November 23, 2017
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Public Cynicism Enables Costly Political Hypocrisy

The political hypocrisy of crony capitalism –  touting market capitalism while making taxpayers fund corporate welfare – is a rare and unfortunate case of bipartisan consensus.

by Ralph Nader


The political hypocrisy of crony capitalism –  touting market capitalism while making taxpayers fund corporate welfare – is a rare and unfortunate case of bipartisan consensus. Republicans openly embrace it, but many Democrats also fall prey to government-guaranteed corporate capitalism when they believe it to be politically expedient.

Maybe these examples will get you steamed enough to tell your members of Congress – “enough already!”

Jeff Bezos recently launched a bidding war pitting cities against one another for Amazon’s second headquarters. Imagine shelling out at least 7 billion taxpayer dollars in return for Amazon’s unenforceable promise of 50,000 jobs and $5 billion in capital investment.

The bidding frenzy with the taxpayers’ money, without a taxpayer referendum, should be an embarrassment to the mayors who are bidding for Amazon’s business. Mayor Jeff Cheney of Frisco, Texas (population 160,000) wants to build the city around Amazon and its taxpayer-funded entitlements. Philadelphia’s officials have offered a slew of tax incentives for Amazon’s empty promises. Never mind that existing businesses would continue to pay taxes that are waived for a giant company that is emptying out property tax-paying Main Street, USA.

So far, Amazon has managed to flim-flam local leaders across North America. GT Bynum, Tulsa’s Mayor, is doing somersaults. No problem with tax escapes. “Whatever it takes,” he assures them. From the Mayor of Washington, DC to the Mayor of Ottawa, Canada, cities are promising whatever it takes to bring this predatory-pricing Moloch to their city.

Egging them on before the October 15, 2017 deadline for submissions, Bezos’ spokesman, Adam Sedo, imperiously declared: “We invited cities to think big, and we are starting to see their creativity.”

San Jose, California’s Mayor Sam Liccardo said “no way.” In a column printed by the Wall St. Journal, Liccardo wrote: “My city won’t be offering incentives to Amazon. Why? Because they are a bad deal for taxpayers. With many subsidies, the jobs a company brings to an area don’t generate revenues commensurate with public expenditures.” He cites the cost to Boston’s taxpayers for luring GE’s headquarters from Connecticut to be $181,000 for every job promised. Iowa, he added, gave Apple $213 million in tax escapes to locate a 50-job data center in Waukee, IA.

Besides, wrote the forthright Mayor Liccardo, the presence of a skilled workforce, good schools and infrastructure “play a far larger role in determining boards’ corporate location decisions.”

“Why are they doing this whole dog and pony show?” asks Matthew Gardner, from the nonpartisan Institute on Taxation and Economic Policy. “They would like a package of tax incentives for something they were going to do anyway.” Professor Art Rolnick of the University of Minnesota went so far as to call Amazon’s bidding wars “blackmail.”

Meanwhile, Emperor Jeff Bezos, the world’s richest man, gets to sit back and watch his “candidates” fight it out.

A Taiwanese giant, Foxconn, the builder of Apple’s iPhones in China, enjoys a similar advantage. To build a flat-screen plant, by sheer coincidence, in House Speaker Paul Ryan’s district, Ryan’s buddy, Governor Scott Walker, compelled his Republican legislature to cobble together a $3 billion taxpayer-funded package for an unenforceable promise of 13,000 jobs (from an initial 8,000 jobs after more taxpayer cash was assured).

The whole deal, repeatedly trumpeted by Trump, with a company notorious for not following through on previous deals elsewhere, was pushed on Wisconsin’s elected officials by funding from the extreme right-wing Charles Koch Foundation and the Bradley Foundation.

Not to be outdone, Trump’s energy secretary, Rick Perry, is pushing  $3.7 billion in loan guarantees to the failing, long-delayed, red-ink doused Vogtle Nuclear Power Plant in Georgia. Add this sum to the $8.3 billion already extended in taxpayer-guaranteed loans to this “boondoggle” and still the New York Times reports that these guarantees “might fall short of what will be required to complete the costly reactors.”

These corporate interests see American taxpayers as a limitless honey pot for their giant, bungling, conniving businesses. At the same time, Trump’s director of management and budget, Mick Mulvaney, constantly justifies ruthless cuts to important public programs by citing taxpayers’ rights. Apparently, these rights are not applicable to protecting taxpayers from predatory big-business executives hungry for corporate welfare that gets Mulvaney’s regular approval.

Public cynicism allows the costly hypocrisy of politicians to thrive. So watch out for the “pox on both your houses” public sentiment. Beware of crony capitalism – it turns politicians against the taxpayers they allegedly represent in favor of unaccountable corporate interests. Don’t let the “welfare kings” pick your pockets, by letting Congress wallow in cash register politics misusing the very power you have delegated to it.

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