Beware the crony capitalism of the Carrier deal, says .... Sarah Palin

Remember the good old days, when Republicans opposed crony capitalism and sotto voce dealings with favored entities? Donald Trump and Mike Pence basked in the glow of Indiana workers this week after claiming victory in rescuing almost 1,000 Carrier jobs that were destined for Indiana. Many Trump skeptics have been critical to the point of suspicion about the Carrier deal, but enthusiastic Trump backer Sarah Palin also offered a cautionary note rather than a cheer from the sidelines. While calling herself “ecstatic for Carrier employees,” Palin wonders whether Republicans are falling into the same bad habits of the Obama administration:

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When government steps in arbitrarily with individual subsidies, favoring one business over others, it sets inconsistent, unfair, illogical precedent. Meanwhile, the invisible hand that best orchestrates a free people’s free enterprise system gets amputated. Then, special interests creep in and manipulate markets. Republicans oppose this, remember? Instead, we support competition on a level playing field, remember? Because we know special interest crony capitalism is one big fail.

Politicians picking and choosing recipients of corporate welfare is railed against by fiscal conservatives, for it’s a hallmark of corruption. And socialism. The Obama Administration dealt in it in spades. Recall Solyndra, Stimulus boondoggles, and all their other taxpayer-subsidized anchors on our economy. A $20 trillion debt-ridden country can’t afford this sinfully stupid practice, so vigilantly guard against its continuance, or we’re doomed.

Reaganites learned it is POLICY change that changes economic trajectory. Reagan’s successes were built on establishing a fiscal framework that invigorated our entire economy, revitalized growth and investment while decreasing spending, tax rates, over-reaching regulations, unemployment, and favoritism via individual subsidies. We need Reaganites in the new Administration. …

[F]undamentally, political intrusion using a stick or carrot to bribe or force one individual business to do what politicians insist, versus establishing policy incentivizing our ENTIRE ethical economic engine to roar back to life, isn’t the answer. Cajole only chosen ones on Main St or Wall St and watch lines stretch from Washington to Alaska full of businesses threatening to bail unless taxpayers pony up. The lines strangle competition and really, really, dispiritingly screw with workers’ lives. It’s beyond unacceptable, so let’s anticipate equal incentivizes and positive reform all across the field – to make the economy great again.

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Palin’s not the only one worried about parallels with Obamanomics. The Wall Street Journal slammed Trump and Pence for their one-off intervention with Carrier and the “politicized allocation of capital” to benefit mainly the politicians who conduct them. That’s not the only presidential parallel the WSJ editors see, either:

Mr. Trump has now muscled his way into at least two corporate decisions about where and how to do business. But who would you rather have making a decision about where to make furnaces or cars? A company whose profitability depends on making good decisions, or a branding executive turned politician who wants to claim political credit?

The larger point is that America won’t become more prosperous by forcing companies to make noneconomic investments. A nation gets rich when individuals and business are allowed to take risks as they see fit in a competitive economy. Politicians are rotten investors. Mr. Trump would help the economy, and his Presidency, far more if he focuses on getting the pro-growth parts of his agenda through Congress.

Like the Nixon Administration, Donald Trump’s unpredictable, non-ideological policy-making will sometimes be disorienting for those who claim to believe in free markets. Some conservatives will be tempted to tolerate bad policies that appear to be popular that they’d never accept from President Obama. Many Republicans stayed silent or supported Nixon as he imposed wage-and-price controls and created the EPA, only to regret it later. They shouldn’t make the same mistake with Mr. Trump.

The better strategy is to support him when his policies promote growth and try to block him when he veers into big-government cul-de-sacs. In that spirit, his Carrier shakedown is a short-term political victory that will hurt workers and the economy if it becomes the norm for the next four years.

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The danger depends on whether this is truly a one-off, or an indication of Trump’s governing style and economic policy. Trump’s not president yet, so his intervention with Carrier didn’t afford him the opportunity to roll out a comprehensive regulatory/tax/economic policy change that improved the circumstances for all players rather than just Carrier. According to Carrier’s public statement, it was his outlook on broad economic and regulatory policies that convinced them in part to keep half of the outsourced jobs in Indiana, along with state-based incentives that Pence provided.

If the Carrier intervention was a last hurrah of Private Citizen Trump and Outgoing Governor Pence, then it’s a nice way to close out the election … and a reminder of how important it is to start working on those policies of regulatory and tax reforms ASAP. But if this is how Trump plans to govern as president — as a sort of fix-it specialist dealing favors or penalties depending on cooperation — then both Palin and the WSJ are right about the problems compounding themselves over the next four years. At least during Obama’s presidency, conservatives felt free to point out the dangers and failures of top-down economic interventions. Conservatives who just got pounded by the populists in the Republican primaries will be inclined to keep their heads a little low, at least at first, but that would be a mistake.

Palin offers a hopeful note in her essay at Young Conservatives. “Gotta’ have faith the Trump team knows all this,” she writes. Vigilance might be a better approach over faith, in this case.

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David Strom 3:20 PM | November 15, 2024
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