Crony Capitalism a Consistent Failure for Taxpayers
We all know about Solyndra and the various titanic boondoggles from the so-called "stimulus plan". My headline notes that these were a failure, but I guess that is only from the perspective of the taxpayers. From the perspective of the ruling class these programs might have done precisely what they were supposed to do- loot the public treasury and reward your friends and supporters.
Well its not just the federal government that can blow taxpayer money trying to circumvent the free market by picking winners and losers. Gov. Beebe can do it too. I have spoken before about his so-called "Quick Action Closing Fund" which he can use at his personal discretion to fund businesses that he has decided ought to be supported by the rest of us. And this problem is not limited to Democrats. Recall my previous story on the trouble that tough-talking Texas Governor Rick Perry had with a very similar fund. Although maybe its not his trouble that businesses he blessed with taxpayer money wound up getting some of it back to him in contributions.
Gov. Beebe elected to hand $1 million taxpayer dollars right up front to Windstream, with another $4.5 million dollars to be doled out over time if certain goals are met. About $3.5 million of that money is gone, but it appears that Windstream jobs will be going elsewhere. What really hurts is that when the deal was made these were not really new jobs. We were just paying them not to move existing jobs in Arkansas when Alltel sold out to Windstream. They agreed- just long enough it seems to get most of our cash.
The whole concept of giving the Governor a slush fund ought to be scrapped. Politicians get credit for "job creation" when all they are really doing is taking jobs from one place (the place they would occur in a free market) and dumping them in another. They then trumpet the jobs they "gained" or "saved" but you never see the ones they lost. Why tax a local hardware store in order to give Home Depot a cash incentive to open an new store down the street?
When big companies play states with slush funds like this off against each other you can be sure that the politician who gets to claim he "created jobs" was the one who over-bid the most taxpayer money to the strangers. We really ought to be nicer to the businesses that we already have rather than continuing to tax them in order to pick a few winners.
This November, we will be asked to vote on a 1/2 cent sales tax increase for "highways." Certain big players in NWA are touting this as a "pro-business" plan that will "create jobs." They cannot be correct. Like the existing slush fund, this new one cost jobs in some places in order to create the gains in others. It also cannot be a "pro-business" plan as an honest "pro-business" plan would keep taxes and regulations to a minimum in order to produce a generally favorable business climate and then let the free market sort out the winners and losers.
This is rather a "pro-cronyism plan" in which certain big players know they will benefit at the expense of the average small business whose customers now have that much less buying power on every transaction. The only place it will truly increase business is in counties of other states that are adjacent to Arkansas, as our residents slip across state lines for big ticket purchases in order to flee our disproportionate sales tax burden.