big deal
felt optimistic when Trump announced last week that he’d reached a deal with the factory’s parent company, United Technologies, to preserve 1,100 of the Indianapolis jobs — until the union leader heard from Carrier that only 730 of the production jobs would stay and 550 of his members would lose their livelihoods, after all.
.. At the Dec. 1 meeting, where Trump was supposed to lay out the details, Jones hoped he would explain himself.
“But he got up there,” Jones said Tuesday, “and, for whatever reason, lied his a– off.”
In front of a crowd of about 150 supervisors, production workers and reporters, Trump praised Carrier and its parent company, United Technologies. “Now they’re keeping — actually the number’s over 1,100 people,” he said, “which is so great.”
.. Of the nearly 1,700 workers at the Indianapolis plant, however, 350 in research and development were never scheduled to leave, Jones said. Another 80 jobs, which Trump seemed to include in his figure, were non-union clerical and supervisory positions.
.. United Technologies still plans to send 700 factory jobs from Huntington, Ind, to Monterrey, Mexico.
.. In fact, Trump did make that commitment, and it’s on video. “They’re going to call me and they are going to say ‘Mr. President, Carrier has decided to stay in Indiana,’” Trump had said at the April rally. “One hundred percent — that’s what is going to happen.”
Last week, though, the president-elect told the Carrier crowd he hadn’t meant that literally.
Trump Sealed Carrier Deal With Mix of Threat and Incentive
But company officials are acutely aware that its Pratt & Whitney unit, among other things, supplies jet engines to the Air Force’s most advanced fighter and many other planes, making it much more vulnerable to political pressure than other, lesser-known manufacturers that have been steadily closing shop in the Midwest and moving production south of the border.
“It may have a played a role in their equation,” Mr. Trump allowed. “I never mentioned it. I didn’t feel I had to.”
.. What about the fact that Mr. Trump frequently sourced products for his properties overseas, along with some popular Trump-branded merchandise? Will he lead by example and buy more goods made in the U.S.A.?
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.