Corporate welfare: 100% wrong, 52% effective

100% Against Corporate Welfare Sticker

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From the very first time I ran for office, I believed that government should stick to doing things that only government should do: provide universal services and amenities to the community it serves. Police, fire, roads, parks, water and sewer are great starting points. Some things aren’t so black and white: trash collection, golf courses and convention centers and concert halls are things that could go public or private, but in general, there is nothing wrong with some publi-private competition.

However, when we start down the road to “economic development” by government, where we pick winners and losers in private enterprise I’m 100% against it. Why one business should get preferential tax breaks or lower interest financing, grants or other tax support, while its competition doesn’t creates havoc in the marketplace.

We’ve gone hog-wild down the “economic development” path in Montgomery County. How do the Wamplers (owners of Hara Arena) feel as Hara Arena has had its business cannibalized  by the Dayton Convention Center, the Nutter Center, and other-tax supported venues?

Despite the fact that Montgomery County hasn’t gained any population in the last 25 years, we’ve been building new housing, new retail space and new office space like crazy- granting tax breaks and creating private taxation districts (TIFS) where the money paid in taxes comes back to the taxpayer (you’d like that deal wouldn’t you?). We now are grossly overbuilt- and facing much larger overhead costs of maintaining all the infrastructure (more roads to plow, pave and sweep). Yet, we scratch our heads about why downtown buildings are empty and being sold for pennies on the hundreds of dollars while we’re pouring tax dollars into Austin Road Interchange and new office buildings.

Finally, the Ohio Attorney general does a study on what we got for all the “investment” in “economic development” read what the Cleveland Plain Dealer reports:

A new Ohio Attorney General’s report showed that only 52 percent of companies that received Ohio taxpayer-funded economic development awards that ran out in 2010 kept their promises to boost the economy.

The report, released Thursday, identified 200 companies that received grants, tax credits and other awards from the Ohio Department of Development that did not meet their goals for job creation, job retention or other measures.

The awards to non-compliant companies totaled more than $82 million.

via Nearly half of companies that received Ohio economic development awards didn’t keep promises to boost economy, study shows | cleveland.com.

The main excuse for continuing playing this game which pits one community against another to give away your hard-earned tax dollars to these corporate charlatans is that “if we don’t do it- the jobs will go somewhere else.” Hence, NCR moved to Georgia, Mead moved to Delaware, Kettering and Miamisburg (depending on which division). The reality is, if your community isn’t a good fit for a company to make money – no amount of sales incentive should make a difference.

This is one of the key pieces of legislation I’d work to introduce in Congress when I’m the Honorable Gentleman from Ohio representing the hard-working people of the tenth district: No tax breaks or incentives can be made for business relocation, or for “job creation” except on a national level- and only for broad industries for companies that have less than 10% of the total market. We don’t need to support the Exxons or Banks of  America anymore, nor do we want our politicians rewarding their paymasters in our auction system of election.

If we really cared about creating jobs in America- we’d make our tax system work to reward those who employ the most U.S. citizens be able to make the most money. You get what you pay for after all- and what we’ve seen over the last 40 years is that the rich 1% have bought our Congress to help them gain even more wealth at a ridiculous rate.

Ending corporate welfare is my number two priority after taking the money out of politics. I hope you’ll consider supporting my campaign.

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4 Responses

  1. jstults January 4, 2012 / 9:09 pm
    A good example in the news that economic development “promises” aren’t promises (and it is foolish to pretend they are):

    Senator Jerry Moran, Republican of Kansas, said on Wednesday that he was “outraged” that Boeing was moving that work to Washington State.
    “It is hard to believe that conditions would have changed so rapidly over the past few months to bring about the decision to not only move the tanker finishing work elsewhere, but to also close down the entire facility,” he said. “The fact that Boeing is now refusing to honor its commitment to the people of Kansas is greatly troubling to me and to thousands of Kansans who trusted that Boeing’s promise would be kept.”
    Boeing to Shut Witchita Plant

  2. Bubba Jones January 5, 2012 / 9:53 am
    jstults – I didn’t read your link, but my guess is that Boeing moving production from KS to WA has something to do with the recent NLRB decision concerning Boeing’s new plant in SC.  Are you familiar with that situation?
  3. J Dziwulski January 5, 2012 / 3:13 pm
    This was a pretty good post….you are talking about how effective these programs are, what are the outcomes, and whats the decision as to are the programs ‘worth’ the cost. 

    There is a lot done re ED, esp things like tech transfer, that could stand some scrutiny as to how effective they are. Im thinking of things like those Edison programs and various other tech-related ED programs.   We hear about them but dont see many metrics as to the outcomes.  

  4. jstults January 7, 2012 / 9:31 am
    Bubba Jones, I think the consolidation of the Wichita operations has more to do with the looming defense budget cuts than anything else.  I did collect a few links on the Boeing NLRB stuff in my Dayton Aerospace Cluster comments.  I think it’s pretty clear that the Puget Sound-centric Machinists Union used the government as a negotiating “stick” the way any crony capitalist might angle for competition suppressing regulation or subsidy. 

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