Friday, October 22, 2010

No to Corporate Welfare

I'll be glad to have 189 new jobs in Racine if they ever materialize (read story here). That said, isn't $5.7 million in corporate welfare from the state an admission that Wisconsin has a burdensome tax and or regulatory environment? Do we want government using our money to pick business winners and losers? My answers are yes and no respectively. Let us level the playing field and make life easier for the only people who can actually grow our economy, entrepreneurs.

9 comments:

Tim the Shrubber said...

"That said, isn't $5.7 million in corporate welfare from the state an admission that Wisconsin has a burdensome tax and or regulatory environment?"

Perhaps a bit, but every States does this...even the current small Goverment poster boy Texas. Many, many of those jobs 'created' is Texas are still the result similar state payouts.

And I say created in quotes because in many cases they are just jobs poached from other states. Texas says, "Hey, we have somewhat lower taxes than the state you are currently in plus we will give you corporate welfare to move here....come to Texas y'all." Oh well, at least the value of my house in Texas has not dropped in value.

Now, I would rather not see the state not make these kinds of payouts...but WI would be screwed if they quit doing it while others continued to do so.

Denis Navratil said...

"Wisconsin would be screwed if they quit doing it."

Perhaps TtS. That is, unless they replaced corporate welfare with smaller, less intrusive government. The way I see it is that if your state is economically uncompetitive then we ought to do something about it. One choice seems to be the Doyle/big gov method that addresses the problem in an ad hoc basis that politicizes business decisions while increasing the incentives towards corruption. Another is to treat all businesses equally and stop the corrupting and politicization of both business and politics. Obviously, I prefer the latter. Thanks for your comment TtS.

Tim the Shrubber said...

"...all businesses equally and stop the corrupting and politicization of both business and politics."

I would love that, but unless all (or at least most) of the States start acting this way, any State that does not play the subsidy game unilaterally will be slammed.

Texas has a "smaller, less intrusive government"...and still offers the corporate welfare (to favored companies). It seems to be a variation of the Prisoner's dilemma. Everybody would be better off if they stopped the corporate welfare, but they are not going to because they cannot trust the other players to also refrain.

Denis Navratil said...

Unilaterally ending corporate welfare coupled with smaller government is a winning strategy in the long run. I would love to see that experiment take place.

As I see it, government officials are biased in favor of big, publicity generating business propositions. This allows Doyle to bask in the glory of bringing jobs to Wisconsin even as we hemorrhage jobs overall. Of course the big splashy jobs announcement comes at the expense of the suckers who plod along unappreciated by Doyle etc... Eventually they close down or pack there bags or decide against expansion.... all of which means fewer jobs. Ultimately it will take an electorate that understands economics and the trickery of politicians to right the ship. Lately I am a bit more optimistic about those prospects.

Anonymous said...

..."Another is to treat all businesses equally and stop the corrupting and politicization of both business and politics.."

LOL, you brought a smile to my face today. And the republicans are champions of equality, and fair politics?!

Denis Navratil said...

Glad to make you smile anon. Note, however, that I didn't suggest that Republicans are "champions of equality and fair politics."

Anonymous said...

This is accepted business practise for government in the name of "economic development". Tax small business and keep their margins razor thin, then when you can make headlines by giving some of that cash to someone to create a few jobs, fantastic! We just brought in a new company or got someone to stay in the State! Nevermind the fact that non-union money from small business is used to bribe large, mismanaged unionized companies like Harley in order to keep those Democratic votes.

Sean Cranley said...

Isn't it intersting how money (capital) can organize itself into partnerships and corprations fo various stipes, trade groups, etc. etc. But let working people organize to get decent wages and benefits and all hell breaks loose inside the Con brain stem.

Unions are one of the best things that ever happened in this country. Are they perfect? No. but neither are corporations and I've never heard anyone suggest that ban them.

Anonymous said...

Wait, did Sean Cranley chime in about business? Does he also have an MBA from the Gateway Technical College School of Business? No, I'm not curious enough to read the post, as always.