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The problem with Obama's carrots and sticks plan

President Barack Obama speaks in Las Vegas, Nev.

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Kai Ryssdal: The housing plan the White House came out with today, follows in line with what the president proposed in the State of the Union this week -- trying almost anything to get the economy going again.

Commentator Amity Shlaes is a little worried.


Amity Shlaes: Carrot and stick. Stick and carrot. The pair represents an age-old tool for changing behavior. President Obama plans to build much of his election-year policy agenda around carrots and sticks. In Obama's world, businesses and business people are the rabbits in need of behavioral change.

Obama wants to reward companies that create jobs here in the United States. One of the carrots is a tax credit for companies that move operations back here. Another would double tax breaks for high-tech factories making products here.

These are juicy carrots. But the sticks put forward by Obama are hefty. The president wants to eliminate a tax break for moving expenses when a company ships operations overseas. He also wants to close a tax loophole that allows companies to move some types of profits to overseas tax shelters.

The president figures that businesses will tolerate the pain of the sticks for the reward of the carrots. He thinks if he pokes the stick in one corner, they'll hop over to the corner where the carrots are.

But the trouble with this argument is that the U.S. economy is not a rabbit cage. And business people -- entrepreneurs especially -- don't respond well to prods from a stick. Any stick. If they get a glimpse of the rod, they'll leap away for sure -- but it might just be to somewhere outside the United States. Our cage. And the carrots of cheaper labor there overseas might even be tastier.

Maybe the president is forgetting the goal, which is making the economy grow faster. Enough carrots, and businesses will grow. And they'll create jobs. But pick up even just a few sticks, and you won't get recovery. Instead, we'll all be looking at an empty cage and asking: Where are the rabbits?


Ryssdal: Amity Shlaes is a senior fellow in economic history at the Council on Foreign Relations. Take a second to send us your thoughts -- write to us.

About the author

Amity Shlaes is author of the biography “Coolidge,” and she directs the economic growth project at the Bush Presidential Center.

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ValpoViking's picture
ValpoViking - Feb 1, 2012

What the heck is this woman talking about?

emitchboy's picture
emitchboy - Feb 1, 2012

Unlike Mr. Schrieber, "Tunaqueen" above got it right. And I also am sick to death of the media, including my favorite public media outlets, consistently using this phrase wrong. It drives me up a linguistic wall. This particular commentary, while interesting (even though I disagree with it), falls completely on its face by standing on a woefully incorrect metaphorical premise. Folks, for the thousandth time, it's not "carrot or stick", or "carrots and sticks". It's "carrot and stick". The image is taken from luring a stubborn horse or mule to go forward by tying a carrot, with string, to the end of a long stick, therefore dangling a treat before a stubborn animal, so it will continue to walk. For heaven's sake, folks, use a usage manual, Bartlett's, or at least google, to make sure of a phrase's derivation before you use it on the air, let alone base an entire commentary on it. Your public will thank you.

bumbinhagan's picture
bumbinhagan - Feb 1, 2012

You are hilariously pious but unfortunately mistaken. Please do yourself a favor and look up the phrase. It is not about a carrot on a stick--or rabbits.

Ernie.Schreiber's picture
Ernie.Schreiber - Feb 1, 2012

Some "carrot on stick" folks think the phrase refers to holding a carrot before a donkey's nose as an incentive. Others think it refers to feeding a donkey for good behavior and beating it with a stick, when it is recalcitrant. But never before have I heard the phrase used in reference to a rabbit. In what world do people beat rabbits with sticks? To what end? An editor should have saved this young woman from such a misuse of the phrase.

bumbinhagan's picture
bumbinhagan - Feb 1, 2012

Dear Marketplace, Amity Sclaes, and Tunaqueen,

The metaphor of "carrots and sticks" has nothing whatsoever to do with rabbits. I can't believe you aired a segment in which someone repeatedly misuses it, although the effect was somewhat comical. (Why are we worried about carrots and sticks and empty rabbit cages? Only Ms. Shlaes knows.)

The carrot and stick idea comes from the different ways you can get an animal to pull a cart: hit it with a stick or hold a carrot out in front. Punishment vs. reward. It's pretty simple. I'm not sure what Ms. Shlaes imagined happens to the rabbits--are they beaten with the sticks? Or are they merely handed a stick, much to their chagrin?

Olorcain's picture
Olorcain - Feb 1, 2012

I am assuming that Ms. Shaeles has a decent job so she can buy items made by companies who have moved their operations oversees. Many people in this country, however, no longer have a job because manufacturing is now done somewhere other than the US. Why does she think that US taxpayers should subsidize companies who have no faith in the people that they want to buy their products.

pauliswood's picture
pauliswood - Feb 1, 2012

"If they get a glimpse of the rod, they'll leap away for sure -- but it might just be to somewhere outside the United States."---Miss Shlaes.

So Miss Shlaes worries businessmen will leave? Nothing wrong with that I guess - at least they'll be closer to their workers.

Of what use is the bathwater when the baby is already gone?

Tunaqueen's picture
Tunaqueen - Feb 1, 2012

I am so weary of people miss-using the term "carrot and a stick" to represent reward and punishment rather than the promise of something you will never obtain, but can get close enough to think you will. Traditionally, the carrot was tied with string to the end of a stick dangling a short distance from the front of a donkey or mule's nose to get them to move forward, in the belief they would reach the carrot.

The story by Amity Shlaes uses the carrot/reward and stick/punishment analogy over and over and over. Is there a new story in which an animal is rewarded with carrots and beaten with a stick? How did this get started? Does PETA know about it?

bumbinhagan's picture
bumbinhagan - Feb 1, 2012

I am so weary of people criticizing other people for "miss" using phrases, then doing it themselves.

This is a case of the pot and the meat kettle.

Tunaqueen's picture
Tunaqueen - Feb 1, 2012

I wasn't criticizing the author - I was seriously wondering if there was a new version of the story that involved carrots and sticks that I hadn't heard of. I am quite old and naive and the story I grew up didn't involve hurting donkeys or rabbits with sticks.

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