While many on the political right are applauding President-elect Donald Trump’s deal to help preserve a large chunk of Carrier’s U.S. jobs, Thomas Donlan of Barron’s takes a different view.
Too bad that Carrier President Chris Nelson and Gregory J. Hayes, CEO of United Technologies, the parent company, had no principles on which to stand for U.S. capitalism against the force of an oppressive government.
They had their chance this month to remind the president-elect that there is a right to close businesses in the U.S. (after filing lots of forms with the Internal Revenue Service, the Labor Department, other federal agencies, and state regulators). And U.S. companies have a right to buy and sell and make components and products overseas.
The CEOs also had their chance to tell the president-elect that he cannot impose a tax on the products of just one factory or company, especially not the products of an American-owned factory in a foreign country.
“If the Carrier case sets a precedent for how Trump’s economic policies are going to work, it heralds a dangerous shift from an economic system based on rules, toward one based on deals,” warned Robert Z. Lawrence, a professor of trade and investment at Harvard University’s John F. Kennedy School of Government.
There are unfortunate precedents for the behavior of these CEOs. Going back to 1791, to Alexander Hamilton and the Society for Establishing Useful Manufactures in Paterson, N.J., the U.S. government has trained business leaders to believe that the government can be an easy source of support. They rarely see that the government can be the largest threat to business survival.
Every bailout, every tax credit, every military contract, every highway project, every tariff, and every dubious regulatory approval is another dog biscuit for some business and its lobbyists. They are well-trained to roll over on command.
