Just because Donald Trump is now president, it doesn’t mean that cronyism has suddenly come to a halt. Unfortunately, it’s likely going to remain the same or get even worse as time goes by.
Last week, the president commemorated “Made in America,” and the White House held a special event that invited 50 businesses to celebrate. According to Reason, 21 of those companies have received some kind of loan guarantee, economic incentive, government grant or subsidy over the last two decades.
Here are some examples, using data aggregated by Good Jobs First:
Simms Fishing Products: has collected more than $400,000 from federal and state subsidy programs since 2011. Ames Tru Temper, maker of wheelbarrows and small-scale farming equipment: collected more than $3.3 million in grants and tax breaks since 2003.
Caterpillar: has received 200 grants valued at more than $155 million since 1997. The company generated $38 billion in revenue last year. Caterpillar was granted an additional than $17 million in government grants for a subsidiary company, Solar Turbines Inc.
Sikorsky Aircraft Corporation, a helicopter manufacturer: over $146 million in direct government grants since 1997.
Campbell’s, the soup brand: over $44 million in grants and loans from state and federal sources over the past 20 years.
The handouts to the well-connected businesses totaled nearly $600 million.
Unfortunately, “Made in America” is simply a euphemism for subsidizing industry with a hint of socialism. Besides, this whole “Made in [Insert Nation Here]” is archaic when you think of international supply chains.
As Liberty Nation notes:
In today’s global economy, the term is irrelevant when it comes to international supply chains. Yes, a product may have been manufactured in the U.S., but all of the supplies, ingredients and trinkets have all been produced in a foreign territory. These tags of “Made in the U.S.A.” are antiquated because the supply chain at any given small business, factory or corporation is globalized.
For instance, let’s take a look at the standard Trump Hotel. Business Insider put together a terrific illustration that highlighted what products are inside the typical hotel suite and where those same items originate from. Ice buckets are manufactured in Thailand, marble slabs come from Italy, synthetic grass was imported from the United Kingdom, lock parts were built in Norway and the disposable slippers were developed in Japan.
Legendary free market economist Milton Friedman superbly elucidated in “Free to Choose” about how the power of the market created a pencil. As Friedman noted, a single person would not be able to build a pencil; it takes an entire planet to accomplish what seems a rudimentary feat. The wood comes from Washington State, the graphite comes from South America, the eraser (rubber) comes from Malaya.
It shouldn’t come as a surprise, though, considering that Trump was a crony capitalist his whole life (eminent domain).
I love buying things from CHINA on EBAY! I purchased a $1 metal money clip with free shipping. I received it in 15 days. It would of costs me $8 to but the same one from a U.S. vendor.
I do not buy into all the lost jobs thing from all the jobs going to other countries. Look at all the UPS, USPS and FEDEX jobs that have been created because of worldwide shipping.
The USA has become a service economy (since 1950) and many of these high paying IT jobs are much better than manufacturing jobs.
When the robots come there will be plenty of good paying jobs fixing them.