DUCK SOUP: Gorillas In The Myth
When a group of folks band together based on shared beliefs we usually call it religion -- that is, if we credit them with rational suppositions. If they worship kumquats and believe that tapping their noses with crowbars elevates them toward the divine we say they embrace myths. Kumquats and crowbars are too much for our scientific, Cartesian logic to allow. Give us parting seas, angels dancing on the head of a pin, speaking in tongues, or at least, an ancient turning-wheel-of-life tradition with yings and yangs and a fat godhead who contemplates his tummy.Have you noticed that politicians theoretically on both sides of the political spectrum seem to share beliefs in economic growth? Did you ever stop to wonder if they all might be mything something? Ronald Reagan, perhaps the greatest witch doctor of the good growth groupies, got away with calling his opponents' plan "voodoo," although he was a growth groupie too.Fact is, periods of rapid economic growth always bring higher unemployment and lower wages. Recessions do the opposite. Big businesses, especially very big businesses, do well when growth is galloping, individuals and families do better when it walks or stops completely. Growth brings instability and crime, stagnation stabilizes. Hmmm.It's pretty obvious who benefits from the mything of the electorate, and it's equally clear who foots the bill.Adam Smith, the great guru of market theory, pointed out that in order for market forces to act in everyone's best interests the producers of goods have to bear all of the costs of production. That means costs have to be internalized. When costs are externalized, that is, paid by someone who doesn't stand to gain or lose from sale of the product, the market becomes skewed and works against society's best interests.In recent years national, state and local governments are climbing all over each other to lure business. "More jobs!" they chant. "Increase the tax base," they sing. "Kumquats! Crowbars! Hallelujah!"So South Carolinians will pay $130 million over the next thirty years for the pleasure of having BMW in their neighborhood. If the Willamette Chip Mill sneaks into Rutherford County, North Carolinians will chip in nearly a million bucks to improve a couple of roads. Over and over we are told that it is in our best interest to provide water or sewer hookups, roads, loans, bonds, retraining for prospective workers or other benefits to improve the business climate. Gotta get those factories! "Kumquats! Crowbars!"But, companies pay property taxes too, don't they? Aren't they going to help fund all those expensive baubles we're dangling in their faces? Well, no.Nationwide corporations paid 43% of property taxes in 1957, today it's about 18% and shrinking. One of the first concessions a big outfit demands is reduction of taxes or valuation. If that sounds Mickey Mouse -- I mean, can't local pols see through a scam that transparent? - it is. When Disney did its World thing in Florida their real estate was taken off the books. So Floridians pay for infrastructure to provide Goofy with visitors. How thoughtful.When a candidate tells you that your region should be friendly to business, suggest that it should be friendly to you instead. Small businesses owned by your friends and neighbors, individual proprietorships, companies with a commitment to the community and a track record of hiring and keeping employees strengthen the social fabric. Like the stand up comedian's gorilla, once you have a transnational corporation in your living room it can do anything it wants to.Look to Moore County, South Carolina for a case in point. It attracted Proctor-Silex in the 70s with tax breaks, cheap labor and environmental flim-flam. They even tossed in a $5.5 million water and sewer bond issue when the plant expanded. In 1990 Proctor-Silex flew south because Mexico upped the externalization ante on all counts, dumping 800 workers. ("More jobs!") Moore County still pays for the bonds and the drums of toxic waste the company forgot to put in its luggage. ("Increase the tax base!") "Kumquats! Crowbars! Hallelujah!"