…or “Wac-A-Molonomics” as we like to call it, but it’s hard to pronounce.
Now we finally understand President-Elect Trump’s keep-jobs-in-America policy. It’s his own special version of the classic arcade game, Wac-A-Mole.
On November 29, Mr. Trump – author, in name only, of the classic “Art Of The Deal” – took great pride in announcing that Carrier would not be moving approximately 1000 Indiana jobs to Mexico. Who knows what Mr. Trump and still Indiana Governor Mike Pence offered Carrier and/or its parent company, United Technologies. It’s the same United Technologies that does billions of dollars a year in federal government contract business.
Now we get it. Like a game of Wac-A-Mole, Trump and his domestic economic policy team are going to be running around the country putting out fires. By “fires” we mean companies threatening to leave if they don’t get some very significant financial incentive to keep them here.
It’s a precedent setting accomplishment, more scary than impressive. Mind you, this isn’t about saving General Motors which employs over 50,000 hourly workers in the United States. Not that saving just a few hundred jobs isn’t important. Of course it is, particularly when the location of those jobs is highly concentrated in just a few communities whose total economies would be significantly impacted by resultant unemployment.
That said, apparently all you have to do if you want special incentives – with direct involvement by the President whose ego you’ll be stroking – all you have to do is threaten to leave the country and/or cut back production.
If that precedent weren’t bad enough, we have the fact that Carrier’s parent company is a major government contractor. Who knows what that implies about the deal Trump/Pence struck in Indiana? Remember, “competitive bidding” isn’t supposed to involve threats by contractors related to domestic employment and production of consumer goods.
And now what happens when the Trump Wac-A-Mole incentives run out or aren’t enough anymore?
Mr. Trump, this is not deal-making you’re doing. It’s extortion by the company and/or bribery by our government. Whatever it is, it fails miserably to address the underlying question… “Why are they leaving in the first place?”
- What are the underlying issues related to domestic and international markets?
- How do we increase worker productivity to gain or re-gain our competitive advantage over other nations with which we trade?
- We can, for example, still make steel in the United States, provided we use technology that enables our workers to justify their higher levels of compensation while selling product at competitive prices.
- If we can no longer afford to make steel in America – without the idiocy of closing our borders to international trade, that is – what should we be making to support our labor force? To reduce un- and under-employment and poverty in our county?
- How can our domestic economy benefit from reaching out to less developed countries for humanitarian and political purposes?
Has Donald Trump even thought about these things? Does he have the mind for it? Does he realize there’s a real and profound difference between complex economic policy and the comparatively simple business transactions he’s used to making?
National micro and macro economics isn’t a game of Wac-A-Mole, Mr. Trump. The sooner you figure that out, the better.