Here's The Real Problem With Donald Trump's Carrier Deal

Donald Trump’s Carrier deal is dangerous. Not merely because the agreement undermines the rule of law or unilaterally reshapes the relationship between big business and government though it does both. The really scary part: Trump’s strongman tactic provides hundreds of families with more than Democrats have offered them in decades.

In February, Carrier’s parent company, United Technologies, announced it would close two Indiana factories, sending a total of 2,100 jobs abroad. The company was profitable, its workers productive. Executives were only slashing the domestic workforce to reduce labor costs. In November, Trump swooped in with a deal to keep 800 of those jobs in the United States.

Since the U.S. signed the 1994 North American Free Trade Agreement and in 1995 joined the World Trade Organization, it has lost millions of manufacturing jobs amid a swelling trade deficit, which now stands at about $500 billion a year. This is a domestic economic problem. But according to Matt Stoller , a fellow at New America Foundation’s Open Markets Program, it’s also a problem of political power.

“Those workers have no ability to affect the institution that dominates their lives the corporation,” Stoller told HuffPost. 

Listen to HuffPost’s full interview with Stoller in the latest episode of the HuffPost politics podcast So That Happened, embedded below. The segment begins at the 16:30 mark:

The hyper-financialized globalization of the 1990s didn’t take off in an ideological vacuum. As Stoller documents in a recent feature for The Atlantic , the offshoring boom was an intellectual descendent of a Democratic Party movement from the 1970s. With the country embroiled in a disastrous war in Vietnam and facing serious racial and gender iniquities at home, the focus on corporate power that had dominated Democratic thinking since Franklin Delano Roosevelt’s presidency seemed abstract and insignificant.

Democrats needed to address the unique problems facing women and people of color, and their foreign policy was a mess. But the party coupled its new policy emphasis with an economic platform that steadily demolished its New Deal foundations. By the time Bill Clinton took office, Democrats had embraced a social justice model in which Wall Street would deliver prosperity through deregulated capital markets and unfettered international trade.

That worldview left the party incapable of dealing with issues like Carrier which is why President Barack Obama and Democratic members of Congress didn’t do anything to stop the plant closings. To many Democrats in Washington (and nearly all Republicans), the Carrier layoffs were not actually a problem they were one part of the way the world is supposed to work.

The Trump deal saves less than 40 percent of the Indiana jobs that Carrier and United Technologies had planned to offshore. The tax perks Carrier got in exchange for keeping the jobs in Indiana, Stoller noted, are too meager to make much difference in the company’s bottom line. But United Technologies is a major government contractor. Either implicitly or explicitly, Trump could threaten to take away other, bigger sources of the company’s revenue if it didn’t do what Trump wanted.

“Do what I say, or else,” is not a good way to run a country. But many workers, especially those at Carrier, don’t even get an “or else” from corporate America.  

“This is a potentially extremely dangerous manifestation of autocracy,” Stoller said. “But you have to understand that it is being layered onto a commercial system that, to a lot of people, is already autocratic.”

Trump didn’t do anything that will prevent other companies from making offshoring announcements in the future. But 800 families owe their jobs to Trump. They could have been championed by Democrats.

Serious advocates of free trade don’t deny that the status quo hurts a significant swath of the American middle class. Instead, they emphasize that deeply impoverished people abroad end up with better wages under today’s system. The Ghost of Jeremy Bentham , the thinking goes, must admit that the problems of the global poor take precedence over those of even the most disadvantaged U.S. workers.

It is a curious ideology in which the world’s poorest citizens are owed no more than the fruits of sweatshop labor, which can only be granted by raiding the earnings of the American middle class and padding the pockets of U.S. executives.

But the bigger problem is political. Millions of American workers are being told their lives and even their entire communities are little more than a loss item on a global balance sheet. Vote Democrat: At least you still have a refrigerator.

A few months after the Carrier layoffs were announced, a Rexnord Corp. factory down the street announced its own plan to ship 300 jobs to Mexico.

“It’s pretty simple what these corporate people want,” Rexnord worker Draper Alumbaugh told Indiana news station RTV6 in an interview that went viral . “They wanna pay people nothing and they wanna profit everything.”

Alumbaugh sounded like Bernie Sanders . He voted for Trump.

“So, That Happened” is hosted by Jason Linkins, Zach Carter and Arthur Delaney. It is produced, edited and engineered by Christine Conetta.

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