Donald Trump, the GOP's resident populist and major headache, was at it again over the weekend with his demagogue like rant against Nabisco and Ford for their moving manufacturing to Mexico. It's not clear from Trump's rant whether he was suggesting a boycott of these two American companies, although he did indicate that he would not be eating Nabisco products like their world famous Oreo cookies.
So why did these two companies move some of their manufacturing to Mexico? It wasn't because they are particularly fond of Mexico or Mexicans anymore than they might be fond of Canada and Canadians or any other nation and its workforce.
The answer to these moves is simple and yet Trump did nothing to address the real reason for these companies and their latest actions. The United States has the highest corporate tax rate (39%) of any other country in the industrialized world. Corporations have an obligation to maximize their profits for the owners of the corporations, which are typically stockholders. Public ownership of corporations accounts for 65% of the general pubic through their 401k pension plans and similar invested pension plans and personal stock portfolio holdings.
So what Trump has done is falsely direct attention away from the truth of the matter that government has failed, through its corporate tax code, to make American business competitive with foreign corporation. Instead, Trump has given people in the American labor force the idea that corporations are throwing them under the bus for the sake of profit.
But, Trump knows the function of a business entity is to make a profit for its owners and employees. Without profits there is no business and there are no jobs. Private enterprise is not a social welfare endeavor. Most businesses want to be good community citizens because it makes good business sense to engage in positive acts within the community to encourage an exemplary partnership between the community and its labor force and the business. Businesses want the best labor force and working with the community to establish a good relationship virtually guarantees that the local labor population will look favorably toward the local business in a mutually satisfactory result.
Donald Trump could have gone a long way in explaining the underlying reality of why American companies are essentially compelled to off shore jobs. Trump could have taken the opportunity to enlist popular support to move, if not push, government toward reducing corporate taxes to stimulate job growth in America. That would have been the conservative principle to enunciate, rather than implying that American businesses are somehow at fault for killing jobs in America only to move them offshore.
No comments:
Post a Comment