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President-elect Donald Trump would like everybody to
believe that his election is energizing the economy by forcing businesses to
create thousands of jobs in the United States. And companies like Sprint seem
perfectly happy to go along with this fiction because they know they can profit
handsomely by cozying up to Mr. Trump.
On Wednesday, Mr. Trump said Sprint’s top executive
had told him the company would add 5,000 jobs “because of what’s happening and
the spirit and the hope.” But it turns out that the jobs are part of a previous
commitment by Sprint’s parent company, SoftBank, whose chief executive said at
Trump Tower in December that it would invest $50 billion and create 50,000 jobs
in the United States. And even that promise was part of a $100 billion
technology fund that SoftBank announced in October, before the election. In
sum, Mr. Trump’s statement was hot air, just like his tweet in which he thanked
himself for an increase in a consumer confidence index last month.
It’s easy to see why SoftBank and Sprint might want to
help Mr. Trump take credit for creating jobs. SoftBank’s chief executive,
Masayoshi Son, wants the Department of Justice’s antitrust division and the
Federal Communications Commission to allow a merger between Sprint and
T-Mobile. In 2014 regulators appointed by President Obama made clear to Mr. Son
that they would not approve such a transaction because it would cut the number
of national wireless companies to three, from four, greatly reducing
competition in a concentrated industry. Mr. Son sees a new opening for his deal
in Mr. Trump, who has surrounded himself with people who have sided with large
telecommunications companies in regulatory debates and have argued against
tough antitrust enforcement.
This is crony capitalism, with potentially devastating
consequences. If Mr. Trump appoints people to the antitrust division and the
F.C.C. who are willing to wave through a Sprint/T-Mobile merger, he will do
lasting damage to the economy that far outweighs any benefit from 5,000 jobs,
jobs that might have been created even without the merger. Individuals and
businesses will find wireless service costs a lot more when they have only
Verizon, AT&T and T-Mobile/Sprint to choose from.
In addition, a combined Sprint and T-Mobile would
inevitably cut thousands of jobs as executives merge the companies’ networks,
stores, billing systems, customer service departments and so on. That has
happened time and again after big telecom deals. When AT&T was acquiring
BellSouth in 2006, executives said they expected to cut 10,000 jobs after the
deal closed in December of that year. Since then AT&T has also acquired
DirecTV. At the end of September, AT&T employed 273,000 people around the
world, down from 309,000 in 2007.
It has become abundantly clear that Mr. Trump is
easily distracted by shiny objects, especially if they reflect back on him.
He’s more interested in boasting about how he personally saved a thousand jobs
at Carrier, say, than in policy details that could make a difference in the
lives of tens of millions of workers.
Never mind that Carrier is only keeping
about 800 jobs and that its chief executive said that the company would get rid
of some of those anyway through automation. This should greatly worry
Americans, especially people who are counting on Mr. Trump to revive the
economy and help the middle class.
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