When president-elect Donald Trump made a successful effort to stop Carrier from moving 1,000 jobs from Indiana to Mexico he was praised.
But not universally. Democrats and their media cronies went on a tirade, finding a dozen ways to put a negative spin on Trump’s positive action, for instance saying that tax breaks promised to Carrier to stay in Indiana are simply “bribes”. Even Sarah Palin disparaged it as “crony capitalism” (which is why Palin probably will not be in the Trump administration).
OK, folks, here is the truth about this deal:
For decades now the federal US government and many state governments have been driving job-creating and wealth-creating businesses away in the following ways:
*Labor unions, which are closely allied with the Democrat party and with government, have destroyed or thwarted the creation of tens of millions of good US jobs over the last 70 years during the post World War II economic boom.
The main employer in the Nikitas3.com hometown in Massachusetts, General Electric, was driven out of town, along with 11,000 jobs, by 30 years of relentless strikes and labor actions and outrageous wage demands even though workers already were well paid. The unions were warned for years to cool it, but they persisted. General Electric closed up shop in 1988.
High labor costs and labor strife simply drive business out. That is why US automakers have been moving operations for decades to lower-cost nations – because of their unions. When General Motors and Chrysler were bailed out by Obama in 2009 high-school-educated unionized assembly line workers were earning $150,000 a year in wages, benefits and pensions.
Meanwhile non-union “transplant” car companies like BMW and Toyota have been established in the Southern US and are prospering making great cars. Their workers earn 65% of the pay package of unionized workers at American auto plants, but they don’t want the unions. They are happy with less pay – but still good pay – since they do not have to deal with the unions and their labor strife, threats and anger and possible loss of their jobs.
High labor costs kill jobs. Consider the effect that proposals for an artificial, government-imposed $15 an hour minimum wage is having. McDonald’s already is rolling out new touch-screen computers designed to take orders, to eliminate human order-takers at the counter.
If human order-takers demand too much money, like $15 an hour, McDonald’s will simply fire them and move to touch screens in order to stay competitive. Otherwise high labor costs will make McDonald’s hamburgers too expensive to make and the company will go out of business.
McDonald’s also will adopt robots to make french fries and every other product if $15 an hour gains momentum. Thus people are better off working at $10 an hour than unemployed at $15.
Under Trumpian free-market economics, employers should ultimately decide what wages that they are going to pay, not unions or government.
*Government regulations drive business away. If you don’t own a business, you don’t know how bad this situation can be, having to deal with constant government inspectors, paperwork, mandates, bullying, harassment, inquiries, etc. It consumes huge amounts of time and money. Government agencies demand endless “reports” about every aspect of the business, often to deal with social issues. The reports end up on the shelf and never get read by anyone. Most of these regulations are ridiculous, which makes them even harder to deal with.
Trump wants to cut regulations substantially.
*‘Green’ laws are making it increasingly impossible for businesses to succeed. In one small county in Massachusetts 800 manufacturing jobs in the paper industry were killed in 2008 alone after “green” laws pushed up the price of electricity. Meanwhile 35,000 coal miners have been put out of work by the shutdown of the same coal-fired power plants that are producing low-cost electricity. In short, ‘green’ laws are costing us dearly at both ends. Trump wants to reduce job-killing “green” laws.
*Punitive taxes push business out. The United States now has the highest corporate tax rate in the world, which Trump is proposing to lower.
We could go on and on. So these forces, all emanating from the socialist left, have done tremendous damage to our economy.
Yet now that Donald Trump has saved 1,000 jobs the Democrats and their media cronies are going nuts. This is part of their War on Trump. It will not work.
These Trump Haters are claiming that Trump used “government force”, in the Carrier deal, that he is making sweetheart deals with employers using taxpayer money.
This is nonsense. After government policies like high taxes and regulations have been driving jobs away for decades Trump is now doing the opposite – using government incentives and policy to keep jobs here, as he did in the Carrier deal. And that is a good thing.
It is also a proven strategy that has been around for a long time. State governments have been using lower tax rates to attract business for decades. The American economy has been shifting strongly to lower-tax and lower-regulation states like Texas and Florida.
But these tax policies are disparaged by Democrats as ”loopholes” and “corporate welfare” since Democrats always advocate higher and higher taxes, no matter the negative effect that high taxes have on the economy.
We know that high taxes do not produce more revenue to the government. In the final analysis they produce less revenue, along with fewer jobs. Because high taxes drive business away, along with jobs and tax-paying workers. Highly-taxed economies throughout world history have always produced less prosperity – sometimes dramatically less – than lower taxes.
During his presidency Ronald Reagan lowered tax rates on wealthy Americans from 70% to 28%. You would think that this would have significantly reduced the amount of money flowing to the government, but the opposite happened. The economy boomed, employment skyrocketed and revenues to the federal treasury INCREASED by 91% over eight years.
In 1923 Republican president Calvin Coolidge lowered the top tax rate from 63% to 25%. This set off The Roaring 20s economic boom.
On the other hand, a special luxury tax on yachts was imposed in 1990, ostensibly to bring more money to the government and to get rich people to pay their “fair share”. Instead rich people simply stopped buying yachts.
Not only did government sales tax revenues from yacht sales actually plunge, but thousands of people in the yacht-building industry lost their jobs. This led to lower tax revenues from worker paychecks while increasing the expenditure of government money on programs to support the newly-unemployed workers, i.e., a double whammy to the taxpayer.
Amazing how that works, isn’t it? And it works that way every time.
Here’s another example that contradicts the liberal view of history: Eight years of heavy US government spending on make-work projects and handouts under Democrat president Franklin Roosevelt had failed to end the economic depression of the 1930s like socialist theory said it would. Here is a quote from Roosevelt’s own Treasury secretary Henry Morgenthau speaking in 1941 about the expenditure of large sums of taxpayer cash since Roosevelt had taken office in 1933:
“We are spending more money than we have ever spent before, and it does not work. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. I say after eight years of this administration, we have just as much unemployment as when we started and an enormous debt, to boot.”
So there you go. Already since the election of Trump the economy has been soaring on the expectation that Trump will have a pro-business administration. This is happening because much of the economy is psychological, meaning that people need to feel good about the economy to invest in it. And American economic optimism has hit record highs since Trump was elected.
Wages and prosperity rise naturally in a strong economy. That is why we should support president-elect Trump. We all will benefit.
(Please bookmark this website. And please recommend this site to all of your friends via Facebook and any other means. Let’s make Nikitas3.com the #1 conservative site by word of mouth. And if you would like to contribute to Nikitas3.com, please click the link at the upper right where it says “support this site”. Thank you, Nikitas)