Thursday, September 19, 2013
Paradox? Local Conservatives Demand Large Government Role For Economic Growth
You’ll never see the above headline in a local establishment or corporate-owned newspaper at anytime. Ever.
For instance, the Janesville Gazette (Aug.18) contained a front-page headlining story titled, “All filled up?” explaining away that Janesville’s large inventory of vacant industrial properties no longer exists. The newspaper, as an example, gave much credit for the so-called progress to a single private developer and praised the Rock County Development Alliance for tracking vacancy rates and collecting the data.
Not mentioned in this article in any way, shape or form, or any previous similar stories about local economic growth is the role government played in nearly each and every case. Now, I’m not tooting the government’s horn on this as much as I'm looking for proper credit given to where it is due.
One of the "success" stories from that article is an industrial location on Venture Drive in Janesville which received a $328,000 TIF funded forgivable loan whose forgiveness is based on job creation. It can be safely assumed that the “new” business occupant also received state enterprise tax credits for basically moving their operation from Walworth to Janesville.
Just for the record I’m not bashing any of the businesses mentioned here. Again, I’m just looking for political consistency at the overall record, aligning economic growth ideologies with the reality, and accuracy in reporting about these activities.
Now, I can see small government business conservatives, those self-described “jobs creators,” go ballistic and stomp their feet at me over the idea that government created those jobs, yet I’m not implying government did that at all.
What I am implying is the contradiction inside their own meme, that without government and its power to tax collectively, legislate selective tax credits or legally create caches of tax revenue (TIF Districts, WEDC) for redistribution, many of these developers and businesses would likely not remain in Janesville.
Truth is, government is thee impetus for any measurable economic growth because many of those seeking government aid for start-ups or expansions in and around Janesville have stated they would have to look or re-locate elsewhere without it. That's a fact. In the past, I've referred to this gambit as fear market enterprise. In short, they are holding entire communities hostage in exchange for access to local tax treasuries.
One such ultimatum came from the new private-for–profit start-up SHINE medical technologies, who was asked what would happen if Janesville decided against an "incentive" package containing a taxpayer-backed $4 million loan guarantee. The founder of SHINE replied that scenario would force him to abandon Janesville and look at other communities to start his venture.
SHINE eventually got what they wanted from the city of Janesville which also included free land and other perks valued at over $9 million. They also picked up federal grants and state tax credits worth an additional $20 million. So I have to ask, why doesn't the concept of government (vs private banks, free market capitalism), and more accurately the public (taxpayers), ever get any credit for this?
Here's another one. When cash-rich Seneca Foods said they were considering the construction of an 80,000 sq. ft. addition to their existing food processing facility in Janesville, they realized their private-for-profit business model had a costly hi-tech waste water problem.
Instead of turning to a local philanthropic fund (Rock County 5.0?) that provides venture capital and private loan guarantees for innovation and ideas (LOL, no they don't), or private waste management companies for help or resolving their problem internally, they put the screws to local city government and asked, "what can you do for us?" Of course since Seneca hinted that they had competing offers from other communities, the City of Janesville obliged and proposed building a $3.3 million aerobic waste facility for Seneca.
Never mind that Janesville is broke and had to borrow every penny for the project while Seneca sits on huge cash reserves. Never mind that the deal gives Seneca a government powered advantage over its free market competitors. Adding insult to injury, not one official from Seneca Foods was present at the city council meeting when the hand-out deal was approved. Instead, the city council president described how we'll all one big happy family and how wonderful it is to "partner" with such a great community member!! Fear market enterprise.
It doesn't end there. Over the years there have been many other wealthy developers and businesses, ANGI, Prent, GOEX and WW Grainger just to name a few, who have received collectivist government revenue for their business projects. I'm barely skimming the surface and this is only Janesville.
Fear market enterprise has now reached the point in Janesville where they no longer even guarantee existing jobs or add workers in exchange for the financial aid. Some have boldly justified their demands on local government with the line, "the community (taxpayers) needs some skin in the game." Yes, they demand "government get out of the way" but also want "public-private partnerships." Some of them have implied that the promise to pay their property taxes is payment enough in return for huge taxpayer funded cash hand-outs. No kidding.
So here's the core of the paradox. These fine principled free market conservatives claim it is government and liberals (particularly progressives) and liberalism that stifle growth by applying collectivism to expand the role of government into the free markets - thereby picking winners and losers in industry and creating uncompetitive advantages. Yet that is precisely where Seneca, WW Grainger, Sara or Hendricks Developments and their business lobbies, Rock County 5.0 and Forward Janesville, go to first for help. If government is so inefficient, so terrible and so destructive to free market competition, why do these folks, many of them huge supporters of Paul Ryan and Scott Walker, politically conservative, wealthy by any standard and ideologically conditioned against (supposedly) government, consistently gravitate to government?
Every. One. Of. Them.
So the next time you hear a conservative politician or local business person say the key to free market growth is by shutting down collectivism or getting government out of the way of business, ask them "how much more will government getting out of your way cost us taxpayers?" Right now, it's costing Janesville a fortune.
More articles related to local economic development:
RNR - Government Plays a Huge Role In Janesville's Comeback.
RNR - Local Business Group Pushing For Their Own Entitlement Society
RNR - Fortune 500 Company Needs $227,500 "Loan" From Janesville Taxpayers
RNR - When Big Business Drinks, Everybody Pays
RNR - Despite Paul Ryan, Janesville's Turnaround Sparked By Government
RNR - Epic Fail: Janesville City Government Enters The Abyss
Posted by Lou Kaye at 12:00 AM