Friday, December 2, 2016

The Dawning of the Age of U.S. Banana Republic Capitalism

Ben Shapiro writes:
Last night, President-Elect Donald Trump toured the Carrier factory in Indiana and bragged that he had used the power of the federal government to leverage the company into keeping jobs in the United States.

To recount from yesterday, here were the basic details of the deal: Vice President-Elect Mike Pence, who is also Governor of Indiana, offered $7 million in tax breaks to Carrier. They turned it down originally, since it would cost them $65 million to keep the jobs in Indiana. What changed their mind? Trump reportedly threatened the withdrawal of federal defense contracts from Carrier’s parent company, United Technologies, which has $6.7 billion in business with the feds. Trump also threatened to increase tariffs on companies reimporting product after shipping jobs out of the country....

Trump bragged about this small dose of economic fascism while visiting Carrier. “This is the way it’s going to be,” he said. “Corporate America is going to have to understand that we have to take care of our workers also.” He added, “I don’t want them moving out of the country without consequences.” Mike Pence, supposed voice of conservatism, piped up, “The free market has been sorting it out and America’s been losing. Every time, every time.”

If you oppose this, you’re a cuck.

I’m old enough to remember when former Alaska Governor Sarah Palin railed against crony capitalism (“It’s not the capitalism of free men and free markets, of innovation and hard work and ethics, of sacrifice and of risk. No, this is the capitalism of connections and government bailouts and handouts…and influence peddling and corporate welfare” – Palin, September 2011). I’m old enough to remember when Ann Coulter wrote, “Democrats’ crony capitalism is the worst of both worlds: risk-taking without any real risk. It’s like gambling with your rich daddy’s money, except we taxpayers are the rich daddy.” I’m old enough to have worked for new White House Chief Strategist Steve Bannon when he made documentaries about Washington D.C. as a “Boomtown” and a “District of Corruption” and complained about government involvement in the economy. Now he pledges trillion dollar spending packages and claps while Trump threatens companies for operating along free market principles. And I’m old enough to remember when Sean Hannity hosted such documentaries (“So, can we anticipate cronyism and corruption until 2016?” Hannity asked Bannon in November 2012. Bannon answered, “I think Washington became an imperial city”).

This is hypocrisy of the highest order. And it’s evidence that a soul-suck has already taken place inside the Republican Party. Yes, other presidents have engaged in this sort of economic tyranny. Those presidents include Republicans like George W. Bush. But conservatives opposed Bush’s steel tariffs – and they certainly didn’t castigate other conservatives for opposing them, or whitewash protectionism. We’ll see whether conservatives begin to grow a spine now that Hillary Clinton is out of the way. But the early evidence isn’t particularly promising.
Shapiro is correct in what he writes here on the spineless "free market" conservatives supporting this mad Carrier move and that they are being soul-sucked, but this isn't standard crony capitalism.This is Banana Republic Capitalism.

It must be understood this Carrier deal wasn't some broad policy effort. This wasn't even a "deal" that Carrier or its parent United Technologies wanted. If they would have been in favor of it or tried to advance it and get it done, it would have been Crony Capitalism. But this wasn't the case.

This was Trump muscling Carrier and United Technologies so he could get a photo op--or in his case a crowd op. This is Banana Republic Capitalism.



  1. ─ This is Banana Republic Capitalism. ─

    Shapiro is more blunt in how he describes this: "Trump bragged about this small dose of economic fascism while visiting Carrier."

    That is exactly what this is: economic fascism.

  2. "This is Banana Republic Capitalism"

    And it's been that way to one form and degree or another since FDR? TR? Lincoln? I'm trying to think when this sort of leverage game wasn't played. It's also played by companies. Almost 30 years ago the Chicago White Sox owned by Jerry Reinsdorf threatened to move to Florida unless government built them a new stadium. That's standard practice for sports teams now. Other businesses too. It's a two way street where the politicians' images are involved.

    Trump's style is different, it's seemingly more in our face, but is it really new?

    1. Re: Jimmy Joe Meeker,

      ─ I'm trying to think when this sort of leverage game wasn't played. ─

      Nice argument, Aristotle.

      ─ Almost 30 years ago the Chicago White Sox owned by Jerry Reinsdorf threatened to move to Florida unless government built them a new stadium. ─

      And the city could have refused. The Carrier "deal" cannot be compared to bribing a baseball team or even offering tax breaks to companies to bring their business in to the state. This is completely different: the newly-elected El Presidente made a tacit threat to the company to keep the factory. That's the stuff of tin-pot dictators.

    2. Is there a rebuttal to my point in there somewhere? The point being that government and businesses have done this back and forth for many decades for the purposes of political image making. Perhaps you just neglected to read "It's a two way street where the politicians' images are involved" or maybe you're just not familiar with history. From breaking up companies to outright attacks on those staying out of the game like microsoft. (microsoft has played ball, contributed since then and is left alone)

      The example of the White Sox is when the company has the leverage on the politicians' image vs. when the politicians use the leverage of government contracts on businesses for their image. Also maybe you're not familiar with the fact that carrier got something out of this deal too. They successfully got $7 million in various concessions out of Trump/Pence. A deal was made. Carrier knew Trump needed to have an image of saving jobs and Trump knew Carrier's parent company needed the contracts.

      Since you're so brilliant maybe you can tell me how this actually is different. Tin-pot dictator activity has been going on this country for a long time.

  3. Thomas DiLorenzo has a different take on this over at LRC.
    Is he a spineless "free market" conservatives also ?

  4. When real capitalism is long gone and dealing with entrenched monopolies (that have been around a handful of decades,) all bets are off in a Neo-Feudalistic Oligarchy. Its one of Trumps few redeeming qualities he calls a spade a spade and deals in the open for the people who the companies could care less about.

    If all he does is bring consequences to the greedy corporations for stiffing the country that made them great, I can live with him as president. Oh and please dont preach at me the academic crap about free trade, its instinct in the wild!

  5. Weird how Wenzel is parroting bitter neocon rhetoric on this while ignoring the Mises Institute. Is Trump derangement syndrome setting in?