Sunday, May 22, 2011

Businesses blackmail communities for tax breaks and corporate welfare

Some Texas investors are hoping to make some money bringing Formula 1 racing back to the US. Formula 1 has never really taken on in the US or been any competition to NASCAR. One of the investors is BJ McCombs, a co-founder of Clear Channel and a former owner of the  San Antonio Spurs, Denver Nuggets, and the Minnesota Vikings.  McCombs is number 308 on the Forbes' 400 richest Americans worth about $1.3 billion.   McCombs and his partners are building a Formula 1 racetrack in Austen and estimate the opening race could bring $300 million in tourism dollars to the area.

What's interesting for a state like Texas is that the state comptroller, Republican Susan Combs (no relative apparently) has agreed to subsidize the investment by promoting the races to the tune of $25 million a year for a total taxpayer subsidy of $250 million. Allen Spelce, a spokesperson for the comptrollers office thinks the taxpayer investment will be recouped through the deal, "It is important that the state continue to generate new economic activity to ensure Texas continues to grow" he tells Business Week. Is this some sort of Keynsian economics from the trickle down folks?  Heresy.

The deal has its critics as some 100,000 teachers in the state are expected to lose their jobs as the rich force the burden of their crisis on to the backs of working people.  $25 million a year would pay for 500 teachers at the average Texas salary.

This sort of welfare for business is rampant. The best example is the recent bailout of course, but through their "legitimate right" as the owners of capital in a capitalist system of production, the capitalist class regularly blackmails entire communities and indeed, countries to subsidize them or they'll refuse to invest.  Sears recently informed the state of Illinois that if it allows a package of tax incentives that benefits business expire next year the company will move to a more favorable business climate.

New Jersey is giving Panasonic $102 million in tax credits to move its headquarters nine miles.  Panasonic says that the subsidies are the reason it is staying in New Jersey saving 800 jobs although it received "quite competitive" offers from other states.

This is what occurs when we accept the right of a group of people to own capital and its allocation and own and manage the means by which we produce the necessities of life.   The conservative Chris Christie, governor of New Jersey,  has savaged eduction cutting funding by more than $800 million.  As she does this she has given $822 million in tax breaks to 69 corporations over the next 20 years.  This is not only blackmail, it is economic terrorism.

Oaklahoma gave millions in tax credits to Weyerhouser, the timber company that still closed two mills and laid off workers.  Utah gave millions to Goldman Sachs to coax this gang of thieves to increase hiring at its Salt lake City location which it did, due to the "high salaries attached to the new jobs". North Carolina gave a ten year tax break to Apple to get a new data center located in that state.

Business Week reports that state and local governments are "giving away" $70 billion a year in subsidies in order to coax business to hire and do so in their communities. "The competition is as intense as I have ever seen it" says Dennis C Cuneo an industry consultant.

For workers and the middle class, our communities suffer.  We are under siege, not from Al Qaeda or some terrorist group but from Americans, respected member's of society, or so we are told.   More accurately, we are in a class war.  We are in a war against the owners of capital whose wealth and social power comes at our expense. 

Part of this war is the idea that we have to compete.  What would we think of a guy who had a barrel full of water in the desert and had us compete with each other for who gets a drink?  We would find this character to be a disgusting individual and we would join together if we could to take that water from him, by persuasion if possible and if not by force. If he refused, his death at our collective hands would be justified.

Workers built Unions to protect us from competition, to protect us from the savagery of the market.  Unity and solidarity, strength and progress came through collective activity, not individualism, selfishness and the placing of individual gain above society as a whole.  There is such a thing as healthy competition.  But we all lose when we compete with each other for who will work and who will not.  Individual against individual, community against community, country against country. We all lose when we compete at the behest of the capitalist for who will work for the lowest pay, the least rights and and with the fewest impediments to profit making. They want us to compete with each other for whose child receives an education or whether a school is built here, a hospital there.

In the last analysis, as long as we allow a situation to exist where wealth is accumulated and allocated by a minority in society and production of life's necessities is set in to motion on the basis of profit for an individual or group of individuals who own the means of production and the process itself, we will never have harmony and we will never end wars and poverty so stop giving to charities.

This system of production is a permanent state of war that inevitably leads to endless conflict and poverty in the global struggle for market dominance.  It is a system of production that has not existed for all time and it must not continue if we want to salvage a future for this planet and its inhabitants.

Remember; the only thing constant is change, and we can play a part in determining what type of change lies ahead but we have to do that in a conscious and determined way by taking the time to study the past, the struggles of workers, Labor history, revolutionary upheavals, the struggle of colonial and imperialised nations for self determination. And for me, a general understanding of Marx's economics.  We don't have to be experts in everything.  What is crucial is to understand the general processes at work in society and I think Marx gives the clearest explanation of these. Check it out.

Philosophers have only interpreted the world, the point is to change it.
Karl Marx

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