The silent majority of U.S. workers (mostly blue collar) may now be more closely scrutinizing President Donald Trump, seeing just how far he’ll go in pressuring companies to keep factories and jobs in America.
During an appreciable portion of 2015, and on into the 2016 presidential campaign, anyone harboring cynicism about the depth of then-candidate Trump’s commitment to come down hard on companies set to ship manufacturing jobs overseas, were arguably surprised when (later) President-elect Trump struck a deal with Carrier Corporation.
An agreement right after Thanksgiving kept approximately 1,000 Indiana factory jobs at home.
If Trump’s maneuvering and subsequent deal came across to some as a premeditated, superficial campaign and publicity ploy, it at least set a compelling, if not new, presidential tone.
Our new breed of president was at the very least going to try, and try hard.
However, assuming the president’s job-saving actions are genuine and continue to be so, the reality is that (at both worst and best) these actions are an illusory composite, even perilously so.
A question arises. Are companies themselves quietly engaged in a strategy of their own, one which enables them to position themselves un-antagonistically with a new president, just to keep the peace with that particular commander in chief, at that particular time?
One of the biggest concerns in this regard, is that companies will only put plans to move jobs offshore on hold only. For as Justin Wolfers, an economics and public policy professor at the University of Michigan, recently wrote in The New York Times, "[P]ut yourself in the shoes of a CEO. You’re not just deciding whether to send production offshore; you also need to decide when to act.
"This gives you a relatively cheap way to avoid the president’s ire: Mothball your blueprints for the new overseas factory, but don’t burn them. When the political threat passes — and, eventually, it will — just dust them off and move," he wrote.
Additionally, consider this, Wolfers further argues, “As soon as Mr. Trump leaves the stage, several years’ worth of pent-up demand for offshoring may erupt, and as these plans are followed and factory jobs return to more normal levels, expect a sharp drop in manufacturing employment."
Such stark assessments lead to an equally critically loaded question, one which may well await the Republican Party later down a harsh realpolitik road.
Will Trump’s efforts and results evaporate faster than the next here today, gone tomorrow political trend of the electorate; the latest rage-flavor of the day, once Trump leaves office? A scenario if played out sooner rather than later would leave the GOP holding a very large bag of political coal, leaving the lasting impression for and with presidential historians and others (those definitely not in the Trump camp) that his efforts were more definitively show and definitely not comprised of lasting, meaningful (as in permanent) socio-economic substance.
As professor Wolfers pointedly argues, "Now imagine what all this will look like to a future policy wonk. Manufacturing jobs seemed to be scarce before Mr. Trump’s tenure, improved while he was at the helm, and then shrank sharply as soon as he left office."
And do companies really improve their overall performance when they are, if not threatened, concurrently intimidated and cajoled into engaging in actions just to please a new White House administration? How will investors feel about such moves?
Pleasing the Oval Office doesn’t necessarily translate into keeping stakeholders (shareholders and customers) lastingly satisfied.
An economist from Northwestern University’s Kellogg School of Management — Scott Ross Baker, notes in a recent Vox.com post, "This can really change the incentives of firms, they can start to think about the way they can make the most money in the future is not to make the best products but to ingratiate themselves."
© 2024 Newsmax Finance. All rights reserved.