Corporate Shakedown Artists

The shake-down is an ugly but pervasive part of our culture. For example, schoolyard bullies shake down other kids, forcing them to hand over their lunch money, and the mafia made a big business of shaking down small businesses.

But these shake-down artists are bush-leaguers compared to the all-time King of the Shake-Down: Corporate America. Using a scam called "location incentives," major corporations that plan to open a new facility routinely bilk millions of dollars from us taxpayers to subsidize their move. Taking advantage of publicity-seeking mayors and governors, corporate executives come in waving paper promises of "new jobs" and "economic growth" for the lucky burg that pays up the most in incentives--things like no property taxes, free land, no utility bills, taxpayer-financed roads, and outright cash.

This is, of course, a ripoff. But who doesn't like free money, so corporations now hire shake-down specialists who are expert at extorting the most. They'll tell Topeka's mayor to sweeten their offer, because Tampa says it will pay construction costs for a building, and Tucson is putting up a $3 million grant.

No one mentions that all of this is a sham. Multi-billion dollar corporations neither need nor merit this public subsidy, they've already decided where they're going to locate (based on real business factors), they'll usually fail to create the promised jobs, and the giveaways drain the public budgets for schools and other real needs. Still, the shake downs work because mayors and governors get their political jollies from announcing that GreatBigGiantCorp has chosen Greater Bugtussle for a new factory.

This is Jim Hightower saying: Holy Adam Smith! A public official should be ashamed, not proud, to take part in this total perversion of the very idea of free enterprise. To help stop these shameful shakedowns by Corporate America, call Good Jobs First: 202-626-3780.

Enjoy this piece?

… then let us make a small request. AlterNet’s journalists work tirelessly to counter the traditional corporate media narrative. We’re here seven days a week, 365 days a year. And we’re proud to say that we’ve been bringing you the real, unfiltered news for 20 years—longer than any other progressive news site on the Internet.

It’s through the generosity of our supporters that we’re able to share with you all the underreported news you need to know. Independent journalism is increasingly imperiled; ads alone can’t pay our bills. AlterNet counts on readers like you to support our coverage. Did you enjoy content from David Cay Johnston, Common Dreams, Raw Story and Robert Reich? Opinion from Salon and Jim Hightower? Analysis by The Conversation? Then join the hundreds of readers who have supported AlterNet this year.

Every reader contribution, whatever the amount, makes a tremendous difference. Help ensure AlterNet remains independent long into the future. Support progressive journalism with a one-time contribution to AlterNet, or click here to become a subscriber. Thank you. Click here to donate by check.

alternet logo

Tough Times

Demand honest news. Help support AlterNet and our mission to keep you informed during this crisis.