Trump Shouldn’t Blame Oreos - It’s Governments’ and Unions’ Fault
Don't Hate - Deregulate
The DC Establishment - made up of both Democrats and Republicans - for decades ignored our immigration laws. And dismissed and impugned, misunderstood or altogether missed the growing fervor for someone who would simply enforce our laws - and not slander those who want them enforced. Trump correctly identified all of this - and embraced it.
How high and far can Trump go? Where he stops - no one yet knows. We do know that Trump’s rocket ride - fueled largely by immigration policy - misfires at least a bit on trade policy. Behold the Case of the Moving Oreo Cookie.
Oreos have been for years made in Chicago, Illinois (and several other American cities). Mondelez International, Inc. - the company that delivers us the chocolatey, spherical goodness - announced they would make their next wave of Oreo manufacturing investment not in Chicago, but in Mexico. This move will reduce - not end - Chicago’s role in production. Jobs in the Windy City will be halved - from 1,200 to 600. (Other cities will continue their current roles.)
Trump, sadly, possesses a bit of a protectionist streak. He immediately vowed to stop eating Oreos - a protest diet, of sorts. But Team Oreo is only doing what any rational person - or gaggle of rational people who decide to incorporate - do when faced with the wide array of impediments job creators face here in the United States. Governments and unions are overwhelmingly antagonistic to domestic economic growth.
(Laurie) Guzzinati, a Mondelez representative,…said the decision to invest in the Mexico plant came after discussions with union representatives for workers at the Chicago plant. She said the company determined that the new production lines would cost $46 million less per year in Mexico than in Chicago, and said labor was "one of many factors."
$46 million in higher costs is a lot of coin. Created and inflated by - as Ms. Guzzinati rightly points out - “many factors.” Unions are certainly one. The others - are almost all government.
The United States has the world’s highest corporate tax rates - 39.1%. Which is in large part why U.S. companies are stashing $2.1 trillion (and likely much more) overseas - they don’t want the 40% initial haircut. Which Trump gets: ”Corporations rightfully don't bring it back because they have a massive tax to pay. We’ve got to make it so they can bring it back.” If we don’t radically change course, Oreos could eventually, exclusively be an import. As so many other once-domestic products now are.
Our ridiculous taxes lead to corporate inversions: “The relocation of a corporation's legal domicile to a lower-tax nation,…usually while retaining its material operations in its higher-tax country of origin.” Big Democrat Billionaire Warren Buffett buddies up to the Big Taxers - but when the rubber meets the road, he inverts. Because, he says: “I will not pay a dime more of individual taxes than I owe, and I won’t pay a dime more of corporate taxes than we owe. And that’s very simple.”
Another factor? The regulations imposed by all manner of governments. Federal Leviathan compliance alone costs businesses $1.9 trillion - just this year. And in the Age of Barack Obama, you know that tally is rocketing skyward. And Illinois ain’t exactly Less-Government-Texas. And Democrat-Machine-Chicago? Ummm….
And on, and on, and….
Obviously, too much government is a huge part of the Oreo departure. Trump understands much of that - but doesn’t close the circle. He wants to make the United States more business friendly - but he should understand and not be upset with businesses that leave because it isn’t. Trump is even threatening tariffs on companies that manufacture overseas. No thanks, Herbert Hoover. You’re so close to correct, Donald. But the solution to too much government isn’t even more government - it’s less.
Florida Senator and Trump presidential primary opponent Marco Rubio proposes Less Government as the solution - here, and everywhere else. Rubio rightly points out: “All these other countries we trade with have quotas, they have their own protectionist programs.” They just don’t have as much Huge Government as do we - so Oreo and many, many others here flee. Rubio continued: “We should get rid of trade barriers. Let’s go to the World Trade Organization, let’s go to multi-national, international forums - let’s get rid of these trade barriers.”
Trump gets right up to the goal line - then on first down…punts. Donald, don’t sour on Oreo and others for leaving a bad deal - make it sweeter for them to stay, and they will. And the decades-long U.S. business exodus will finally begin to reverse itself.