On Trump's Carrier deal

So, right wingers are heralding Trump's carrier deal as a great success for his administration, and point out how Trump saved 1400 jobs at the cost of giving $7 million in tax breaks to companies. Forgive me that I'm not celebrating. Yes, it's good he saved some jobs, but at the same time, we have to look at the overall costs and examine what's going on in the big picture.

We have this huge global economy, with countries acting as agents in a larger market system competing for jobs. Businesses have an interest in making the most money with the least effort. Countries have an interest in ensuring companies set up shop in their country so they keep that sweet sweet money here. In the past, after World War II, there was less competition due to less neoliberalism and also because many countries were devastated by war and took time to rebuild. Because of economic liberalization on the global level and more development, we're seeing the sweet deal we had back when "America was great" as Trump put it dissipating. Trade agreements with other countries and a larger global economic system that favors the rich over the people makes capital very mobile, where countries are on the raw end of the deal. First world countries are seeing living standards decline because they're now forced to compete with the rest of the world for the best deal. So taxes are depressed, regulations are depressed, and the countries with the most unfettered capitalism and best deals for the workers generally get favored, whereas countries that have standards and try to do good by their citizens lose jobs. It's a race to the bottom in which everyone loses, except the corporations, and is perhaps the largest problem my personal philosophy on the economy faces. If capital is so mobile it can skirt regulations and taxes and even strong arm countries into playing by the rules they wish to impose on them, that's a serious problem for the "99%" of workers in the country.

This is why I'm not cheering on Trump's deal. Trump just worked out a deal to save jobs here...by giving the rich a tax cut, which is ceding ground to the corporations in order to appease them. This is a fleeting and pyrrhic victory. We might have saved those jobs today, but what will things look like 5 years from now? 10 years from now? 20 years from now? They'll be back asking for more concessions until we live in a gilded age state. In order to compete with the third world, we must ultimately become like the third world.

Imagine this scenario. Imagine we have three countries. We have a country like the US with progressive taxation and a 40% tax rate on corporations. We have a second country like, say, a European country with a 25%  tax on corporations, and higher taxes on citizens to make up for the lost revenue, similar to many Scandinavian countries. We have a third country that is like the third world and has a 10% tax on corporations. Say we reduce our rate to 25% because the prevailing logic is that 40% is too high and uncompetitive with the rest of the world. What happens? Well, in the short term, we see jobs saved in the first country as they don't leave the second or third countries, but you know what? The second country is going to lower their taxes too because they will now face similar pressures, having the "high" tax rate that's now less competitive because the first dropped their taxes, so they will reduce theirs to 15%. And the third country, wanting to draw more corporations to set up shop in their country, might say, hey, let's not have any corporate taxes at all! So now we have country one at 25%, country two at 15%, and country three at 0%. In the long long term, the optimal corporate tax rate needed in order to keep jobs in country will be zero for all three or very close to it. Because as long as you have another country willing to undercut you in this global capitalistic system, the first world nations will need to repeatedly lower their standards to accommodate corporations and encourage them to keep the wealth in their country. This is the end game of global neoliberalism without some very significant changes. And this is why I oppose free trade, and this is why I don't celebrate Trump saving these jobs. He basically gave away gimmes to the corporations in order to satisfy them, and they'll inevitably come back for more and more until there's nothing left to give. I used to have a friend from Puerto Rico who talked about this too. He mentioned how the island gave tax breaks to corporations until they had nothing left to give, and then they left anyway. This is what will happen to us if we play this game. It's a no win situation for us. We need to fight this system and make it in our image, not allow the corporations to just have free reign.

There are no easy answers to this problem, because any good answer is either very difficult to enforce, has tradeoffs, or requires countries to team up and work together, and not try to undercut each other. Perhaps if free trade deals had provisions for workers and taxes in order to keep some level of parity to stop capital flight from happening, instead of, you know, adding in all of these provisions to export our backwards copyright and patent system on the rest of the world for profit (cough, TPP, cough), then we could see some real change. But this would require the democrats to act like leftists, not like corporatists, so fat chance that this will happen. We should also be skeptical of any trade deal that does not have these provisions in it.

I also think there should be like a 99% exit tax to any company that tries to leave America. If you try to move your operations overseas, then you should lose all of the wealth you try to move out of the country except for maybe a small amount. This would be difficult to enforce in the details however.

It's also possible to try to implement tariffs on any company that tries to move to another country and import their stuff back here, but economically speaking, this could have adverse consequences on growth and stability. This isn't to say we shouldn't do it anyway if we make a calculated decision the tradeoff is worth it, but this is a potentially problematic approach.

Finally, I think if we considered some form of decentralized, democratic market socialism, that leaving the country would be more difficult. Employees who are stakeholders in companies and have power over them aren't going to outsource their own jobs. The fact that the means of production is held by a small number of people with no vested interest of the good of everyone involved is what gets us in this mess to begin with. They just leave, screw the workers, and then hire new workers elsewhere on terms more favorable to them. With a form of light socialism, we will still see the positives of the market system while ensuring workers own and control the corporations, stopping them from leaving the country.

As such, there are solutions on the table to look into. I don't think appeasing corporations by giving them what they want is the answer here though. Give them an inch and they'll take a mile. Trump's victory here seems fleeting and not without serious tradeoffs that further global neoliberalism and lower the bar, allowing for corporations to ask for more and more until we have nothing left to give. Real solutions to globalization will ultimately need to come from the left, not the right. The right just ultimately embraces the corporations and gives them what they want at the expense of everyone else. Only the left ultimately stands by the workers over the long term.