Sanders: "United Technologies Took Trump Hostage and Won"

"You think you're so clever and classless and free..."
(so many versions, so little time)

by Gaius Publius

This matters, both the Carrier settlement itself (how it was achieved) and the Sanders pushback against it. Let's start with Sanders, then go to the settlement. Sanders writes (my bolded emphasis):

Bernie Sanders: Carrier just showed corporations how to beat Donald Trump

We need a president who can stand up to big corporations, not fold to their demands.

Today, about 1,000 Carrier workers and their families should be rejoicing. But the rest of our nation’s workers should be very nervous.

President-elect Donald Trump will reportedly announce a deal with United Technologies, the corporation that owns Carrier, that keeps less than 1,000 of the 2100 jobs in America that were previously scheduled to be transferred to Mexico. Let’s be clear: It is not good enough to save some of these jobs. Trump made a promise that he would save all of these jobs, and we cannot rest until an ironclad contract is signed to ensure that all of these workers are able to continue working in Indiana without having their pay or benefits slashed.

In exchange for allowing United Technologies to continue to offshore more than 1,000 jobs, Trump will reportedly give the company tax and regulatory favors that the corporation has sought. Just a short few months ago, Trump was pledging to force United Technologies to “pay a damn tax.” He was insisting on very steep tariffs for companies like Carrier that left the United States and wanted to sell their foreign-made products back in the United States. Instead of a damn tax, the company will be rewarded with a damn tax cut. Wow! How’s that for standing up to corporate greed? How’s that for punishing corporations that shut down in the United States and move abroad?

In essence, United Technologies took Trump hostage and won. And that should send a shock wave of fear through all workers across the country.

Or, as Politico succinctly put it, "Carrier tariff now Carrier tax cut?" Trump went toe-to-toe with United Technology, and lost.

Trump As Enabler of Offshoring

This is a 180 degree reversal and he's not even in office yet. But Sanders is exactly right:

Trump has endangered the jobs of workers who were previously safe in the United States. Why? Because he has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives. Even corporations that weren’t thinking of offshoring jobs will most probably be re-evaluating their stance this morning. And who would pay for the high cost for tax cuts that go to the richest businessmen in America? The working class of America.

Sanders closes: "I will soon be introducing the Outsourcing Prevention Ac [details here]t, which will address exactly that. If Donald Trump won’t stand up for America’s working class, we must."

Some working class hero Trump turned out to be. I guess we're still peasants after all.

The "Deal"

A little more detail on the so-called "deal." They say "1000 jobs" were saved, but of those only 800 were originally at risk. Plus, 1300 jobs will still move to Mexico.

From The Hill:

The company that owns Carrier will receive $7 million worth of tax breaks over 10 years from Indiana to keep 1,000 jobs in the state, the Wall Street Journal reported Thursday.

Carrier confirmed the news Thursday in a statement, writing that the deal is contingent upon factors including employment, job retention and capital investment.

The company this week reached a deal with President-elect Donald Trump and Vice President-elect Mike Pence to keep the jobs in the state, after announcing earlier this year it would shut down a plant in Indianapolis and move manufacturing to Mexico. ...

The deal would cover 800 workers from the Indianapolis furnace plant and an additional 300 research and headquarters positions that weren't planned to go to Mexico, according to the Journal.

But 600 jobs will still move from Indianapolis to Mexico.

Carrier also still plans to close a second plant in Huntington, Ind., shifting another 700 jobs to Mexico.

More detail via the WSJ (subscripton required): 

Carrier has previously said it expected to save about $65 million a year by shutting the plant and shifting its operations to Monterrey, in the state of Nuevo León, where wages average about $11 a day, plus benefits. The average wage of the Indiana jobs that will be retained is $30 an hour, according to a document reviewed by the Journal.

In case that didn't sink in, Indian-to-Mexico wages shift $30 per hour to $11 per day. That's why we can't have nice jobs, or at least decent paying ones. How much of that savings, do you think, would have ended up in the executive suite, via stock buybacks, sweetened salaries and bonuses, and "golden parachutes"? Answer, as much as possible.

Plus $7 million in tax breaks. Unless some of it is federal, all will come out of the pockets of cash-strapped Indiana and its (largely Trump-voting) tax-payers.

Why This Is Important

First, Bernie Sanders is right — Trump sold out his voters in Indiana. Second, Sanders is saying this out loud and getting lots of attention for it, which means the sound of Sanders analysis is likely playing in Trump's ears right now, and hopefully in the ears of his Sanders-tempted supporters as well.

Which ought to put Trump on the defensive and keep real systemic solutions to corporate America's outsourcing addiction alive. Remember, the problem that got Trump elected isn't going away until cash-strapped citizens — not corporations — get relief they can see, feel and spend. Under Trump, that's not going to happen.

Which means, there's hope after all.

"Working Class Hero"

Trump may not be a working class hero, but Sanders is, and so was John Lennon. Here's the original version. Enjoy:

Fun with music theory: One of the things that makes this song so interesting, so not a "four-square" song, is its phrase length. Each phrase — each line in the verse or chorus — occupies seven measures of music, not eight. It's why you feel off-balance as you listen, like the lines end too soon or restart too quickly. Count if you like; each measure is three beats long, so they're easy to identify. Be sure to stop at seven and restart at one. Very good song-writing from a master at it.

GP