Some Helpful Stuff on Trump’s Carrier Deal


Kudos to Donald Trump.  He negotiated and saved about 1000 jobs at the Carrier plant in Indiana this week.  Indeed, there will be 1000 people who will have a better Christmas because Trump did this.

But we historians have a nasty habit of understanding events like this in larger contexts. We tend to look for a bigger picture.  We think about the implications of political decisions and about cause and effect.  We take the long view.

One piece that has provided a start point for helping me understand the implications of Trump’s job saving efforts as Carrier is Matt Yglesias’s piece at Vox.

Here is a taste:

Now, the overall scale of this move relative to the size of the American economy is pathetic. In Indiana alone, there were 672,000 manufacturing jobs at the 1999 peak, falling to 425,000 in the summer of 2009 and bouncing back to 513,000 as of this fall. Which is just to say that broad Obama-era policies aimed at overall economic recovery have “brought back” almost 90 times as many jobs as are at stake in the Carrier deal. Getting all the way back to the Clinton-era peak would require Trump to pull off about 160 Carrier-scale moves in Indiana alone, to say nothing of the millions of manufacturing jobs in other states.

But the very small-scale nature of the Carrier situation is part of what makes it such appealing public relations. It’s true that something abstract like a 0.25 percentage point cut in the federal funds rate or a temporary partial suspension of the payroll tax would do a lot more to create jobs than jawboning a single company about a single factory. But Trump’s willingness to roll up his sleeves and get involved in the problems of one American community indicates an obsessive focus on boosting the fortunes of working-class Midwesterners — even as his administration’s big-picture policy focus remains on deregulating Wall Street, enacting an enormous tax cut for rich people, and slashing spending on assistance to the poor.

And this:

Trump has done a good job over the years of making his Twitter feed livelier and more exciting than Obama’s feed. But it’s still the case that allowing him to set the media agenda via Twitter is an enormous win for him. Very few people will be affected by the Carrier move — many fewer, for example, than the million or so people impacted by Obama’s leave for contractors initiative — whereas huge numbers of people will be affected by things Trump doesn’t like to tweet about, including rolling back Dodd-Frank and slashing taxes for millionaires.

Touring the country looking for factories to cheerlead or small interventions to help particular communities is a perfectly legitimate thing for a president to do. But a PR stunt is a PR stunt, not a major economic policy initiative.

If Trump actually does try to make this kind of stunt the centerpiece of his economic agenda, that will be a disaster. But the much more likely scenario is one in which he continues with his stated policy agenda of tax cuts and deregulation while using a handful of PR stunts to maintain an image as an champion of the working class. The big question is will he get away with it?

Read the entire piece here.

3 thoughts on “Some Helpful Stuff on Trump’s Carrier Deal

  1. I also just ran across the fact–which I hadn’t seen all day–that the tax break is $7 million, but that’s $700,000 a year for 10 years [with a clawback if Carrier breaks its word]. $700-800 a job sounds like a helluva deal to me compared to unemployment payments, food stamps, and the employees’ lost tax revenue.

    Frankly, the media obscuring this key factoid is the real story here. It’s not #FakeNews but might as well be.


  2. Tom, this defense of the Trump/Pence move has some legs. While it’s sad that the article states “Remember what I taught you in the past year: Facts don’t matter. What matters is how you feel.” It is true (psychologically) that people need to see an example (no matter how small) of a positive but significant event.

    It really surprises me that so many articles are trying to downplay by noting how small it is. But that is just not the point as Adams identifies. Come live in the midwest. Every move to stay in the area is very significant.

    There is a long Presidency to go; but these early ‘victories’ (whatever they end up being) are far more significant than the majority of press is representing.


  3. Scott Adams’ [“Dilbert”] take is far more interesting than Yglesias’s predictable ankle-biting.

    One of the things I will enjoy about the Trump presidency is watching non-business writers try to explain his methods. Case in point, the recent stories about Ford and Carrier keeping some parts of their manufacturing in the United States because Trump negotiated/bullied them into staying. If you tell that story through a political filter – which is all I have seen so far – you focus on the facts. In this case, the political story is that both the Ford and Carrier situations are exaggerated claims of success.

    The political filter misses the story completely…



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