That whole Carrier thing, or: the value of the bully pulpit?
I've been thinking about DJT's widely trumpeted 'success' in getting a subsidiary of United Technologies to keep ~1k jobs in the US rather than shipping them overseas. I am inclined to be deeply suspicious and dismissive of anything the president-elect does, and indeed I feel like this is a lot of hype with little substance. As others have rightly pointed out, this sort of retail arm-twisting will not being manufacturing jobs back to the US on the scale needed to change things, the incentives used were likely not worth the cost, and it is likely that Carrier will either pass costs along to consumers, cut worker benefits, or ship the jobs off eventually anyways.
That being said, I have also heard broader critiques of his action, calling this 'crony capitalism' or modern day industrial policy, arguing that it is not the place of the president to get involved with the decisions of individual private firms. While I have some sympathy with this opinion, I think a re-examination of this point might be warranted. While there is no doubt that POTUS can and should be involved primarily in setting national policies (through both executive action/regulation as well as through engaging with Congress) that would affect the entire course of the country rather than a piddling few jobs, we have to admit that at times the president's options for change are limited.
We know that the forces of globalization are more or less unstoppable and that any rearguard action - including such stupid ideas as punitive tariffs for relocating jobs outside the US or Buy American clauses - will be at best stopgap measures. So even with the best crafted policies and perfect political support (e.g. efforts to reduce domestic labor costs as much as possible, comprehensive trade deals that address labor and environmental regulations in other countries, investment in higher end manufacturing and worker retraining, etc.) you're still going to have to face facts that inexorable forces are shifting certain jobs outside the US. As long as companies can only be cost-competitive if they use cheaper labor elsewhere, most of them are going to follow the money.
Thus perhaps it makes sense for POTUS (or a POTUS-elect) to instead resort to the bully pulpit rather than any specific policies to achieve the goal of reducing manufacturing job losses. Being somewhat charitable, it's possible to imagine that DJT's goal was not to 'save' 1k jobs but instead to provide a signal to industry. Essentially, by publicly chastising companies that outsource jobs (e.g. Ford) and praising/incentivizing companies that stay, DJT is adding an element of reputational risk/cost to the calculations that companies make. The bully pulpit of the US President is as big as it gets, and having the president regularly praise and denigrate private companies might not be how we normally view the job, but it certainly is an interesting approach.
We've already seen how some companies that choose to site most of their manufacturing in the US despite cheaper costs elsewhere tout it as a selling point; they see this as part of their investment in their brand that pays for the increased costs. Public naming and shaming (or praising) by POTUS might just magnify this advantage, especially for companies where labor costs are not a huge part of the cost of production (I suspect that something like clothing or shoes will still be much more cost competitive outside of the US, even though some brands - e.g. American Apparel, New Balance, etc. - even try with those labor-heavy products). I heard an interesting comment on NPR this morning to the effect that companies know they have to site some of their production in China if they don't want their IP stolen; it's just a cost of doing business. Perhaps a similar argument could be made in favor of presidential bullying in the US. Certainly smaller scale politicians - city mayors, governors, etc. - do a lot more of this kind of stuff, though obviously their effect is likely much smaller given their smaller audience.
I'm very leery of this approach but I thought it might be worth a discussion. What do you guys think? Should POTUS in general focus on using the bully pulpit as a force multiplier in achieving policy goals? In this specific case, is it an unwarranted level of political interference in private enterprise, or is it justified? Is this likely to be effective on a broader scale rather than the individual fights DJT picks?
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Originally Posted by wiggin
