Wednesday, November 30, 2016

The Carrier "Deal" and Trump Apologists

I am afarid we are going to see a lot of this during the Trump Administration, Trump apologists everywhere. Trump can do no wrong.

A case in point, the comments at my post labeling Trump a bully for the Carrier deal.

One commenter writes:
Why are you against tax breaks, Wenzel? Isn't taxation theft?
But a tax credit can simply be further manipulation of the economy. It is not necessarily a "tax break" where a corproation is free to do as it pleases with money that otherwise would have been taxed.

Consider an economy where everyone is taxed at a rate of 30% but a "deal" is cut where everyone that devotes a certain amount of its resources to creating busts of Donald Trump gets a tax credit of 5%. I would suggest that this may not be an overall improvemnet for the economy.

A tax cut is different: Your taxes were 30%, now they are 25%, go and do whatever the hell you want with that 5%.

The free market supporter should always be advancing less intrusion of government in the economy, not twisted manipulations that cheer on the manipulator.

A second commneter writes:
I really want to know how Carrier or any other manufacturer moving can accurately be described as "free market forces" when the whole economic structure cannot be described as free market? Or are we merely free market because we have a stock market and a choice between 4 brands at the store? I'd say we have maybe a 50 to 60% free market structure.
There is some truth to this in that we don't know what an economy would look like under free market conditions, though it is likely that even more low paying jobs would leave the country.

That said, there may be an implication by the commenter that because we are not in a free market economy, we can not advocate for free markets. But justifying manipulations will never get  us to free markets. Free market policy should be advanced at all times and manipulations should be objected to. Failure to understand this is a failure to appreciate that sound free market advocacy is based on the principle that only free exchange can result in the certainty that all parties involved benefit. Manipulations always distort away from free exchange and thus it can never be said that such manipulations do not hurt some individuals in a very direct sense. Building busts of Donald Trump and cutting government "deals" to keep Carrier employees in the U.S. are distorting resources from what would otherwise emerge and thus be at the expense of those who will experience less resources available to them.



  1. I tend to agree with RW on this but, the source of this story, is about as hard left as you can get. Although, politic usa referenced a cnbc article that has this juicy bit:

    "While UTX was seeking the savings that would come from moving some production to Mexico, people familiar with the situation indicated that the savings were not worth incurring the wrath of the incoming administration, including the potential threat to the significant business that UTX currently conducts with the U.S. government, largely in the form of orders for jet engines and other defense-related equipment."


    RW, that was your red meat.

    1. ─ "[...]people familiar with the situation indicated that the savings were not worth incurring the wrath of the incoming administration[...]" ─

      So the company was bullied.

  2. While I basically agree with you, Robert, on Trump. However, you seem to be arguing the opposite of what you argued when the topic was Archer Daniels Midland and corn tax breaks for ethanol. There, you were arguing that all tax breaks are good, and I made the point you are making now in the comments. Have you changed your views, or are you only arguing this now because it's Trump advocating the favoritism?

    1. I don't recall supporting ethanol tax breaks. I did a Google search and only came up with a commentary by Ron Paul that I posted:

    2. It's possible I'm remembering a guest commentary like this, but I don't see a comment that's clearly mine on this entry.

  3. ─ [...] there may be an implication by the commenter that because we are not in a free market economy, we can not advocate for free markets[...] ─

    The commenter clearly believes that none of us should argue that the decision by Carrier to move manufacturing to Monterrey, Mexico, is the result of true market forces because there's no true free market. That assertion is patently absurd, if one considers the fact that the owners of Carrier made the decision voluntarily after a cost/benefit analysis and not due to exogenous influences such as terrorism or government depredation, and considering that the company is still free to move its operations to Monterrey. That argument can be used to argue that we cannot say people benefit from exercise since disease hasn't been eradicated.

  4. "Capitalism breathes through loopholes" - Ludwig Von Mises, and quoted by you here and elsewhere.

    Trump is creating a reduced tax burden for a company that otherwise would not do business in the USA. In essence, a loophole in which capitalism is allowed to breathe. You condemned Rand Paul for wanting to close loopholes, yet you condemn Trump for creating just such a loophole.

    Why, Wenzel?