Mackenzie Andersen

manager, Andersen Studio

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States Competing for Corporate Jobs - a Race Toward Global Feudalism?

Some States are competing for corporate jobs by offering an escalating menu of bribes paid for by the general taxpayers.

The following blog post describes what Maine did to convince Tempus Jets to relocate at a former navy air station , which should be enough incentive to attract an aviation company. Although it isn't quite legal, the government bought Tempus Jets with Pine Tree Zone tax Incentives.

As if that is not enough the bureaucrats are promising more "incentives" in the form of "government backed loans". To most a "government backed loan' signifies that the government will co-sign a loan, begging the question : why would a "world class" company like Tempus Jets need the government to co-sign a loan?

This blog post examines the hidden meaning of "targeted sector economics" new linguistics. speculating that "government backed loan" is code for "keys to the redistribution of wealth tool box".

The economic policies of "targeted sector economics" are covering the massive redistribution of wealth from the public to global capitalists which is egged on by the heated competition between states with big government manged economies.

It is time to reconsider these policies.

  • Sep 20 2013: I think the problem is that a State doing the bribes without industry drive is doomed to failure. What will happen is that the company/companies will move in and as soon as the benefits run out, they will plan to move again closing the facilities as soon as it becomes economically feasible.

    A good example of both a success but could be reaching its end is Sematech in Austin, Texas. It was actually driven by the needs of industry and the CEO of National SemiConductor. It was placed in Austin because of the push by DOD, TI, the State of Texas. Because of this, Austin now has large facilities from IBM, HP, Oracle, and most of the HW vendors which has helped its growth and the growth of the University of Texas in the high tech fields.

    I think Texas thought they had a lock on Sematech with that organization being there for over 25 years. Sematech has been bribed by New York and has moved some major research to New York.
  • Sep 19 2013: N O T S O S M A R T in so many ways.. Redmember that they want to sell this stuff some place.
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      Sep 19 2013: Well that explanation is of course of much smarter origin! LOL!

      So because 'THEY want to sell something some place' justifies to you that 'they' are misusing 'their' choice where they are going to pay 'their' corporate tax by playing various local or state governments off against each other?

      Well, if this is what it seems you are supporting, you probably welcome the general tendency of tax evasion of big companies in general, so that these poor beggars will finally be enabled to sell at least something to someone somewhere ... and, of course, just barely covering their expenses in doing so ... :o)

      In other words, this form of blackmailing is to you nothing but the legitimate 'opposing thumb' of an 'invisible hand' which not only miraculously manage OUR economy, yet also strangles the majority of its' participants, aka consumers, aka tax payers for good?

      Now that is indeed of superior smartness! LOL!

      If its about business, the 'selling end' seems to justify just any means, doesn't it? :o)

      And given your statement, I would not be surprised to find you in the choir of those who scream for no government interference and regulations for an all free and open market, to then return to this very government for convenient bail out programs the moment this cruel mechanism of 'free competition' outsmarted those of yours business models ... :o)

      No thanks! We've learned that lesson just recently again and therefore I agree with the closing statement of Mackenzie's idea:

      'It is time to reconsider these policies.'

      And we need to do it now!
      • Sep 20 2013: i am not sure that I was clear - If they want to be able to sell to us, maybe they should provide jobs to us. That's all I meant. They want to do it cheap, but they want us as a market.
      • Sep 21 2013: I am just saying that they are allowed to be in control.

        This is a bad system, and it should be stopped.
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          Sep 21 2013: You last statement made clear that I misunderstood your comments and I apologize!
      • Sep 22 2013: Lejan THANKS
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    Sep 18 2013: What you describe in your example is the logical consequence of the given and dominating economical system and within its borders and by its rules, perfectly comprehensible.

    So by calling theses policies to be reconsidered, are you questioning the economical system as a whole, or do you seek for minor adaptations within?
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    Sep 18 2013: A state cannot just bride companies to come to their state, companies also require educated employees, low crime rates, and access to good health care for themselves and their employees. And for sport teams financially healthy fans is a must.
    No person, company or state government is an island; we are all part of a holistic system.

    Would Andersen Studio move to a state with no artist or art buyers, for just a tax break?
  • Sep 18 2013: It would be good if we could get all of the governments to stop trying to manage economic affairs altogether. The more they do it, the worse the effects.

    I hope that eventually the courts impose the simple concept of equality before the law, and force all governments to treat all corporations exactly alike, with no special "incentives" (bribes) for any. This simple idea would gut the federal government and greatly simplify the tax code.
    • Sep 20 2013: One idea would be to tax the local and state incentives on the Federal Level.

      Without having benefits to give away how would the state dept of commerce people get to play golf on the taxpayer's dime?
  • Sep 18 2013: It's a zero sum game except the cost of these bribes. Texas is not always competitive and some leave the country except they expect us to buy their products.
  • Sep 18 2013: I understand your disgust with these short term incentives at other tax payer expense. Sometimes they work well, others not. What states need to do is to have a low cost business environment. There are other problems-Maine fits this one good- a very rural state, it is hard to large numbers of great high skilled workers. Jet mechanics for production will be tougher to find in Maine than in Seattle or Los Angeles. Incentives have to be there to start growing a new industry sector there.

    I do not have a problem with a state making big infrastructure improvements to land a large company. Depending on terms on state backed loans if they are good. I'm totally against a municipality building a stadium to get or keep a national sports franchise, but not opposed if the local gov't helps finance it with municipal bonds and the owners pay realistic property taxes.

    The best policy any state could have is to give employers tax credits for creating net new jobs a year. Then every business has an incentive to hire new people.

    Remember though no one gets re-elected because the local logger or diner hired a new person. Only time job creation gets touted is when 100 or more jobs are landed by those golf playing idiots in the state dept of commerce lands a new industry.
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    Sep 18 2013: This is nothing new Texas has gained a huge number of jobs from California's onerous laws.

    I actually think this is a good thing as it creates competition to be business friendly states.

    In addition the states will force in nullification as the government will no longer be able to bribe the states into acquiescence or complying with what ever the federal government has dreamed up.

    The more of this I see the better I like it.
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      Sep 18 2013: You are suffering under the delusion that state governments are actually rational. The Maine state legislature just passed and "Extended and Improved Seed Capital Tax Credit, using as a sales point that Maine is on the bottom of the totumpole in New England for capital investments and whining that New Hampshire gets nine times as much capital investment as Maine.

      But New Hampshire doesn't have a seed capital tax credit administered by the state- New Hampshire's only seed capital tax credits are governed by the municipalities where both the benefit and the cost will have the most impact- which is the way it would work in Maine if our constitution were honored by our legislature, our administration and our courts. This did not enter into the thinking of our legislature or our media. The only thing that registered was that New Hampshire is getting nine times as much capital as Maine.
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        Sep 18 2013: I have live in Calif which is as crazy as states get, I have no such delusions.

        The healthy thing is that if Maine's plan does not work corporations will simply go where they are treated the best and Maine will suffer the consequences as we are here in Calif.
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          Sep 18 2013: I don't follow you. The point is that the states are bribing corporations with tax payer givae ways. Its a direct transference of wealth from the public to private corporations. New Hampshire isn't playing that game and is doing better than Maine. In fact New Hampshire is at the top of the New England totem pole

          This is how New Hampshire sells its self:

          ?Other states in the Northeast offer financial incentives in the form of cash payments for new employment, tax reimbursement programs, tax credits and/or temporary reduction in corporate income taxes. This draws attention away from the true bottom line: These states are simply trying to temporarily defer the pain of their high taxes. At some point, your business will have to pay for the incentive programs it offers you.

          Consider this fact: The more people and businesses that rely on government subsidies, the larger government grows; and the larger government grows, the more taxes needed to sustain this growth—and it's the business community that usually ends up paying for a higher proportional share of new or higher taxes."
          (end quote)

          The "incentive" programs in Maine target "angel" investors who usually want an "exit strategy' in seven years. New Hampshire appears to be targeting a more long sighted economy. The "exit strategy" just means selling the business so the "angel" investors can make their "high growth" profits.
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        Sep 18 2013: The key is that it is a state program which means that the state will realize the consequences as they cannot print money.

        When the constituents get upset the politicians will be held accountable. Consider what happened to Barney Franks and Chris Dodd