HOORAY FOR THE DONALD

Now I'm a Democrat, not a Nancy Pelosi Democrat, but a Democrat nevertheless.  So, you might be surprised that, unlike everybody else on my side of the aisle, I am giving the President-Elect kudos for what he did for Carrier's workers.  To me, the fact that he would roll up his sleeves, get in the trenches and save so many lives is very admirable, and I might say uncommon in our political leaders who would often rather discuss the economic theory behind the layoff over a good Cab in a fancy restaurant.

I would hope, however, that no one would lose sight of the real problem here.  Its not Mexico; it's not free trade.  It's short-termism.

In theory, there is nothing wrong with free trade even if it means moving lower tech jobs to Mexico or China or Burma (oops Myanmar).  It can grow our economy and provide more prosperity to Main Street.  Here's how:

• Product A costs $100 to make in the U.S.
• Move it to Mexico-it now costs $50
• All of us (including those who made Product A in the US) get two for one
• And Product A Company gets another $50 in profits
• Product A Company takes that $50 and uses it to develop and make Product A PLUS
• The workers retrain to make Product A PLUS, keep their jobs and get a raise because Product A PLUS is more profitable and can handle the higher wages.

Sounds good. Right? 

But here's the problem:

• That $50 profit doesn't go to develop a new product or anything else that will grow the company and replace the lost jobs with new and better ones.
• It's given to the shareholders through more dividends and stock buybacks.  Carrier's parent, United Technologies, is conducting a $12 billion stock buyback according to Hillary Clinton.

So, there is nothing inherently bad with free trade.  But if it's used to fund short-term profits for Wall Street traders and not to build bigger and stronger businesses, it is very destructive.  The jobs go and never come back because the benefits from it don't get reinvested in the business for growth. 

The politicians love to talk about retraining programs as the panacea which will make everything okay for the worker who has lost his or her job.  But, retraining for what?  We can only eat so many hamburgers.  We need the new, good jobs.

If free trade's benefits are used to satisfy Wall Street's demands for short-term profits and not grow the economy, it becomes a job destroyer, not the job creator it should be.  No wonder that it has done such so much damage to Main Street and America's workers.