Well, it passed. And it was uglier than we first thought.
What turned out to be $40 million in bribes for one company turned into $60 million for up to five. And effectively, the Honorables have created a new incentive program that can be altered and expanded in years to come as every company in North Carolina comes with its hand out, pleading poverty, and crying crocodile tears that it will close its plant or move out of the state unless we, the taxpayers, write them a big fat check.
HB 4 is more than just corporate welfare for two companies (Goodyear and Bridgestone/Firestone). It is a dangerous precedent down a slippery slope towards state-run businesses. If the state is going to get into the business of subsidizing company payrolls to keep them globally competitive, where does it stop?
Now, every company in North Carolina, when thinking of investing in operations will see dollar signs, and show up at the General Assembly begging for their piece of the pie. And why shouldn’t they? The message sent today was loud and clear. The state will pay cash money, just act like you are going to close your operations. If I’m a CEO, why would I pass up the opportunity to add $3 or $4 million in free money to my bottom line? Any smart executive would capitalize on that quickly. House Minority Leader Skip Stam (R-Wake) had one of the best lines when he said (and I paraphrase), "Forget engineers, tire companies can get a better return on investment by hiring lobbyists."
So just wait till next year, during the short session. We’ll hear how well, now we’ve got this program, we should make it available to more companies. What’s another $40 or $50 million? We’re saving jobs!
I sat both in the Appropriations Committee and in the House gallery today and listened to the debate. It’s absolutely amazing how little of a grasp of economics these elected officials have and how short-sighted many of them are. They either honestly think that short-run actions like these subsidies can prolong an inevitable market shift or care more about getting reelected that they will wastefully spend your money to do so.
It’s either/or. There’s nothing else that these programs are good for. They may "save" jobs in the short run, but more than likely the jobs will leave in a few years, but that will be long after you’ve retired and don’t have to stand for reelection.
And if I hear one more elected official say, "I don’t like incentives, but…" I may lose it.
Either you have principle or you don’t.
How much other ethical relativism can we have? "I don’t like beating my wife, but…" "Sex with a minor is bad, but…" Ugh. Pick one side or the other, but for God’s sake, get off the fence.
The other thing this does is continue to send us down the road to corruption. When government starts handing out cash, what kind of backroom deals and meetings in bathrooms will happen to get a deal done. If I’m a company, I’ll pay $500,000 to secure $4 million in profit. Hell, that’s an 800% return on investment. Try to get that selling widgets to Wal-Mart. But those kind of opportunities open the door for dishonorable and shady activity to take place. When government starts picking winners and losers only bad things can happen.