Corporate welfare, a.k.a economic development incentives, is simply legalized thievery | Eastern North Carolina Now

    Publisher's Note: This article originally appeared in the Beaufort Observer, as well as the print version of The County Compass.

    There was a time in this country when people were reticent to accept "welfare." Most people saw it as something to be ashamed of. (We even knew a family back in the 50's who truly needed and deserved public assistance but refused to apply because they thought it was a sign that they had been sinful.) Then we went through a stage where welfare became "acceptable" because many viewed it as "temporary  -  just something to help get through a rough spot..."

    Now days nearly half the people take more than they give to the collective (government). Even people who view social security as something they "earned" don't usually realize that they have withdrawn all they paid in within a few years of retirement and the remainder of their "benefits" come from money borrowed from future generations. Even if you conceptualize social security/Medicare as an institutionalized way each younger generation looks after their elders you have admit, if you're honest, that most social security recipients don't view their monthly check as charity.

    But in recent years (since the Johnson Administration and inherent in every one since then) there has developed and "entitlement mentality." Millions of Americans now believe they are entitled to live off the productivity of others. The latest perversion of values comes, as expressed by the current occupant of the White House, that the dependents deserve welfare because others are "too many people who are too rich."

    But few of us has ever stopped to consider why and how this value system came to be institutionalized. The answer, we would posit, is that it is the result of politicians using our money to buy votes to keep themselves in power.

    Most of us already realize how we think about that statement. Most, when brought to a conscious level, are disgusted with the idea. At the end of this piece we will suggest a simple solution. But there is another angle to this entitlement mentality that we think should be discussed more and the public should address from a different angle. That is corporate welfare.

    Corporate welfare is also known as economic development. It is rooted in a foolish idea that government should help businesses be more profitable. More specifically, it is based on the idea that certain businesses deserve taxpayer subsidies that other businesses, even in the same industry, don't deserve. We've seen the perfect example right here in Beaufort County since a certain clique has taken over the majority vote on the Washington City Council and Beaufort County Commission. The call it "economic development incentives."

    The foolishness was originated and pushed by a small group of self-serving business people who attracted a larger group of wannabe business types who pushed the idea that subsidies should be given to businesses that "created jobs." They organized under the name of The Committee of 100." The idea was that if you got your paper work setup up right you could claim you were "creating" a new business that would "create new jobs." Because these "new jobs" would pay taxes and stimulate trade, the public would benefit more than they paid out in subsidies.

    There are a multitude of problems with this way of thinking. Consider the most simple of many examples. If a business had to have subsidies to create jobs, what do you suppose happens when the subsidies end?

    The real foolishness can be seen in the fact that in order to give these businesses a subsidy the government has to take that money from other businesses or from the customers of other businesses. That results in less money for the more productive businesses which are actually the real job creators. Thus, subsidies kill as many jobs as they "create."

    But there is yet another facet of this debate that has received too little attention. It is the fact that business people who seek and take subsidies should be ashamed of themselves. Just like the family that refused to take welfare back in the 50's because they thought they were like Job (of the Bible) who was being punished for their sins.

    A business that seeks subsidies is either guilty of enterprise sin or simply a thief. Either way these executives, and the wannabees who pay $100 a year to eat lunch with them (i.e., Committee of 100), should be ashamed of themselves.

    If a business is in such dire straits that it must ask for charity then somebody is doing something wrong and rare would be the case that the hard working tax payers and other smart businesses should bail them out. And if they are not in dire straits they are simply robbing the poor to give to the rich. Either way it is a abomination.

    The reality of what is going on in economic development can be seen in local politician Al Klemm. Ironically, Klemm came out of one of these businesses that tried to soak the taxpayers to keep a failed enterprise going, at least until the principals could extract all the value they could get out of a sinking ship. He then used this clique to get elected to the County Commission as a result of the limited voting system. Once elected he has voted consistently to use tax payer money to give donations to his cronies in return for their support of his getting enough votes to continue to vote to give away other peoples' money. He played the same card with the idea of the County Commissioner giving donations to various "non-profits" (ex. Agape Heath) and the chambers of commerce throughout the county.

    Klemm is not the only one. The Washington City Council has been dominated by similar politicians who pandered to the Thieves' Consortium by giving away other peoples' money in return for votes to keep them in power.

    And local political thieves are not the only politicians that play the "economic development game." Jim Pageis, writing at The Federalist documents how bad this problem has become. Click here to read that.
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