From time immemorial corporate executives have played a certain back-scratching if fundamentally dishonest game with politicians, usually at the state or local levels. The corporate types make an investment or employment decision that appears to benefit a particular place, maybe because it makes sense generally, maybe in response to government inducements (maybe disclosed publicly, maybe not). And then they cooperate by giving credit to a friendly politician, who gets to announce a ribbon-cutting or ground-breaking or “jobs saved” claim which is supposed to symbolize the pol’s economic development chops. Usually the economic impact of the “deal” is small potatoes, and may even be offset by the cost of inducements. And in most cases the positive development would have probably happened anyway. But it is in not in the interest of any of the players in the game to admit that it’s all a shuck.
It is increasingly apparent that one of the distinctive features of the Trump administration will be raising that particular game to the national level. The first such Trump-brokered “deal” involved the Carrier Corporation, of course. But since that was a particular company Trump bashed during the presidential campaign for its outsourcing practices, and because Trump’s own running mate Mike Pence was in a position to create inducements as governor of Indiana, it looked like it could be a unique event.
Not any more. The automaker Ford has announced Trump is responsible for a decision to make certain cars in Michigan rather than Mexico. Ford claims they didn’t get any public subsidies or concessions to make this showy about-face, from Trump or anyone else; no, it was just a “vote of confidence” in the mogul’s plans to make America a lean, mean, job-creatin’ machine. Never mind that Trump attacked Ford for its Mexican plans during the campaign, or that he threatened to slap a 35 percent tariff on the company’s Mexican-produced vehicles — that’s apparently just a coincidence.
Now, aside from the rather ludicrous suggestion that Trump’s threats were not a factor in this decision, it is important to note that it involves 1,000 jobs (or so Ford claims, anyway). Yes, there are spin-off effects, and sure, if you are an unemployed or potentially unemployed autoworker living in Flat Rock, Michigan (the site of the plant now blessed by Ford and Trump) it’s a big deal.
Having said that, these 1,000 jobs or the alleged (though disputed) 1,100 jobs saved by the Carrier deal are not the stuff of a national economic strategy. It’s more like a Tinkertoy substitute for a national economic strategy at best, and a cynical exploitation of public misapprehensions about how the economy works at worst, with Lord only knows what kind of concealed price down the road. Is the President of the United States going to bribe or browbeat enough individual companies to double GDP growth? Or is this just a display for the benefit of Rust Belt Trump voters to keep them from concluding their hero has betrayed them when he kills Obamacare or plunges us all into a trade-related recession?
If Trump wants to keep this game credible, he’d better step it up and interact with companies a little more broadly. How he keeps his conservative free-market allies from freaking out publicly over this grossly primitive way of thinking about economics is another mystery altogether. Cutting taxes and killing regulations will presumably cover a lot of sins. But at some point it may become apparent the cocky chief executive is like the rooster taking credit for the sunrise.
