Wednesday, January 4, 2017

Ethics, Ford Jobs, and Republican Ideology

So, look at that!  The GOP has backed down on gutting the Office of Congressional Ethics.  Voters were outraged, the President-elect and Republican Congressional leaders clicked their tongues, and now the move has been rescinded.  That was quick!  And, from a political point of view, wise.

The other big headline is that Donald Trump is once again claiming credit for saving manufacturing jobs in the United States.  To what extent has he done so?  Is this like the Carrier deal, where his claims were overblown but he still deserves some credit?  Or is this more like the Sprint deal, where in fact, his claims did not correspond to reality?

There's a lot to unpack, but consider the following:

The decision by Ford to drop plans for a new plant in Mexico — what would have been a $1.6 billion investment — came at the same time the company announced it would add 700 jobs to build electric and hybrid vehicles at a plant in Flat Rock, Mich.

The new Mexican factory was to build Ford Focus sedans currently manufactured at another Michigan plant near Detroit. Now the company will build those cars at an existing plant in Mexico.

Ford officials said that the revised plans were tied to market conditions that have depressed small-car sales, and that they did not consult with the incoming Trump administration before making the decision.

(emphases added mine throughout)
That said, it appears that Trump's criticism had something to do with the decision to keep the 700 electric/hybrid vehicle jobs in Michigan:
Ford has been a target of Mr. Trump’s criticism since last spring, when he singled the company out during his campaign for planning to create jobs in Mexico instead of pushing employment in the United States. After the election, Ford dropped plans to move production of a Lincoln S.U.V. to Mexico from Kentucky. That move followed discussions between Mr. Trump and William C. Ford Jr., the company’s chairman.

One industry analyst, Ron Harbour of the consulting firm Oliver Wyman, said Ford was under intense pressure to alter its Mexican plans — or risk a constant drumbeat of criticism from Mr. Trump.

“It was an embarrassment for them, and they said, ‘Let’s turn this thing around,’” Mr. Harbour said.

Hmm.  Shall we check in with epic new-one ripper Dean Baker on the subject

Anyhow, one aspect of these Ford jobs that has not gotten sufficient attention is that the only reason they exist is because of President Obama's policy on combating global warming. As the NYT article points out, the plant in Michigan where production is being increased produces hybrid and electric cars. These cars were given subsidies as part of President Obama's efforts to curb greenhouse gas emissions. This was part of Obama's strategy to combat global warming.

As folks may recall, Donald Trump has said that global warming is a hoax invented by the Chinese. It turns out that President Obama's response to this hoax is responsible for creating the jobs that Trump claims to have saved. 

So it appears to me that President-elect Trump deserves some credit for saving jobs which President Obama deserves some credit for creating, and that market conditions were in fact more important than either man.

In other news, Donald Trump is nominating Robert Lighthizer as the US trade representative.  Lighthizer is a protectionist, and assuming he sticks to his guns, will take a dim view of NAFTA, the TPP, etc., and may actually urge tariffs as policy.

It's fascinating to me to see the two wings shape up in the Trump administration: one classically Republican and free-trade, and the other protectionist, which is something we haven't seen out of either party in a long time.

Who will triumph between these two wings?  One of them, on the issue of trade, has to lose.  The cynic in me thinks that the protectionists will lose - there's just too much money at stake to revoke NAFTA, etc.  I think this will play out a lot like the Republican version of the Clinton administration, with the Robert Lighthizers of the world losing out to the Gary Cohns of the world, much as Robert Reich lost out to Robert Rubin.

But I'd by lying to you if I told you things were certain to play out that way.  The protectionists may end up ascendant, which would be extremely interesting to see play out.

Because who knows - maybe the Republican party really is changing.  I'll believe it when I see it, but there are certainly rumblings.  This interesting New Yorker article is worth your time if you're curious regarding the development of the GOP.  One selection:

[Pro-Trump essayist] Decius cited, as one unlikely precursor, the 2004 Presidential campaign of Dick Gephardt, the Democratic congressman, who ran as a fierce opponent of NAFTA and other free-trade agreements. (During one debate, Gephardt argued, “We have jobs leaving South Carolina, North Carolina, Missouri—my home state—that originally went to Mexico; they’re now going from Mexico to China, because they can get the cheapest labor in the world in China.”) In his “Flight 93” essay, Decius called Trump “the most liberal Republican nominee since Thomas Dewey,” and he didn’t mean it as an insult. 

Is Trump truly, substantively different from your average Republican?  Again, I'll believe it when I see it.   

But, you know... what if I see it?

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