Trump’s First ‘Victory’: A Crushing Defeat

  • 12/08/2016
  • Terelle Jerricks

By Paul Rosenberg, Senior Editor

While running for president, Donald Trump repeatedly called attention to plans by air conditioning and heating manufacturer Carrier Corp to move production to Mexico, costing about 2,100 U.S. jobs.

He threatened to “tax the hell” out of Carrier’s air conditioners, lambasting politicians for foolishly trying to prevent such job loss by giving companies incentives. It was a key feature of Trump’s larger argument that, “We will offer a new future, not the same old failed policies of the past.”

But on Dec. 1, Trump caved into Carrier, delivering yet another round of the same failed policies he had denounced. Thanks to a $7 million tax-incentive, i.e. bribe, from his running mate, Indiana Gov. Mike Pence, Carrier’s parent United Technologies, will keep about 800 jobs in Indiana, while shipping 1,300 to Mexico. Carrier also indicated that Trump’s promise of yet more corporate tax cuts—another failed policy—also played a role in their decision. Yet, Trump hailed his sell-out as a great victory.

Sen. Bernie Sanders didn’t.

“Just a short few months ago, Trump was pledging to force United Technologies to ‘pay a damn tax,’” Sanders wrote in a Washington Post op-ed. “Instead of a damn tax, the company will be rewarded with a damn tax cut. Wow! How’s that for standing up to corporate greed? How’s that for punishing corporations that shut down in the United States and move abroad?”

Sanders noted that Trump has endangered the jobs of workers who were previously safe in the United States.

“Why?” he asked, rhetorically. “Because he has signaled to every corporation in America that they can threaten to offshore jobs in exchange for business-friendly tax benefits and incentives.”

“We really need to understand the difference between sticks and carrots here,” said economist Jared Bernstein on AM Joy that Sunday. “He talks sticks, he gives carrots.”

The Carrier charade was emblematic of how completely divorced from reality a Trump presidency promises to be—and how thoroughly his success will depend on a media willing to keep helping him sell his lies. At the same time, Politico noted that Trump’s administration was on track to be the most plutocratic in American history, with a total net worth of more than $35 billion — the very embodiment of the rigged and corrupt system he claimed to have been running against.

On the policy side, Trump’s promises not to cut Social Security, Medicare and Medicaid seem increasingly dubious, while his promised infrastructure plan looks more and more like a bit of failed, old-style trickle-down economics. Only his more authoritarian threats seem relatively firm — except for the fantasy of jailing Hillary Clinton, whose lead in the popular vote is now more than 2.5 million, a stubborn fact that Trump also continues to lie about.

An Orwellian Presidency

“Donald Trump’s presidency now promises to be flawlessly Orwellian,” MSNBC’s Lawrence O’Donnell said on his program that night. “What Donald Trump knows is that if he says it, then it is true. Meaning it is true to Donald Trump voters and it also means that it is at least partially true to most of the American news media… Donald Trump is now writing these headlines, not the media.”

“If you’re going to put a lie in the headline, how do you decide which lie to put? Because there were many in that speech,” MTV senior political correspondent Ana Marie Cox responded, referring to Trump’s follow-up campaign rally-style speech after the Carrier press conference.  “Hundreds of thousands of refugees pouring into our borders? There are less than 100,000, actually…. The fact that there’s a crime wave? There’s no crime wave…. He is laying out the kinds of language and the kinds of policies that lead to a police state. He’s talking about an invisible crime wave. He’s talking about putting people in jail for expressing their First Amendment rights. He’s talking about the press being untrustworthy. It’s a facet of fascism to traffic in these kinds of lies.”

But another key facet of fascism is the corporate partnership of economic elites, which is one of the most striking features of the emerging Trump agenda, reflected in his earliest appointments. Directly contradicting his campaign promises to end crony capitalism and “drain the swamp,” Trump’s initial appointments and policy hints point toward turning the swamp into a spa. Or, as Ohio Democratic Sen. Sherrod Brown said, “This isn’t draining the swamp —it’s stocking it with alligators.”

Trump’s nominee for Treasury Secretary, Steven Mnuchin, is a former Goldman Sachs partner known for foreclosing on tens of thousands of homeowners. His nominee for Commerce Secretary, Wilbur Ross, is a Wall Street insider’s insider, a vulture capitalist who’s made billions bankrupting and downsizing American companies — costing thousands of coal and steel jobs from the heart of Trump’s rustbelt “real America.”

His nominee for Secretary of Education is billionaire heiress Betsy DeVos, a major GOP donor and funder of school privatization initiatives. She has no experience in education whatsoever. In fact, one organization she funds — the Action Institute — has advocated for the repeal of child labor laws: “You can talk about the dangers of coal mining or selling newspapers on the street, but let’s not pretend that danger is something that every young teen wants to avoid.” (A disclaimer/denial was recently added after DeVos’s nomination drew attention.)

“The president-elect is putting together a cabinet that basically contains four different kinds of people,” Esquire’s Charles Pierce explained on AM Joy: “People who are really inexperienced, billionaires, people with crazy ideas, and inexperienced billionaires with crazy ideas. And Betsy DeVos is right at the top of that last [type].”

A key theme running through those crazy ideas is that of privatization — destroying what Americans share and hold in common and selling it off to insiders, one way or another. On one key point, at least, Trump seems to oppose this: he’s repeatedly said he would not touch Social Security, Medicare or Medicaid. But his Department of Health and Human Services nominee, Tea Party Rep. Tom Price, is aligned with House Speaker Paul Ryan’s assault on all three.

A Foreclosure King At Treasury

Mnuchin at Treasury and Ross at Commerce stand out in particular for how sharply they contradict Trump’s campaign message, and how snugly they fit with his actual way of doing things. Mnuchin, a former Goldman Sachs partner — like his father before him — gained public notoriety as CEO of OneWest bank (formerly IndyMac), which foreclosed on more than 36,000 families and their homes, while earning himself at least $200 million. The foreclosures were disproportionately in communities of color. One analysis found that 68 percent of its California foreclosures were in zip codes where the non-white population was 50 percent or greater.

Further attention was brought to Mnuchin on Oct. 4, 2011, when “Occupy LA” protesters joined in a 200-strong protest outside his $27 million Bel Air mansion. They were there in support of Rose Gudiel, facing foreclosure after OneWest refused to accept a two-weeks-late payment in 2009, after her brother was killed in a drive-by shooting at the same time she was furloughed as a state worker, due to California’s state budget crisis. Gudiel had fought courageously for months before gaining broader support, and the public exposure finally saved her. But her case was the rare exception. Another outrageous case involved Ossie Lofton, of Lakeland, Fla., a 90-year-old holder of a reverse mortgage, foreclosed on for an underpayment of 27 cents.

Mnuchin’s hedge fund paid the Federal Deposit Insurance Corp. $1.55 billion for IndyMac in 2009, and sold it to CIT Group seven years later for $3.4 billion, reaping another $1.57 billion in profits in the interim.

“The FDIC lost $13 billion on IndyMac,” David Dayen, author of Chain of Title, explained in The Nation recently. “Mnuchin and company made $3 billion in profits, most of that coming directly from the FDIC in loss-sharing costs.” As for the 36,000 foreclosures, “It’s not hyperbole to say that every one of these foreclosures were fraudulent.”

OneWest engaged in all the industry’s common predatory practices, including robo-signing, peddling deceptive reverse mortgages to senior citizens, and “dual tracking” — processing a homeowner’s loan modification request while simultaneously putting them through foreclosure. Lofton was an example of a reverse mortgage victim. In July 2009, a OneWest vice president admitted to employees robo-signing 6,000 documents per week, without even reading them, much less knowing where they came from or how they were generated. In September 2013, a couple in San Luis Obispo County won title to their two homes plus a seven-figure settlement in a double-tracking case. But the vast majority of OneWest’s victims lacked the resources to fight back.

A Vulture Capitalist At Commerce

Ross is a Wall Street billionaire vulture capitalist who spent decades feeding off of distressed companies—closing workplaces, cutting jobs, healthcare and pensions—throughout what has become Trumpland.

“Wilbur Ross is a champion of American manufacturing and knows how to help companies succeed,” Trump lied in a statement announcing his pick.

Ross is actually a specialist in making money of off stripping once-vibrant economic sectors — primarily steelmaking, coal-mining and textiles.

For example, on Sept. 24, 2004,  Ross’s International Coal Group — a conglomeration of investors along with A.T. Massey Coal Co. — shut down six union mines taken over from Horizon Natural Resources in a bankruptcy proceeding, while keeping its non-union mines open. International Coal Group paid $786 million for the mines, but only because a federal bankruptcy judge voided $800 million in health insurance benefits owed by Horizon to more than 3,000 active and retired United Mine Workers of America union members.

Ross made similar deals in steelmaking, buying up bankrupt companies like LTV Corp., Bethlehem Steel and Weirton Steel, typically keeping them open with much smaller workforces, with less pay and benefits, though not always. At one point he sold an entire former LTV steel mill and shipped it to China.

After the Horizon purchase, International Coal Group also acquired the Sago Mine, where 12 miners died in January 2006.

“We had no reason to believe that this mine was unsafe,” Ross said at the time.

But that’s not how critical industry observers saw it.

“Federal inspectors cited the Sago mine for 46 violations after an 11-week review that ended Dec. 22, and the Mine Safety and Health Administration issued a total of 185 safety citations for the mine in 2005 — an increase of 117 from the preceding year,” the Pittsburgh Post-Gazette reported at the time.

“While safety in steel suffered in the firms he purchased, the process has been most glaring — and deadly —  in coal,” labor activist and author Andrew Pollack wrote in Monthly Review. “And the safety decline is directly connected to Ross’s desire to reorganize his new firms in order to maximize profits upon exit.”

This was not a new phenomena, he noted.

Firms “have always avoided safety spending like the plague, taking safety precautions only when forced to do so by strong unions, and by government regulation which itself only came about because of union pressure,” he wrote.

But conditions had worsened because of the same industry distress that Ross, literally, made a killing on.

That is the man Trump called “a champion of American manufacturing.” But he’s also a top member of a secret Wall Street fraternity called Kappa Beta Phi, whose 2012 induction ceremony he presided over, as reported on by New York Times reporter Kevin Roose. The event was peppered with racist, sexist and homophobic “humor” perfectly in keeping with Trump’s vicious side.

A Donor Class Privatizer to Head Education

If Mnunchin and Ross represent the epitome of Wall Street, Betsy DeVos is the queen of the GOP’s donor class, the other great evil Trump pretended to run against.

“My family is the biggest contributor of soft money to the Republican National Committee,” she wrote in the Capitol Hill newspaper Roll Call years ago, before the advent of ‘dark money.’ “I have decided to stop taking offense at the suggestion that we are buying influence. Now, I simply concede the point. They are right. We do expect something in return.”

Since 1970, the DeVos family has spent at least $200 million funding “The New Right,” organizations like the Heritage Foundation, and the Federalist Society. They’ve poured millions into right-wing Christian causes — fighting against gay rights, fighting unions and working to destroy public education.

Education historian Diane Ravitch told Mother Jones that DeVos would be the most radical, anti-public-school education secretary since the Office of Education was established in 1867.

“Never has anyone been appointed to lead in the past 150 years who was hostile to public education,” Ravitch said.

The DeVos education attack employs the rubric of private educational “choice,” but without public oversight — the same sort of formula used by “Trump University,” which just agreed to a $35 million fraud settlement.

The DeVos family’s greatest “success” has been in their home state of Michigan, where, as education author Nikhil Goyal explained in The Guardian:

They helped pass Michigan’s first charter school law, pushed a failed Michigan school voucher referendum, helped get hundreds of pro-voucher and charter candidates for public office elected, proliferated charters, weakened teachers unions by advocating for right-to-work legislation in Michigan and warded off a proposed Detroit charter oversight commission in a state where 80% are run for profit with minimal accountability.

But charters have dramatically failed to improve education, as Michigan’s Bridge magazine reported:

National testing shows that Michigan, which has had choice since 1996, has fallen markedly in national measures of classroom performance. As one example, the state is now ranked 41st in 4th grade reading scores, from 28th in 2003.

Racial segregation has also sharply increased:

In the 2009-10 school year, roughly 64 percent of choice students across the state moved to a less diverse district. That rate is now approaching 70 percent, a Bridge review of student residency and demography data shows.

The number of school districts statewide where fewer than half the students are white rose from 38 a decade ago to 55 last year.

In short, not only is Betsy DeVos a poster child for the donor class Trump supposedly ran against, her policies are the very essence of the “old failed policies of the past.”

Privatizing Medicare is Back

While DeVos’s rhetoric of “choice” in education is aligned with Trump’s record and campaign positions—Trump has promised to spend $20 billion promoting a school choice agenda—the same can’t be said about Tom Price, Trump’s choice to head the Department of Health and Human Services. While the two agree on repealing Obamacare, Trump has repeatedly pledged to defend Medicare and Medicaid, both of which Price has taken aim at, in alignment with House Speaker Paul Ryan.

Past GOP attempts to privatize Medicare have proven disastrous. The most infamous was in 2005, after Bush narrowly won re-election, then barnstormed across the country on his privatization scheme, causing public opposition to swell overwhelmingly. Trump’s staunch defense of Medicare on the campaign trail reinforced that historical message. But what actually happens in the months ahead could be dramatically different.

“Given that the president-elect is by all accounts a deeply impressionable man with little to no policy expertise, Price is almost certainly set to play an extremely influential role in any negotiations over health care legislation,” Slate’s Jordan Weissmann warned. “But it does seem that Republicans will try to undo Obamacare first—and that could prove difficult enough to bog them down for awhile.

But First, the Infrastructure Scam

Much faster action could come on another front—infrastructure spending, where Trump has promised a trillion dollar investment to help rebuild America, something Democrats have long been calling for. Unfortunately, Trump’s plan falls far short of what’s advertised.

Rather than having the government raise or borrow money at incredibly low interest rates and allocate money to state and local governments for needed infrastructure projects, Trump would give private investors tax credits for construction projects, while also guaranteeing contractors a hefty profit margin.

Sanders blasted Trump’s plan, calling it “a scam that gives massive tax breaks to large companies and billionaires on Wall Street who are already doing phenomenally well.” He went on to explain, “Trump would allow corporations that have stashed their profits overseas to pay just a fraction of what the companies owe in federal taxes. And then he would allow the companies to ‘invest’ in infrastructure projects in exchange for even more tax breaks. Trump’s plan is corporate welfare coming and going.”

Welcome to the Trump Towers Swamp.

 

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