Trump's Carrier coup is creating a new crop of left-wing economic libertarians

Source: Washington Examiner | December 1, 2016 | David Freddoso

I’ve argued for a long time that a lot of people are going to be annoyed by how similar President-elect Donald Trump is to President Obama on economic policy.

The odd thing is, so far those most annoyed are not the ones who rightly criticized Obama for doing what Trump is doing now; rather, they mostly seem to be liberals who praised Obama for spending unseemly amounts of money to induce job preservation, yet suddenly object to Trump playing this same corporatist game.

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Trump’s big victory (and politically speaking, it is a victory) includes further inducements and subtle threats over the federal contracts of Carrier’s parent company. The up front cost appears to be $7 million in subsidies, but given other costs — which include a hit to the company’s profitability and its ability to call in a favor later from President Trump — it will likely end up costing taxpayers at least as much as the payroll of the plant in question.

Now, some of us remember those 2 million jobs that were supposedly “created or saved” by president Obama’s $831 billion stimulus package in its first year, and even the less likely claims of 3.7 million over two years. Even if those numbers are accurate, then those jobs cost the taxpayer between $400,000 and $200,000 each.

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But that doesn’t make what Trump is doing in following Obama’s example good or right. Government interference on behalf of small groups of workers is always a crowd-pleaser, as Trump is finding now to his delight. But it comes with opportunity costs that are always overlooked and usually much larger to society as a whole. As Frederic Bastiat would point out, we are able to see the workers at Carrier who keep their jobs because of Trump’s intervention. But we are unable to see the much larger number of people who would be better off, and perhaps hold jobs that will now never be created, if companies’ business investments were made rationally based on their own interests and not based on government threats or inducements.

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Even Bernie Sanders, who had once supported President Obama’s stimulus package despite noting that it “is not perfect,” now writes that “Trump’s Band-Aid solution is only making the problem of wealth inequality in America even worse.” He’s right, because government bullying and bribing of business to make irrational decisions — something I’m sure we’ll see a lot of in the coming months — carries diffuse costs that will harm the livelihoods and purchasing power of millions. That’s the trade-off for the concentrated benefit it brings to a small number of workers.

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