Sunday, August 28, 2016
Pence and trade and Trump's national pride
So I watched a program on CNN this week-end about the Carrier plant leaving Indiana for Mexico and it was very sad. More than a thousand people lost their jobs and they all seem to think they will not ever find another one like it. Trump has talked a lot about this on the trail, blaming NAFTA and Obama and Clinton for the job losses and declaring that he would immediately hit any manufacturer with huge tariffs who tried to do that which would cow them into staying in the future. The workers in the story all believed him.
Somebody really ought to ask Trump and his running mate about this (Which they probably will since it was flagged for the media by the DNC):
As Donald Trump’s running mate, Gov. Mike Pence is campaigning for a man who has promised to penalize companies that ship jobs overseas.
But since Pence became governor in 2013, the state has awarded millions of dollars in economic development incentives to companies that have moved production to foreign countries such as Mexico and China. Those production shifts have cost thousands of Hoosiers their jobs during Pence’s time in office.
An IndyStar analysis found that the Indiana Economic Development Corporation — which Pence leads — has approved $24 million in incentives to 10 companies that sent work to foreign countries. Of those incentives, nearly $8.7 million has been paid out so far.
During that same period, those companies terminated or announced layoffs of more than 3,800 Hoosier workers while shifting production to other countries, where labor tends to be far less expensive.
The state has clawed back or put a hold on some or all of the incentives in four of those cases, returning $746,000 in taxpayer subsidies. But in the other six cases, the companies faced no consequences.
The primary reason: The job creation and retention requirements in the state’s incentive agreements are usually narrowly tailored to a single facility, leaving workers at other sites owned by the same company vulnerable to offshoring.
Take, for example, handbag maker Vera Bradley. The company was approved in December 2014 for a $1.75 million, 10-year tax break to assist with a $26.6 million expansion of its headquarters and distribution center in Roanoke, near Fort Wayne. In exchange, the company agreed to retain 567 employees and add 128 jobs by the end of 2017.
But the following year, the company closed its New Haven design center and moved production to factories in Asia to save money. The factory’s 250 employees, who worked just 15 miles from the Roanoke headquarters, lost their jobs.
Vera Bradley has claimed about $118,000 in tax credits so far and remains in compliance with its state incentive agreement, said Abby Gras, an IEDC spokeswoman, in an email. The company now employs slightly more than 600 workers in Roanoke, a spokeswoman for the company said. That’s a net loss of more than 200 jobs across the company’s Fort Wayne area operations.
Pence, who has been campaigning for Trump across the country since accepting the Republican vice presidential nomination in July, did not respond to interview requests for this story left with his office and campaign staff.
But his commerce secretary, Victor Smith, sent a statement to IndyStar defending the state’s economic development record and noting that 150,000 jobs have been added since Pence took office.
Carrier was among those companies that received incentive money although Pence got the company to pay it back once the video of the layoff being announced (which got Trump all excited) went viral. But there are a bunch of other companies in Indiana which have done the same and pocketed the cash.
The point is that this problem is not confined to the trade deals or to any politician. It's much bigger than that. It's easy to take a shot at government for failing to protect workers, and there's plenty of blame there, but we are dealing with a complicated problem with a lot of moving parts (so to speak...)
Meanwhile, the Republicans are pulling the wool over people's eyes as usual:
Pence has said in the past he supports the Trans-Pacific Partnership, which Trump opposes. More recently, Pence says he would support renegotiating trade agreements with Trump in the White House because he believes Trump could negotiate better deals.
Political observers say Pence’s actions as governor raise new questions about the true extent of his support for Trump’s trade policies.
“To the extent that there is any daylight between them, one has to wonder what Mike Pence’s true thoughts are,” said Robert Dion, a political scientist at the University of Evansville. “In the event they disagree, you have to wonder, has Mike Pence changed his position or is he simply doing what a VP nominee must do to be part of a national ticket? That’s the million dollar question.”
The seemingly different approaches to companies that offshore jobs are also a study in what kind of constituency each candidate appeals to, Dion said.
“The real thing you’re getting at is the gulf between the chamber of commerce Republican crowd and the populist appeal of Trump,” Dion said. “What Trump is speaking to is that populist anger and frustration. I think what the evidence shows is that Mike Pence — like a lot of Republican governors and some Democrats have done — has worked with the chamber of commerce and business leaders. That’s where the gulf is at.”
Oddly, the one area in which Trump is sincere is his belief that the rest of the world is laughing at Americans because of our allegedly terrible trade deals. But keep in mind that his solution is to stick huge tariffs on American companies that manufacture overseas and drive wages down in the US to keep prices low so they can "compete." It's a huge mistake to believe this has something to do with the plight of the American worker. This has to do with "national pride" which isn't the same thing at all.
digby 8/28/2016 03:30:00 PM