Crony capitalism is as crony capitalism does

Craig Hall, Publisher

Craig Hall, Publisher

And it knows no party.

Read that again: Crony capitalism knows no party. And to the great surprise of many (who still refuse to see it), all it took was the Carrier deal to show just how out of touch with freedom and economics our elected leaders are.

Trump supporters are gleefully screaming from the rooftops about the jobs that “The Donald” saved by keeping Carrier in the country — all while conveniently avoiding many facts that would have the head spinning for any lover of freedom and basic economics.

Let’s just start with the basic premise of tax breaks for new and big businesses under the guise of jobs created or saved. Only someone in the bureaucracy of government largess could come up with a plan to take confiscated dollars and use those dollars to make up dollars the government won’t get from taxes from an existing business to save jobs so folks from that business can spend a small percentage to generate sales taxes to help pay for the next round of businesses that only the government and select dignitaries are smart enough to tell the rest of who get no tax breaks exactly what business needs to be saved next.

I realize that’s a long, run-on sentence, but also a perfect example of this run-on, worthless version of government picking winners and losers. Added on to this heap of “special treatment” cronyism are our elected betters telling us which businesses deserve tax-free treatment to relocate or locate to a city or county near you. The only thing I notice is we have a lot of people elected who claim to be for no taxes, the little guy and creating a more business-friendly environment in their particular area of jurisdiction are the same folks who always seem to leave out the part where those favors only go for new businesses that they (and they alone) approve of, big businesses that have insider access to government officials and that you and your existing small business that provides goods and services (under their all-knowing purview) will never see a dime of tax breaks when it comes to feeding the dollars they need to make to pay for their cronyism.

Don’t think it happens here? Guess again. One doesn’t have to go too far back in history to see nearly EVERY Republican signing on to the crony capitalism-based Rural Jump-Start Colorado. You remember, that’s the special program where a select few individuals determine just which businesses will get to relocate to Mesa County tax-free for 10 years if they promise to create jobs. Now I know it was sold with some special “requirements” for those businesses in terms of competition and other determining factors so a new, favored business won’t “hurt” already established businesses in our area. But doesn’t giving one business a tax advantage over all others already hurt the established businesses in the area?

Also missed in how the above program will “work” is the obvious example of Start Up New York, which in the previous year to passing our version of this law created under 100 jobs while spending nearly $30 million in advertising and promotion. That’s a great deal for ad companies, the government and a couple of small companies, but not a good deal for taxpayers.

But let’s get back to Trump and the Carrier deal. First off, like the Mesa County crony capitalism I refer to in this column, this is a state program and none of the business of any president or president-elect. But one only needs to look at Trump’s running mate as to why this “job emergency” made it to the top of the employment heap, since Indiana is Mike Pence’s home state. But did you know that even with this special gift to some selected workers, more than 1,500 Carrier, and its parent company, United Technologies, jobs are still going to Mexico? Why weren’t those jobs worth saving? Did you know that the incoming administration is threatening to tax companies at 35 percent on goods they try to import after leaving the country while also inferring that companies that leave will be ineligible for federal contracts? I thought blackmail and using the IRS as an enforcer on your enemies was something Trump supporters would be against.

Or how about some Main Street logic? How many folks do you know who owned a business that went out of business in the past five or 10 years? I bet you know more than a few. Now put that number percentage-wise on to the number of small businesses in this state and then multiply that by the number of folks each of those businesses employed and you’d come up with thousands upon thousands of jobs lost. I must ask: Is it really worth spending millions of dollars to attract what these know-it-alls consider 50 or 100 “good-paying” jobs while they ignore thousands that will never return? Of course it isn’t.

But that won’t stop these programs from happening. Because to folks who want to pick winners and losers, tax breaks are for winners and the vast majority of businesses — to nearly every one — that operate in our county and state are losers when it comes to making the level of true crony.

The only tax investment these folks find worth every penny is the camera time to pat themselves on the back. In this case, Trump is no different.

About
Since June of 2000, Craig Hall has been the owner/publisher of the Grand Valley Business Times. He can reached at 970-424-5133 or publisher@thebusinesstimes.com
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Posted by on Dec 6 2016. Filed under From The Publisher, Opinion. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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