Our talented Mary Chastain blogged on the deal reached between President-Elect Donald Trump and Vice-President-Elect Mike Pence and HVAC company Carrier. Rather than exporting jobs, Carrier will remain in Indiana, saving approximately 1,000 jobs.
Mary expressed concern that if this was a firm-limited approach, Trump would be simply picking winners. The exact details about the deal have been slow to emerge.
“The incentives offered by the state were an important consideration,” to staying, Carrier said in a statement Wednesday. Pence is the governor of Indiana.Carrier didn’t specify what the incentives were. Trump threatened Carrier with stiff tariffs during the campaign, but Carrier’s statement depicted a friendlier negotiation.
However, it must be noted that another Indiana plant is closing…and that Pence did not hesitate to act to take back incentives previously given.
Carrier’s announcement in February that it was eliminating the 1,400 jobs was paired with grim news from another Indiana company, United Technologies Electronic Controls, that 700 jobs would be eliminated at its facility in Huntington….After the [original] February announcements, Gov. Mike Pence and the state legislature went after the two companies to claw back hundreds of thousands of dollars in grants from the Indiana Economic Development Corporation, a quasi-state agency that made grants to the companies to train new and existing workers and to keep jobs in the state.
Perhaps the deal included allowing Carrier to keep the grants? What is known is that Carrier will get roughly $700,000 a year for a period of years in state tax incentives.
No matter the reason, it is a pleasant bit of news at the start of the holiday season for average Americans. Interestingly, consumer optimism has surged since Trump’s concluded his successful run for the White House with a stunning upset of Hillary Clinton.
The initial reaction of consumers to Donald Trump’s victory was to express greater optimism about their personal finances as well as improved prospects for the national economy, according to the University of Michigan Surveys of Consumers.The post-election gain in the Sentiment Index was 8.2 points above the November pre-election reading, pushing the index 6.6 points higher for the entire month, according to U-M economist Richard Curtin, who directs the surveys.The post-election boost in optimism was widespread, with gains recorded among all income and age subgroups and across all regions of the country, according to Curtin.”The upsurge in favorable economic prospects is not surprising given the president-elect’s populist policy views,” he said. “And it was perhaps exaggerated by what most considered a surprising victory as well as a widespread sense of relief that the election had finally ended.”
Tied to that optimism is consumer behavior. It appears that Trump’s election may have made last Friday Black again.
Holiday spending rose 9 percent Thursday and Friday combined, compared with the same two-day period last year, according to First Data.The bump was fueled by shoppers turning to online deals.E-commerce sales rose 10.8 percent for the two-day period, while sales at physical stores grew 8.6 percent, according to First Data, which analyzed online and in-store payments across different forms of payment cards from nearly one million merchants Thanksgiving and Friday. The data captures about 40 percent of all card transactions in the U.S. but excludes cash.
The positive economic news is now being described as the result of“Trumponomics”.
Big banks such as Bank of America (BAC), UBS (UBS) and HSBC (HSBC) are bumping up their predictions for U.S. growth and stock market gains. The reason? Trumponomics.”Following Donald Trump’s election victory, we have altered our GDP forecasts as we are now expecting a modest fiscal stimulus from lower tax rates and higher government spending,” wrote HSBC chief U.S. economist Kevin Logan in a recent report.It’s a stunning reversal from the days before the election when economists and market experts at many Wall Street banks were forecasting dire consequences — a recession and a swift market drop — if Trump were elected president.Now many are saying the opposite: Trump is good for growth.
Looking back, the core of Reaganomics was the reduction of taxes and the promotion of unrestricted free-market activity.
Looking ahead, perhaps Trumponomics will be a blend of Reagonomics and the “Art of the Deal”?
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