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>A Bloomberg piece on how Larry Summers, president of Harvard, economic bigshot in Obama 44's first term, blasted Trump's move to keep some United Technologies

>A Bloomberg piece on how Larry Summers, president of Harvard, economic bigshot in Obama 44's first term, blasted Trump's move to keep some United Technologies (Carrier) mfg jobs in Indiana instead of moving them to a maquiladora. He blasted Trump on the grounds that politicians have no business trying to influence keeping jobs in their districts. That's an astonishing position. https://www.bloomberg.com/news/articles/2016-12-02/summers-s.. https://www.bloomberg.com/news/articles/2016-12-02/summers-s.... True, especially since there are fine grounds to oppose Trump's "deal", namely that the same amount of government money could have just paid the workers' salaries directly, or the government could seize the factory and put it under worker ownership, or the government could use the money as part of the proposed trillion-dollar infrastructure plan. Bribing a company to "save jobs" with more money than it will actually pay out in salaries is just plain wasteful.

enraged_camel 10y ago
>>namely that the same amount of government money could have just paid the workers' salaries directly Your math is off. The company agreed to keep 700 jobs in the US, and will in return get $7 million in tax breaks over 10 years. That's only $700,000 per year.
- Eridrus 10y ago
  Especially when you speed it out across 500 jobs it's only $1400, which is nothing compared to what welfare would cost and the loss in tax revenue. So it's not a bad deal if you look at it in isolation, but there are reasonable concerns on whether this is scalable and whether we want to introduce protectionist policies with the expectation that the rest of the world may retaliate. Because if that's not the plan, then the Carrier deal is just showmanship with little substantive impact.
EvanAnderson 10y ago
I find your use of "Obama 44" amusing. It's as though you've fallen through a wormhole from a future in which there has been a second Obama presidency (Michelle, perhaps, or a second Barack Obama administration after passage of an amendment to repeal the 22nd?). If prior convention held true were Barack Obama ever re-elected it would be considered a different presidency distinct from the 44th. (A poorly attributed State Department "ruling" that I'm seeing references to says the two non-consecutive terms of Grover Cleveland are considered two different presidencies-- the 22nd and 24th. See: http://www.nytimes.com/1989/02/27/opinion/l-cleveland-makes-two-767089.html http://www.nytimes.com/1989/02/27/opinion/l-cleveland-makes-...)
- eli_gottlieb 10y ago
  It was in a paragraph I quoted from my parent poster.
  - EvanAnderson 10y ago
    Sad to hear you don't have information from the future. Quoting on here is a hot mess but having poor reading skills is my fault.
OliverJones 10y ago
There's a long and sordid history of firms demanding tax breaks from politicians to keep jobs in a certain place, then taking the money and sprinting off. Here's a way for executive-branch politicians to spend tax money to keep jobs in their districts. 1. agree with the legislature about the value of the jobs, and how much to spend on the subsidy, and for how long. 2. figure out the ratio between the subsidy and company payroll headcount and/or cash outlay. For example, "We are willing to subsidize employment at this location to the tune of US$50 per W2 employee per week", or "We are willing to subsidize employment at this location by one half of the employer contribution to social security and medicare." (Should subsidies be based on headcount or gross pay? I don't know. Working that out is part of the task of deciding the subsidy.) 3. After each payroll, get the employer to submit receipts for their social security and medicare contributions. 4. Certify that those receipts are legitimate (not faked, etc). That should generally be easy, and it's necessary for public trust. 5. Pay the agreed-upon amount, promptly, to the employer. This has the advantage that the subsidies go down immediately if employment goes down in the subsidized location. It rules out monkey business surrounding long term tax breaks for short term jobs. It's transparent in its costs and benefits. And, guess what, Dr. Summers? Spending the public's money in this way is certainly within the remit of elected politicians. If the public doesn't like it they can put a stop to it.

enraged_camel 10y ago

>>namely that the same amount of government money could have just paid the workers' salaries directly Your math is off. The company agreed to keep 700 jobs in the US, and will in return get $7 million in tax breaks over 10 years. That's only $700,000 per year.

Eridrus 10y ago
Especially when you speed it out across 500 jobs it's only $1400, which is nothing compared to what welfare would cost and the loss in tax revenue. So it's not a bad deal if you look at it in isolation, but there are reasonable concerns on whether this is scalable and whether we want to introduce protectionist policies with the expectation that the rest of the world may retaliate. Because if that's not the plan, then the Carrier deal is just showmanship with little substantive impact.

EvanAnderson 10y ago

I find your use of "Obama 44" amusing. It's as though you've fallen through a wormhole from a future in which there has been a second Obama presidency (Michelle, perhaps, or a second Barack Obama administration after passage of an amendment to repeal the 22nd?). If prior convention held true were Barack Obama ever re-elected it would be considered a different presidency distinct from the 44th. (A poorly attributed State Department "ruling" that I'm seeing references to says the two non-consecutive terms of Grover Cleveland are considered two different presidencies-- the 22nd and 24th. See: http://www.nytimes.com/1989/02/27/opinion/l-cleveland-makes-two-767089.html http://www.nytimes.com/1989/02/27/opinion/l-cleveland-makes-...)

eli_gottlieb 10y ago
It was in a paragraph I quoted from my parent poster.
- EvanAnderson 10y ago
  Sad to hear you don't have information from the future. Quoting on here is a hot mess but having poor reading skills is my fault.

OliverJones 10y ago

There's a long and sordid history of firms demanding tax breaks from politicians to keep jobs in a certain place, then taking the money and sprinting off. Here's a way for executive-branch politicians to spend tax money to keep jobs in their districts. 1. agree with the legislature about the value of the jobs, and how much to spend on the subsidy, and for how long. 2. figure out the ratio between the subsidy and company payroll headcount and/or cash outlay. For example, "We are willing to subsidize employment at this location to the tune of US$50 per W2 employee per week", or "We are willing to subsidize employment at this location by one half of the employer contribution to social security and medicare." (Should subsidies be based on headcount or gross pay? I don't know. Working that out is part of the task of deciding the subsidy.) 3. After each payroll, get the employer to submit receipts for their social security and medicare contributions. 4. Certify that those receipts are legitimate (not faked, etc). That should generally be easy, and it's necessary for public trust. 5. Pay the agreed-upon amount, promptly, to the employer. This has the advantage that the subsidies go down immediately if employment goes down in the subsidized location. It rules out monkey business surrounding long term tax breaks for short term jobs. It's transparent in its costs and benefits. And, guess what, Dr. Summers? Spending the public's money in this way is certainly within the remit of elected politicians. If the public doesn't like it they can put a stop to it.