The Semi-Free Market
Jul 25th, 2005 at 12:00 am by Susie
Modern American politics is dominated by the doctrine that government is the problem, not the solution. In practice, this doctrine translates into policies that make low taxes on the rich the highest priority, even if lack of revenue undermines basic public services. You don’t have to be a liberal to realize that this is wrong-headed. Corporate leaders understand quite well that good public services are also good for business. But the political environment is so polarized these days that top executives are often afraid to speak up against conservative dogma.
Instead, they vote with their feet. Which brings us to the story of Toyota’s choice.
There has been fierce competition among states hoping to attract a new Toyota assembly plant. Several Southern states reportedly offered financial incentives worth hundreds of millions of dollars.
But last month Toyota decided to put the new plant, which will produce RAV4 mini-S.U.V.’s, in Ontario. Explaining why it passed up financial incentives to choose a U.S. location, the company cited the quality of Ontario’s work force.
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But education is only one reason Toyota chose Ontario. Canada’s other big selling point is its national health insurance system, which saves auto manufacturers large sums in benefit payments compared with their costs in the United States.
Say you’re a mafioso. You know this guy with a nice business, nice house, nice car, nice family, solid bank account.
You want that stuff, for the loot it will get you.
So you buy or muscle into partnership with the guy at his business. You take over the accounting, tell him to look after the PR and sales end. A trusting soul, he goes to do that end of the biz.
And you run up every line of credit to the max buying things for yourself and your pals. You buy a whole lot of stuff on payment plans, with no intention of every paying for it — you sell it off as soon as it comes in. You stop sending in the workers’ tax and pension and health plan payments, and you put some hefty insurance on the place, on the man’s house, on him and on his wife.
Just when the questions about what’s going wrong start to get thick, you burn the joint, whack the guy in ‘a plane accident’ or something, sell his wife to some thug overseas, and put all the loot in your bank account. When the property comes up on a foreclosure, you buy it at ten cents on the dollar.
Now suppose that, just when you’re pretty well along in this process, this blowout you’re running, a newspaper guy named Krugman says, ‘you really ought to put some money into the kids schooling and their doctor visits, ya know?’
You’d say, oh yeah, I’ll sure do that.
But you’re thinking, ‘this Krugman guy doesn’t even suspect the real program is to bankrupt the joint. He’s asking for Band-Aids while I’m hacking arms and legs off. Nice guys really do finish last.’
I’m losing patience with anyone who thinks the Bush Pirates are working within the rules, or even the system, anymore. Even Paul Krugman.
They’re running a blowout, mafia style. When ya gonna say so, Paul?
I read somewhere that the southern states offered huge tax breaks and Canada did not.
Thanks for blogging this, Susie. The short-sightedness of the conservative movement is quite alarming, really. Poor education is cheap, but it costs jobs. Letting your friends in the insurance industry shake down the country for coverage is cheap (for you), but it costs jobs. That’s where this debate has to happen.
One of the little ironies of this whole thing: When NAFTA was signed the American National Association of Manufacturers sued the provinces and the federal government in Canada, to force them to cut back on the benefits in unemployment insurance and medical system. The argument was that it gave the Canadian worker an unfair advantage. They sued and sued and eventually the provinces had to start pulling money out, underfunding the programmes to the point where we’re now, famously, at the waiting list stage.
This was one of the arguments some people in Canada used against NAFTA - that it would level the playing field, and not to the benefit of Canadians - but it was of course ignored. Canada was open for business, like a cheap bordello.