Forget Carrier: The Trump Administration Will So Pro-Business, Anti-Labor That "It Will Make Your Head Spin"

Forget Carrier: The Trump Administration Will So Pro-Business, Anti-Labor That "It Will Make Your Head Spin"
This post was published on the now-closed HuffPost Contributor platform. Contributors control their own work and posted freely to our site. If you need to flag this entry as abusive, send us an email.

Our 30th president, Calvin Coolidge, is often misquoted as opining flat out that "the business of America is business." The man who presided over the heart of the boom of the "Roaring Twenties" was indeed a classically conservative small-town Republican with strong pro-business leanings. In fact, his quote was, as we say nowadays, more "nuanced" in that the context was remarks supporting a free--but commercial--press that, because of its profit motive, could more accurately reflect the realities of the business world.

Donald Trump has far lesser regard for the "free media," although his campaign cleverly exploited their profit motive--particularly CNN's. President Coolidge's misquoted remark, however, has been associated with Republican administrations from Hoover to Ike on through Nixon, Reagan and Bush. The ascendance of Trump, first to the GOP nomination for the presidency and then to his stunning election to the Oval Office, appeared to many--including incumbent and erstwhile Republican office holders, media commentators and even his own voters--to offer a more a "populist" move away from Republican pro-business orthodoxy. His direct and personal challenge to punish companies that have moved or plan to move U.S. manufacturing jobs offshore to gain the benefits of globalization, in terms of lower factory wages and super-efficient supply chains, seemed totally out of step with GOP "Chamber of Commerce" pro-business orthodoxy.

The Republican Party had severely criticized the Obama administration for intruding in the free-market economy by picking and even funding winners like clean energy upstarts; many, including the 2012 GOP presidential nominee Mitt Romney, condemned the loans to General Motors and Chrysler that saved hundreds of thousands of good paying jobs in America's auto industry as another offense against free market capitalism. Moreover, Republicans were joined at the hip in large numbers in both the House and the Senate in support of President Obama's sponsorship of the TransPacific Partnership multilateral trade agreement with Asia-Pacific nations other than China.

Trump, on the other hand, emphasized how working- class Americans would be victimized by the TPP as he said they had been by the North American Free Trade Agreement, which Democratic President Clinton had accomplished in the 1990s but largely with GOP votes. Trump said he would repudiate NAFTA as well as TPP if it passed, and take action to stop the further exodus of manufacturing jobs from the U.S., which in fact has been going on since the 1970s and was accelerated during the recent Great Recession.

And so he did, soon after his election (or so it seemed), in the case of Carrier, a remaining American manufacturer of air conditioners and a subsidiary of United Technologies (UTX), an industrial conglomerate with substantial contracts with the Defense Department. In his very first public appearance since election night, Trump proclaimed that he had convinced the companies involved to save "over one thousand" manufacturing jobs slated to be moved to a new factory in Mexico (which would pay workers $6 per hour instead of the $26 on average at the factory in Indiana).

We came to find out, however, that the "fine print" of the deal involved a $7-million tax benefit "job ransom" from the State of Indiana, arranged through its sitting Governor and Vice president-elect Mike Pence. Since it also turns out that, according to the whistle-blowing union head at the Carrier plant, only round 800 jobs would in fact be retained in Indiana under the Trump/Pence ransom payment, it would work out to a bit less than $100,000 of what can only be called "corporate welfare" per job! In turn, that adds up to years of taxpayer subsidy to Carrier for the additional wages each worker will get on average because the saved Indiana jobs stay at the $20-per-hour higher wages that Carrier will have to pay to save UTX's place in the Pentagon contract line.

What are the odds that this job-saving agreement lasts just past the 2018 midterms? As Trump himself might say, it's a "win-win"--for Trump and for UTX Carrier: the losers being American consumers of air conditioners, not to mention GOP advocates of "free-market" economic policies who, if Obama had done this deal for a solar panel manufacturer threatening to move production to China, would have howled at the moon in condemnation. But don't ever expect consistency from politicians!

The innards of the UTX/Carrier deal are just the tip of the iceberg that will hit Trump voters among the working class as they begin to grasp the makeup of the incoming Trump Administration in terms of pro-business, anti-labor and anti-union policies. Trump couldn't help himself from signaling this bait-and-switch when he vociferously attacked the head of the Carrier plant union after that official called Trump out on his 25 percent overstatement of the number of saved jobs, fuming that the union head had done a poor job for his membership. Surely Trump was not arguing that the union should have accepted Carrier's proposed illegal $5-per-hour wage offer to keep the jobs in Indiana. But maybe Trump did think that $5 would have been a good deal, since he did argue during the campaign that U.S. factory jobs were leaving because our wages have been "too high."

Trump's nominee for secretary of labor, Andy Puzder, is literally on the same page with Trump on that "overpaid" score, and not surprisingly opposes proposed increases in the minimum wage (he is a fast food conglomerate CEO). Puzder has been an outspoken advocate of replacing as many human jobs as possible with machines: "They're always polite, they always upsell, they never take a vacation, they never show up late, there's never a slip-and-fall, or an age, sex or race discrimination case," he said of his favorite kind of "working class." This is the fellow who will be supervising the Occupational Health and Safety Administration and Equal Employment Opportunity Commission--while he de-commissions President Obama's extension of overtime pay benefits.

Secretary of Commerce nominee Wilbur Ross, a very successful New York City "vulture investor" (he likes the name) in bankruptcy situations, is right there with Puzder when it comes to his regard for laboring folks, especially the coal miners Trump has promised to put back to work in the mines. Hopefully, it won't be in any mines owned by Wilbur Ross--one in West Virginia cost 12 miners their lives, let alone their jobs.

President-elect Trump's nominee for secretary of Health and Human Services, Representative Tom Price, is well known for his opposition to ObamaCare and all its mandates, including those that compel companies both large and small to offer health insurance policies for their full-time workforce. Representative Price, a medical doctor, has been the prime author of GOP attempts to repeal (without replacing) the Affordable Care Act in the present Congress. Trump voters that manage to keep their factory jobs can expect to lose their health insurance policies, whether under ObamaCare exchanges or those their companies may be free to abandon without federal consequences.

Treasury Secretary nominee Steven Mnuchin's closest contact with the working class is probably the janitorial staff at Goldman Sachs, and he is clearly not inclined to give them an income tax cut nearly as generous as the planned reduction in the top rate for his Goldman colleagues (not to mention his boss, the president-elect). He has stated that the top taxpayers will not actually be getting an overall tax cut because of marginal rate and capital gains reductions due to new limits on deductions for things such as mortgage interest and charitable contributions.

Congress will love the rate cuts but fight tooth and nail against the deduction cuts! And of course the Trump-promised elimination of the estate tax doesn't do much for the working class. Nor will the forthcoming Trump Treasury's currency-manipulator charges and tariff trade war with China (more on the country below), which does reflect GOP pro-business policy--circa 1930--and the Smoot-Hawley Tariff Act, which presaged massive Great Depression unemployment for the American working man and woman.

All in all, the Trumpenomics Team's domestic game plan and starting lineup look like a pretty tough opponent for the working class. As the Midwestern native Garrison Keillor observed: "Alas for the Trump voters, the disasters he will bring on this country will fall more heavily on them than anyone else. The uneducated white males who elected him are the vulnerable ones, and they will not like what happens next."

Referring to Trump's anti-China language and focus on branding that country an economic arch-villain, one observer--ironically from the financial industry--best summarized the situation facing Trump's working class voters' dilemma going forward: "Is Donald Trump looking for a foreign enemy to redirect the attention of his supporters as he implements a plutocratic fiscal agenda with his plutocratic cabinet?" said Gary Greenberg, head of emerging markets at Hermes Investment Management.

Those supporters perhaps well remember Trump's Gettysburg campaign speech, late in the campaign, that finally spelled out his "contract" with the voters regarding the actions he would take on their behalf upon being inaugurated as president. Now these same voters must also remember the many times Trump, in the course of the campaign, made clear that he takes a certain pride in not honoring his contractual obligations.

Go To Homepage

Before You Go

Popular in the Community