Trump's Carrier speech 'absolutely chilling,' economic analyst says

Pethokoukis on Trump: Worst economic speech since Mondale
Pethokoukis on Trump: Worst economic speech since Mondale

President-elect Donald Trump's speech about his deal to keep Carrier jobs in the United States was "absolutely the worst speech," economic policy analyst Jimmy Pethokoukis told CNBC on Thursday.

Trump boasted about his deal to keep about 1,100 Carrier jobs in Indiana, and also took aim at other companies who may be thinking about moving jobs out of the country.

"Companies are not going to leave the United States anymore without consequences. Not going to happen. It's not going to happen, I'll tell you right now," Trump said on Thursday.

Pethokoukis, a scholar with the conservative-leaning American Enterprise Institute, called it the worst economic speech since Democratic presidential nominee Walter Mondale promised to reverse Reaganomics in 1984.

"The idea that American corporations are going to have to make business decisions, not based on the fact that we've created an ideal environment for economic growth in the United States, but out of fear of punitive actions based on who knows what criteria exactly from a presidential administration. I think that's absolutely chilling," he said in an interview with CNBC's "Closing Bell."

Trump's deal with United Technologies includes $7 million in financial incentives provided by Indiana to keep 1,100 jobs at Carrier, the company's heating and air conditioning unit, in the state. However, Carrier still plans to move roughly 1,300 other jobs to Mexico and close another facility in Indiana.

Keeping jobs in America
Keeping jobs in America

Robert Shapiro, former undersecretary of commerce for economic affairs under President Bill Clinton, said the problem in this country is not about getting people to work.

"Unemployment is below 5 percent today. We've largely achieved that. The goal is to keep that going and to do it with rising incomes," he said in an interview with CNBC's "Power Lunch" before Trump's speech.

That means a serious agenda of public investment in education, training, infrastructure and other things that make companies more productive, he explained.

"We certainly don't want to take as our guide to creating jobs special tax breaks for a company that earned $7.5 billion in profits last year, got $6 billion in defense contracts, paid its top five executives $50 million, in order to preserve 1,000 out of 2,100 jobs," said Shapiro.

"It's essentially a transfer from the taxpayers of Indiana, who are providing these tax breaks, to the shareholders of United Technology plus those 1,000 workers. That's really not a model for creating jobs across America," he added.

Republican former Rep. Eric Cantor, who served as majority leader from 2011 to 2014, said Trump knows he can't have one-off discussions with every company in the U.S.

"What I think all of us are hoping for is that we can once again see a return to an overall environment in the United States that speaks to regulatory reform, tax reform, health-care reform, that actually then says hey it is now a pro-business environment. We can see investors take risks, invest capital, create jobs," he told "Power Lunch."

Paul Bonicelli, director of programs at the Acton Institute and former foreign policy advisor to President George W. Bush, pointed out that special arrangements with companies to keep jobs in their state or municipality happens all the time. The real story, he said, is about Trump's overall economic plan.

"At the end of the day, it is unleashing the economic potential of Americans that grows jobs and I think that's what this administration is going to do," he told "Closing Bell."

— CNBC's Jacob Pramuk contributed to this report.