Friday, December 2, 2016

Trump's Carrier Speech 'Absolutely Chilling,' Economic Analyst Says

President-elect Donald Trump's speech about his deal to keep Carrier jobs in the United States was "absolutely the worst speech," economic policy analyst Jimmy Pethokoukis told CNBC today.

Trump boasted about his deal to keep about 1,100 Carrier jobs in Indiana, and also took aim at other companies who may be thinking about moving jobs out of the country.

"Companies are not going to leave the United States anymore without consequences. Not going to happen. It's not going to happen, I'll tell you right now," Trump said on Thursday.

And he then added, that for corporations "leaving the country is going to be very, very difficult.'

Pethokoukis, an analyst at the American Enterprise Institute, called it the worst economic speech since Democratic presidential nominee Walter Mondale promised to reverse Reaganomics in 1984.

Trump's deal with United Technologies includes $7 million in financial tax incentives provided by Indiana to keep 1,100 jobs at Carrier, the company's heating and air conditioning unit, in the state. However, Carrier still plans to move roughly 1,300 other jobs to Mexico and close another facility in Indiana.

As I have argued before, there is nothing wrong with tax cuts, however, 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, it can be distorting the economy:
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.
BTW, for those hoping that Trump is going to clamp down less on the victimless "crime" of the drug trade, Trump had this to say at the Carrier event:
 People are saying: Do you think Trump’s going to build the wall? Trust me, we’re going to build a wall. And by the way, people are going to come through that wall. We’re going to have doors in that wall, but they’re going to come through legally...But one thing that’s not going to come through is drugs — the drugs are going to stop.
The drugs are going to stop.
Trump's full 'Carrier Speech' is here.


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