About Us
Mission Statement
Rules of Conduct
Remember Me

The Art of Lying About the Deal
Author: BobR    Date: 12/07/2016 15:00:39

It's been common knowledge for decades that tRump is a shyster. He has always been more a salesman than a "business leader", and like all salesmen, will say whatever it takes and promise whatever he needs to in order to close the sale. In short - he's a professional liar. During the campaign, his bullshit was flowing at such an amazing rate, it was impossible for fact-checkers to keep up. While it was exasperating during the campaign, it was just that - campaign talk. As I've noted previously, he is already walking a lot of those back.

Now that he is the president-elect, however, his words carry more weight. What he says matters. His comments can effect jobs and the economy, if only because he will have the power to put them into action. In the last few weeks, he has created large ripples by blundering (the Taiwan call... the meeting with the Japanese prime minister and tRump's daughter). What's worse is the blatant lies.

Yesterday tRump took credit for securing a promise from a Japanese tech conglomerate to invest in the U.S. and create 50K new jobs. Wow - he's doing great and he's not even in office yet, right? Well... it appears he may have gotten played:
...in October, weeks before the election, SoftBank and the government of Saudi Arabia announced plans to form a $100 billion fund to invest in technology companies around the world.

[Masayoshi] Son told The Wall Street Journal in an interview that the money he promised Trump would come from the huge fund.
Speaking with reporters on Tuesday, Son said he told Trump he would like to "celebrate his presidential job" by investing in "startup companies" in the U.S.

He said the reason was that Trump has made deregulation part of his platform.

That could be a reference to Son's failed attempt in 2014 to merge Sprint with T-Mobile (TMUS), which ran into regulatory hurdles. SoftBank paid more than $20 billion to take control of Sprint in 2012 and has struggled to turn the U.S. carrier around.

So in other words - tRump thinks he pulled in this great deal that was actually already in the works before the election, and Japan is going to get something in return from tRump: favorable deregulation to allow the creation of a monopoly. The net effect is a loss for our country, and tRump thinks he made a great deal.

The other great "deal" he thinks he made involves the Carrier air conditioning company. Everyone is fairly familiar with this - he supposedly convinced them to keep jobs here in the U.S., claiming he saved 1000 jobs. That number is suspect:
WTHR, the NBC affiliate in Indianapolis, took a closer look and found that the agreement “may not have saved as many factory jobs” as Trump claimed.
“We found out today that more jobs are leaving than what we originally thought,” [Carrier worker T.J. Bray, who’s also a communications rep for the union] said. “It seemed like since Thursday, it was 1,100 [jobs saved] then it was maybe 900 and then now we’re at 700. So I’m hoping it doesn’t go any lower than that.”

Union workers got a letter at the plant saying Trump’s deal with Carrier will save only 730 factory jobs in Indianapolis, plus 70 salaried positions – 553 jobs in the plant’s fan coil lines are still moving to Monterrey, Mexico. All 700 workers at Carrier’s Huntington plant will also lose their jobs.

As for Trump’s “1,100” figure, the president-elect was apparently including 350 research and development jobs that, according to the local report, “were never going to move to Mexico in the first place. Those were jobs that Carrier said all along would stay in Indianapolis.”

The worker's union president is not happy. What was the price to make this deal? $7 Million. One could consider this ransom paid, and it sets a dangerous precedent for other companies to try the same tactic.

It isn't just jobs saved that tRump exaggerates. He tweeted yesterday that the current contract to replace Air Force One is too expensive, at $4B (one presumes he is implying per plane). Once again, though, the truth is very different:
Earlier in 2016, Boeing received a $170 million contract to design a replacement for the aging pair of Air Force Ones used by the president. Boeing is not actually building the jet, though logically it is the only U.S. manufacturer with the capability to build such an aircraft.
At a minimum, there would be two Air Force Ones. You need a spare in case there is a problem with one. The jets generally have a life cycle of 30 years.
Cost have actually not been set. The Defense Department’s five-year plan indicates a cost of $2.9 billion over the next five years for design and development. It’s logical to assume at least another $1 billion in additional expenses to complete and procure the aircraft.

So an estimate of $4 billion — for design, testing and manufacture of at least two jets — is not completely out of line. But the budget is subject to approval by Congress and the actual design of the aircraft. Boeing literally needs to re-engineer the plane from the ground up, so there are many one-time expenses.
Nothing has been ordered yet. But the program could be eliminated. This may not be a problem for Trump, but certainly would affect his successors, especially if no order is placed before Boeing stops making 747s. The current aircraft were delivered in 1990, and as we noted, the life cycle is about 30 years. The Pentagon says the current fleet “faces capability gaps, rising maintenance costs, and parts obsolescence as it reaches the end of its planned 30-year life-cycle.”
(more details at the link)

I think it's also safe to assume that tRump thinks he could negotiate a "better deal". What that would entail one can only imagine, if you look at the shabby deals he's worked with the Japanese investors and Carrier. There's also the reality that he wants to create jobs, but cancelling government contracts destroys jobs and ultimately hurts the economy...

... and the Blunderer-in-Chief isn't even in office yet.

39 comments (Latest Comment: 12/07/2016 21:14:46 by Raine)
   Perma Link

Share This!

Furl it!