Trump's Carrier Is Not Obama's Solyndra
No sooner had president-elect Trump announced a deal had been reached with air conditioner manufacturer Carrier to keep 1,100 manufacturing jobs in Indiana rather than being shipped to Mexico, the usual suspects began chattering about “corporate welfare”, “crony capitalism”, and the hypocritical picking of winners and losers.
Carrier is an established business, not a pipe dream like the green energy failures President Obama subsidized like Solyndra. It is one of many U.S. businesses struggling to survive in the Obama era of high taxes and oppressive regulation. Trump has promised to cut corporate taxes and eliminate oppressive and job-killing regulations, but he is not president just yet. The Carrier package of tax incentives he helped negotiate is but a down payment on this promise. All companies will soon be freed from the shackles of job-killing taxes and regulations. They will not have to game the system by threatening to go to Mexico. Trump’s tax and regulation cuts will create the fertile business environment that will allow them to stay and grow profitably.
The deal puts money in the hands of a U.S. business which will use it to grow, and in the hands of 1,100 employees who will give their families a Merry Christmas. They will get paychecks instead of unemployment checks and food stamps. The $7 million over a decade is dwarfed by the economic and human costs of not making the deal.
States and cities offer tax breaks and incentives all the time to lure businesses all the time from other states. In Illinois in 2011 Democratic Gov. Pat Quinn gave such breaks to keep Sears and the Chicago Mercantile Exchange in Obama’s home state. Letting profitable businesses keep more of the money they earned rather than turn it over to the feds to be wasted in money pits like Solyndra or to subsidize green energy companies tilting at windmills is not corporate welfare but merely good common and business sense. Trump isn’t picking winners and losers. He is trying to help a winner continue to thrive and grow.
As far as Carrier goes, the score is Trump 1100, Obama zero. In June, Obama mocked Trump’s desire to keep employers like Carrier from leaving the country. Obama called them the “jobs of the past” and in effect said good riddance to them:
In June, President Obama participated in a PBS townhall and was asked about Trump's promise to keep Carrier's Indiana plant in the U.S. The townhall participant -- Eric Cottonham, a member of the Steelworkers Union employed by Carrier -- asked Obama if anything could be done to stem the tide of jobs flowing out of the country, as Trump had recently promised to do.
"I see here you’re doing a lot of things, but in Indianapolis, there’s nothing there for us," he asked. "I mean, what’s next? I mean, what can we look forward to in the future as far as jobs, employment, whatever? Because all of our jobs has left or in the process of leaving, sir.”
"Those jobs of the past are just not going to come back," Obama told Cottonham.
Instead, Obama advised workers losing their jobs to learn how to adapt their skills to "some of these new technologies," in particular, the "clean energy sector."
"Let's focus on those," he suggested. "The days when you just being able to -- you just being willing to work hard and you can now walk into a plant and suddenly there’s going to be a job for you for 30 years or 40 years, that’s just not going to be there for our kids because more and more, that stuff’s going to be automated."
Funny, he doesn’t hold the threat of automation over fast food workers striking to get $15 per hour to ask people if they would like fries with that burger. They may very well be replaced with automated kiosks. Why doesn’t he call their jobs “jobs of the past”? In fact, Carrier jobs are good-paying jobs and Trump’s deal will lead to jobs of the future -- jobs to be generated in Indianapolis rather than Monterrey, Mexico.
In his Carrier speech, Trump announced the promise by Carrier and its parent company, United Technologies, to spend upwards of $16 million to renovate its Indiana plant in a firm commitment to next-generation manufacturing. Trump said in his speech:
So, United Technologies has stepped up. And I have to say this, they did it in such a nice and such a professional way. And they’re going to spend so much money on renovating this plant. And I said, Greg, say that number. You know, he said $16 million. Well, the minimum number is 16. It’s going to be, in my opinion, a lot more than that.
Whatever the number, it will surely bear more fruit than Obama’s failed investments in “the clean energy sector”. It is Solyndra, not Carrier, that is the poster child for crony capitalism, an investment if failure to reward an Obama donor. As Investor’s Business Daily editorialized:
The Secretary of Energy takes responsibility for and defends the granting of a half-billion-dollar-loan guarantee to an imploding solar panel maker. But that's not where the campaign donor buck stopped…
In point of fact, newly disclosed emails show Democratic fundraiser and Solyndra investor George Kaiser talked directly with White House officials about the now-bankrupt solar company's $535 million loan guarantee from the Department of Energy.
Kaiser, a major Obama bundler and backer who raised $50,000 to $100,000 for the president's election campaign, was one of Solyndra's primary investors. Kaiser himself donated $53,500 to Obama's 2008 election campaign, split between the DSCC and Obama for America…
There was no due diligence done in the awarding of taxpayer dollars to a firm everybody knew had an unsustainable business model in an industry largely kept afloat by taxpayer subsidies. Political considerations and donor cash had everything to do with the loan.
Crony capitalism is blowing $500 million of the taxpayer dollars on an industry that can’t survive without federal subsidies. Carrier is not Solyndra. Trump picked a winner. Obama was the one who picked losers.
Daniel John Sobieski is a free lance writer whose pieces have appeared in Investor’s Business Daily, Human Events, Reason Magazine and the Chicago Sun-Times among other publications.