I’ve taken the liberty of making some edits to today’s CNN Money article “Carrier: Trump gave us state ‘incentives’ to save jobs” to more broadly reflect the viewpoints of: a) Indiana taxpayers and b) US consumers, and also to highlight the fact that Team Trump is already engaged in crony capitalism, legal plunder, and dishing out generous corporate welfare payments using taxpayer money before they are even in office!
“Carrier: Trump gave us state ‘incentives’ corporate welfare financed by Indiana taxpayers to save jobs that was too generous to turn down”
Carrier is keeping more than 1,000 jobs in Indiana — thanks to “incentives” corporate welfare and crony capitalism offered financed by taxpayers in the state run by Vice President-elect Mike Pence.
Carrier released a few more details Wednesday on the deal to receive corporate welfare it struck with President-elect Trump and Pence to keep some jobs from going to Mexico to benefit from crony capitalism and legal plunder using taxpayer handouts. It is Trump’s first major victory for crony capitalism and legal plunder, delivering on one of his biggest campaign promises to use taxpayer handouts and the threat of tariffs on American businesses and consumers to benefit some domestic manufacturers and some US workers.
“The incentives corporate welfare and handouts offered by the state financed by Indiana taxpayers were an important irresistible consideration temptation” to staying, Carrier said in a statement Wednesday. Pence is the governor of Indiana.
Carrier didn’t specify what the incentives were exactly how much corporate welfare and taxpayer handouts it was offered. Trump threatened Carrier’s American consumers and businesses with stiff tariffs taxes on imports during the campaign, but Carrier’s statement depicted a friendlier negotiation following its bribe from Trump and Pence that promised generous corporate welfare payments financed by Indiana taxpayers.
“The incoming Trump-Pence administration has emphasized to us its commitment to support the business community and create an improved, more competitive U.S. business climate financed with money coercively extracted from Indiana taxpayers,” Carrier said as it opportunely accepted a generous promise of taxpayer handouts and corporate welfare.
Carrier said the deal is “preserving more than 1,000 jobs” in Indiana in the short-run, even though its higher labor costs in the U.S. pretty much guarantee a loss of the company’s market share and jobs in the long-run. The Carrier plant in Indianapolis employs 1,400 workers. A nearby plant owned by the same parent company, United Technologies Electronic Controls, employs 700, and had also announced plans to move to Mexico to serve the interests of the company’s customers and shareholders. That plant was not part of the new deal to receive corporate welfare to compensate Carrier for higher U.S. labor costs, financed with money coercively extracted from state taxpayers.
Carrier’s customers became Trump’s punching bag early and often on his campaign to the presidency. Trump threatened to hit Carrier’s consumers in the U.S. with a 35% tariff if it moved jobs to Mexico, which would have burdened hardworking American families with higher prices for Carrier’s products.
The battle between Trump and Carrier’s consumers symbolized Trump’s broader threats to renegotiate trade deals to the advantage of some American producers and get tough on American families who voluntarily purchase low-cost goods from Mexico and China to stretch their household budgets as far as possible.
Despite keeping some jobs in America, Carrier emphasized its commitment to free trade in theory, but couldn’t pass up the opportunity to compromise that commitment in return for receiving generous corporate welfare payments financed by funding coercively extracted from Indiana taxpayers.
“This agreement in no way diminishes our belief in the benefits of free trade in theory,” Carrier concluded in its statement, “but the temptation offered by Trump and Pence to receive such generous corporate welfare payments from the taxpayers via legal plunder was just too intoxicating and irresistible for the company to pass up.” “]
Let us invoke Frederic Bastiat’s test for “legal plunder” and see if it applies to Carrier:
How is this legal plunder to be identified? Quite simply. See if the law takes from some persons [Indiana taxpayers] what belongs to them, and gives it to other persons to whom it does not belong [Carrier]. See if the law benefits one citizen [Carrier] at the expense of another [taxpayers] by doing what the citizen himself [Carrier] cannot do without committing a crime.”]
See more on the Carrier deal from my AEI colleagues Claude Barfield, Ben Zycher and Jimmy P.
This post first appeared at the Carpe Diem blog at AEI.org.