Donald Trump's first big economic blunder: Beneath the noise and bluster, Carrier deal is disastrous

Donald Trump has already made a mockery of the presidency — and bribed a company in which he owns stock

Published December 5, 2016 10:00AM (EST)

Donald Trump speaks on October 13, 2016 in Cincinnati, Ohio.   (Getty/Ty Wright)
Donald Trump speaks on October 13, 2016 in Cincinnati, Ohio. (Getty/Ty Wright)

There wasn't a single aspect of Donald Trump's Cincinnati "victory rally" last Thursday that was normal, including the very fact that he held a "victory rally" in the first place. It's all breathtakingly abnormal.

It's worth noting that NBC News' chief foreign correspondent, Richard Engel, warned of several autocratic tells to watch for when it comes to Trump's actions and behavior moving forward. Engel noted that overseas autocrats such as President Recep Tayyip Erdoğan of Turkey routinely engage in rallies not unlike the one Trump held the other day.

Beyond that, the big takeaway from the event was the death of traditions such as "being presidential." With that, the ideals of presidential "dignity," "humility," "decorum," "benevolence," "knowledge" and "expertise" also died untimely deaths. To repeat for the sake of emphasis: Trump's words and deeds aren't normal in any way. Presidents or presidents-elect shouldn't act like this, threatening the press or recapping the election returns on cable news in childish fashion. Worse than that, it's actually dangerous to world stability to suddenly observe the leader of the free world acting like Bill O'Reilly — if Bill O'Reilly appeared to be blasted out of his mind on cocaine.

In addition to many other trespasses, Trump heartlessly mocked Martha Raddatz for being momentarily shaken up while discussing military deployments during ABC News' election night coverage. Trump said at one point, "They say there's never been a grassroots movement like this before. Maybe Andrew Jackson." No, Andrew Jackson was not a "grassroots movement." Presidents don't say things like this. They just don't.

The rally capped off a day in which Trump's first stab at "making America great again" involved an empty PR stunt in which the president-elect claimed to have rescued jobs from being outsourced to Mexico by Indiana-based Carrier, the manufacturer of heating and air conditioning units.

Despite what you might've heard on cable news about the Carrier deal being a triumph for the incoming president, it wasn't. First, Trump and Vice President-elect Mike Pence, the governor of Indiana, cut a $7 million check to the corporation in the form of tax giveaways, courtesy of the very taxpayers whose 1,300 jobs are still being stripped away and sent to Mexico. Sure, Carrier chose not to send about 800 jobs to Mexico, but as we learned later, the company is still sending 1,300 jobs to Mexico anyway. Put another way, Trump's great triumph in Indiana adds up to a net job loss.

Don't take it from me, though. The Wall Street Journal reported:

The company will keep about 800 jobs it had planned to move out of the Indianapolis plant, but it still plans to move 600 jobs from that factory to Mexico. United Technologies also will proceed with plans to close a second plant in Huntington, Ind., that makes electronic controls, moving 700 other jobs to Mexico.

Let's be clear. Indiana taxpayers will be handing Carrier millions of dollars in corporate welfare, in exchange for outsourcing 1,300 jobs to Mexico. In other words, to paraphrase Trump's zinger, Trump is building Carrier factories in Mexico and making Indiana pay for it. If we follow the money, we discover that Donald Trump himself owns a small financial stake in United Technologies, Carrier's parent company. (See page 45 on the hyperlinked PDF.) It's one of many conflicts of interest hanging like an orange albatross around Trump's neck.

For a leader whose reputation is inextricably linked to his dealmaking skills (with a close second being his Twitter-trolling skills), this is a horrendous first outing as would-be president.

In addition to the reality that Carrier intends to send nearly twice as many jobs to Mexico as will remain in Indiana and the fact that Trump and Pence are granting Carrier $7 million in state tax breaks for doing so, the deal sets a troubling precedent. Now CEOs are further encouraged to announce plans to move factories to foreign nations, simply to extort tax incentives from our autocratic chief executive.

On top of everything else, Trump spent much of the campaign threatening American businesses with harsh penalties for shipping jobs overseas. Indeed, Trump once threatened Carrier itself, declaring, "You're gonna pay a damn tax when you leave this country and you think you're going to sell product because we're all so stupid."

Decide for yourself whether Trump is really "so stupid." But unless I'm missing something, I'm not exactly sure how giving Carrier $7 million in tax breaks is "a damn tax" or punishment of any sort, for that matter, especially since company will still fire 1,300 workers and send their jobs to Mexico.

We should be happy, I suppose, for the 800 workers who'll keep their jobs — but at what ultimate expense to American manufacturing? When CEOs can simply ship jobs off to Mexico and China and get paid handsomely for it by the government, it's impossible to define this as anything but Trump's first economic blunder — the first and quite likely least of many, by the way.

By Bob Cesca

Bob Cesca is a regular contributor to Salon. He's also the host of "The Bob Cesca Show" podcast, and a weekly guest on both the "Stephanie Miller Show" and "Tell Me Everything with John Fugelsang." Follow him on Facebook and Twitter. Contribute through LaterPay to support Bob's Salon articles -- all money donated goes directly to the writer.


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Carrier Donald Trump Economics Jobs Martha Raddatz President Trump Trump Carrier Deal Trump Victory