Trump’s Carrier deal puts capitalism at risk
While on the campaign trail, President-elect Donald Trump talked a big game about keeping businesses from going overseas. And, now, he is already doing exactly that.
His deal with Carrier, a company that once had its headquarters here in Syracuse and employs more than a thousand people in nearby DeWitt, will keep just under 800 jobs from leaving the country, according to PolitiFact. At first glance, this seems like a great thing. But under closer investigation, it becomes clear that Trump had to give up quite a bit for this deal to go through. To be exact, Trump gave Carrier — the namesake of the Carrier Dome — $7 million dollars in tax breaks, according to CNN Money.
This means that the American government is paying around $8,750 per job and poses a massive question: Is this deal worth it?
Before addressing this, it is important to keep in mind that this move was incredibly political. Trump named Carrier specifically during his campaign, and he needed to get a victory or there would have been serious backlash. But just because he got one company on board does not mean that this type of deal will be the status quo under a Trump administration. Carrier had the advantage in this deal because Trump needed them to stay for political reasons, and he probably gave more to them than he will be willing to give to other companies in the future.
Regardless, several news outlets are using the massive incentive package as a headline, making it seem like this move is totally irrational. But if Carrier had gone and moved its jobs to Mexico they would be getting massive benefits anyway. So instead of letting both the company and Mexico benefit from an American business, the United States will benefit along with the company.
But this type of ruling even gives companies the chance to take advantage of Trump. Trump wants business to stay in our borders, and now everyone knows he is willing to pay for it. So any company now has the chance to threaten a move overseas, and if the Carrier deal is at all representative of the economic future Trump is striving for, then he will be writing some massive checks that come from the taxpayers’ pockets. The irony of course, is that Trump isn’t really in the “taxpayer” category from what we know.
Carrier once had its headquarters here in Syracuse and when it left, it took controversially nearly 10,000 jobs with it, according to The New York Times. This led to massive financial consequences that are still evident in the city today, as in any case whenever a company of this size moves its factories overseas.
It’s the threat to the free markets and true capitalism that is more concerning than the deal itself. When the government has a heavy hand in the markets, things can get messy. If the government continues to make deals specific to individual companies, then there will be no true economic freedom.
And many people across party lines are wary. Though Sarah Palin should only be used cautiously as a source for any kind of truth, her Young Conservatives editorial on the what she describes as “crony capitalism” has many valid points.
As Palin mentions, if you are a fiscal conservative you should be against this deal and the future it will lead to. The deal leads me to believe that Trump is going to treat the government like a business, and that is an issue — it is not the government’s place to interfere with the market in this way.
All we can do now is hope that this kind of deal is a one-time event — but maybe even that is wishful thinking.
Alex Deitrich is a freshman history major. His column appears weekly. He can be reached at email@example.com.
Published on December 10, 2016 at 12:47 am