An Important Question

[meus-ovatio.livejournal.com]

States in America provide, on their own, about 50 billion dollars of tax incentives to various companies to lure them in and provide jobs. The financial sector, if you are not aware, recently received Billions upon Billions of dollars in order to stabilize our economy. The auto and airline industries have also received their share of help. Our farming industry cannot survive without steady government subsidies.

Sometimes parents need to be sat down and talked to. It is a very tough and painful thing to address, but somebody has to ask:

Is our economy a special-needs child?

Comments

[policraticus.livejournal.com]

No. But we treat it that way.

[speciesofspaces.livejournal.com]

No, I think most would characterize it as what some refer to as twice-exceptional, or two-E, child -- a child with a special need or disability, and also gifted IQ. Yes, there is a special needs component. However, we are RAH RAH AMERIKA and BETTER THAN YOU and WE'RE #1 and all that smarter, better, stronger BS.

[stewstewstewdio.livejournal.com]

a child with a special need or disability, and also gifted IQ

Yes. We are military savants.

Transition transmission

[surferelf.livejournal.com]

I think most of this has to do with the transition from an industrial economy into something else. The old systems don't work the way they used to, and we haven't yet figured out the new ones. Until we do, there will be a lot of bumbling and fumbling and such.

Re: Transition transmission

[meus-ovatio.livejournal.com]

Oh great, the economy is a pissed-off teen.

Re: Transition transmission

[a-new-machine.livejournal.com]

This exchange needs DQ'ing.

Re: Transition transmission

[sandwichwarrior.livejournal.com]

I 2nd that motion.

[redheadrat.livejournal.com]

Tax incentives work since there are pros and cons to building value in every locality. By bringing work to the state, jobs along with individual payroll taxes are gained (regardless of company profitability), and welfare expenditures are reduced (sometimes).

So when done right, the state will have net $ benefit even with zero taxes being collected from a business. In addition to that, teh tax incentives usually expire (10 years in Philadelphia), but most companies stay after such term.

Auto industry should have gone through a bankruptcy after the first round of government loans defaulted.

Airlines don't really get help from the government, usually quiet opposite.

Farming industry is a different story. Government subsidies keep US farming ahead of the curve. USA is currently one of the handful of countries that can easily feed itself with no imports of any food. Take away the subsidies and the supply will dry up.

I think that USA should stop subsidizing food export programs.

[meus-ovatio.livejournal.com]

But who cares if State X gets job over State Y? That isn't economic growth. That is just placement issues. The business is already there and already going to operate, it's just a question of where, and I don't care of Alabama or Washington gets them. States aren't separate economies. I can't imagine why anyone would ever pit a nation against itself economically like this.

[redheadrat.livejournal.com]

States are fairly separate economies. Many states have bigger budgets than some European countries.

You also have to realize that many businesses are not actually here, they don't exist in the economy yet. Often the start-up costs along with more draconian taxes (top line revenue vs. bottom line income) prohibit establishing of a business in one territory, but make it possible in another.

When BMW built its plant in USA, they did it only because of some clear tax and customs incentives. They could build that plant in Mexico with ease.

Lastly it is about getting businesses to the excess capacity points. When you have an excess capacity, you make incentives, when you have scarcity you withdraw them.

[meus-ovatio.livejournal.com]

Lastly it is about getting businesses to the excess capacity points. When you have an excess capacity, you make incentives, when you have scarcity you withdraw them.
That's a nice hypothetical for a command capitalism directed by the rational agents of a centralized authority... but it has nothing to do with how it actually works.

States are fairly separate economies. Many states have bigger budgets than some European countries.
I don't see what the arbitrary geographical and political lines have to do with the actual economic map. We are designed to not be fairly separate economies. They don't start and end at the border.

[gunslnger.livejournal.com]

We are designed to not be fairly separate economies. They don't start and end at the border.

That's only partially true. The states are supposed to be separate and independent and yet tied together into a cohesive whole also. They are supposed to be separate economies, but with no barriers between them to allow for easy trading between the economies. The decline of federalism has made this less true over time, but it is the way it was designed.

[a-new-machine.livejournal.com]

In some states, you can very clearly see the separate economies that *do* start and end at the border. For instance, in MA for years you couldn't get a tattoo. The NH border has a large number of tattoo parlors as a result. NH booze is cheaper, so you see (state-run) liquor stores near the border. NH has no sales tax, so a lot of retailers, given the option, set up in NH because they know consumers near the border are OK driving an extra 10 minutes to save ~6%.

[meus-ovatio.livejournal.com]

You mean if you wanted a tattoo, you drove over a river or something, and this constituted a "separate economy"?

[farchivist.livejournal.com]

States are fairly separate economies.

Maybe to Podunk Small Business Dude running a three-person op out of his home, but not to Real Business. Not to Corporate America.

[sandwichwarrior.livejournal.com]

I wouldn't be so sure about that.

http://www.boston.com/news/local/massachusetts/articles/2011/03/17/patrick_says_fidelity_left_him_in_dark_on_jobs_move/

[farchivist.livejournal.com]

That's just a tax thing or whatever. They get a better break elsewhere. It's not as if those 1000 jobs can't be done the same way in NH or GA or IL or anywhere else. That's why they can move out without notice; it doesn't matter which state they drop those jobs in, so they can pick whichever one suits them best. It's interchangeable, modular.

[sandwichwarrior.livejournal.com]

Well yes, if it is advantagous to move from one state to another they will do so. Patrick failed to consider this in his policy decisions and is now paying the price.

[farchivist.livejournal.com]

And since we have plug-in economies, where working in one state is no different than working in another state, there's no problems in moving. If the economies were 'separate', moving your workplace from one state to another would be like moving your workplace from the USA to France or China and having to work under their codes.

There is no Californian economy, no Georgian economy, no Illinois economy. There is just the American economy.

[redheadrat.livejournal.com]

Eliminate local and state governments first.

[sandwichwarrior.livejournal.com]

To piggy-back on what surferelf was saying I think a large part of it has to do with trying to enforce the "status-quo" rather than adapting to a changing dynamic. Holly crap _____ industry as we know it is disintergrating! Did anyone ever stop to think maybe that's a not such a bad thing?

Instead we get, "oh they're too big to fail"

The Dinosaurs smell a change in the air, and roar their defiance.

[paedraggaidin.livejournal.com]

This is one of two primary reasons why I think the GOP as a whole is chock-full of BS on "small government" economics: the same Republican local and state government officials in Kansas who rail against welfare queens, public and private sector unions, education spending, and healthcare reform also happily feed millions of state taxpayers' dollars to Boeing, Hawker-Beechcraft, Cessna, and Bombardier Learjet whenever they threaten to move to cheaper locales (which is every couple of years or so). These same people still moan and bitch about Pizza Hut and Rent-a-Center moving and whine that they might have stayed if we'd thrown more money at them, but woe betide the poor people of Kansas who can't afford health insurance. Those bums should just go and get jobs. Minimum wage is enough to feed a family of four, jeez!!

Corporate welfare isn't real welfare, you see. It's capitalism!

[meus-ovatio.livejournal.com]

The business of government is business. -Milo Minderbinder.

[debergerac.livejournal.com]

the democrats aren't any better at encouraging small businesses in my experience.