Donald Trump

Donald Trump's Cronyism and Authoritarianism on Full Display in Twitter Attack on G.M.

Trump's attack on General Motors is factually wrong, economically illiterate, and another example of how he bullies companies to do his will.

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Paul Hennessy/Polaris/Newscom

Donald Trump has not yet taken the oath of office, but he's again overstepping the limits of presidential authority by bullying more American companies for shipping jobs to other counties.

As he did in December—claiming credit when Carrier, an Indiana-based air conditioning and heating manufacturer that had been a popular whipping boy during Trump's presidential campaign, decided to cancel plans for moving jobs to a new facility in Mexico—Trump took to Twitter over the weekend to berate General Motors for selling Mexican-made cars in the United States.

The carmaker joins a growing list of American businesses being personally and publicly attacked by the president elect. It gives another chilling look at how the country's 45th president views the relationship between government and business, and again shows Trump to be an economically illiterate bully.

"The president-elect's tweet is disturbing on lots of different levels," Daniel Griswold, a senior research fellow at the Mercatus Center, said in a phone interview Tuesday.

For starters, Trump's tweet about G.M. isn't very factual. As The Wall Street Journal reported on Tuesday, most of the Cruze hatchbacks made at Chevrolet's Mexico facility are sold in foreign markets, not in the United States. Producing vehicles in foreign countries helps car manufacturers make more sales abroad and open greater market share. That's why BMW operates a manufacturing plant in Spartanburg, South Carolina, and Nissan builds cars in Smyrna, Tennessee.

Trump's economic nationalism will make it harder for American brands like G.M. and Ford to compete in growing foreign markets like Latin America and might counter-productively hurt those companies if they lose market share to foreign rivals, Griswold predicted.

"With the president-elect intimidating companies into withdrawing from foreign markets, we stand to lose influence and market share in those economies," Griswold told Reason.

Targeting the automobile industry just doesn't make much sense. Sure, unemployed auto workers in the Rust Belt might have helped Trump win the White House, but the industry as a whole is flourishing in the United States. Motor vehicle exports from the United States reached a record 2.6 million in 2015. In 2016, more than 12 million cars and light trucks were assembled in the United States, notes Griswold, and output has more than doubled since 1994, when one of Trump's favorite boogeymen, the North American Free Trade Agreement (NAFTA), was signed.

On Tuesday, Trump was at it again, taking credit for Ford's decision to scrap plans for a $1.4 billion Mexican manufacturing facility and to invest $700 million in a Michigan plant instead. Ford, like Carrier, had been a popular target for Trump's vitriol during the campaign.

"It used to be cars were made in Flint and you couldn't drink the water in Mexico," Trump told a crowd during a September speech, conflating two issues that didn't have much in common beyond happening in the same physical location. "Now the cars are made in Mexico, and you can't drink the water in Flint. That's not good."

Less than two weeks after winning the election, Trump took credit for Ford's decision to keep a plant in Kentucky open instead of moving it to Mexico:

It's dangerous for a president to meddle in the economy on such a personal level, but it's arguably more dangerous for him to believe that he's doing so effectively. Consider what Trump said in December about Carrier's decision to keep their plant in Indiana open. On stage, he told a story about meeting a Carrier worker on the campaign trail who expressed the utmost confidence that Trump would keep the company in place, even though the decision to move had already been made.

"I never thought I made that promise," Trump said. "Not with Carrier. I made it for everybody else. I didn't make it really for Carrier."

"That was a euphemism," Trump continued. "I was talking about Carrier like all other companies from here on in, because they had made the decision a year and a half ago."

That's ego masquerading as humility. Of course Trump believed he had the power to bully Carrier into staying in Indiana—or at least that he would have the power to bully "all other companies from here on in" to make similar decisions—and to reward the faith that so many had placed in him. That the company did so in such short order after his victory at the polls only reinforced the strongman message. Trump was practically glowing (moreso than usual) on the stage that day in Indiana, giddy over the opportunity to demonstrate that all America really needed was a chief executive determined to prevent jobs from spilling over the border.

Trump was not shy about foreshadowing. "Companies are not going to leave the United States anymore without consequences," Trump promised to raucous applause. "Not going to happen. It's not going to happen, I'll tell you right now."

There will likely be more cheering about Trump's bullying of Ford and General Motors. "Trump is already delivering the jobs he promised America," trumpeted the New York Post on New Year's Day (the headline got a retweet from the president-elect, of course), but that might only encourage the new president to continue down a dangerous path of mixing politics with businesses in an unprecedented way. Libertarians and fiscal conservatives for decades have talked about corporate welfare schemes as examples of "government picking winners and losers," but Trump is threatening to take the idea to its most extreme conclusion—one where it's not clear who exactly the winners are.

"This is the rule of one man," said Griswold. "Not the rule of law."

NEXT: Why we need enforceable constitutional limits on federal power

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  1. Cronyism is taking care of your cronies at government expense. Whatever you think of telling GM to not move to Mexico, that is not cronyism. Perhaps it could be if Trump were taking money from the UAW to do so. But that doesn’t appear to be the case.

    Not all economic nationalism is cronyism and there is a huger amount of cronyism done in the name of “free trade” and “internationalism”. If you want to object to this, fine. But could you please at least try and accurately describe what is going on here instead of using what has become the all purpsoe word for “I am really fucking stupid and hate Trump but can’t explain why” otherwise known as “cronyism”.

    1. Cronyism might not be the right word for it but I certainly take issue with the idea that certain regions of the country should have the government cater to them at the expensive of everyone else.

      Trump was elected on the strength of Rust Belt voters who are demanding the use the power of the state to coerce companies into keeping jobs there. This is antithetical to the free market and Reason is right to oppose it.

      1. Trump was elected on the strength of Rust Belt voters who are demanding the use the power of the state to coerce companies into keeping jobs there. This is antithetical to the free market and Reason is right to oppose it.

        Sure they do. What they don’t have a right to do is claim that those workers have no right to vote in their own economic interests. And that is what Reason is doing here. They throw out terms loaded like “cronyism” because they don’t want to just object they want to say that the entire position is morally illegitimate. You see when reason takes money from donors who benefit from open borders and free trade and then advocates for such that is totally different than other people advocating for policies that benefit them. Those people are cronies and have no right to hold their position and reason is principled and special.

        Think of it this way, if a bunch of people whose single economic interest was to be able to buy cheap shit made in Mexico and have cheap labor to mow their lawn voted for someone who promised just that at the expense of the people in the rust belt, wouldn’t they be cronies as well? By reason’s logic strictly speaking yes. Of course reason would never say that because they are pure as the driven snow and everyone else is just a crony.

        1. free market = principles
          Trumpism (for lack of a better word?) = principals

          one has moral standing, the other, not so much

          1. free market = principles

            So its like Lordes for cripples then. As long as you call it “free market” you can be as craven as you like and tell everyone else they are the cronies.

            Yeah, that is pretty much what I was saying. Thanks for confirming.

          2. But it’s not a free market as long there is welfare…

            The government is essentially subsidizing low skill immigrants by providing the stuff their low salary doesn’t let them afford (and they then send their salary back to Mexico)

          3. free market = principles

            When was the last time Reason stood up against corporate limited liability as a violation of free market principles?
            Intellectual property?
            The differential treatment between capital gains and wages?

            They silent about free market violations that help the those who own, and but get really huffy about those that help those who work.

          4. We don’t have a free market. What we get to pick from in this political reality is various deviations from the free market.

            There is the Democratic version: “give the government a lot more money or else”.

            And then there is the Trump version: “give me good press coverage by keeping some more jobs in the US or else”.

            I know which one I prefer.

            1. There has never been a free market in the history of mankind and there never will be. To create a truly free market, you would first have to completely eliminate government because ALL government activity distorts the market. In other words, a truly free market can only exist under anarchy. But anarchy is inherently unstable. So the best we can do is create a pseudo free market with minimal government intervention, but even the definition of “minimal” is debatable. For example, in an ideal pseudo free market, should government fund courts? Or should courts be privatized to minimize government’s corrupting influence? You can debate the costs and benefits of every service the government provides, and the more services you add, the further you drift from a truly free market.

              Then again, maybe there is one type of truly free market, one without the rule of law, where might makes right.

    2. “But could you please at least try and accurately describe what is going on here instead of using what has become the all purpsoe word for “I am really fucking stupid and hate Trump but can’t explain why” otherwise known as “cronyism”.”

      Easy. He’s proposing to use tariffs to oppose free trade. As always, everyone loses as a result.
      I’m certainly glad we didn’t get the hag, and Trump’s made some decent cabinet selections, but he’s an econ dumbass seemingly every bit as bad as Obo.

      1. You are correct Sevo. If his words become actions, he will be no better than every other dipshit politician who thinks they can engineer prosperity by passing laws.

      2. It’s really just shuffling around the money.

        Instead of people paying more taxes to pay for welfare, people buying cars will pay more to support American built cars.

        Assuming Americans are going to continue to buy American cars and not cheaper imports. Which isn’t a given.

    3. Trump’s bullying of GM is a clear example of racism.

    4. It may not be cronyism per se, but this type of bullying *invites* cronyism. All companies need to do now is to hold their employees hostage, like Carrier did – “give us tax breaks or we fire them all!” – and voila, rent seeking.

      1. If it turns out to be the case that every company in America is able to get the government’s boot off its face by threatening to move, I don’t see how that is a bad thing.

        1. Well, the problem is that the gov’t will not take all American companies with the same level of seriousness if they make that threat.

          If a large company threatens to move, then Trump may care because the headlines can blare a large number of jobs saved, but if a small company threatens to move, he probably doesn’t have the time or resources to deal with it.

          Thus, this sort of behavior is just favoritism towards large companies or discrimination against small companies.

    5. Cronyism is taking care of your cronies at government expense.

      This is only part of the crony formula. The other part is taking care of your cronies at someone else’s expense. Usually that’s competitors in the same market, and the exchange is often for campaign contributions. If he can follow through on reducing tax and regulatory burdens that make Americans unprofitable to employ, he won’t even have to whack anyone with a stick. Also, he’ll probably solidify an eight year term, which the Democrats are already working hard to make happen with their fearmongering and demonization strategy.

      1. The other part is taking care of your cronies at someone else’s expense.

        Sometimes but government means “someone else”. And yes, if he eases the regulatory burden, these companies will stay.

    6. Trump’s “cronies” are American workers.

    7. It becomes cronyism IF a company contributes to Trump like so:

      1) did they donate substantially to his campaign?
      2) did they or will they donate substantially to his inauguration?
      3) did they or will they lobby or donate his administration during his term?

      Once they purchase access to him and he responds with favorable gov’t intervention, then it is cronyism.

      Right this instant, we could correctly accuse Trump of cronyism if Carrier somehow donated to Trump or Pence’s campaign and got favorable treatment (tax credits, in this case) in return.

    8. WTF John? The cronies in this case are the UAW.

  2. As mentioned when I linked the story earlier, it’s obvious that Trump prefers GM cars to be higher priced. Is he in the marketing or the finance dept?

    1. Does he think that Americans will ignore their economic incentives and buy more expensive American-made cars out of patriotic fervor, or something? Just like in the 1950’s, right?

      1. I won’t pay 10% more for a car if it isn’t 10% better (10% more valuable in terms of intrinsic value).

        So if the American car company is charging $11,000 for a car and losing business to a foreign car company who is charging $10,000 for an equivalent car, and the American company demands a tariff on the foreign car of 10% to bring it up to an equal price of $11,000, I am essentially being forced to pay $11,000 for a car that is really only worth $10,000 (whether I buy the American car or the foreign car, I am still getting screwed by 10%).

        I won’t buy either car in that case. Instead, I’ll keep repairing my existing car or buy a used car that is actually worth what I pay for it, because I don’t want to take the $1000 loss if I buy the new car.

        If the American car company wants me to buy their car for 10% more, they should make it better so that it is worth $11,000.

  3. Any of you homies mention “Trump Derangement Syndrome”, and I’ll bill ya.

    1. “This is the rule of one man,” said Griswold. “Not the rule of law.”

      #TrumpDerangementSyndrome

  4. Me thinks Ford ran numbers on Mexican plant expansion, decided smarter move (no matter who was Prez) was the Michigan investment instead, then segued that into Trump favoritism as kind of a bonus.

    1. Yeah, this here. Its pretty well known that the reduction in labor costs SOTB comes with offsetting additional costs – quality, transport, bribes, etc. The NAFTA maquiladora zone hasn’t been the big profit-driver many thought.

      1. You and TZ echo one of my own thoughts: from a post on another thread on H&R:

        Ford Motor Co.announced Tuesday it is cancelling plans for a $1.6 billion factory in Mexico and will instead invest $700 million in a Michigan factory that will create 700 new U.S. jobs….

        …In an interview on the FOX Business Network’s Cavuto: Coast-to-Coast, Ford CEO Mark Fields said the company’s decision to cancel the Mexican plant is a result of a decrease in demand for small cars in the U.S.

        “We are doing this decision based on what’s right for our business. As we think about the investments here in Michigan, as you can imagine Neil, we look at a lot factors as we make those. One of the factors that we are looking at is a more positive U.S. manufacturing business environment under President-elect Trump and some of the pro-growth policies that he said he is going to pursue,” Fields said.

        1. On the one hand, I find it disturbing that Fields believes in political promises, on the other I have to assume the any FoMoCo CEO is Illuminati confirmed, so he should be wired in to what’s REALLY happening…right?

          1. I find it disturbing that Fields believes in political promises, on the other hand….

            CEO Mark Fields: We are doing this decision based on what’s right for our business.

            1. The CEO of a concrete manufacturer building a bunch a new plants near the US/MX border based on “some of the pro-[wall]growth policies that he said he is going to pursue” might say the same thing. A seemingly wise decision, if you believe pols.

    2. It looks also like they chose to go ahead with new higher-tech development ? they announced the hybrid F150 and Mustang today for 2020 and revealed information on an electric SUV to come out around then ? that’s all being developed in that same Michigan plant. Note that most automakers are using American plants for new designs and then going overseas for fabrication of older designs (Japanese and European makers likewise do much of their hybrid work in the America south, because of the high-end workers and particulars of the R&D environment). Under the original plan, the focus was to be on the Focus, produced en masse in Mexico on a copy of the Michigan lines, while it looks like they’re opting to expand the line first since they’re expecting a better tax environment for that part of the production span under the GOP.

  5. Someone’s tired of winning.

  6. Donald Trump is going to make Reason miss Hillary Clinton.

    1. Can you please make us miss you?

  7. Megyn Kelly jumps ship to the Communists:

    http://money.cnn.com/2017/01/0…..index.html

    1. Megyn Kelly jumps ship to the Communists….

      Tomato: tomato

    2. Comcast is a Communist organization? Weird.

  8. overstepping the limits of presidential authority by bullying more American companies for shipping jobs to other counties.

    Trump’s pre-inauguration tweeting has exactly nothing to do with “presidential [sic] authority”, you know. Presidential authority is exercised via using the actual powers of the office. Giving a speech, much less tweeting, without more, is not an exercise of Presidential authority at all.

    “With the president-elect intimidating companies into withdrawing from foreign markets, we stand to lose influence and market share in those economies,” Griswold told Reason.

    Leaving aside whether anyone is “intimidated” by Trump’s tweets, these companies aren’t “withdrawing from foreign markets” at all. They still have their sales and distribution systems set up in every market that they have been in, and I doubt they plan to close any of those down.

    1. Yeah since when is “we are not building a plant here” the same thing as withdrawing from foreign markets? Why do they write this stupid shit?

      1. Because they can’t handle that the Libertarian Party ceiling is 3% of the vote in an election where the major party candidates are widely despised (with one under active criminal investigation), and the best candidate they could find was a stoner who apparently had a nervous breakdown during the election and his running mate who endorsed Hillary Clinton.

        You know all of those stories about how Democrats are in denial about why they lost? The only reason you’re not seeing those stories run about LPers is that LPers aren’t prevalent enough to care about. But they’re every bit as delusional as the Democrats…they’re just less successful with worse leadership.

  9. How winning so much destroyed making America great again.

  10. Trump apologists are going to be painful for the next 8 years.

    It is cronyism because there will be tax brakes, green filed incentives, subsidies, etc.. There has to be an economic reason for a company to retain the operation here or in mexico. This is no different than other politicians threatening bad press or extorting regulations out of companies. The reasons for Ford to stay are not market driven, they are reactionary to what becomes burdensome regulation. That means a misallocation of capital and distorted market signals for ford and their competition which results in punishment to the consumer.

    Whether trump is going it for ideological reasons vs graft like the Obama’s and Clintons did, is irrelevant. It is further departure from free markets and it is dangerous.

    1. Trump apologists are going to be painful for the next 8 years.

      No doubt.

      Of course, pointing out fallacious MSM/proggy/fellow traveller temper tantrums can easily be mistaken for Trump apologetics.

    2. Trump apologists are going to be painful for the next 8 years.

      No, what is going to be painful is Trump’s opponents complete inability to make a coherent argument. Being a Trump apologist is going to be wonderfully easy because you won’t have to actually defend him. You will just be able to point out how stupid his critics arguments are.

      1. They won’t have to defend a really expensive wall that won’t work?

        They won’t have to defend a few of his cabinet posts and advisors who, on paper, are more of the FED-Goldman factory and neo-cons? For Christ’s sake, he has Newt Gingrich advising him. That guy is a lunatic neo-con. And his treasury sec pic is Goldman. That is hardly draining the swamp.

        I like a few of his pics and some of the things he has been saying but you cannot be without suspicion when it comes to his words and actions if you really believe that free markets are the best thing for our economy. Right?

        1. They won’t have to defend a really expensive wall that won’t work?

          No because people like you will continue to make dumb arguments like the failure to be a complete solution means it isn’t any kind of a solution or that a few billion dollars is in any way “expensive” within the context of a three trillion dollar government.

          They won’t have to defend a few of his cabinet posts and advisers who, on paper, are more of the FED-Goldman factory and neo-cons?

          No because his critics will continue to make stupid ad hominym attacks and use words like “neo con” like they mean anything.

          so yes, it is going to be wonderfully easy.

          1. Well, that was painful. Good work.

          2. HA! I was thinking as I read timbo’s “neocon” reference, “wasn’t it John who used to claim neocons didn’t exist?”, and then BOOM! Hahahahaha

          3. There’s no way in hell a wall would only cost a few billion. No fucking way. Construction costs would approach $100 billion and I would be shocked if yearly operation and maintenance expenses were less than $5 billion. And in the end, it would be as useful as an anti-virus program that hasn’t been updated since 2003.

            If you support a wall, you are a not a fiscal conservative. Full stop.

      2. “Being a Trump apologist is going to be wonderfully easy because you won’t have to actually defend him. You will just be able to point out how stupid his critics arguments are.”

        Yeah, causing economic damage is really a clever move by Trump:
        “He’s proposing to use tariffs to oppose free trade. As always, everyone loses as a result.
        I’m certainly glad we didn’t get the hag, and Trump’s made some decent cabinet selections, but he’s an econ dumbass seemingly every bit as bad as Obo.”
        See that John? Just asking…

  11. My problem with Trump’s tweet is that GM brings those cars into the US under NAFTA, a treaty duly ratified by Congress as the Constitution requires, which Constitution states ” This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land, or, in other words, the President can’t fucking unilaterally abrogate the terms of the treaty.

    1. Well, not legally – just like he can’t fucking go around drone-striking anybody he damn well pleases regardless of what sovereign nation they’re resident in and whether or not we’re at war with that nation and whether or not that sovereign nation protests the violation.

      I’m sure Trump can claim the President has wide latitude in setting tariffs and foreign policy and taxing the shit out of imports regardless of any treaties to the contrary is foreign policy – and Congress won’t challenge him, and any small group of Senators who sued would either be denied standing or the case would be declared non-justiciable by SCOTUS.

      1. He does have wide latitude in setting tariffs. That is true. If you don’t like that, take it up with Congress.

        1. This is my favorite thing John has said today. I appreciate you and others making the Reason comment section no longer an echo chamber.

        2. He may have the latitude, but he’s a dictator for using it!

          Hitler! Hitler! Hitler!

          Excuse me. I seem to have soiled myself.

    2. But he said “its bad” and he said “we’re gonna change it folks.”

      And he said he “was going to be the greatest jobs president god has ever created.”

      And people cheered this unchallenged logic. The guy got elected on two syllable sentences and free tweet rebroadcasts.
      No more preposterous than Brak O getting elected by saying hope over and over again with the collaborating press

      Americans deserve all of the crap they get from pols.

    3. Um…commerce clause.

  12. Yeah, he has no clue what he’s getting into. In manufacturing, parts and the pieces that make those parts and the raw materials that go into the pieces come from all corners of the globe. Even service related industries like telecom. Yeah the services are provided here and therefore many of the jobs, but call centers and everything from IT development and Network engineering to Finance are outsourced overseas to India. Where do you go with that? Just let the market be free.

    1. He knows exactly what he is getting into. You have to understand why he is doing this. It is not about saving the economy one company at a time. It is about creating the impression among the public and his supporters that things are getting better. It is what good leaders do. They walk in the first day and change something small that everyone sees as an improvement. That gets people to buy into the larger project. That is all Trump is doing with Carrier and this and the rest of it. It is all symbolic.

      And symbolism matters because a lot of what drives an economy is optimism. If people believe things are getting and are getting better, they are more willing to spend and invest and the perception becomes a self fulfilling prophecy.

      1. Symbolism does have an effect of sorts.
        Further departure from free markets and having a president that does not try to hide that is also incredibly damaging.

        Like I said, he has said some really compelling things but he has also equally spouting some moronic shit. Hopefully he is all talk on the trade war stuff and the massive amounts of stimulus spending. Maybe he is all talk about building a navy that is already huge.

        maybe he is all talk about punishing private enterprise for making economically sound decisions at the interest of their investors. Or maybe he says you cannot sell a car here if you build it somewhere else.

        When Marxists assholes like Brak said dumb shit, folks that understood economics would call him out on it.

        1. I don’t see how this is incredibly damaging.

      2. And symbolism matters because a lot of what drives an economy is optimism. If people believe things are getting and are getting better, they are more willing to spend and invest and the perception becomes a self fulfilling prophecy.

        Is that a fancy way of saying “animal spirits”?

      3. Sounds like somebody has been reading Scott Adams

      4. Except that this completely overlooks unintended consequences.

        If I were an air conditioning manufacturer, I would be thinking right now: how can I get some of this sweet tax-subsidy action that Carrier got?

        And then when that K Street lobbyist firm calls me up and says, “give me $100,000/year and we’ll put our guy who is connected to the Trump admin on the job of getting you a $1 million subsidy.” I’m thinking $400,000 for a 4-year Trump term to get $1 million back is pretty good.

        And EVERY other company is thinking the same thing.

        How is this good for America? We end up with what we have now–Washington DC has the richest Super ZIPs (see Charles Murray’s “Coming Apart” for an explanation) because the whole town has turned into a giant gov’t rent-seeking machine.

      5. Will you still be defending Trump when he causes the US dollar to go into a free fall because he thinks the US can get rid of its debt through bankruptcy?

  13. Producing vehicles in foreign countries helps car manufacturers make more sales abroad and open greater market share.

    Is this true? And if it is, is it because producing things domestically in those countries has benefits relating less to economics and efficient markets than it does state action of varying kinds (import duties, regulations, etc.)? This strikes me an “It Is Known” truism, so I wonder – how true is it, and why?

    1. It is totally not true. It is nothing but a repeat of the old fallacy about Henry Ford got rich by paying his employees enough money to buy cars. Reason needs to stop writing about economics. None of them are up to it.

      1. Re: John,

        It is totally not true.

        Liar.

    2. It’s true in the sense that big European manufacturers have factories in the U.S. because they sell so many cars here.

      It’s not true in the sense that big American manufacturers have factories in Mexico because they sell so many cars in Mexico.

      1. They have factories in the US because there are tariffs on cars made in Europe. They moved those factories here to get around the tariffs. But reason will never mention that because tariffs are magic things that companies and markets will never adjust their behavior to accommodate.

      2. Ford has a massive small car market all over the world. I’m sure they sell plenty in South America and Latin America.

        1. I’m sure they sell some there.

          That’s not the reason they move plants to Mexico, though.

          1. Re: JayU,

            That’s not the reason they move plants to Mexico, though.

            The reasons are economic. So what?

        2. Ford does have a big global market. You know what they don’t have? Manufacturing plants in every country where they sell cars. Because having a plant in a country only helps sales in that country if it helps you get around government-imposed barriers. And I’m willing to bet that those barriers only matter in countries that have their own domestic auto industry.

          It would be an interesting topic to take up from a libertarian perspective. Maybe someday Reason will do so.

      3. Yes, they sell a lot of cars here. But that alone doesn’t mean they should have manufacturing here. And having manufacturing here doesn’t generate more sales per se. But being more competitive can mean more sales here. And manufacturing here may make them more competitive. John above gives one example: avoiding tariffs. Others include reducing exchange rate risk and risk reduction through diversification.

    3. Re: R C Dean,

      Is this true?

      Yes. That is why car markers do that with THEIR OWN FUCKING MONEY. M’kay?

      And if it is, is it because producing things domestically in those countries has benefits relating less to economics and efficient markets than it does state action of varying kinds

      “Efficient markets”? Neo-classical bullcrap.

      OF COURSE it is a question of economics, even if in the equation the car makers have to contend with import duties and such. Whatever they have to do to please their stock holders.

      how true is it, and why?

      It is true and the reason is because car makers are rational actors. QED.

      1. But, OM, they are being rational actors within a world where you can make money as a crony capitalist and/or by working the government system. So, the fact that they are doing it begs the question of why, exactly? Are they doing it because it increases their market share more or less organically, ex-state interference? Are they doing it avoid import duties or otherwise play footsy with the state? It makes a difference, you know.

        There may be very good reasons to have facilities overseas – I just think the claim that not having a plant in a country means you are exiting that market for all purposes is both facially ludicrous and raises the question of just how many sales you do give up in a given country by not having a plant there. And, again, why? Because if those increased sales exist because of the state, then it hardly seems like an example of free trade to have plants in a country.

        1. Re: “I just think the claim that not having a plant in a country means you are exiting that market for all purposes is both facially ludicrous”

          It IS ludicrous, and if someone doesn’t understand the difference between the market in which a manufacturer sells its products and the market in which the manufacturer buys its labor, they really have no chance of understanding this discussion.

  14. The carmaker joins a growing list of American businesses being personally and publicly attacked by the president elect.

    I’m confused. Am I supposed to squeeze out a tear or two for GM here? We’re talking about same GM that was among those deemed “too big to fail” in very recent memory, right? Sorry, but when you accept the king’s ransom, you sing the king’s tune.

    Now sing, chumps.

    1. that is a good point. The mother fuckers took how many billions in taxpayer money? Fuck them, they can make cars in the US.

      1. agreed to that point. Would be a pleasure to see GM go out.

    2. “I’m confused. Am I supposed to squeeze out a tear or two for GM here?”

      No, we are to squeeze out a tear for the mess gov’t meddling in the economy always causes.
      Is that hard to understand? Would you prefer a 5-year plan?

      1. I would of course prefer no such thing, but the example presented in this article is not particularly sympathetic.

        1. Michael|1.3.17 @ 4:40PM|#
          “I would of course prefer no such thing, but the example presented in this article is not particularly sympathetic.”

          Yeah, hoping your enemies get shot is a great reason to promote government firing squads.

    3. Re: Michael,

      I’m confused. Am I supposed to squeeze out a tear or two for GM here?

      You should for any other company that does not have the wherewithal that GM has to defend itself from the attacks of El Se?or Presidente Bananero Trumpo.

      1. Amen to this.

        And we wonder why the biggest companies keep getting bigger while small companies keep closing down.

        We are already in an oligopoly and oligarchy where the most powerful companies are in bed with the gov’t, getting their agenda passed while the little guys are locked out.

        Google visited the Obama White House an average of once a week according to White House logs (matter of public record). What does that say for the little startup company that happens to be taking on Google in a particular field?

  15. RE: Donald Trump’s Cronyism and Authoritarianism on Full Display in Twitter Attack on GM
    Trump’s attack on General Motors is factually wrong, economically illiterate, and another example of how he bullies companies to do his will.

    Look, Trump would no more engage in cronyism that Obama.
    What’s wrong with you people at Reason?

  16. Crony capitalism is the one thing that everyone can agree is a bad thing. If any issue could bring us together and spur a constitutional convention it’s that one.

    Unite us! Unite the clans!

    1. A constitutional convention scares the hell out of me.

      1. I dunno. It might be interesting to have a Constitution again.

      2. Why? Sure, they might propose some foolish amendments, but those amendments still have to be ratified separately by the states. If the ERA could be defeated, it should be easy to defeat any ill-conceived amendment that comes out of a convention.

  17. He is punishing car companies, and unions that gave support to Obama all the while making it look like he is sticking up for blue collar workers.
    That what it looks like to me.

    1. Depending on his intentions, he could also be using this as a screen in order to pass more business friendly policies. If a president had the intentions of cutting taxes and regulations on business, he should expect to be branded as a friend of big business (and by extension a foe to workers/consumers) by his opponents. What better way to parry such an attack than to precede the pro-business moves with seemingly pro-worker moves by bullying big business to save/create jobs?

  18. Also when does a tweet carry the same force as a law ?

    1. Apparently, both are exercises of Presidential authority.

    2. Since never.

      But a nice non-sequitur.

  19. He promised to lower the corporate tax rate. I mean we are number 1 in the world – USA USA USA

    If he lowers the corporate tax rate and gets rid of some regulations, as promised, don’t think more business would stay?

    1. I sincerely hope he does keep his promise to lower the corporate tax rate.

      But he has to do it for all businesses across the board, regardless of access or connections or size, for it to work. Otherwise, if he picks and chooses favorites to get tax cuts while others do not, then every company that can afford to (only the biggest businesses) will hire lobbyists to make sure they’re the ones who get the preferential treatment.

      I’d love to see him simply reduce the tax rate in ALL the corporate tax rate brackets by 5%. Removing the uppermost brackets favors big businesses; re-sizing the brackets will hurt some businesses while helping others. Reducing all the brackets by 5% still retains the stupid progressive nature of the brackets, but at least it will be closer to fair. The best situation would be a flat tax with one bracket for every size of business.

    2. Just get rid of all regulations. Companies can regulate themselves just fine.

  20. Just skimmed the article, and didn’t have time to read all the comments yet but I suspect this might be related:

    Check Mike Rowe’s FB page

    I just read that my old employer, The Ford Motor Company, has reversed their decision to build a $1.6 billion manufacturing plant in Mexico, opting instead to invest $700 million in a Michigan assembly line. I’d like to take a moment to congratulate Ford, its current employees, its future employees, the great state of Michigan, and of course, The United States of America. This is a big, fat victory for anyone who wants to see America get back to the business of making things.
    Now…
    Will Ford’s decision be politicized? Yup.
    Will Ford be accused of acting in their own self-interest? Yup.
    Will critics say Ford could do more, and criticize them for doing too little? Yup.
    Will the media overwhelm us with articles that explain why this is no big deal, and how Ford’s decision will ultimately result in no new jobs? Yup.
    Do me a favor ? ignore these people. They don’t know how to feel good about anything other than feeling bad. They don’t understand the value of justifiable optimism – or it’s importance.

  21. It’s dangerous for a president to meddle in the economy on such a personal level, but it’s arguably more dangerous for him to believe that he’s doing so effectively

    You know what other president like to meddle in the economy on such a personal level?

  22. Shocking!

    Didn’t see that coming.

  23. “It gives another chilling look at how the country’s 45th president views the relationship between government and business, and again shows Trump to be an economically illiterate bully.”

    in his defense, it’s not how he views the relationship between government and business as much as it’s how he views the relationship between himself and businesses not owned by someone with a similar last name.

    that’s part of the reason why he’s economically illiterate.

  24. Isn’t it anti-American to want to make Americans pay more for cars, by threatening higher tariffs or by coercing car companies to build their vehicles in more expensive countries?

    1. America no longer stands for freedom, liberty, or truly free markets, sadly.

      Anti-American now means refusing to pay your taxes that will ultimately go to someone else in the form of personal or corporate welfare.

  25. Isn’t it anti-American to want to make Americans pay more for cars, by threatening higher tariffs or by coercing car companies to build their vehicles in more expensive countries?

  26. “but that might only encourage the new president to continue down a dangerous path of mixing politics with businesses in an unprecedented way” Really???? How limited are you? Corporations have been meddling in politics since time began… Karma’s a bitch when you lose the election. You know ,,,, Establishment GOP and DNC, don’ t you???

  27. “This is the rule of one man,” said Griswold. “Not the rule of law.”

    Shit your pants more for me.

  28. “Border-tax”

    Someone must’ve told him not to use the word “tariff” any more.

  29. Anyone have a reference on what the tariff is for a GM car sold in Mexico?

    1. A GM car, made in America

  30. I have a hard time feeling sorry for GM being dictated to by the political class when it only exists because it was able to successfully beg several billions of dollars from congress twice in as many decades. Fuck protectionism, but I’ve got the world’s smallest violin here.

  31. The first time I have seen someone claim presidential overreach and actually be wrong about it. What Trump has done is very much in the purview of his power to negotiate trade agreements with other countries.

    Furthermore, the author is crediting NAFTA with the increase in auto production? a) check your variables their bro. b) increased auto production does not equate with increased cash flow for the middle class.

    This is article is a big thumb’s down. Do a more thorough analysis rather than a click bait “we hate Trump” clickbait post please. The info is out there.

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