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December 03, 2012 10:45 AM Cavemen in Neckties

By Ed Kilgore

This is hardly a new subject—TNR’s Alec MacGillis among others did some serious investigative reporting back when Rick Perry was a viable presidential candidate—but Louise Story of the New York Times takes a long look at the whole sleazy business of state-funded “investment incentives” for corporations as exemplified by Texas, and how it affects public budgets and services there and elsewhere.

I strongly encourage you to read the whole thing, and reflect on the systemic atmosphere of corruption that surrounds the “race to the bottom” of state and local government officials happy to trade off revenues, regulations, every law or ordinance protecting the citizenry, and every shred of self-respect, in exchange for the right to grip-and-grin with “job-creators” at ground-breaking and ribbon-cutting ceremonies. Pols who go along with the game often care nothing about the public services they’re trading off or the low-wage, non-unionized workers who are the alleged beneficiaries. It’s also how your average redneck pol can instantly become known as a shrewd wheeler-dealer when all he’s really doing is acting as a corporate agent shaking down taxpayers and pocketing a “pro-business” reputation and perhaps some campaign contributions—not to mention legitimizing all the time he spends hob-nobbing with and sharing the lifestyles of his new corporate friends.

Careful readers may deduce that I take this subject kinda personally. It’s true. The pathological game Story describes is a chronic disease in my native South. But when I worked in community and economic development in Georgia in the 1980s, there was a sense that the “race to the bottom” was a thing of the past, that we were finally ridding ourselves of craven habits of whoring ourselves to “investors” that went all the way back to Reconstruction, and realizing that economic development meant enhancing, not despoiling, our own material and human resources. Republicans as well as Democrats were beginning to “get it,” talking about education and skills levels and quality of life as more important than low taxes and wages in stimulating economic development. A guy like Rick Perry was viewed as a throwback, a caveman in a necktie.

Now cavemen in neckties have made a big comeback, and more and more Republicans are making the lowering of business costs the main point of public policy at both the state and national levels. It’s useful to look at a place like Texas and see where it all came from, and where it inevitably leads.

UPDATE: Commenter TJ flatteringly asks for links to previous stuff I’ve written on this subject. Off the top of my head, here’s one that also discusses the nationalization of the “moonlight and magnolias” approach to economic development in the states (notably Wisconsin) and at the federal level.

You may be interested to know one of the first times I wrote about this was actually in a speech deriding the old (yet now supposedly fresh-and-new) southern approach to economic development that was requested, refined and delivered by none other than then-Georgia governor Zell Miller, in 1991. That’s how far the rock has rolled back down the hill.

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.

Comments

  • Nadd2 on December 03, 2012 10:59 AM:

    Take, for example, Scott Walker. Please, take him.

  • c u n d gulag on December 03, 2012 11:03 AM:

    The real "tell" that the politicians don't give a shite, is that they don't even bother to do any sort of ROI on what they've given the companies.

    They don't look at what additional promised jobs, if any, the deal created.
    They don't look at what, if any, additional tax revenue from the company, and the people in the promised jobs, brought forth.
    They also don't look at any other societal benefits, or problems, that the deal brought to the area - like expanded education and training, more and better health care for more people, etc., or the reverse.
    Once the deal is struck, the politicians turn their backs on the whole matter, and go to look for their next source for campaign funds.

    In other words, it's a bank robbery made to look like a loan.
    And an inside job at that!
    After all, it's OUR employees, the politicians, who make those deals with OUR money, all while being on the companies payrolls - maybe indirectly, but at the very least, they are in thrall to those very companies that they threw money at.

    After all, who's going to pay for the politicians reelections?
    The people who just got screwed, or the people who got assistance in doing the screwing?

    Maybe some enterprising local reporters should hold their local politicians little tootsies to the fire, and demand a detailed accounting, a RO"I", on the public's "investment" in those companies?

  • howard on December 03, 2012 11:27 AM:

    it would be one thing if the states that are the worst offenders actually had good growth to show in return....

  • Mikhail on December 03, 2012 11:33 AM:

    Howard, that is it *exactly.* All this corporate whoring is dubious on its own (crony capitalism, much?) but if it actually produced some sort of positive returns, that would be one thing. But mostly it seems to demolish the states in which it is practiced, bankrupting them in favor of the 1%.

  • Margaret on December 03, 2012 11:42 AM:

    As Nadd2 indicates, this is not a problem limited to the South. As the film, "As goes Janesville" reveals, WI has witnessed the following: (1) Despite numerous incentives, GM pulls out of Janesville, costing substantial numbers of jobs. (2) A group of corporate leaders pressure the city council of Janesville to provide incentives to a start-up which may or may not provide 150 jobs at some later date, while (3) the school system loses 200 jobs. But of course, government doesn't create jobs, my friend. Apparently however it can bribe someone else who may or may not create jobs while certainly losing jobs.

  • TJ on December 03, 2012 11:43 AM:

    Ed-- You've long written on the effects of the South's chosen method of economic devlopment-- the false rationales, the Bourbon control, the sacraficing of education, wage growth, etc, on the altar of low taxes, pro-business policies. Can you link to some of your previous writing in this regard? From a fellow Southerner....

  • scott_m on December 03, 2012 12:03 PM:

    I live in Texas.



    Anyway, the GOPols like to go on about the job growth here compared with other states with the implication that if other states adopted the low-tax/low-service/low-regulation government that Texas runs, they too could experience net job growth.

    Nope, nope, nope.

    What Texas is doing is leaching jobs from those other states. The Republicans running Texas are like a baseball player bragging about all the fielder's choices he hits.

    It's a cliche, but it can't be said enough: We don't give a @#&*! how you do it in Texas.

  • rdale on December 03, 2012 12:18 PM:

    Welcome to Eu-Taw, the most-business-friendly state in the Union! We are consistently rated as the most "well-managed state" by Forbes magazine, and are the playground of the Barons von ALEC. The governor of Utah, Gary Herbert, with his high-school education and his real-estate training, falls all over himself to suck up to any company that promises to set up shop here. Radioactive waste? Not a problem! Strip mines by a National Park? We have lots of National Parks! Just make sure your five- or six-figure check to the governor's "campaign" clears and let's talk business!