“Companies are not going to leave the United States anymore without consequences.” – Donald Trump
The reaction to Trump’s deal to keep 1,100 Carrier jobs in Indiana has ranged from outrage to adoration. There are so many layers to this Shakespearean drama that all points of views have some level of credence. I’m torn between the positive and negative aspects of this deal. If you’ve read Bastiat’s The Law and Hazlitt’s Economics in One Lesson, you understand the fallacies involved when government interferes in the free market. Politicians and their fanboys always concentrate on the seen aspects of government intervention, but purposely ignore the unseen consequences.
First, I wholeheartedly agree with Scott Adams’ assessment of Trump’s move as a brilliant, visible, memorable, newsworthy ploy to sway public opinion and sending a message to corporate America that he means business. Trump beat Carrier like a rented mule during the entire presidential campaign for announcing they were closing their plant in Indiana and moving the jobs to a new plant in Mexico. The publicity was so bad, I ended up getting a substantial rebate when I had a Carrier air conditioner installed in the Spring.
I’ve seen Trump worshipers trying to show what a fantastic economic deal this was for Indiana and the country. They are only looking at the scenario of staying versus leaving. The other scenario is what exists today versus what will exist tomorrow. Those 1,100 jobs already exist in Indiana. They are already paying taxes and spending money in Indiana. The taxpayers of Indiana currently have no obligation to Carrier or the employees of Carrier. With this new “fantastic” deal, the employees of Carrier are still employed, but now the the taxpayers of Indiana have a $7 million obligation to Carrier.
This isn’t a zero sum game. The $7 million is taken from the pockets of taxpayers and will not be spent in the greater economy of Indiana. This deal is absolutely a net loss for Indiana versus where they were before the deal. The people of this country are hypocritical when it comes to keeping jobs in the U.S. They want cheap electronics, gadgets, appliances and air conditioners. Therefore, they have been buying cheap foreign made products by the trillions for the last couple decades.
Carrier was moving to Mexico for the low labor and regulatory costs. This would have allowed them to sell the air conditioners made in Mexico at a lower price than if they are made in Indiana. Therefore, the consumers of these products would have spent less money on the air conditioners, leaving excess funds to spend on other products. The purchasers of Carrier air conditioners are not benefiting from this deal.
It is true that if Carrier had sent those jobs to Mexico, there would be a short-term negative economic impact on Indiana. The 1,100 people would have lost their jobs and would have utilized unemployment and probably food stamp benefits. Eventually, most of these people would have obtained employment elsewhere – some at lower paying jobs, some at higher paying jobs. Indiana has an unemployment rate of 4.4%, so there are jobs out there. Another company might be able to buy the existing Carrier plant for a great price, start a new production plant, and hire new employees. This is the unseen part of the picture.
The real issue here is why Carrier and thousands of other corporations feel the need to move operations out of this country. Since the passage of NAFTA in 1994 and China’s decision to provide slave labor to foreign corporations around the same time frame, American conglomerates have embraced the “benefits” of globalization:
- Close your plant in the U.S. and fire Americans.
- Open a plant in Mexico or China and hire locals at slave wages to do the same job as the fired Americans.
- Sell cheap products back into the U.S., undercutting the prices of smaller domestic producers and eventually putting them out of business – resulting in more American job losses.
- American conglomerate Ivy League educated CEOs listen to the advice of criminal Wall Street bankers and use their excess profits to buyback their stock and drive their personal compensation to astronomical levels.
- Capital investment by American conglomerates becomes virtually non-existent.
- Meanwhile, China steals the American technology and product designs and eventually produces knock-off products, undercutting American conglomerates.
- The Federal Reserve provides cheap and plentiful debt to Wall Street scum bankers, while Madison Avenue maggots convince Americans to accumulate debt to purchase the cheap foreign made goods.
- The production jobs shipped to China and Mexico are replaced with low paying service jobs in the retail and restaurant sector, sustained by the Federal Reserve debt machine.
Many, if not most, of those voting for Donald Trump want less government in their lives. Trump railed against corruption, government favoritism, crony capitalism, and special deals. For the last eight years we’ve witnessed Obama favor green energy frauds like Solyndra, use taxpayer funds to save union jobs at GM and Chrysler, provide tax breaks to wealthy buyers of Tesla luxury cars, purposely destroy the coal industry, and not prosecute one Wall Street criminal banker. This Carrier deal is just a different version of the government carrot and stick game used by every president.
This high profile deal is a symbolic message to Trump voters and American corporations, but it can’t become the standard operating procedure for his presidency. Government picking winners and losers, aligning with particular companies or industries, or attempting to manage the economy is nothing but an expansion of the corporate fascism we’ve been experiencing for decades. Trump needs to create an economic climate which will convince American companies to expand, invest, and hire more workers. He has already documented what really needs to be done:
- Reduce corporate and individual tax rates. If corporations are allowed to keep more of their profits, they are more likely to hire and invest in their facilities. Many new businesses are started by individuals, so lowering their taxes provides more resources for growing their businesses.
- The regulatory nightmare strangles small business owners, giving an unfair advantage to conglomerates. Wiping out thousands of useless Federal regulations will save existing businesses billions and allow fledgling businesses to get off the ground.
- Repealing Obamacare and replacing it with a more market oriented competitive healthcare system which reduces the outrageously high costs to companies and individuals would free up billions of investment or spendable funds for companies and individuals.
- Existing trade deals need to be renegotiated to make sure global trade is truly free. Wage arbitrage cannot be the sole basis for why companies decide which country to build their plants. China makes it extremely difficult for American companies to do business in China from a tax and regulatory basis. Any fair trade deal would address these inequities.
Donald Trump is successfully winning the public relations aspects of his new job, even before assuming power. I think he understands the bigger picture of what needs to be done to revive our stagnant, over-taxed, over-regulated, and government suppressed economy. Tax simplification, reducing the size of the Federal government, getting the Feds out of education, not policing the world, and cutting Federal spending would provide some of the resources to implement tax cuts and deal with Obamacare repeal.
Trump continues to infuriate ultra-liberals like Larry Summers and Paul Krugman with his wheeling and dealing, even before ascending to the presidency. Lame duck Obama looks even more lame, as Trump engineers deals as a private citizen benefiting the country. Time will tell whether this Carrier deal was just a symbolic line in the sand, or whether it is a sign of future government interventionist policies which will ultimately backfire. In the long run, the less government, the better.
“Practically all government attempts to redistribute wealth and income tend to smother productive incentives and lead toward general impoverishment. It is the proper sphere of government to create and enforce a framework of law that prohibits force and fraud. But it must refrain from specific economic interventions. Government’s main economic function is to encourage and preserve a free market. When Alexander the Great visited the philosopher Diogenes and asked whether he could do anything for him, Diogenes is said to have replied: “Yes, stand a little less between me and the sun.” It is what every citizen is entitled to ask of his government.”― Henry Hazlitt
Henry Ford paid his people $5.00 per day, when the average wage was about $1.50 per day. This was done in order to stabilize his workforce, but was also done as Ford believed that his workers should be able to afford his products.
Henry Ford realized that paying people a decent wage would come back to reward him immensely. Of course, the wall street banksters howled in protest, stating that Ford’s high wages would “destroy capitalism” as they knew it…Henry Ford mistrusted banks and knew of their destructive potential. His writings have stated as such.
Henry Ford had a great part in establishing a “middle class” and was instrumental in helping quell the “class warfare” that was evident in other parts of the world.
Our present “race to the bottom” with the implementation of the fraudulent H-1b visa program has made native-born Americans second-class citizens in our own country. The “pointy-headed intellectuals” in our “business schools”, colleges and universities have lost sight of the fact that a well-functioning economy requires a consumer base that is able to afford the consumer products available to them.
It helps to have the products produced by the very consumers that eventually purchase them…in today’s business schools, the stockholder is looked upon as the one entity that must be “stroked” at all costs…the balance that is required for an economic system to flourish is ignored…a well-functioning economic system is like a three-legged stool that requires consumer/employees, investors/consumers.employees, and financial backers, also consumers,employees,investors to properly function. Take the employees out of the equation (with the siren song of cheap imports) and you have the mess that we are in today…
The Henry Ford 5 bucks a day trope has been beaten to death. By that thinking Boeing would have to pay it’s employees millions per day while Wal-Mart could slink by paying under 2 bucks. You people what they are worth. Allowing the government to decide who gets paid what is the essence of crony capitalism.
Your quote “the Henry Ford 5 bucks a day trope has been beaten to death” is a good example of what is ignored and that business schools DO NOT teach. I agree that nothing good ever comes out of government-mandated wages…However, Henry Ford was prescient to know that if he paid his employees well, they would be able to buy his products, as well as many others. Henry Ford DID create the conditions for the middle class.
The notion that the stockholder’s profits is the end-all for a capitalist society IS all wrong. A non-crony-capitalist systems needs CONSUMERS, who are paid enough to be able to make the system work. Consumers are part of the symbiotic relationship that is needed to make capitalism work.
We have never had “free trade”. Foreign governments place trade restrictions on U S products while freely shipping us their products. The “Value Added Taxes” that many countries impose are a way for foreign governments to “protect” their industries.
For an economy to truly prosper, consumers (employees, workers) have to be part of the equation. What good are “cheap goods” when you have outsourced (offshored) your manufacturing capabilities? What is the difference between making 5 million dollars and keeping your USA-based workforce employed (and able to purchase your goods) and offshoring (and getting rid of your US workers) for another mere million in “profits”? Message to all you wall street types and banksters. UNEMPLOYED AMERICANS DO NOT MAKE GOOD CONSUMERS.
Wall street types praise Wal-Mart for “keeping wages low and corporate profits high” while criticizing companies such as Costco for paying their employees decent wages (and still prospering handsomely).
The same thing happened in the last century when Henry Ford paid his employees $5.00 per day (when the average wage was $1.50 per day). Of course, the same wall street and banksters howled that Henry Ford would destroy capitalism by paying his workers a decent wage. The OPPOSITE happened. Henry Ford CREATED a good portion of the “middle class” (of which the wall street types and banksters are presently destroying). Henry Ford (among others) KNEW who was behind wall street and the banksters, published his findings and was roundly (and unjustly) criticized for speaking the TRUTH. Radio priest Father Coughlin had the same message and was muzzled by the Catholic Church…WHY??
We are at a “race to the bottom”. . .
Business “schools”, wall street, banksters and politicians–there are many more of us than there are of you . . .
The Indiana State Government could go to hell if it can’t go without $7million dollars .
You can’t question the unemployment rate in every citation and then claim that Indiana’s is 4.4%.
And just because he promised them a 7 million dollar tax cut doesn’t mean he’ll do it- remember, he hasn’t taken office yet.
I just can’t see a downside to reversing the policies of the past 25 years. Is it a slam dunk guarantee of economic recovery? Who knows, but what we’ve been doing has been a disaster.
It’s all relative. Whether it’s 4.4% or 20%, the majority of people in Indiana who want to work can get a job.
The $7 million dollars of tax breaks are from the state and they have been agreed to.
We’ve already had crony capitalism for the last 25 years with government dictating winners and losers. How is this different?
It’s not different IMO. I listened to Trumps speech the other day and throughout the entire thing I kept wondering where the money will come from? That and what the hell do will need a bigger and stronger military (and police) for? If anything the military needs to be made drastically smaller and if we can get back to rule of law and ENFORCEMENT of those laws then LE’s job will get easier requiring less police, not more.
I fear his first term will just be more extend and pretend. He’s going to have to devalue the dollar to make all those goods from new ‘Murican manufacturing jobs appealing to the world too. Hell, ‘Muricans can’t afford to purchase ‘Murican made goods anymore.
I should start by saying that this is clearly your area of expertise, not mine. I trust you to give a more thorough analysis of the economics than most people. I sat down and did an hour or so of research into this before responding so I don’t embarrass myself. I discovered that the response to this “influence” Trump has exerted on Carrier is universally dismissed by both the media as well as the current administration. Those are signs to me that the opposite must be true.
Especially when it comes from people who have been so dependably wrong about everything so far, most recently the sperg from 538-
In what may have been the most poorly articulated dissection of the episode I have ever read. Not to mention that very few of the links are actually live, odd for an article only 4 hours old as of this posting.
What concerned me was that you contradicted yourself in more than one instance and that is not like you.
You wrote: “The purchasers of Carrier air conditioners are not benefiting from this deal.”
Several sentences earlier you also wrote: ” The publicity was so bad, I ended up getting a substantial rebate when I had a Carrier air conditioner installed in the Spring.”
You also wrote: “Trump needs to create an economic climate which will convince American companies to expand, invest, and hire more workers.”
After you had written: “If you’ve read Bastiat’s The Law and Hazlitt’s Economics in One Lesson, you understand the fallacies involved when government interferes in the free market.”
I agree that government and business should not be interconnected. There is a world of difference between “convincing American companies to expand, invest and hire more workers” and “requiring by law that American companies expand, invest and hire more workers.”
It appears that Trump has done the following without once acting in the capacity of a sitting President-
1) Convinced an American company to expand, invest and hire more workers simply by speaking with their management (and putting a little public pressure on them via his open discussion).
2) Not interfered on a Governmental level.
3) Benefited the purchasers of Carrier products while simultaneously protecting the jobs and factories already extent in the USA.
Say whatever you will about what may happen when he takes office, but that is quite an accomplishment for an as yet private citizen.
The other part is the 7 million “tax incentive” you mentioned. Trump is the President elect- a federal position. Those tax incentives- whatever they may be as no one has articulated them in writing, at least that are searchable on the Internet- are State level. Giving breaks in taxes to companies do not require that taxpayer be “on the hook” as there are no cash payouts. It may reduce tax receivables by 7 million, but that may also be offset by reduction in existing benefits, also what we’ve been told to expect.
Keeping manufacturing in the CONUS is a better deal than exporting it. Period. As long as it isn’t on the taxpayers dime there is no downside that I can see.
Correct me if I have misunderstood any of this.
HF
I think you are being disingenuous on purpose. I know you.
I benefited before the deal because Carrier was trying to fend off the bad publicity. Now that they have a deal, no need for rebates.
Bastiat and Hazlitt argue for minimal government intervention in our lives. When I say “economic climate” I mean less taxes and less regulations. That’s exactly what Bastiat and Hazlitt would support.
Trump did not convince Carrier to expand, invest or hire more workers. They still shipped another thousand jobs to Mexico. He convinced them not to ship all the jobs to Mexico. How did he benefit purchasers of Carrier products? If they were made for a lower cost in Mexico, they could afford to sell them cheaper to purchasers in the US.
From a PR perspective, Trump has recorded a victory.
Taxes not paid by one entity have to be paid by someone else, unless government spending is reduced by the $7 million. It’s just maff.
You have purposely misunderstood much of what I wrote. I know your methods. 🙂
Holy mother of god!! Such a friendly, feel-good, don’t-hurt-your-feewings shitfest.
Look, just because hardscrabble farmer writes awesome stuff and is a magnificent contributor and adds so much value to TBP ………. that doesn’t mean you should go easy on him when he questions your impeccable wisdom.
Tell him he’s a fucken maroon! Tell him to go fuck a duck. At a bare minimum, a “Blow Me!” is in order. He can take it. Quit being such a pussy.
I didn’t go easy on him. I specifically refuted all of his contentions with ease.
He uses that “playing dumb awe shucks” approach when he is passively aggressively attacking.
I am just kicking his ass in an understated sort of way.
I’ll save the Blow Me’s for the idiots who take a shit on the site.
“He uses that “playing dumb awe shucks” approach” ——– Admin
Good call!!!
Could this be the real hardscrabble farmer??
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Not my intention. Not that intent means much in the final analysis of right/wrong, but for clarity’s sake. Maybe I don’t fully grasp what’s being said here, but if it’s that this is the same old same old I disagree. I usually find myself in agreement with most of what you write, but I think that this particular observation is cynical in the wrong direction. Of course if it turns out I’m wrong, I’m not going to be blindsided either. There is just this feeling that his goals are not the same ones that motivate the status quo. Nobody does a roast like the one at the Al Smith Dinner if their intention is to keep on doing what everybody else has been doing. You like Walking Dead comparisons so here’s one- Trump is like Neegan- I don’t think anyone has any clue what his motivation really is, but they are certainly afraid of it and that makes it fun to watch.
I’m not a big fan of Trump for reasons unrelated to economics/politics- I’ve said it repeatedly- but I was one of the first to call it for him back when he first tossed his hat in the ring because I sensed that he was riding the wave rather than trying to make them like his opponents. It seemed more like physics than politics, but that’s just my take.
HF
I’m still hopeful Trump will change the dynamic in Washington DC. I think this Carrier deal is a smart political move. It does send a strong message to corporate America and to the workers of this country. I wasn’t being cynical, even though that is my nature. I wanted to balance the true economics of this particular deal with the bigger picture of what truly needs to happen. It seems the 2nd part of my article was ignored or disregarded.
Neegan is going to die at the hands of Rick and many others. I hope Trump doesn’t meet the same fate.
HSF steps out of the bullpen…
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You know a thread is getting really good when HSF very politely throws a big steaming pile of monkey poo at admin. In some ways such and innocuous topic (but not really when you look deeper) but it is creating one of the best threads/discussions in a while. Carry on monkeys.
I agree with you HSF–and I must sadly say I strongly disagree with Admin, for once, on this.
The premise that the government/Trump agreeing to allow a $7 million deduction from normal rates of government confiscation is somehow “stealing” or “taking out of the pockets” of the Americans that that money would be redistributed to by the government–well that is completely contrary to the attitudes that are usually professed on this site.
Will the middle class tax breaks also be construed as “taking out of American’s pockets” monies that the government would otherwise be redistributing to our entitlement programs?
The issue is that the money–$7 million in tax breaks–NEVER belonged to anyone but Carrier in the first place!
Change is good. Jobs are good. Hoosiers are happier.
Bastiat and hazlitt are just more worn out dogma. We gotta fix our shit
Wow. Pretty pathetic shallow responses to my fact based reality check article. What a shocker. Don’t get caught worshiping a demagogue.
I’ll be making judgements based upon actions and facts.
No one gets a free pass on TBP.
Your analysis mirrors that of Sarah Palin, but can you field dress a moose?
I can see the monkeys don’t like their new leader questioned or second guessed. He can do no wrong. How dare I point out the fallacies of government intervention.
Too bad. Whenever Generalisimo Trump steps over the line and does something wrong I will point it out.
The Trumpeteers may not like it, but tough shit. I don’t give a fuck what anyone thinks.
I’ll admit that the Carrier deal is a slippery slope. It’s just not very slippery, and it’s not very slopery. When we have graft on the billion-trillion dollar scale, $700k per year to buy some PR is like a couple of pennies under the couch cushions. I’m very concerned about Trump drifting away from his promises, but I’m worried about his being influenced by neocons and forgetting about points 5 & 7 of his healthcare proposals. https://www.donaldjtrump.com/positions/healthcare-reform Denninger wrote about this today.
Greetings,
I sense that the Carrier deal is something that you are not happy about. I get it. I’ve also said since day one with posts telling TBP that Trump was unbeatable because of his experience with reality television. Doing as many seasons as Trump did on the Apprentice turned him into the Terminator.
Frankly, I dont believe he cares about those guys one way or the other. This was just an convienent way to make everyone eat crow while he waits around for his turn on the levers of power.
I thought your presentation was quite well-reasoned and well-documented, as is always the case when you address economic issues. I’d be very interested in seeing an essay on national monetary sovereignty, public banking and transition away from the debt-based monetary system and economy.
No fan of big (or nearly any) government I, but even less a fan of the banking oligarchy, itself really a non-elected form of government. There are dangers inherent in both financial systems, but I’ve reached the point at which I’d rather take my chances with a tightly controlled national monetary authority than with the dread Fed, the “politically independent” entity supposedly looking out for the financial and economic interests of the nation. They’ve had their century.
You (Administrator) just tipped your hand friend. You’re emotional outburst and childish name calling just cost you your credibility. You’ve shown you are to thin skinned and biased to report on Donald Trump fairly.
Blow me asshole.
How sad that you would so quickly devolve to liberal tactics of petty name-calling ( “monkeys”, “Generalisimo Trump”, “Trumpeteers”) when someone doesn’t agree with you.
I had much more respect for your well thought out article and honest rebuttal of HSF’s questioning and different perspective, although I still don’t agree with you.
Did you just arrive on TBP this morning?
(I know you didn’t but your accusation indicates you did.)
I’m with you, Mr. Admin. I’m not a big Trump fan, but what he did with Carrier was a brilliant PR move that has the media bedwetters and the lame duck President (emphasis on LAME) shitting bricks. He took action, as promised, and his supporters are impressed.
I,too, think that such intervention into the private sector is a slippery slope, and hope that it is a one off, not the first of many such moves. We shall see. The next 6 weeks before the inauguation will be very interesting.
Be still, my foolish heart!
Sign me up for another 4 years!
Nobody gets a free pass on TBP. And that includes two dead ‘economists’. Llpoh said it best, a couple of weeks ago. We all tend to be on the austrian side, but it’s just a theory.
Star you are either trolling admin or you are in desperate need of a class in basic logic. Not sure which…
Not really, Francis, i actually thought about sitting this one out. But I love economics, Jim’s cold blooded assessments are what drew me here. We don’t disagree at all on where we are. But I see the future differently, and that discussion is what keeps me around. Trump’s economic ideas are very similar to my own. I’m betting it works, and works better than you could ever imagine. Only time will tell. I haven’t seen a crow on my plate yet.
This is all academic. We are mammoth hunters 20 years before the mammoths died out, sitting around a camp fire in what will be Canada discussing the best ways to kill mammoth. The only difference is that we know the mammoth are dying.
Free markets can’t exist without open borders . High end production leaves looking for cheap labor.. Cheap labor pours in looking for free shit . National peace and prosperity are all but guaranteed. What’s not to love?
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I don’t think this deal would have been possible if Trump did not have the Gov. of Indiana as his VP.
I’ll go on record and say I am glad some of my fellow americans are keeping their jobs however I have this queasy feeling that 1) either Carrier just extorted the taxpayers (many of whom may not even own a carrier product) 2) Trump’s way of making yuuuge deals is using taxpayer dollars to bribe companies in staying in the U.S.
This just in:
Trump Advisor Says Administration Not Looking To “Rip Up NAFTA” Or Impose “Quote-Unquote Tariffs”
http://www.zerohedge.com/news/2016-12-05/trump-advisor-says-administration-not-looking-rip-nafta-or-impose-quote-unquote-tari
Flash, good to see you back. We won. Let’s see what’s next
cant fight progress
Laissez-faire capitalism isn’t possible with counterfeit money. It distorts all economic calculation and allows the state to corrupt all relationships. We have reached the point where there is absolutely no price discovery for anything because markets and risk have been disabled.
RT Rider, that’s a really good point. Big props
It’s $7 mil over ten years. $700k per year to retain 1,100 jobs. $650 per job per year. The incremental increase in tax revenue (compared to whatever shitty job the workers would otherwise get) will cover $700,000 per year. I agree that it’s not the way to handle the every situation, but it’s not every situation. Moral hazard, blah, blah, blah. States and regions spend lots of money to advertise a message – “come to the Black Hills”, etc. This is spending a tiny amount to send a message to American businesses that they should think long and hard before moving manufacturing to another country – or Trump will get his tweeter going on you. There is nothing whatsoever wrong with our assessing tariffs on products brought into the US. Tariffs are one of the few sources of revenue referenced in the constitution. Other countries don’t play “fair” and they’re not hung up on Adam Smith and his invisible hand. 4% of autos sold in Japan are from foreign companies, for example. That’s not 4% from American car companies. That’s 4% from all other countries – BMW’s, Audis, etc. Germany spends money on apprenticeship programs. No one gets all purist about it, and manufacturing is double the share of their economy that it is here. This is just one small shot across the bow of these mercantilist countries that we’re weary of getting abused by faux “fair trade”. And as the Trump administration starts tweaking all of the trade deals, the people we’re negotiating with will know that Trump won’t paint himself into a corner with free trade orthodoxy. He’s only threatened tariffs so far and it’s made other countries preemptively compliant. They’re afraid of him. Good. I like it that way.
Better to be feared than loved-Machiavelli.(I think)
“Trump needs to create an economic climate which will convince American companies to expand, invest, and hire more workers.”
The economic climate for corporations is $$$$$. If they have to pay a penalty that reduces their profits, that is the most important incentive.
The other choice is to eventually become a 3rd world country with a greatly reduced standard of living with not much hope of a future for your children.
BTW, the Carrier situation was different – they already had a factory that was almost fully built in Mexico. If action can be taken to greatly reduce any incentives to move elsewhere before any major financial costs are expended, then states would not be in a position to screw taxpayers by offering tax reductions to companies.
“This deal is absolutely a net loss for Indiana versus where they were before the deal. ” ———– from the article
Not arguing the point ….. but, I don’t understand it.
A “net loss” would mean Indiana NEVER recovers that $7m. Right? So, Carrier will never pay $7m in taxes over time? 7 years. 10 years. Whatever.
The 1,000 people employed still pay taxes. Also, what about all the supporting industries near Carrier? The ones that would likely close shop if Carrier left. Shouldn’t the taxes they pay be counted?
Anyway, I agree 100% that the move is symbolic. Certainly, Donald isn’t going to spend the next four years haggling with every Tom, Dick, and Harry corporation! Besides, what’s to keep a CEO from saying — “Hey, I’m moving my company to Mexico!” — not cuz he means it, but just to get a tax break.
You are confusing “leave versus don’t leave” with “how it is today versus how it will be”.
Today those workers exist and work at Carrier without a $7 million taxpayer subsidy. Tomorrow they will work there and the taxpayers will have paid $7 million they didn’t pay yesterday.
Get it?
Another thing I marveled at in Trumps recent speech was how he droned on about how his govt was going to creating jobs. For the last eight years we’ve all ridiculed Obammy and the govt when they talked about “creating jobs” but now all of the sudden everyone is confident that the Trump administration will be doing so. Just like with Obama, the only thing Trump can do is to deregulate things so that private business and entrepreneurship can create jobs.
Trumps Carrier deal means that govt will be losing $7 million in revenue which can only serve to increase debt in the short term and we all know that ‘Murica NEVER decreases its debt so the Carrier deal will be a net drain on the economy.
If Indiana is like most states they are required to balance their budget.Besides,Pence was the governor there,I bet it is set aside somewhere in a pork barrel project that will just not be funded.
I do not like govt. doing this kind of thing but in this case I agree with it.
Trump’s not going to bring many jobs back because of automation & regulation.
“If Indiana is like most states they are required to balance their budget.”
Bwahahahahaha!
Indiana has $46,377,635,000.00 in state debt. Yes, $46 Billion!
How the hell can any entity that requires a balanced budget end up with $46 billion in debt?
https://ballotpedia.org/State_debt
I understand that Indiana taxpayers will pay $7m … money they didn’t have to pay previously.
But, if Carrier leaves, they would probably pay even MORE. So, I don’t see the net loss.
I looked up Indiana unemployment benefits. The weekly check is 47% of their average salary.
—- assuming the average salary is $30k … some will be much more, some less
—- that’s a normal $576/wk …. or a $271 unemployment check
—- assuming 26 weeks unemployment = $7,050 per person …. or $7,050,000 for the thousand unemployed.
—- and then there’s surrounding businesses that will go bust (bakeries, grocery stores, suppliers, etc etc) …. those people go on unemployment also.
Indiana pays either way, that’s for sure. I just think the cascading cost of unemployment is much higher than the $7m tax credit.
Well …. I ain’t no accountant. To which I’m guessing you’re thinking — “Thank God!!!”.
Stuck, they might have cut a deal for that paltry savings when they could get a better deal paying $5/hr in Mexico and not pay social security or healthcare. The $15/hr they pay American workers is only part of the picture.
That means this is but a face-saving gesture for Trump and Pence. Carrier will leave quietly in a year, after Trump’s honeymoon period is over.
I’m just overwrought right now and can’t think straight.
Yes, you are one overwrought-ass MF’er. 😉
Are you assuming the 1,100 people will never get jobs again?
I’ve had 10 jobs over my career so far. How about you?
I had 10+ jobs the two years before joining the Air Force. Not kidding.
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Yes, the 1,100 people will get jobs again. My little math thingy above, which estimates that Indiana will pay $7m just in unemployment benefits if Carrier leaves …… is only assuming people stay unemployed for 26 weeks.
and in today’s economy most of those jobs will be low paying
What is being overlooked is the sage advice of world recognized economics authority Nancy Pelosi: “unemployment benefits are the most effective producers of job growth.”
Taxpayers aren’t paying anything, Jim. Carrier is getting tax cuts. I like tax cuts. Trump and lyin ryan are promising major tax cuts. Tax cuts, and american jobs. What’s not to like?
Tax cuts HAVE to be accompanied by equal spending cuts otherwise it’s just sleight of hand.
No they don’t. Revenues can grow through expanded business activity. Ever hear of the multiplier effect?
Where was the business activity expanded in the Carrier deal? That’s what I thought.
Trouble is, the inept, corrupt govt NEVER follows through. Ten seconds after a deal is made they immediately forget that more things need to happen to make the deals they’ve already made, viable. That’s how we get $20 fucking trillion in debt! That’s how we get bankrupt pension funds. Everyone assumed an 8% annual return at deal time and no one bothered to follow through and make adjustments along the way.
Your faith in govt, Trump or otherwise has always left me dumbfounded but I do like your attitude.
So you don’t understand the multiplier effect. No problem, I can explain it to you. Oh, that’s right, I already did, a couple of years ago. Enjoy.
Star, I gotta call BS on the multiplier effect. Not that it doesn’t exist, just that it’s usually overstated, especially when it comes to tax cuts. The cult of tax cuts is passé. Sure, you get good effects from the tax reform of 1981, when nominal rates were cut from 75% to 28%, but cutting from lower rates has less effect. Boosters of sports stadiums pitch billion dollar tax abatements on the theory that the hotdog vendors will pay income tax. That’s when the multiplier effect is beyond ridiculous. Better to offer $7 million for 1,100 Carrier jobs than $1 billion for a stadium, though.
Again Star, your faith in corrupt and inept govt is breathtaking to behold. Your Cup-O-Koolaid runneth over.
That’s true everywhere except in reality. I’ve counted at least 5 times in these comments where people have assumed that the money didn’t just appear out of thin air. I’m not saying I wouldn’t mind living in your world, but it’s your world not reality. Taxes will be dropped and no spending will be cut, and that’s reality. That doesn’t mean there won’t be a price to pay some day, but nobody knows when that day is.
Your emotional approach to issues is annoying. States are required to balance their budgets. The $7 million not received from Carrier must be found somewhere else. It won’t come from spending cuts, so the taxpayer of Indiana will foot the bill. This deal is not creating American jobs. Those jobs already exist today. Your narrow focus and unwillingness to see the entire picture is disappointing.
My article addresses all the positive aspects of the deal and hopefully what Trump will really implement. You seem to have ignored that part of the article, which constitutes the majority of it.
Childishly agreeing with everything Trump does or says is pretty shallow.
Damn, you’re smart, Jim. Like I trained you myself.
Looks like your god has just backed off scrapping NAFTA and imposing tariffs. Ouch.
Keep praying at the altar of Trump. I’m sure it’ll payoff.
Another empty suit……..same as the last hopey change empty fukkin suit.
Really? Let’s look at our sources of information. Starfck- reads Trump’s own words on twitter “I’ll tax the rat bastards 35%”. Quinn- sees some 3rd hand quote from some low level staffer I never heard of “Trump is going to beg Mexico to go easy on us”. We’ll see
Did anyone notice the Donald went to have a sit down with Al Gore to talk “Climate Change” …….AFTER DT sent his daughter Ivanka? WTF
This is like a bad script for a soap opera. All we need is some organ music in the background. Anywho, Al Gore was all smiles and said it was a good meeting.
Translation- Sheep get fucked again.
I agree with your premise. And it’s disappointing to see so many people blindly follow this guy. Apparently he is above criticism. It’s also disappointing (but hardly surprising) so see so many people who correctly mocked Obama for asserting that it was the governments duty to create jobs now praising trump for his pronouncements of the same thing.
It’s is not the role of government to create jobs. The government just needs to get out of the way. It’s amusing and depressing all at once to see ‘conservatives’ angry over the last 8 years of Obamas economic interventionism now praise trump for doing the same thing. One of the biggest reasons I left the Republican Party and gave up on conservatism. They all want small government when democrats are in charge, but as soon as they are in charge, they want huge government interventions again, which they hope to direct in ways they want. Rank hypocracy.
via Armstrong economics…
Renzi to resign – Italy follows the Global Trend – Votes NO
Globalization = Fuck You
I’m not talking about the multiplier coming from tax cuts, Iska. I’m talking about the multiplier of having a building churning out 1000 paychecks a week instead of standing empty. Try to deny that. The stadium thing is total nonsense, I agree. Think about it. There are 60 something stadiums being built right now around the world. For what? Just more bubble economics.
I haven’t seen in print what the net net dollars to Indiana will be once taxes paid by Carrier are reduced by $7m. I assume they will still be ahead tax wise verses these plants closing, considering taxes continuing to be paid by employees, property taxes, ripple effect etc.
Is Indiana giving up half their tax take, a quarter, all of it? Just curious.
Trump could start with giving me (small business owners) a tax break.If he just does this and puts up a wall across the southern border he will be a success in my eyes.
If he fails on changing our tax system or does nothing to stop ( illegal and legal) immigration then he fails as president.
BB, lyin ryan was on 60 minutes tonight. Big tax cut for small business real soon. How does 15% sound? Great, if you ask me.
I am on Admin’s side, for the most part.
Trump is not bring back manufacturing jobs. They are gone, and tech will ensure it continues.
And the Carrier jobs “saved” will be bullshit. Higher priced lower quality goods for all will be the result, plus a nice govt handout to Carrier. Great, just great. Bullshit it is great. It sucks.
Anyone remember the 70s? No competiion, bad quality goods were the norm. We do not want to go there.
The only answer is to radically improve the efficiency of US workers, while keeping wages under control. More output for the same price is what is needed.
Sure, better trade agreements are needed. But the real answer is in increased productivity of all workers. And that is not going to happen.
Poorly educated, lazy, entitled, stupid, free-shit dependent, debt-riddled snowflake workers are not going to elevate the US. Fix that, and the banking system, and the govt parasites, and you can fix the economy.
Otherwise, the screwing will continue.
I am glad Trump was elected. But he is not bringing back the jobs, and stopping the outflow with handouts is going to blow up in his face.
Jeebers. +1000
I posted my tangle post while you were doing this. I had this EXACT conversation with a fairly liberal client of mine a few days ago. We were actually on agreement on it, oddly. Manufacturing may com back to the US but the jobs will not – at least not in the number some are thinking. They will be automated. And so it goes.
I am glad Trump was elected too and you are right. As the free shit supply slows he will put himself at political and personal risk as a result. Things are far more complicated than they appear on the surface.
Speaking of jobs not coming back.I read an article several weeks ago about a factory in the Midwest that employed 600 people.It was not competitive & closed.
A couple of years later it was automated.It now operates 24/7 with 14 people.
One of the suppliers I work with is the largest of its nature in the world. The warehouse they have here in BC is large, I’m going to guess about 150,00 square feet. More SKU’s than you can shake a stick at. The entire operation in the West is run by 5 people. It is automated. In the old days an operation that size would have required at least four to five times that amount of labour. Three guys in the warehouse and two up front, the rest replaced by robots and computer programs. The wave of the future.
Tampa, you read an article. Persuaded you, huh? Don’t fall for it. My friend’s factory in Illinois employs 300 people, it’s totally modernized, and his payroll is in excess of a million dollars a month. All that money goes straight into the community. That’s one lousy building. Not to mention the taxes he pays, the money he spends. Both of Carrier’s Indiana plants are twice that size. Don’t listen to the bullshit. Production is our future, and tarriffs are the stick that will make it happen. The carrots are lower taxes, less regulation, and destruction of the asset stripping mechanisms that exist right now.
I won’t completely disagree with you Star but the long term trend is automation.
Another thing I have not seen mentioned in this thread is energy costs.Because of cheap energy costs we were having some business come back to the US.I don’t know how much is has brought back but every bit helps.
Stuck, This is the same person who screamed bloody murder when Obama supposedly paid a ransom for Americans held in Iran. He conveniently forgot that the money already was due to Iran. He made it sound like Americans were paying that money and not the banks making money by holding the funds.
Now the weasel thinks it’s perfectly OK to hand out American tax money to a corporation holding American jobs hostage to see what they can get from the Great Negotiator.
I’m going to select The Anti-Reagan for $200, Alex.
Which president-elect started his administration by handing out tax-payer money?
Imagine Reagan offering billions to PATCO instead of firing their asses like he did. What kind of message would that have sent the other unions? This is the way it is looking to every other corporate big dog; Trump is a chump. Shit, Apple will soon try to negotiate a better deal than they got from Ireland.
I’m afraid Trump may have made one too many trips to Putin’s casting couch.
For fuck’s sake, Coyote, you’re overwrought. It’s 700 grand a year. It’s a rounding error. Don’t conflate it with Reagan offering billions to PATCO. This whole fucking “issue” is fake news. You know it’s bullshit when David Brooks is deeply concerned about the precedent it sets.
I think it’s a good thing when businesses or corporations get a tax break, any tax break. And it seems to me this does not equate to taking taxpayer money. I think this means the state/local governments are just not getting as much. Take it up with them if they raise your taxes as a result.
I think all taxes should be greatly reduced or eliminated. Starve the beast, from federal to state to local. The less they have to spend, the less they are involved in our lives.
Thank you Vic. You get it
In the land of make believe that may be how shit works but in the real world it never works out that way. The seven million dollar tax reduction WILL result in Indiana’s debt going up because there is no fucking way they will make $7m in cuts.
Of course ALL taxes SHOULD be reduced but taxes are the only means for States to generate revenue (aside from Fed handouts) and there is no way that citizens will see a reduction overall from this deal and any *benefit* the state *might* sees will certainly not trickle down to main street. Either the debt goes up or the citizens get taxed elsewhere………….extend and pretend baby……it’s the ‘Murican way!
I hear you, Llpoh, but if I have to pay $200 for a vacuum instead of $60, it’s not the end of the world. More importantly, though, the occasional exhibited Trumpian willingness to do things that are illogical on the macro level (like tariffs and subsidizing US industries) gives us leverage in trade negotiations. A corollary: I want a non-interventionist foreign policy, but I’ll concede that we’d give up leverage if our stated position were “no matter what, we’re not getting involved”. A pacifist can’t credibly threaten anyone. An orthodox laissez-faire free-trade zealot can’t cut good trade deals.
The problem with that line of thinking is that you might not mind spending a little more on a vacuum cleaner, but what about that same price increase in nearly everything you buy? One or two things may not make a big difference, but across the board it all adds up. Making everything cost10-50% more with no increase in incomes is going to hurt, and I don’t think incomes are rising significantly anytime soon.
The manufacturing business owner has spoken. Listen closely monkeys, Trumpeteers, and the maff challenged.
The great thing is, we’re about to find out. No longer will the WSJ be able to scare people with the bullshit that tarrifs will destroy the economy. Trump isn’t scared. Neither am I. Mexico and China should be. Watch how well this goes.
Around here we have a couple of mid sized manufacturers that are going three shifts, one large one that cannot get enough people to work their 24/7/365 production and so many small shops and manufacturing operations that you can’t count them. Oh, and the lowest unemployment in the US.
And while I’m not an employer I can tell you based on the people I know who work at these places, there are no snowflakes.
So why can’t we bring back manufacturing jobs?
automation?
Jeebus, HSF – let me explain it again.
There ain’t no fucking manufacturing jobs. Automation has killed them off.
In the fifties, around half the population worked in manufacturing. Now it is around 8 or 10%. Or a drob of around – wait for it – 65 million jobs at todays population.
Best etimates are 2 to 4 million mfg jobs may have been outsourced.
The went largely to China. Mexico is but a blip.
Even if ALL those jobs came back (they ain’t), manufacturing jobs would continue to decline by around 2.5% per year. Or around 300,000 per year.
Or even faster if you piss of companies and say they cannot leave. Lots fucking faster.
Manufacturing as a source of jobs is fucked. It is in terminal decline. Get over it.
And your comment re them not being snowflakes is of no consequence. They may be hard-working, great folks.
But are they computer literate? Engineers? Educated in the sciences? No? Then they are fucked. Even if they are, they are probably fucked.
No person, or company, in their right minds wants to employ people. Employees suck, and I mean that truly. I HATE employing people. They are nothing but headaches. I much prefer robots – they come to work, don’t get hurt, don’t whine and cry and go on strike, don’t cost more and more each year (actually they cost less and less), etc.
The fucking jobs ain’t coming back.
Trump knows little or nothing about manufacturing. Or he is out and out lying. The jobs are gone, and they are never coming back.
Llpoh, you start taking apart some of the big monopolies with anti trust, and punch labor back into shape, lots of small and medium size plants will spring up. And they won’t want to automate everything. I was watching a machine cut up aluminum plate the other day, I think with a laser, I didn’t ask, it was cutting long sweeping rounded edges faster than you could have drawn it, one after the other. But someone still had to set ot up and monitor it. I agree, there won’t be as many jobs, and they will require mote skill, but we want them here, not Asia.
Can you believe how civil these shitfests are now?
In the old days, bodies would be scattered, six people would have left TBP never to return, and stuck would have threatened me with bodily harm.
Smokey would have said “he should have ducked”.
Admin – I am just getting warmed up. First, I tried reasoning with them. But, no, that is not working.
I guess it is time to put on my steel toed boots and get to kicking ass and taking names.
Star – for fuck sake, just how many motherfucking lazer cutting machines do you think we need?
And let me tell you something – those fuckers are now automatically fed. You can now run dozens of the fuckers with one guy.
But guess what? The choice job is the fucker who programs it, or who does the cad/cam drawings.
And those folks are NOT your general knuckle-dragging manufacturing worker from the past.
The factories will come back but the jobs wont.
Lower corp tax rates will be a big help, btw. A very big help.
Llpoh. I agree with Scott and Jim both, this was for show. But it serves a purpose. Wages have to be kept under control, no question. That involves dealing with a stew of issues, liability, regulation, taxation, deflating the bubble economy and most importantly, a massive rollback of the welfare state. Hunger is a great motivator. I’ll disagree about jobs, most multi nationals are toast if access to our market is interupted, and I believe he is serious about using that leverage. We’ll see.
Star – we are mostly in agreement. But fact is, mfg jobs are history. They are being automated away. There is nothing to bring back.
Yes, the US has huge market power. But it needs imports as much as the next guy. Lots of stuff it no longer produces or mines. Rare earths. Robots. Computer components. Car parts. Etc.
Yes, these can be made in the US. But the delay in doing so would cause a depression if not trasitioned well. Plus, automation would limit the number of jobs involved.
The future is in dog-grooming and yoga training. Also spirit cooking.
yep, manufacturing jobs (caveat: as we typically know it) are toast. That said, everything requires labor of some kind, even if it is indirectly. The automation systems require labor, the problem ends up being that man of the non-thinking bolt tighteners aren’t capable of this.
People will then say it’s a “training” issue. in some way it is as long as the candidate has potential. to often modeling clay is needed but all that is available is dried out play-doh.
the real issue still comes back to immigration and control of who enters as a citizen. Whatever becomes of “manufacturing” (likely more intellectually challenging) or the jobs akin to that will not be effectively done by room temp IQ 3rd worlder religious nutjobs.
the big one is H1B.
kink the piping for the spigot of govt handouts and things will improve.
i’m excited Jim wrote this, nothing occurs within a vacuum but I share the same concerns and am not surprised Trump did this. i’m just looking forward to seeing a good ole fashioned shitstorm, it’s been too lovey-dovey around here…
Who the fuck has said anything about rolling back the welfare state? Has Trump, has anybody?? no, nobody has. We have, what, 21 states that list truck driver as most numerous occupation. Let those automated trucks hit the road and it won’t be 5 years before they start to talk about guaranteed minimum income.
I have one question and one comment.
Question: How does the many-times-more difference in CEO pay versus average employee pay today compared to 30 years ago factor into the overall picture, if at all (is it just pure greed or is there something else at play?)
Comment: Inexpensive products from China are not really inexpensive, they are cheap shit. Americans buy up all the novelties and “bargains,” which has led to the storage facility industry. We must be the only nation on earth whose citizens have homes overflowing with crap they don’t really need. We are pestered 24-7 to buy, buy, buy. Just use your credit card, ’cause you really deserve that shiny new thing.
I recall an electric frying pan from the 50’s that my parents had that was still working perfectly after 30 years of hard use. That kind of quality isn’t even desired anymore because people have enough disposable income to get something new because they are bored with the old and because it is cheaply made elsewhere. We could spend more on fewer well-made American products and be happier I think.
I have a 54-yr-old Burberry’s overcoat and a pair of Lloyd & Haig wingtip shoes (granted, not US-made) of the same vintage and when the one remaining cobbler (once a trade, not just a type of pie) in the nearby town was re-heeling the shoes, he sighed and commented to me that you didn’t see shoe leather like that anymore. The dry cleaner who repaired the topcoat lining commented that the coat must be an old one. Because of the style? “No, the heft of the tweed. Can’t get anything like this any more.” The same goes for a Lodge cast iron fry pan and other initially expensive stuff that has paid for itself many times over here on the back nine of my life.
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I usually don’t have much to say on these types of threads because this what I see when I think of the hurdles we all face when it comes to the legal, regulatory and political mess that has been made out of our economies over the past 100 years.
Jim is right about his concern over making the knot worse. Sometimes in our zeal to untie it we forget that the odds of actually being successful are slim to none and that in all likelihood it will just get worse if we try. In fact it’s likely that the knot is a sort of Chinese finger puzzle where the harder you try to remove it the worse it gets.
Better to pull out your knife and cut the whole lot out and start fresh. It will save time, headaches and aggravation in the long run. I figure, better to have shorter line than something which is unusable and constantly becoming bigger and more tangled.
Just my .02 cents. Yep it’s only worth that much.
Short term pain, long term gain. I think you’re right: cut and start anew, but unless it’s a clean cut, it might do more harm than good.
With a birds nest like we have right now, it would be even better to go with a whole new nicely spooled reel. When the fed turns off the drag, this is what you get.
Nice going, tourist. I’m never taking you fishing.
Lol. That’s not mine!!
Gayle – CEO salaries are a disgrace. They promote short-term results instead of long term ones, which is very damaging. That is the major issue in my opinion.
The size of their pay is disgusting, but in the scheme of things it is neither here nor there. It is the fact that pay is tied to short term results that is the big issue.
Buy American made. Do so voluntarily, and the benefits will be huge. Do so because of tarriffs and govt handouts, and it will be a disaster.
The real problem is “free trade”…that means the goods from overseas actually cost the USA almost nothing in return and are essentially “Free”.. As long we just trade IOUs and paper currency for goods, the job situation in the USA will not improve.. When you can get something for nothing, then the goods with zero actual cost will have the competitive advantage.
The world has over $10 trillion of the US’s IOUs but they still take more worthless promises in exchange for goods.
Americans should relish the fact the rest of the world wants to be their supplier of Free Goods. America’s greatest export is all but worthless IOUs.
The rest of the world is the greater fool. They finance all the US’s overseas wars and escapades too.
Astounding that the real point here is missed while the article – accurate as far as that goes – wallows in the details. The issue here is not a thousand jobs in Indiana or a tax cut or Federal money. This is a shot across the bow of the entire globalist system, a system that has as its heart putting workers in Indiana on a “level playing field” with Chinese or Indians. The whole insane plot is nothing but a scam to benefit the already rich and to pauperize the American middle class. Trump knows exactly what he is doing.
Details = facts.
We wouldn’t want any facts to disturb the narrative of the all knowing Trump.
I’ve said before that when everybody is rich, nobody is rich. Price differentials make a market for goods and services. These differentials exist across borders. American labor needs to drop its price. If deflation were allowed to occur, eventually, labor would cost less.
However, the Fed fights deflation with Wimpy dollars (I’ll Gladly Pay You Tuesday For A Hamburger Today!). Why is that?
At one time, immigration rules allowed buyers of real estate to get a green card. Imagine a scenario where Chinese nationals had Yuan on parity with the dollar. We would see and invasion of the USA and real estate prices going through the roof.
The real trick is to allow lower skilled American workers to price themselves out of a job and hire H-1B workers that do not cost the company in Social Security and healthcare. Then we see a startling situation where a pharmacist working for Wally World makes as much as the guy flipping burgers in the next booth.
Indeed, there was a time when children in Mexico received an accelerated education since they only had compulsory education up to 6th grade. My cousin in Juarez kicked my ass in math back when we were both in 5th grade. Today, it is common to find Mexican kids who can’t perform simple math calculations without a calculator.
I blame it on the brain drain of the 80’s, when the USA put out an emergency recruitment campaign for foreign teachers. I believe that worked so well, America then went after foreign nurses. Cheap labor, educated abroad. What a winning formula, save on education expenses and reap the benefits of low cost labor.
All this noise about immigration is a failure to see the big picture. Who needs a fucking wall to stop illegal lettuce pickers when the real threat in technology and medicine flies in on a jet? I do not have a video but to illustrate the futility of complaining about business’ predilection for profitable immigration:
Two cops were called to a disturbance, they found a man raping a woman. Despite their orders, threats and warnings, the individual carried on with his assault until, I presume, he finished.
I think most of the comments on this article fall into the ‘interesting, but irrelevant’ bin. It seems that we all (mostly) agree that the Carrier deal is a symbolic shot across the bow and more of a PR move than anything to do with economics directly.
Speaking of Bastiat and the idea of the seen vs the unseen, what if the net effect of this deal is to brighten the economic outlook of millions of people across the country and they start to spend more? I know math will win in the end and exponential growth cannot continue forever, but the overall mood of the people does have an effect on the economy. The very people who may have no real idea how it all works end up impacting it in sort of a self-fulfilling prophecy sort of way. The economy is a confidence game and this Carrier deal is something that may make a difference in the nation’s confidence.
I haven’t seen any mention of the fact that the tax money belongs to Carrier. We shouldn’t assume the government is entitled to it…it just takes it. Local, state and federal governments are funding projects it has no business being involved with. When it comes time for budget planning, get rid of the pork and you will find that the $7 million isn’t even missed.
“Everybody has a plan, until they get punched in the mouth.” – Mike Tyson
It’s great that everyone wants to keep those jobs in America and support tariffs on corporations producing shit in foreign countries. One little problem. You are all addicted to cheap foreign produced goods.
Let’s see how you react to a 30% increase in the price of everything you buy. Talk is cheap. Tariffs and trade wars are not. Americans are barely getting buy at current prices. It should be great when they are paying 30% more for American products produced by robot factories in the U.S.
Yeah, I’ll be crying because all the cheap chinese clutter at walmart disapears.
My summer sausage and vodka are made in America. My underwear may have been made in Bangladesh, but it’s 20 years old. Bring it on. ‘Murica !
Iska, your argument, like your underwear, is full of holes. I guess you do fine just throwing another dog on the bed when it gets chilly at night. However, most folks do not live in a trailer far away from civilization. They need soap and water, they need food and central A/C.
“Let’s see how you react to a 30% increase in the price of everything you buy. Talk is cheap. Tariffs and trade wars are not. Americans are barely getting buy at current prices. It should be great when they are paying 30% more for American products….”
You just described what it is like living in almost any other country on the planet. Americans, and I love you guys, have no clue what it is like to watch the purchasing power of your money fade almost overnight. We went from a .90 cent dollar to a .68 cent dollar in a period of months. Imagine what that does to the cost of your goods when all of your imports (and some of your domestic goods) are paid for in US currency then sold in your native.
Think of the cost of fuel alone.
Then add onto that a shrinking job market. The amount of manufacturing that would have to come back to the US to offset some of this pain would have to be staggering at a corporate level. At an individual level, given that much of it is automated, the return tax wise is minimal.
More and more people are on the dole of some type every day. With tax reductions and no reductions in spending and with possibly less growth in small and medium sized businesses than many might think things are not going to be as peachy as some hope.
We, the west, economically are headed for some major pain. As purchasing power decreases people spend less. The economy shrinks. Optimism is nice short term but it doesn’t pay the bills especially if the money being spent is borrowed. More debt will not get us out of this mess. You cannot spend/consume your way out of debt.
That being said – at least the west isn’t at war with Russia. So I guess I’ll take that as a win.
You are all addicted to cheap foreign produced goods.
Now who is assuming facts.
The FACTS speak for themselves dude. Open your fucking eyes. Check out the trade deficit. I’m sure you don’t purchase anything made in a foreign country. Right?
I pay 5 bucks for a half a gallon of organic milk. I think that’s all I need to say about my willingness to pay for quality.
How about that computer you are using to make your comments about buying American?
Is it OK for me to buy Scotch?
NEGATIVE. You are restricted to Roo Juice and Vegemite.
I’ll take the increased cost if the quality comes back along with the higher prices. As Zig Ziglar would say, “It’s not about cost, but about value.”
I love riling up the monkeys with facts that don’t match their preconceived beliefs and hero worship of the Trumpster. Read for comprehension before hurling shit. It makes you look petty and narrow minded.
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Has nothing to do with facts, Jim. I just happen to love punishing tarriffs. think about this, Jim. You call parroting globalist economic theory fact. Here’s a fact. It didn’t work. In the period of the free trade/globalist experiment, america certainly didn’t improve. The globalists didn’t deliver an improvment in the lives of their citizens. They’ve got to go. They failed. And all their pet theory should get trashed with them.
“The globalists didn’t deliver an improvment in the lives of their citizens.”
You honestly think that was their goal? Wanna buy a bridge?
Administrator says:
December 5, 2016 at 8:43 am
“Everybody has a plan, until they get punched in the mouth.” – Mike Tyson
It’s great that everyone wants to keep those jobs in America and support tariffs on corporations producing shit in foreign countries. One little problem. You are all addicted to cheap foreign produced goods.
Let’s see how you react to a 30% increase in the price of everything you buy. Talk is cheap. Tariffs and trade wars are not. Americans are barely getting buy at current prices. It should be great when they are paying 30% more for American products produced by robot factories in the U.S.
__________________________________
Not to mention that most people in every fucking state in the country who are employed either work for WalMart or drive trucks full of shit to WalMart.
Thank God Zara, a truly rational TBPer, is back. Talking sense to these shit throwing Trumpeteer monkeys is meaningless when they breathlessly worship at the altar of Trump.
Jim, i have a buddy who owns a big plant in Illinois, of all places, probably the worst state to have a business in. He is third generation in the biz, and his kid runs it now. He makes gas heaters and fireplace things. He has 300 union employees. They automate as much as they can, but some of his presses are like 50 tons or something, and have been in his shop since the Korean war. He does some china stuff, too, but they do most of it here. And having a paid for factory that size is still a gold mine, even in Illinois, even with a union workforce. Being private, he competes head to head with Carrier. And judging by how he lives. I’d say he’s winning. Cut wall street out, and business here makes tons of sense.
Star – your buddy may have a good biz. But you know jack about what you are talking about. 50 ton fucking press is a toy. Really. I have some experience making the shit you reference – and the fucking Chinese can make the same stuff for the cost of US materials.
Re the factory – if it is a gold-mine, he is not getting a big enough return on its capital. He may be making money on the original cost, but current? That is much harder.
I hope he does well. If he is going head to head, at his size, with the big boys, it is only because they let him. They can drive him out of business tomorrow if they take a mind to. He is but a gnat on their ass.
He better be in a hard to manage niche area that is in the too hard basket for them. Otherwise, sooner or later, he will be fucked.
Llpoh, he is one of the few in his industry who survived the Obama years. His is a case of if it ain’t broke, don’t fix it. They carry no debt. They gross like a small country. You are right about the presses. 500 ton Verson are the old ones, and the newer stuff is 165 ton Aida and 300 ton Komatsu. I had to ask him, i know nothing about presses. He said they had to set the Komatsu on a 400 ton base, and then build the building around it.
Out of my depth with respect to manufacturing and its future, but one thing occurs to me: if “progress” were indeed linear and always progressing, yep, I’d agree that the likelihood is that robotics will put paid to manufacturing jobs, but if history is not linear (as the 4th turning enthusiasts believe), then we cannot be sure that some event or other will delay or even push back the march of technological progress. Maybe not a “world made by hand” regression, but a small-and-medium manufacturing regression? A financial crisis of the sort expected by many here would be a possible cause. I don’t believe in cyclical theory, but I’ll take it over linear any day of the week. Is anyone else inclined to think that manufacturing jobs might return to the US in an economic situation very different from that which exists now?
To compliment what is being discussed here:
THE RE-ENGINEERING OF THE DOLLAR IS ABOUT TO BEGIN
DECEMBER 2, 2016 JC COLLINS LEAVE A COMMENT
Understanding the Carrier, Ford and Apple Decisions on Manufacturing in America
By JC Collins
The cornerstone of the POM thesis has always been that the USD would not collapse, or suffer a horrible death, as some pundits and fear mongers have promoted over the years. It has always been my position that the dollar would see some modest depreciation in the range of 20% to 30% which would facilitate an increase in exports and lower the debt-to-GDP ratio. I even published a small e-book titled Re-Engineering the Dollar which attempted to explain some the fundamental aspects of this transformation.
The President Trump script is aligning with the larger mandates of the multilateral monetary transition from the unipolar USD structured system to a multi-currency system. Re-designing the dollar and transforming the Federal Reserve are all aspects of fitting America into the new and emerging international monetary framework.
Since the creation of the Fed in 1913 the US dollar has been pushed into the role of central reserve asset in service to the international monetary system. This role was further enhanced and broadened after the Bretton Woods conference in 1944. The macro function and micro adjustments of the international system have been structured around the role of the USD.
With the transformation of the international monetary system taking place the role of the USD needs to change. The Federal Reserve and its function have been to provide support to the international role of the dollar. Both now will need to be re-defined and re-engineered in order to adjust their own domestic relationship as well as their external relationship with the rest of the banking and monetary worlds.
The dollar has never been allowed to depreciate substantially and had to always maintain a higher value than most of the national currencies which were pegged to it. The forthcoming transition will allow the dollar to finally depreciate which in turn will make American exports cheaper again.
The Trump script has known this fundamental change was coming and it was why I stated he would win the moment he announced his candidacy. The Make America Great Again slogan was purposefully designed to capture the fundamental change which in now beginning to take place. The transition itself will happen in phases with one minor change followed by a major change, and so forth.
One of the first major changes which we can expect to take place will be the ending of the USD exchange rate pegs. China will lead the path forward on this with the rest of the ASEAN nations following.
It should be understood that this is a positive thing for American interests. The loss of manufacturing and jobs over the decades has been a direct effect of the international pressure placed on the reserve role of the dollar. It has been widely recognized for decades that the international responsibilities of the dollar are not aligned with the domestic needs which a currency is meant to serve.
The transformation of the Federal Reserve and the subsequent and on-going re-engineering of the dollar could take various forms and paths towards domestic growth. The Fed has acted as the de facto international central bank and can now re-align itself to meet domestic needs like most central banks. Watch for policy changes and new mandates to come forth which will force and encourage the Fed to begin meeting these domestic requirements.
Equally so, the dollar itself will transform through valuation adjustments and exchange rate re-arrangements. The large amount of USD which has accumulated in the foreign exchange reserve accounts around the world will begin to be reduced through substitutions and exchanges.
American companies that have off-shored manufacturing will now be encouraged through practical business strategies to move their operations back. The process itself will take years and will in essence be a reversal of the off-shoring which took place. This will bring back jobs.
More manufacturing and jobs means more GDP and taxes. Managing the debt is the name of the game and increasing GDP will lower the debt-to-GDP ratio. Re-negotiating American debt, as Trump has suggested, will also constitute an aspect of re-engineering the dollar. The substitution of USD for SDR and other currency will also play an important role in this re-engineering.
With so many moving pieces it has been challenging to keep the focus and path forward clear in the writing and research presented here on POM. It is heart-warming and encouraging that the mass of our thesis has been unfolding as expected.
The path behind us is littered with accurate predictions and expectations, which makes the path before us all the more clear and understood. – JC
This moron again? Buzzkill
Thanks for posting this FM.
“Equally so, the dollar itself will transform through valuation adjustments and exchange rate re-arrangements.”
Anybody want to guess which direction those “valuation adjustments” of the USD will be?
-30%
I’m thinking we’ll get two devaluations spread out over time. Ten percent ought to do nicely for the first as ‘Muricans don unnerstan maff. The second one will be 20% or more. I think Collins estimated a total USD devaluation of 50%-70% in steps.
Makes sense too if the dollar is truly being replaced by the SDR as the world reserve currency and I have no reason to doubt that.
I/S- Take a look at the UK in the 70’s when they lost reserve status. This will most likely mirror their event. Not to rule out that TPTB will drop us over the cliff in a succession of hard jolts..
A simple question from a simple mind:
If there was one currency used worldwide, as we seem to fear, would this nation of 300 million+ people be able once again to produce its own shoes, stationery, and towels?
I had a Carrier Hybrid system installed in 2008 and it has given me nothing but very expensive problems compared to the old technology of my previous system.
What is interesting to me is how Trump remains quite the lightening rod even as President Elect. Both on this thread and in the daily headlines.
Will probably get even more festive after he takes the oath of office, no?
100. I win.
“So why can’t we bring back manufacturing jobs?”
—— hardscrabble farmer (to Llpoh)
Llpoh has written quite extensively about this.
To newbies, or those who missed them, these are TERRIFIC reads. Even for old timers, re-reading these articles would be beneficial.
===========================
1. LLPOH Short Story: Why Manufacturing is Going to China
2. LLPOH’s Update on What I See Happening
3. LLPOH’s Grim Reality #1
“This article is reasonably long, but I highly recommend it, as it gives great insight as to why manufacturing is doomed in the western world, particularly in the US. The destruction cannot be avoided. Action was needed decades ago, but was not taken.”
——- Llpoh article below, first paragraph
4: LLPOH’s Grim Reality #2
5. LLPOH – Case Study #1 [Caterpillar]
Trump Advisor Says Administration Not Looking To “Rip Up NAFTA” Or Impose “Quote-Unquote Tariffs”
by Tyler Durden
Dec 5, 2016 12:55 PM
After repeatedly referring to NAFTA as “the worst trade deal maybe ever signed anywhere” during the presidential campaign, the Trump administration seems to be softening it’s protectionist rhetoric. According to The Hill, in speaking to a group of concerned business leaders, Trump advisor Anthony Scaramucci said that the new administration isn’t looking to “rip up NAFTA” but rather to “right-size it and make it fairer.”
Anthony Scaramucci, a senior advisor on the Trump transition team, told a group of business leaders convened at a bipartisan meeting by the group No Labels that President-elect Trump is a free-trader who is looking to make trade deals more fair, not scrap them.
“I don’t think we’re looking to rip up NAFTA as much as we are looking to right-size it and make it fairer,” he added. “He’s got a great relationship, by the way, with the Mexican president. They talk regularly,” referring to Trump and Mexican President Enrique Peña Nieto.
Scaramucci said his homework on Trump’s economic team has been to study the impact of the North American Free Trade Agreement (NAFTA), which Trump called “the worst trade deal maybe ever signed anywhere” during the campaign.
“I don’t think anybody in the administration from the top to the bottom is looking for protectionism. We understand the economic harm and the impact that would take,” he said. “I don’t think anybody in the administration is looking for quote-unquote tariffs, but I think they are a cudgel if you will to lay out there if we can’t get the trade deals to be right-sided to now benefit the American people.”
All that said, the suggestion that no one within the administration “is looking for quote-unquote tariffs,” would seem to slightly contradict tweets from the President-elect himself who has directly warned, as recently as yesterday, that companies looking to offshore manufacturing jobs should expect a 35% import tariff.
Of course, only time will tell if the Trump administration will pursue protectionist policies like a 35% tariff or whether the tough talk is all simply a negotiating tactic as suggested by Scaramucci.
He added that deals signed since World War II were designed to promote global peace and stability, but sometimes came at the expense of American workers.
“This economic interdependence has actually reduced conflict around the world. However, one of the deleterious side effects of this is that it’s hollowed out the manufacturing base of the United States,” Scaramucci said.
“Things get snippeted a certain way in the media and they get framed a certain way that he’s a protectionist and he’s against trade. I can state categorically that if he were standing here right now he’d tell you that he’s a free trader,” he said.
In the end, we’re certain the Trump administration fully appreciates that while protectionist policies may have a positive impact on manufacturing employment levels in the short term, in the long term keeping manufacturing costs artificially high only serves to improve the return profile of automation and other technology-based capital investment projects.
Bwahahahahaha!
“Looks like your god has just backed off scrapping NAFTA and imposing tariffs. Ouch.” ——— Admin
Wow wow wow just wow.
Ever sit in a rowboat in the middle of a lake? Even when there are no waves it slowly drifts away.
Little by little, inch by inch, Trump is drifting away from the stuff he said that got him elected. By inauguration day he’ll be miles and miles down the shoreline.
I wonder when he’s gonna say he was just being figurative about building The Wall.
“No, Sucky!! IT’S ALL IN THE PLAN. Have FAITH!!”. Yeah, whatthefuckever.
Inch by inch ….
What did you expect? If you hire an unconventional candidate with a ‘mandate’ but beholden to nobody, and you give him a blank check to do anti-establishment stuff, engage in racial and misogynist language because you trust him…
Back then we attended a sales event where the finance officer took a disliking to the slippery real estate agent. She said, Whichever real estate agent you hire, keep a close eye on him. He paid her back with a joke about bankers: He was mean, he was stingy, he had a glass eye. But if you looked closely you could see a glint of humanity in his eye, unfortunately it was his glass eye.
Stuck, my experience might not be unique but I was dumb back then. I recall that finance officer’s advice with chagrin. When I got out of the AF, I decided not to go back to El Paso. I hired a real estate agency to sell my starter house there. She called me one day with good news, she had managed to unload my house. She wanted me to send her a check for her commission. When she sent me the contract, I found that she had sold my house for $10 to a bitch who never made a payment and got the house foreclosed. I could have done that and kept the $2500 I paid her. That’s what I got for trusting a glib saleswoman and blindly giving her a blank check to do what she had to do to sell the house.
Just placed this one in my “El Coyoteisms” file under the “Pugnacious Perspectives of Particular Perspicacity” tab.
Unparked, most of my better lines are quotes of people I’ve heard over the years. I recall my old boss Earnie said at my friend’s going away party, Well, as his boss I guess I should say something, of all the supervisors we’ve had here, Elbin is one of them.
Elbin was PR and I was a beaner (before I turned white). We were messing with a knock out PR girl who was hot before Latinas were a thing. She said she was part Mexican and part PR. I asked hopefully, which part of you is PR? The good part! Elbin interjected
Thanks Stuck.
Good article admin!
However, most people don’t get the NWO hasn’t lost a step. Look at Trump’s cabinet/advisors! Neocons, bankers, JOOS, etc. All this is a PR ploy.
Trump is going to try to start WW3 with CHINA. If Hillary was elected, WW3 would have started with Russia. The Chinese/Russian/etc alliances would have dragged the other country into a war.
Embrace the DOOM!
Just smoke and mirrors. When nobody’s looking Carrier is going to sneak out back door. As long as price is what drives consumers manufacturing will have no choice but leave for greener pastures.
Who can manufacture this floor jack in North America and make money.
That is Canuck Bucks as well!
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Answer:
Nobody!
Rob, would you climb under a vehicle supported by that floor jack?
Is that a request?
Rob, make sure you use the jack stands, no matter what jack you use.
EC
Ya made me laugh. Depending on how it is read it could be a request but no worries I would always use stands anyways.
Anyhoo the answer HSF to that question would be no. However the stores are full of low functioning sentients who care for price when buying shit they don’t need. The only point is to show that the gig is up for manufacturing. All that tariffs accomplish is that jack would double in price and still be dangerous to get under.
The fool that uses it will get crushed one way or the other. Why bother with the smoke and mirrors.
Rob, a friend of mine from Dade had a flat up my way, and couldn’t get his lugs loose. He called me to see if I could. It took everything I had, but I got the first one to spin. Wrong. The lug hadn’t moved. The shaft of the crossbar wrench twisted
Chinese steel for you.
Starfuck is one badass mofo.
Around here we call chinese steel monkey metal. Might be racist but I don’t really care.
Chinese steel can be as good as any anywhere. Like anything else, do not buy shit Chinese steel, find the good stuff.
I know lloph. The quality varies. The old saying ya get what you pay for still applies. Even the stuff coming from China.
Rob, i think that was about 2003, when chinese steel kind of just swallowed everything. We were building some sheds out back, and we had to stop using screws because the screw guns would just strip out the center of the screw. So we went old school, hammers and nails, and it was even worse. Instead of driving into the wood, the nails would compress, split, all the zinc would peel off. Horrible crap.
Okay what gives. I am trying to figure out why Luke is all butt hurt. He has no reason to be upset aboot anything.
He could see Admin was going to beat him to a pulp. All losers complain that the other guy isn’t playing fair. He wanted Admin to ‘play fair’.
https://youtu.be/trDsXlDJIbM
The patient, or the economic well being of this country metaphorically speaking, has been dying a slow death for a century now. The patient’s disease entrenched itself when he began his addiction to economic interventionism as his cure for the aches and pains brought about by the slowly proliferating boom-bust cycles brought to bear by the oligarchic money printers – the dealers of death. The patient’s prognosis is indeed dire.
Our disease of economic interventionism is of the Hindenburg strain and is an addictive, deadly, and communicable disease. Unlike its relative, the Lenin strain, which is a more rapidly escalating, drastic intervention leading to a certain and often violent death, the Hindenburg strain progresses more slowly. It begins with prohibitions, mandates and excessive regulations that stifle the patient’s growth, and eventually becomes a placebo for an unsustainable and terminal patient. Like a Demerol addiction, last weeks dosage is insufficient to alleviate today’s ever-increasing pain. A heftier dosage is required on a regular basis.
Today, little more than palliative therapy remains to keep the patient alive, and for how long is really anybody’s guess. There is no surgery or medicinal cure for the disease. Perhaps Dr. Trump can keep the patient’s vitals stable for a while, and maybe buy the patient considerable time with less suffering, but the inevitable is just that – a sure and certain conclusion that can not be averted.
Some of this is extrapolating according to existing trends. Some of it is imagining that massive, centralized factories are the way to make manufacturing efficiency and volume production feasible again.
Part of Kunstler’s _World Made By Hand_ is de-centralization. Imagine not Carrier, massive manufacturing complexes in a few places, but more, smaller complexes located in more places. NO, it’s not as efficient as centralized manufacturing, but it can work, and employ more people, than the centralized manufacturing complexes. It won’t sell as cheaply; it won’t serve a whole nation at once, most likely.
IF you can keep up a massive, centralized manufacturing complex it probably can out-compete a bunch of smaller ones; that’s economic reality AS LONG AS you have cheap, long-distance shipping and safe highways (thinking CRIME here) to ship on. But if Cheap Oil is an illusion (and the cost of exploring, extracting and refining ever reaches what it really costs to do so) and crime makes long-distance shipping expensive / impossible we may see a Renaissance of manufacturing locally because we HAVE to, or do without.
It’s a grim idea, and it may never come, but the current paradigm of ONE Carrier plant in Indiana making furnaces and A/C for the whole country may be ending, along with the Rule of Law (see: Hillary) and Cheap Oil all at once. I have no idea how it will finally fall out, but I doubt we can keep doing what we’re doing much longer.
When the Crunch comes, how will all those derivatives and bad deals shake out? When it comes time to finance the next bond issue, capital expansion or plant construction, who will the Carriers of the world turn to when Goldman Sachs, JP Morgan Chase, Wells Fargo and all their buddies are bankrupt and / or in jail for securities fraud? When you don’t trust anyone in NYC, Chicago or SF, where will you borrow expansion money, or do you just not expand?
We REALLY need to re-think banking and lending in an age of fraud, lies, deceit and theft (legalized). Small, local banking networks run on “trust, but I know where you live” may be an answer.
This is my first time here and due to the admin’s ego it will likely be my last.
Don’t let the door hit you in the ass on the way out Luke.
Hit the fucking road douchebag.
Luke, glad you wandered in!
Admin has his knowledge base and opinions, based on his experience. As do I, and everyone else who wanders in here. He runs the place, and gets all the space he wants. But he has lots of virtues:
He does not censor anyone – even when he has reason to, in my opinion
He has strong opinions – do you enjoy debate with those who are wishy-washy?
He has a background in finance, and generally argues from experience in those areas closely related to finance, with some others thrown in
He listens to others’ opinions, then gives his
Admin is generally fairly well rooted in reality – as are the rest of us, mostly. But reality varies from place to place – downtown Chicago is not like downtown Nashville, and neither looks much like Left Elbow, Idaho. TBP folks live all sorts of places, and have all sorts of opinions: we have Aussies, Argentines, and Europeans wandering through here.
Isn’t that what you WANT, interesting clashes of opinion driven by experience and facts as the participants see them? What would you change?
Nice to meet you, hope you stick around long enough to figure out how this place works.
I feel you, Luke. However, Admin’s ego is unfortunately our fault. We praise him too much.
Don’t be a cock-tease. You might have been sent by providence to disabuse Admin of his delusion.
Your like the proverbial abortion, you came for nothing, never saw the light and left nothing. Peace, bruh.
Bye!
The comment that a layed off carrier employee will go from that $30+ hour job with some health and retirement benefit support to a similar job is foolish to even propose unless you are fortunate enough to fall into some government job or the few “VERY FEW” private sector jobs offering adequate salary and benefit package you are in LA LA LAND Standing next to BO BO OBAMA THE CLOWN WITH A CHEERLEADER OUTFIT ON SIS BOOM BAAAA assholes those jobs in significant numbers do not exist and you know it . What does exist is low wage full and part time jobs offered by businesses that expect more and more for less to a point where it would be comical if it were not pathetic ! Every mechanical trade person prays for a scale job because they will receive a prevailing union scale wage on par with what most government employees receive and the Davis Bacon Wage Act provides that and one of the reports out of the Trump circle is to repeal that ! Fine as long as minimum wage is what a federal employee receives otherwise it’s just indentured servitude and abusive labor practice supported by government action or inaction ! Now comes the excuse “a small business cannot pay that wage,it would bankrupt them” ! Well look around $20 trillion in debt and climbing , government fed , state and local cannot pay it either !
BANKRUPTCY the final solution as I was told regarding my steelworker days when our pensions were bankrupted out from under us ,”guess you should have saved more back when you were earning that good pay” ok same to you congressman , policeman , fireman and school teacher if my union package cost too much so does yours now WAVE BYE BYE??
Think of it this way. In 1950, Truman comes out and says “I am going to bring farming jobs back! No more destruction of our farming jobs, I am bringing them back!”
In 1900, farming employed half the workforce – equivalent to around 80 million workers today. But today, there are around 2 million farm workers. What happened to the other 78 million? Technology drove them out is what happened.
Now, everyone else oday would see how laughable it would be if Truman had said such a thing.
It is equally as laughable that Trump is saying he can bring manufacturing back.
You think, for instance, he can get Apple to bring in perhaps hundreds of thousands of jobs, given the vast investments they have overseas? And given the symbiotic supply chains?
It is total bullshit.
What he can do is make the US attractive for businesses of all types. He can lower tax rates. He can reduce red tape. Wipe out ridiculous regulation. Improve quality of education. Streamline the govt. first x the banks. Kill the welfare state. Etc etc etc.
In turn, those efforts might make the US more competitive, and allow for the creation of new industry, whatever that may be.
But he is not going to bring back mfg jobs. Those jobs simply no longer exist, or will rapidly cease to exist.
I suggest he work on exploiting the ag industry. It is perhaps the US’s most significant advantage in an over-populated and increasingly hungry world.
A post full of good shit, I’m pulling out only one piece:
“And given the symbiotic supply chains?”
This is a big one guys, production may be king, but you can’t build shit without the material to do so and we have completely abdicated our ability to manufacture our own technology to East Asia.
And its going to bite us in the ass eventually.
They have the raw material. They have the refining. They have the parts. They have the supply chains.
America needs to stop subsidizing farmers, we definitely need to stop coddling California (in every way…but mostly I mean water rights in this instance), and we need to stop interfering with the businesses that can thrive in our nation.
TPC, you lost me with the last paragraph. Don’t you like to EAT?
You don’t need farm subsidies to produce food. The price of food will raise. If it goes up high enough, I’ll start up a chicken coop and expand my garden to be more than just peppers/cucumbers/tomatoes.
It wasn’t technology that eliminated farming jobs. It may have been a contributing factor, but it was one of the less important ones. NPK was number 1. After WWII the bomb factories had huge surpluses of the elements that were shifted over to fertilizers. Number 2 was the shift away from work as a meaning of life and instead directed into a means of accumulating consumer goods and recreation as reward for becoming employees. Number 3 was the involvement of the Government in agriculture in order to reduce the cost of food as a household expenditure which shoveled huge volumes of tax money into industrialized agricultural models forcing family farms out of business because they simply could not compete, the very first application of the “get big or get out” view. Number 4 was the lure of the new wave- a new car, new house, consumer goods, good job, college education, etc. that Madison Avenue pumped relentlessly in order to sell more stuff.
Running a sustenance style farm requires huge amounts of labor, a wide variety of disciplines and skills, numerous risks associated with weather and markets that cannot be controlled, competition from taxpayer subsidized BigAg, a customer base that prefers to spend more of it’s available income on processed rather than raw forms of food, an ignorant population where it comes to nutrition, and a debased and reduced rural market for the products it does produce in excess.
What it benefits us is cleaner water, healthier soil, preservation of select and endangered species, variety of products, resilient and capable citizens who are self sufficient rather than dependent, zero government funding, and for the people who practice it healthy and stable families, improved overall health, and communities that are far less prone to policing, criminality, dependency on government intervention, etc.
When everything is viewed through an economic lens the bigger picture becomes so obscured that we quite literally cannot see the collapse in other areas. We wonder how we became so debased and degenerate without realizing that we are no longer human, but widgets- “consumers” as our own government calls us with no value beyond what we can spend on products and services.
Life doesn’t have to be like that and the choice is ours to make. We are not victims of technology unless we choose to be.
HSF
A good friend of mine grew up in an Iowa farm family. Neither of her parents finished high school; not sure about dad’s age, but mom was 15 when they got married.
They got ahold of some farmland in the 50’s. They have run a family farm ever since, acquiring a few thousand acres of land along the way. At present, mom and dad are multimillionaires.
I am sure a great deal of hard work and shrewd business sense are the sources of their success. What I want to ask, but never do, is how much did they collect in government subsidies over the years?
HSF – that is s the dumbest shit ever fucking posted around here.
I stopped reading after two sentences.
Go look up when farming jobs died. They died long before WW2. It was fucking TRACTORS, cotton gins, planters, etc. that killed the vast majority of farming jobs.
In 1880 it was half of all workers worked in Ag. By 1930 it was 20%.
It was tech – the industrial revolution – that killed ag jobs. Peddle that bullshit somewhere else.
We are so screwed from every direction and no fix is on the horizon ! Just more rearranging the deck chairs on the Titanic
This has been an interesting thread & I hope it keeps going.This is slightly off topic but related.
Stores that only sell American made products.Spread it around & let’s create some jobs.
http://www.labor411.org/411-blog/653-need-holiday-shopping-ideas-these-24-stores-specialize-in-made-in-america-gifts
http://www.heraldtribune.com/news/20130703/venice-store-only-sells-items-made-in-usa
I’m sure that there was the Milton Friedman of hunter/gathers, and I’m sure he had amazing insights that the less intelligent hunter/gatherers marveled at, and I’m sure that many of those lesser men modeled their lives after him. It was all pointless fucking drivel when they planted the first seed, and built the first livestock pen.
That’s what is facing us, and all this free market bullshit, is just that. It’s life lessons from soon to be dinosaurs. I’m not one of those that thinks automation can be, or even should be, stopped. I view it more as a natural disaster. It cannot be avoided, but it can be prepared for. That means we, as of now, batten down the hatches. We drop all immigration, especially the low intelligence unskilled kind. We preserve our supply of dwindling jobs as long as possible, anyway possible. We clear up as much debt as possible, any way possible, and then we try to stay flexible enough to ride the rough waves. If we can do that, then we might survive it.
I just don’t get it with all this hand-wringing. Is everyone hearing-impaired? Economically illiterate?
What do you think Trump has been saying throughout his entire campaign? By lowering the cost of doing business in the US, he intends to encourage ALL American businesses to have the incentive to stay in the US. And he wants to create more favorable terms for ALL the businesses that are thinking of leaving, or have left and are holding trillions in off-shore money, so that they can re-enter the country and create millions of new jobs for us. He’s said it, oh, around 10,000 times. I mean, what did you think he was saying?
Carrier is only the first of—it is to be hoped—many companies to come. They’re not receiving any benefit that any other American company will not receive. The government will not be playing favorites. it’s not ‘Solyndra’ or any of the Leftist nonsense.
Was it statist when Clinton signed a bill that essentially made it more desirable to American businesses to move out of the country? All Trump wants to do is reverse the direction of the tide.
Moreover, how would you propose to move business backin to the US minus offering financial incentives that make it easier to do business here? Can you think of any other way to effect this? No, you can’t. Because there is no other way.
Apparently, most of you didn’t understand a thing he said. In the last 80 years, the Left has spread so much disinformation about the nature of economics that it is believed even by people who should know better.
ahem
Might be a good idea to go check out those links that Stucky listed for stuff wrote by Lloph some years back. Pretty much lays out the problem. I don’t see manufacturing coming back. Hewers of wood and drawers of water. Everything works in circles. Throw in a beaver pelt and a fella can almost make a living.
In Nova Scotia we are gearing up to build latest warships for navy. Several years later and much delayed the project is flailing about because the country lacks critical infrastructure and people to make it work. Meanwhile in Korea they crank out new ships on an industrial scale that even United States has difficulty competing. And now even they are having trouble dealing with the rising Dragon.
Have to say folks around here are mellowing with age. The shit fests are turning into lame fests. Doesn’t help when HSF is doing his best Beaver Cleaver imitation. Hard not to like the guy even if he wants me to get crushed under a 44 dollar floor jack. Before all his defenders dog pile me I just want to say that i respect him. Anyhoo he used to jump out of perfectly good airplanes and these days makes a living that 78 million gave up on. But I ain’t buying the Johnny Hayseed routine he is up to.
“Might be a good idea to go check out those links that Stucky listed for stuff wrote by Lloph some years back. Pretty much lays out the problem.” ——— RiNS
Amen!!! Llpoh wrote some powerful stuff! He must have the patience of Job dealing with all these obtuse folks.
Maybe he should start saying “manufacturing JOBS won’t be coming back”. Someone mentioned that above.
Let’s say Company X left 20 years ago and 1,000 jobs with them. Let’s say Trump convinces Company X to come back to the USA. Will they come back with 1,000 jobs? Of course not. Because, as Llpoh has said countless times — automation. They’ll come “back” with 100 jobs, or less. So, indeed, manufacturing may “come back” … but, not with the results (jobs) Trump and gang expect. All this is elementary, Watson.
Rob, that’s part of the problem- this false dichotomy of either you live in the world where you must live like a Monty Python version of a serf hauling manure in your hands or you can be a Donald Trump kicking back in your penthouse with all the comforts of modern living and gold plated toilet seats to boot.
I don’t write Beaver Cleaver at all- I have repeatedly described the losses and the humiliations of trying to live this way, the injuries, the failures, everything else that goes along with it. That said I’d rather die on my own piece of ground surrounded by my loved ones after having given everything I have for the experience than to be burned alive in a rave at 3:30 in the morning amped to the gills on X, surrounded by tatted up strangers. There’s a price to be paid for every lifestyle.
Everybody eats, every day. To have only 1% of the population producing all of it seems like a risky strategy to me. You and others have mentioned supply chains, what happens when they collapse? Could happen, right? What about when the NPK runs out? You ever see what a piece of ground that’s been using fertilizer and growing a monoculture for thirty years looks like the day they quit? I doesn’t even grow weeds.
I was just thinking after I posted the response above that I’d get some kind of hit for it. To be honest the only representation of farmers we see in the modern world is some toothless hick in bib overalls hunting down hipster millennials so he can torture in his decrepit barn them or a niche commercial for Ram Trucks, Carhart jackets or Red Wings boots. I get it, it’s a joke to want to work all day to just make a living, but there’s all the other benefits I’ve tried to enumerate that haven’t got price tags affixed to them that make it not just worthwhile, but worth everything. I’ve done both and there’s no comparison, at least for me. So yeah, let’s just keep going down the path we’ve been on and pretty soon in the not too distant future everyone will be on board the Comet pizza train wondering why we ever objected to it in the first place because progress.
I agree with you on having 1% of population producing food for the rest of us being risky. The risks of a destabilizing Walking Dead event is very high. So I get what you are doing. If I had to I could probably go back to the land. My Dad has some acreage that I could put to plow. But I know that life can be brutish and hard.
As far the the characterization of farmers being hicks I know where your coming from. I will say it takes a pretty sharp dude to make a living from the land these days. See I grew up next to a small subsistence farm in a plot of land given by my my Dad by my GrandDad. My Grampie worked for railroad to pay the bills but he made sure to grow and raise all his own food. He knew from experience and a Great Depression that only person who can keep family fed was himself. But my Father decided to go in different direction. Headed to Paper Mill to make his fortune. At the time it was a good decision as the only thing being grown on farms was poverty. Yeah I get the whole quality of life thing that you espouse but being poor sucks. It is why several hundred million Chinese have flooded to shitties from countryside.
These days we just run to store buy something shipped from half a planet away. Don’t think too much about it. Most of the time. Yet if there is a pending storm the veneer is removed and survival comes roaring to the fore.
So the meme that farmers are hicks. I agree that is too common. But it is what it is.
I would be lying if I said I don’t mean to pick on you. Somebody has got to do it. I do like your writings and wish I could impart the images that flow so easily from your pen but I am a sarcastic and cynical SOB not inclined to trying to make folks feel good aboot themselves.
As for the Comet Pizza thing I am not sure how you got from there to where. Not sure even how it is related to this thread but I think it should be investigated. It is worthwhile and every decent person would agree.
“As for the Comet Pizza thing I am not sure how you got from there to where.”
A society that cannot do for itself but is entirely dependent upon the whims of others who are never held accountable will be made to accept whatever they are told to. The Comet Pizza folks are not the rabble, they are the trendsetters, the policy makers, the law givers. A people who are willing to eat a diet of processed foods unto morbid obesity, to abort millions of their future children without blinking, to scarify and pinhole their bodies like a carnival act of old voluntarily will submit to any for of degeneracy and degradation because they are not free. In less than a generation the things people are outraged about with the Ping Pong Pizza crowd will become the norm.
Liberty comes with a price but it can’t be bought.
HSF
I agree somewhat however one can grow their own food and still be at the whims of others. Sixty years ago folks in rural Nova Scotia had much higher food security than now yet poverty was still soul crushing. And dependence on others via off farm jobs a virtual guarantee.
As for rural folk being the underpinnings of what is good and true in society you are virtue signaling to the wrong guy. Degeneracy and Degradation is not a recent phenomena. One need only look to events that conspired in the Shoah of the Second World War.
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The trains still ran on time thru the countrysides of Europe and nary a peep from those, as they trundled by, working the land . Things haven’t changed much. There wasn’t a whole lot of outrage then and there ain’t much now. It was keep your head down and pretend it was someone else’s problem. Your wish for more to get back to the land is not going to sway the calculus of morality good and bad that pervades this modern world.
Living off the farm isn’t an extensional threat to this Liberty. The problem isn’t the urban/rural divide. It is the prevalent liberal mindset that responsibility is always somebody else’s problem. This price you speak of for Liberty is an indeterminate value that still ends up having a cost even if for most it is seen as an imaginary number.
If you say so.
200
You win the prize.
There’s no prize, Rob, but you’re comparing apples to oranges.
And the photo you posted features a Soviet soldier, so it’s not representative of the Shoah. There is a train though and the train is fine.
Warfare and ethnic conflict are not the same thing as degeneracy and moral depravity. You may as well have brought up cancer and electricity, both of those are creations/symptoms/expressions of humans but they’ve got nothing to do with the conversation.
BTW, I noticed that Krugman wrote a piece about Carrier that looks like he plagiarized it from Jim. Banana Republic, here we come!
http://krugman.blogs.nytimes.com/2016/12/03/when-the-ridiculous-is-ominous/
I didn’t bother spending a whole lot of time looking for a picture. Who knows that soldier might have been herding Chechens into boxcars for all expense paid trip to Siberia compliments of Uncle Joe.
As for degeneracy/moral depravity versus Warfare/ethnic conflict it is a chicken and egg thing for me. I think they go hand und hand. It all has the same DNA. None of those involved in the Pizzagate have any respect for life. Doesn’t seem a great leap for them to be involved in the destruction of countries as well as people. A coin where each side has equal levels contempt for life. You disagree. So be it.
As far as the conversation you were the one that brought up Comet Pizza. How that relates to Air conditioners, not sure. But for you to claim higher moral ground than others is bridge over the Arnhem too far for me.
I will have to read the Krugman bit. I suspect you are right about the Banana Republic bit though. Looks like we are there now.
Yep. Guess that kinda explains this:
https://www.youtube.com/watch?v=mx457T7iWMA
“I’d rather die on my own piece of ground surrounded by my loved ones than to be burned alive in a rave at 3:30 in the morning amped to the gills on X, surrounded by tatted up strangers” HSF. Dude you’re killing me
HSF, I don’t think you’ll have the option to be a serf if you wanted to, once automation has reached a certain point, because then it’s going to bleed into robotics, it really is one and the same, and for the first time in human history the elite class won’t need the poor to fight their wars, farm their land, clean their houses. They won’t need the poor for anything. That’s the brave new world that waits for our children, or grandchildren.
And once robotics bleeds into AI they won’t have a need for the elite class anymore.
Back to you.
So tired of this shit.
Mexcian slavery is not “free trade.”
Suicide nets around the Apple factory is not “fair trade.”
Cheap products that break in two weeks and poison your children are not “consumer savings.”
The Liberaltarians want to keep their sweet little consciences clear at all costs. Meanwhile the rest of the world performs every protectionist measure under the sun to lower our standard of living.
Let’s play fair, while they don’t, so we can satisfy some nebulous set of morals that don’t really exist in the first place.
Go fly your peace flag in the woods.
You’d be singing a different tune if you were one of the 1100 breadwinners who didn’t have to tell their families there would be no Christmas this year. I’m so sick of this free trade, open borders libertarian crap.