Ever since Donald Trump declared his intention to run for president 18 months ago he’s been promising to do all he can to dissuade American corporations from moving their manufacturing operations and jobs to Mexico and other countries to the detriment of the American economy. He put American companies on notice then that they would not be free to relocate their companies outside of the U.S. "without consequences."
In all that time, few if any have complained that his plans would amount to crony capitalism until now with that perennial babbling idiot, Sarah Palin, suddenly wagging an accusing finger at Trump after he started to make good on his promises two months before taking office. As usual, Palin doesn’t know what she’s talking about.
Trump and Vice President-elect Mike Pence traveled to the United Technologies Carrier Air Conditioner plant in Indianapolis last week to announce that the company has agreed to keep 1,100 jobs in the city instead of moving them to Mexico. Company officials said that the state of Indiana, where Pence is governor, offered the company a $7 million tax incentive package over multiple years, contingent on factors including employment, job retention and capital investment.
Now Palin says that deal amounts to “crony capitalism.” "When government steps in arbitrarily with individual subsidies, favoring one business over others, it sets inconsistent, unfair, illogical precedent," she says. "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."
But Trump isn’t stepping in arbitrarily with individual subsidies favoring one business over others. He’s advising all American businesses that there will be unpleasant consequences for them in the form of taxes and tariffs if they move American jobs to other countries to take advantage of cheap labor and lax regulations, and then try to move their products back to America to compete unfairly with American manufactured rivals.
In short, Trump intends to level the playing field. Republican governors have been offering incentives to businesses forever to get them to locate in their states. That’s not crony capitalism.
Of course, a level playing field might mean higher prices for American consumers on products manufactured in Mexico and China, but the American economy would benefit enormously. And if Americans decide that they don’t like Trump’s plan they can always vote him out of office in 2020 to make way for a one world order globalist like Hillary Clinton.
Crony capitalism is defined as an economy that is nominally free-market, but allows for preferential regulation and other favorable government intervention based on personal relationships. In such a system, the false appearance of "pure" capitalism is publicly maintained to preserve the exclusive influence of well-connected individuals. It is characterized by close, mutually advantageous relationships between business leaders and government officials. Trump’s plan does not fit that definition.
"Foundational to our exceptional nation’s sacred private property rights, a business must have freedom to locate where it wishes," Palin argues. "In a free market, if a business makes a mistake (including a marketing mistake that perhaps Carrier executives made), threatening to move elsewhere claiming efficiency’s sake, then the market’s invisible hand punishes."
Trump fully recognizes that businesses have total freedom to locate wherever they wish. He’s not going to try to prevent that freedom. Carrier doesn’t make a marketing mistake by taking advantage of virtual slave labor conditions and zero regulations in third world countries only to realize a windfall by selling its products back to America without any consequence. America can slap a tax on Carrier’s products just like it may slap a tax on any Mexican products if it deems such action beneficial to Americans.
That’s not crony capitalism. American government interests have partnered with private enterprise for the benefit of Americans since the founding of our nation 240 years ago. It was done to fight piracy on the high seas; to build Liberty Ships, tanks, bullets and other armaments during wartime, and to build out the vast infrastructure of the United States.
As long as the private entities aren’t given unfair cozy advantages over their competitors the practice does not amount to crony capitalism.
Sarah Palin’s finger wagging in this instance is just crony baloney.