Donald Trump

Trump and McAuliffe Share a Lot

They both see politics as just another side of business.

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Republicans Corey Stewart, who is running for governor of Virginia, and Del. Glenn Davis Jr., who is running for lieutenant governor, are both positioning themselves as apostles of Donald Trump. Yet in some ways the president-elect's closest Virginia analog is a Democrat: Gov. Terry McAuliffe.

True, McAuliffe wouldn't say so. When he looks in the mirror, Trump is probably the last thing he sees. Trump has slammed the governor for restoring felons' voting rights and alleged (incorrectly) that McAuliffe funnelled money to the FBI official investigating Hillary Clinton's emails. In turn, McAuliffe has excoriated Trump's outreach to African-Americans and laughed at his claims of voter fraud.

And then there's the minor matter of Trump beating McAuliffe's good friend Hillary in the election. You might say the two men have their differences.

But they also have their similarities.

Last week Trump jawboned air-conditioner maker Carrier into reversing a plan to move jobs to Mexico. The deal gives Carrier $7 million in state tax breaks.

Trump also has warned companies thinking about offshoring that they will face steep tariffs if they try to ship goods to the U.S. (No word on what threats Trump might have made regarding the cancellation of Defense Department contracts with Carrier's parent company.) And he has dangled "incentives" to convince Apple to start making iPhones in the U.S.

This is nothing new. In fact, it's how Trump has run his own business. As a New York Times investigation reported in September, Trump "used his father's, and, later, his own, extensive political connections, and relied on a huge amount of assistance from the government and taxpayers in the form of tax breaks, grants and incentives to benefit the 15 buildings at the core of his Manhattan real estate empire."

Trump also once tried to use eminent domain to take a widow's home so he could bulldoze it and use the land for limousine parking. Because he's such a friend of the little guy, you see.

McAuliffe has not gone that far. But McAuliffe—another deal-maker—also sees politics as just another side of business. When he put his electric-car company, GreenTech Automotive, in Mississippi rather than Virginia, he said he did so because "I have to go where, obviously, they're going to put incentives."

Mississippi loaned GreenTech $5 million, and McAuliffe has been chummy with Republican Haley Barbour, who was governor of Mississippi until not long before GreenTech's production launch. GreenTech also tried to raise funds from Chinese investors by using a special immigration visa, called EB-5, eligible to foreigners who sink money into U.S. projects. The spearhead for that effort was Anthony Rodham, Hillary Clinton's brother. A federal investigation later found McAuliffe got special treatment from an official at the Department of Homeland Security.

As governor, McAuliffe has continued his enthusiasm for the political allocation of economic resources. He approved $7 million in incentive grants to bring German grocer Lidl to Virginia. He approved a $5 million grant to lure a Chinese paper company to Chesterfield. He approved another $4 million for a Dollar Tree expansion in Chesapeake.

Last year the McAuliffe administration ladled out $1.15 million to convince Hardywood Park Craft Brewery it should stay in central Virginia rather than build a new production facility in North Carolina—a nearly perfect analog to Trump's Carrier deal. And the governor gave $5 million to Stone Brewing for its brewery and restaurant in Richmond.

To be fair, McAuliffe hardly invented such behavior. In one 10-year period preceding his tenure, Virginia (under both Democratic and Republican governors) handed out more than $700 million to various projects. McAuliffe simply stepped on the gas: He passed out incentives so fast that he burned through nearly all the money in the Commonwealth Opportunity Fund in less than a year.

Sometimes the taxpayers have been burned, too. In one instance, the commonwealth handed over $1.4 million to Lindenburg Industries, which—supposedly—was a Chinese subsidiary that would create 349 jobs at "an industrial honeycomb manufacturing operation" in Appomattox. A press release from the governor's office boasted that the deal was "a direct result of the Governor's meeting with company officials in Beijing."

Just one small problem: It was all a scam. No factory was ever built—or even started. Eventually Virginia emailed China, asking for its money back.

In an embarrassing parallel, GreenTech Automotive—with which McAuliffe severed all ties shortly before taking office—has been a money-loser, producing only 25 cars last year and selling not a one. In August it missed a debt payment owed to Mississippi.

Granted, there's a huge difference between a malicious scam and a well-intentioned business plan that doesn't get off the ground. GreenTech is not the same as Lindenberg or—oh, Trump University, for instance. And unlike Trump, McAuliffe has not tried to coerce companies with threats of reprisals if they don't play ball.

Still, the two men mingle politics and business in much the same way. That is not a flattering reflection upon either of them.

This column originally appeared at the Richmond Times-Dispatch.

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84 responses to “Trump and McAuliffe Share a Lot

  1. When he put his electric-car company, GreenTech Automotive, in Mississippi rather than Virginia, he said he did so because “I have to go where, obviously, they’re going to put incentives.”

    Well, sheesh, Terry — then go to Mexico.

    1. Trump won’t let him.

      1. Sure he will — but at a steep price.

        1. But then he’ll build a wall and McAuliffe can’t get back. See, this wall ain’t all bad.

  2. They both gave donations the Clintons.

    1. Puts a new spin on, “I gave at The Office,” no?

  3. BTW, in regards to Trump’s comments on Carrier, NPR commentators were sputtering about how calling out individual companies on their business practices was something that Socialist French President Nicolas Sarkozy would do.

    Trump is confusing the shit out of the press, that’s for sure.

    1. Obama never did anything like that. He thought that the government should totally stay out of USA based companies business. He also closed Gitmo and descheduled cannbis, and … oh wait…

    2. Lol the cognitive dissonance must be crazy

    3. something that Socialist French President Nicolas Sarkozy would do.

      Sarkozy is a french “conservative”. Hollande was the card-carrying socialist.

      Sarkozy was accused of nepotism /corruption over some questionable fundraising and promises to hand out jobs to connected people. which may have been what they were referring to. I’m not super hip to french politics but from what i gather he was accused of doing what all presidents do in France, just that the left dislikes it when less-lefties chisel in on their game.

      1. ^This guy get it!

        Excellent analysis, and absolutely accurate WRT French/Euro-landian politics, on the whole.

        1. I’m hopeful that Fillon will not just be a leftist calling himself a member of the right like Sarkozy, Chirac, etc.

          1. I don’t think Fillon will be elected, TBH. Le Pen is really capitalising on a lot of raw nerves and legit voter anger, which she can conceivably parley (HA!) into electoral successs, and Hollande has made anything remotely Lefty a pile of dung.

            “Wish in one hand….”

            1. Considering that Le Pen is nothing more than a socialist with a loathing for immigrants, I could see some of the Left voting for her. They’ll take anti-immigration hysteria over market reform any day. France desperately needs Fillon to enact serious labor market reforms and to eliminate the fonctionnaires. We’ll see what happens.

              1. The hysteria, as you put it, is legitimate. People are really angry with multiple incidents of violence, the rapes and assaults (from younger, second generation Islamo-Mohammedans, by the by, in addition to “migrants”), and overall lack of integration by the immigrating population manifesting itself in the form of, “No Go Zones.” (And please don’t insult me by saying they don’t exist. I have seen some myself, with my own eyes.)

                Labor market reforms do need to happen, but people also want security and at least a temporary halt to an unfettered invasion.

                1. I don’t disagree that France, and Europe for that matter, have serious immigration problems. Mass Islamic immigration from certain parts of the world to Europe is causing problems. Don’t worry, I’m not a Vox writer. I understand the frustration that many Europeans have towards the recent surge of immigrants.
                  The National Front, however, has long been opposed to immigration, long before this recent wave of the past few years.
                  Fillon, IMO, is much more preferable for he will deal with immigration and advocate for a freer market. The immigrant surge will eventually end regardless of who is elected and a Le Pen administration will only further damage the fledgling economy.

                  1. The immigrant surge will eventually end regardless of who is elected

                    Maybe. The factors driving it are many and varied. Pull some of them out of the picture, and the rate might go down, but amp some of the others up, and the drop might be canceled out.

                    Regardless, Western Europe has an assimilation problem as much as an immigration problem. There shouldn’t be any banlieus full of Algerians and other people from long-since independent former colonies, whose families immigrated to France generations ago. There should be French people of various and diverse ancestries who see each other as countrymen. Not agreed on everything, but also not hoping to see their fellows harmed.

                2. Thank you, Groovus.

      2. Kickbacks to donors sounds like what politicians do in general really

      3. Sarkozy was accused of nepotism /corruption over some questionable fundraising and promises to hand out jobs to connected people.

        IOW, he was trained for politics in the USA?

      4. Good catch… they may have said Hollande…

        1. Doubtful…. Hollandaise believes in taxing everything with a heartbeat, and offers dispensations of, “You.,.I will tax you, but tax you last!” to those most favoured to him. Otherwise, Chez Taxageddon for all.

  4. Prediction: iPhones are very likely NOT going to be made in the USA, and if they are, they will not be made by humans. This is just a simple matter of math. I don’t care how much Apple folks like their iThingys, a large majority of them cannot afford a $8000 phone.

  5. The government has essentially made it a requirement that businesses work through the government to get anything done so can’t really you blame them when they utilize the government in mutually parasitic methods in order to put food on the table. As a building designer I would like Reason to point out one job any job that is not regulated by the government such that you never have to deal with the government. I’m pretty sure what ever you list someone can find a regulation for it. I’m not saying this is a good thing but it is a fact of life.

    1. Yep i cant really fault business when government is root cause…filling the trough so to speak

    2. Everyone knows it is a fact of life.
      The intellectual argument is how do we, as a liberty loving people, eliminate these market distortions and misallocation of capital so the economy can operate better and allow for free markets to reign for the prosperity of all who are smart enough to thrive?

      answer: Wood chipper.

  6. This is nothing new. In fact, it’s how Trump has run his own business. As a New York Times investigation reported in September, Trump “used his father’s, and, later, his own, extensive political connections, and relied on a huge amount of assistance from the government and taxpayers in the form of tax breaks, grants and incentives to benefit the 15 buildings at the core of his Manhattan real estate empire.”

    Trump also once tried to use eminent domain to take a widow’s home so he could bulldoze it and use the land for limousine parking. Because he’s such a friend of the little guy, you see.

    If you don’t like those things, blame the government for allowing them to occur not the people who take advantage of it. Understand, if Trump hadn’t done those things, his competitors still would have. In a environment like NYC where the government is all pervasive, you either figure out a way to make that work for you or go out of business because your competitors most certainly will figure out how to make it work for them.

    For a magazine that claims to support the free market, Reason seems to have no idea how business actually works.

    1. Yeah, weird that a magazine that supports the free market would fault business owners for taking advantage of an unfree market and using the power of the state to harm others.

      Really weird.

      1. would fault business owners for taking advantage of an unfree market and using the power of the state to harm others.

        Yes it is totally weird. Does Reason expect businesses in New York to become consciousnesses objectors and go out of business in protest? If not, then what is their bitch? The problem is government not the people who act rationally in response to it.

        1. I read a biography of Cornelius Vanderbilt a few months ago. Even 175 years ago, the NY legislature was deliberately passing legislation that virtually required businessmen to offer bribes in order to maintain their businesses. Much of what the “Robber Barons” are accused of could not have been done without the deliberate threats or passage of legislation intended to put money in the pocket of politicians.

          1. Even 175 years ago, the NY legislature was deliberately passing legislation that virtually required businessmen to offer bribes in order to maintain their businesses.

            And if that was all we were talking about, I’d be the first to defend the practice on the part of businesses. But, it’s not. Too often we see the guy initially the victim of a shakedown line up to become one of the shakedown artists, using the government to stop honest competitors from exercising their rights. Greasing the wheels to get the government to allow you to build a building you shouldn’t have needed their permission to build in the first place is one thing. Paying off the government to forbid other developers from building or taking other people’s property for your projects is another.

    2. Yep. “Being an asshole is not illegal”, yet.

    3. The government is not only allowing businesses to do those things, they are actually manipulating them into doing it, since if they don’t, they can’t compete with the other cronies. This is just another thing that leftists seem totally oblivious to. Blame corporations, believe the government will save you from the bad practices that the government actually invented.

      Example: Government colludes with cable company, making them a monopoly by forcing out competition. Then leftists bitch about why cable company is gouging them on prices and providing shitty service, asks government to step in. /derp

      1. since if they don’t, they can’t compete with the other cronies

        ding ding ding

        We have a winner.

    4. Yeah, this is what is so silly about the favorite prog argument “but you use the government roads, you hypocrite!”. Yeah I do, because that’s all there is. If the government declares a monopoly on something and backs it up with guns, people either have to deal with the monopoly or not play at all.

      1. Or do you take Social Security? That one drives me nuts. Yes, I will. That is because the government forcibly took my money for my entire working life. So, yes I will be taking any of it they are kind enough to send back to me.

        1. Obviously, John, those idiots have never looked at a paycheck stub in their entire lives.

        2. Interestingly though, the Court ruled a while ago that you are not entitled to collect Social Security, which raises the question of if the government is not obligated to pay you back, are you obligated to pay the government in the first place?

          1. Because fairness. Or something.

          2. if the government is not obligated to pay you back, are you obligated to pay the government in the first place?

            You really think you’re going to get an answer that applies logical consistency from the Court headed by Chief Justice John “Penaltax” Roberts?

            1. To be fair, the case Flemming v. Nestor was from 1956 under the Warren Court, but yeah, Roberts and consistency don’t really go together.

              1. I know, but one presumes the raised question would be asked in the context of today’s court. Although it would likely never get that far. The courts seem to hold that the government has a nearly limitless power to levy taxes; they don’t actually have to spend the tax revenue in any particular fashion, nor are they held to any standard of stewardship. The courts have repeatedly held that the government legally has powers but not responsibilities; it is up to the people to constrain the powers and enforce the responsibilities at the ballot box. Unless the judges don’t personally like what the government is doing, at which point long dormant clauses (as well as “penumbras and emanations”) of the Constitution suddenly spring to life but only for a short time.

                1. keebs, are you suggesting that even SCOTUS judges have biases and policy preferences outside of the scope of their purview?

                  1. keebs, are you suggesting that even SCOTUS judges have biases and policy preferences outside of the scope of their purview?

                    The idea that we could have ever had a “non-political” arm of government was absurd. But the same people who claim that SCOTUS is “non-political” applaud some of its most politicized decisions.

                    1. Saying SCOTUS is non-political is like saying the CFPB is “independent.”

                    2. The Federal Reserve has ridden that “independent” horse pretty damn well in my opinion. They get to devalue the currency and enable excessive government spending and debt, but good luck getting most people to recognize that they’re just another arm of government that should be held accountable (although I will give Sanders some “credit” insofar as he proposed putting a soviet of idiots in charge of the Fed, which at least reflects that some people recognize the existence and power of the Fed even if they don’t begin to understand how to reform it).

                2. Yes, very well said.
                  Roberts, in NFIB v. Sebelius, expanded the taxing power even further. Not much more preferable than just expanding the commerce clause as the leftists on the court wanted.
                  To your broader point, you have stated exactly the problems that I and many others have with the concept of Judicial Deference. Thomas is a prime example of a justice who will sometimes grant the government broad powers and say that it is up to the legislature to figure out what is right or wrong, not the Court.

                  1. Judicial deference could be a useful tool, if it wasn’t selectively applied. Right now, for example, the state legislatures can pass just about any bills they want, as long as they don’t “conflict” with Federal laws, but the state legislatures must be constituted according to some bullshit rule Warren and co. invented out of thin air in the 1960s.

                    WTF?

                    A good chunk of the problem with my state, and many others, is that an essential check on legislative power, bicameralism, was murdered by the courts. What is the purpose of two houses of the legislature if they’re both chosen the same way and always agree with each other? But then whatever laws they pass get “deference” from the courts because FYTW (unless, again, the judges get hurt feels).

        3. The government took your money?

          Sorry, John, but you’ve been taking our money your whole working life. Go fuck yourself, parasite.

          1. Go fuck yourself too. And take your incredible intellect with you.

            1. Lol John, good one.

  7. Every governor in the country does this shit. I’m not sure why we’re supposed to suddenly get all wee-weed up over it now.

    1. Because you’re a libertarian?

      I know, LOL.

      1. No shit, the question is why is this supposed to be worse than every other instance? Because TRUMP?
        By the way, “LOL” just makes you look like a Tony-level retard.

      2. Ah, yes, Hail Rataxes. I remember you now. You’re the one on every thread decrying this stuff, over and over again, long before the Carrier story.

    2. I’m not sure why we’re supposed to suddenly get all wee-weed up over it now.

      You should have been “wee-weed” up over it long before now.

      Anyone who wasn’t concerned before now but is now all of a sudden because of Trump is a hypocrite and a moron. Conversely, any libertarian who says “So what if Trump does this shit, everyone else does it too” is also an idiot, and probably should stop claiming to be a libertarian. I thought we were supposed to be some of the few people who actually held our principles over principals, but I guess not.

  8. Last I looked Carrier is a money making operation and the factory in question is staying open. There is a big difference between Trump and Pence getting Indiana to lower Carriers’ taxes and McCulliff sending Virginia tax dollars to sham corporations in China. And it is not just that Carrier makes money. It is also because letting someone keep more of their own money is not the same thing as sending them check. Fuck reason for pretending otherwise.

    If Trump is so bad, why can’t you clowns make anything but stupid criticisms of him?

    1. If Trump keeps his word and lowers the corporate tax rate, and does other stuff across the board, it’s all good. If he doesn’t but continues making crony deals with specific companies, then it’s all bad. Right now he has no authority to do the former, so we’ll see what happens. I think that the entire Reason staff are told each morning to find something, anything potentially bad on Trump and write an article. I’m not sticking up for Trump, but some balance would be nice until he actually does stuff as President. What’s the actual president doing right now? Besides making up some lame ass lies about how he now supports legalized weed. Where’s your pen and phone, Obama? Get it done.

      1. You are right lowering corporate taxes is the end goal. And hopefully Trump will get Congress to do that. In the mean time, deals like Carrier make a great case for why lowering corporate taxes is so important. it would be nice if Reason would make that case instead of engaging in leftist bitching about fairness and cronyism.

      2. What’s the actual president doing right now?

        I don’t know about the president, but Biden’s keeping busy.

    2. While I don’t think the Carrier deal is a great thing, it sure is a great PR stunt. PT Barnum would be proud of the showmanship. It imo is actually a good thing at improving America’s mood, which we’ve needed for the last 16 years or longer. When he gets in office and creates a Kennedy Space program-like moment, he might truly make America Great Again. I am not holding my breath on this one however.

  9. This is an interesting topic, especially if you take the politicians out of it – thinking about the line between what you might call “cronyism” and you might call “improved economic policy.”

    Giving tax relief to one company would seem to fall under “cronyism”. What about tax relief to one industry? Probably same, but maybe more palatable? What about tax relief for new businesses? What about changing regulations to attract a particular industry? Are these things more acceptable when done at the state/local level than nationally?

    Obviously there are simpler libertarian answers that would include massively reducing the tax burden across the board, massively streamlining the tax code, and taking a machete to regulations. Those would seem to be a pipe dream at this point. Given the current convoluted mess, I think it’s somewhat unclear what the best libertarian solutions would be.

    1. Indiana gave Carrier a tax break and saved a thousand jobs and ended up getting a smaller piece of something in return for a bigger piece of nothing. The Carrier case is a perfect exposition of how self defeating corporate taxes are. Instead of bitching and moaning about the deal, reason should be pointing out the implications of it on corporate taxes as a whole. The lessen is “corporate taxes are idiotic and harmful”. Instead of saying that, Reason bitches about cronyism and seems to support punishing everyone equally in the same of fairness.

      1. I have never understood the “targeted tax breaks are anti-libertarian” line of thinking. You could just as well invert the formulation and say “higher taxes on everyone else is anti-libertarian” which at least expresses a sentiment with a libertarian spirit.

        1. Ot is a form.of rent seeking that has dubious long term resuls and leads to unequal treatment on tax law. Jt not as outright corrupt as othet tyled of tent seeking, but it is not good ei th her.

          1. I’m assuming we’re just talking about reductions in the rate of corporate income taxes, not outright subsidies. As John notes, corporate income taxes don’t make a lot of sense to begin with. I don’t know that it can be called rent seeking, since I don’t see where rents are being extracted from anyone by the recipient of the tax break. Sure, the government is extracting rents from the companies with higher taxes, but that’s true regardless of whether any companies get a break.

            I’d rather see every company get the same relief from taxes, but I’m not going to begrudge the company that gets an “unfair” break unless and until that actually involves money being transferred from my pocket into their revenues.

  10. Gee, a story about what Trump might do one day! We need more of those.

    1. And after a year and a half of spot-on predictions about Trump, why shouldn’t we believe them this time?

  11. And he has dangled “incentives” to convince Apple to start making iPhones in the U.S.

    First the Obamaphone; now the Trumpphone.

    1. It’ll be YUUUUGE!!

      1. And then he’ll invite the blue jeans makers to come back to the U.S and start making pants with bigger pockets to put the phones in. Multiplier effect in action!

  12. Trump also has warned companies thinking about offshoring that they will face steep tariffs if they try to ship goods to the U.S.

    Ahhh! The pro economy president.

    What could go wrong?

    1. He’s just trolling! Anybody that doesn’t realize that is stupid! He doesn’t really believe what he says!

      Am I doing this right?

      1. He be trollin’, they be hatin’!

  13. I do have some problem with the inherent picking of winners and losers with the Carrier deal, but, on a strictly on the math, it was a good deal. $7 MM to save 800 jobs. That translates to $8,750 per job. At $30/hr average wage, that translates to $62,400 per year. The first year’s tax alone covers the cost of the tax relief.

  14. You really expected more of a difference between two Democrats?

  15. You really expected more of a difference between two Democrats?

    1. I don’t even see the difference between your two posts.

  16. Mc Caulif is a corrupt politician with neither ethics or morals and you must be an idiot to see equivalences.

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