EMAIL SIGN UP!
Most Popular This Week
Popular content
Today's Top News
Corporations' Cross-Country Extortion Racket
BOEING EMPLOYEE John Pluegar said, "It's a beautiful sight."
"I love it," said a Boeing wing mechanic who asked not to be named, admiring the plane.
They and so many others are ooohhing and aaahhing about the new 787 Dreamliner passenger plane that Boeing recently unveiled. The 787 is scheduled to start carrying passengers next year, and orders for about 700 planes have already been placed. With moist air-conditioning, wireless Internet access, larger seats, and 20 percent greater fuel efficiency, Boeing's first all-new model in 12 years offers plenty to get worked up about. More then 15,000 people went to the coming-out party, with another 30,000 hooked in by satellite. According to PR Newswire, "In all, the 787 premiere potentially reached 100 million or more viewers, making it one of the largest corporate TV and Internet broadcasts in history."
Those are impressive numbers, worthy of the world's largest aerospace corporation. But the most impressive figure of all is 3.2 billion: that's how many dollars the people of Washington State conceded in tax breaks and grants to get Boeing to build the plane in the city of Everett.
It's one of the most egregious efforts by a corporation to play states off of one another for private profit.
In 2004, Boeing Company requested and received "bids" - really offers of hundreds of millions or billions of dollars in tax breaks and subsidies - from at least 21 states seeking to have the company build the Dreamliner assembly factory within their borders.
Washington was especially desperate, since Boeing had moved its corporate headquarters out-of-state, from Seattle to Chicago, in 2001.
Washington State with so much brand loyalty - but Boeing with no hometown pride!
Corporations have grown expert at forcing race-to-the-bottom competitions between states, reducing tax revenues by billions of dollars. States are all too willing to play along, spending millions of dollars of their own competing for new business, or trying to swipe existing businesses from one another, under the guise of "economic development."
It's a phenomenon that's hit home here too: Among other instances, in the late 1990s, the New England Patriots - emblem of regional unity - played Connecticut against Massachusetts, threatening to move from Foxboro to Hartford. Connecticut offered the Pats a $500 million stadium financing package, but the team ended up right back where it started - with the Massachusetts footing the bill for $70 million in "public" infrastructure improvements.
While in individual instances one state wins and another loses, in the aggregate we're all worse off, as net public good decreases with each such maneuver, and cash-strapped governments devote limited time and resources to stealing - not creating - jobs.
As states sprint to the bottom, the perpetrating corporations aren't disdained, aren't vilified by the jurisdictions giving up millions or billions of dollars to nab them: They're greeted as heroes at celebratory press conferences and ground-breakings, in editorials and campaign literature.
It's time for the states catch on - to work to change the logic of the dynamic, and stop celebrating these robber-barons.
There are at least a couple of potentially viable possibilities:
In 2000, taxpayers filed a lawsuit challenging $281 million in incentives offered by Toledo, Ohio, to DaimlerChrysler, on the grounds that such targeted incentives violate the Commerce Clause of the U.S. Constitution, which says that tax policy regulating commerce is the purview of the federal government. The money (and land that held 89 homes) was offered to persuade the company to expand locally - even while reducing the number of local jobs by 10-20 percent - rather than in Michigan. The U.S. Supreme Court eventually ruled against the plaintiffs on technical grounds - that they didn't have standing to have filed the suit. The issue remains unresolved.
(The legal team was initially prepared to fight the Patriots' move to Connecticut, had it moved forward.)
Alternatively, states could join together in an interstate compact to not use targeted tax incentives to steal jobs from one another. (States participating in the pact would still be able to use such incentives to draw in businesses from non-participating states.) Several state legislators through the Northeast have begun the conversation this year.
It'll be a struggle, but we'll all be better off if states start to stand in solidarity, and not be seduced to play pawns in a game that only benefits corporations.
David Segal, of Providence, is a Rhode Island state representative.
© 2007, Published by The Providence Journal Co.
Comments
Note: Disqus 2012 is best viewed on an up to date browser. Click here for information. Instructions for how to sign up to comment can be viewed here. Our Comment Policy can be viewed here. Please follow the guidelines. Note to Readers: Spam Filter May Capture Legitimate Comments...

15 Comments so far
Show AllIf targeted tax incentives are not unconstitutional, they should be, as they are starkly unfair to other companies in the market. Government should be maintaining a level playing field, not meddling in the business world.
We've got to do something about the undue influence of corporations in public policymaking, and about the rampant corporate welfare that distorts the marketplace. Part of the answer is repudiating the right of corporations to free speech, based on their supposed corporate "personhood". Another part is getting rid of these targeted tax incentives that foster a race to the bottom.
Regulations should be simple for everyone to understand, and universally applied. The Founding Fathers would be appalled by the way governments are selling out. Legislation has become an industry, with laws written by lobbyists that are so long, sometimes the people voting on them haven't even read them. Really appalling.
"states could join together in an interstate compact to not use targeted tax incentives to steal jobs from one another."
Right on! Organize, cooperate, collectivize. Stick together don't let the sobs get you down. You might even consider joining a Union!
So exactly what was Kissinger and Putin talking about? This got no press here.
http://www.globalresearch.ca/index.php?context=va&aid=6365
there is very little patriotism with capital, in fact the capital flight from this country rivals any in the world, not to mention the rape of the Russians after the cold war collapse, of course, we are next, making people suck up for jobs will even be easier when the country is broke and people are slaves. in the name of efficiancy, just enough to get by, sound familar, the Nazis had it down pat, feeding just enough to get by but not enough to cause trouble,(wouldn't want a revolution) with work is freedom on the gates of Auswitz,,,it is getting more like nazism everyday, fascism is the bundleing of sticks, corporat and goverment, Fascae,,according to Mussilini, and old dictionaries, newly changed to hid the corporate owners intent,,Propaganda, media ownership, demegoge talk show, no Fair and Balenced Doctraine, which was in response to Nazi propaganda style National control,, makes ya wonder, in the once richest country in the world. now we are the largest debtor...owed to whom and why,,,merger mania corporat wave; your new job discription...slave.
Large corporations wield enormous power and play by their own set of rules. They buy favorable legislation with large political contributions to both political parties. They have created a global economic order in which all of the rules were made by them. In short, they have become the new aristocracy.
What a joke that we still celebrate our independence from Great Britain, when we have lost our freedom to these multi-national corporations.
These corporations are run by smart people, they give us the carefully crafted illusion of freedom and appeal to our emotions via nationalism. They create smoke screens to hide their unsavory activities by casting al Queda, North Korea, Iran or any other group as the most ominous threat to our survival. Just to make sure we don't see through the ruse, they create another boogie man in the form of "illegal" drugs. Demon steroids, demon blood doping. They demonize foreign leaders, Ahmadinejad, Ghaddaffi, Hussein, Chavez, pick your scoundrel of the month, all to conceal the real monster from view. Sadly, most in the US have been gullible enough to buy it "hook, line and sinker".
These corporations inflict far more damage on us than any terrorist organization or third-world government ever did, or ever will.
Gregory The Great July 21st, 2007 8:24 pm
"These corporations inflict far more damage on us than any terrorist organization or third-world government ever did, or ever will."
Have you seen this article by Jerome Corsi about the "new deal", which may or may not be proposed by proponents of globalization who now admit that the majority are getting screwed by it?
http://www.wnd.com/news/article.asp?ARTICLE_ID=56744
You can find the article on World Net Daily, Exclusive Commentary, July 21, 2007.
Re: the elite, power, democracy, and the people:
Ask the powerful 5 questions.
1. What power have you got?
2. Where did you get it from?
3. In whose interest do you exercise it?
4. To whom are you accountable?
5. How can we get rid of you?
ONLY DEMOCRACY gives us that right.
That is why NO-ONE with power likes democracy.
And that is why EVERY generation must struggle to win it and keep it.
Including you and me, HERE and NOW.
Tony Benn, 2005
http://www.bennites.com/
I live in Washington (Seattle) and it is important to see the full breadth of this problem. Both the Mariners and the Seahawks played this card long before Boeing. The Seahawks even insisted that they get their own new stadium instead of sharing one with the Mariners like some spoiled kid that can't be convinced to share the shiny new toy with their sibling. Just think what the response would be if we built a new rap concert Hall, then the Heavy Metal crowd demanded that we build another one just for them rather than share the venue with rappers - rediculous.
The situation with Boeing and with other corporations around the country is no less idiotic. This farcical situation amounts to no less than extortion. The corporate boards of these companies should rightfully have their personal assets seized and turned over to the collective employees and unions who actually BUILT the company. They could then be frog marched to the state line in handcuffs and released after which they are welcome to try to run an aerospace manufacturing company which owns no airplains, manufacturing equipment, runways, hangers or anything of real value. I'm sure a business with consisting of nothing but overpaid slackers and alot of files will do wonderfully.
Also the Mariners and the Seahawks can lick my _ss.
Thank you Mr. Segal for this eye-opening piece. Here in New Mexico a long time crusader for rational energy policies has broken off from the usual lobbying of the congress and the governor and formed a group called breakthegrip.org. After years of working on these issues he realized the game was rigged by the power corporations have to influence legislation by writing it. The proper battle field in the US is on the state level where corporations are granted their charters, this is where they become persons with perpetual life. The corporations can be stopped because we the people have the power to define them.
How much are you paying for each job with these corporate subsidies. Could the money be better used for direct investments in new renewable energy companies that would create new high paying jobs?
Public funded, governmental institutions are involved in corporate bribery -- this must be illegal!
Competing states are squandering public funds for a whore that flies off with the john with the largest dollar offer.
This sweet deal for Boeing reeks of corporate-state corruption.
The state of Wash should be sued for squandering public funds. Boeing should strive to become a responsible corporate citizen.
Corporate extortion should be investigated as a RICO violaton but it won't be. States play the game as well competing to be "business friendly" meaning, litle or no taxes, lax regulations, and weak labor paid low wages. It's hard to find public ownership anymore on any level. The "partnership" of public and corporate interests is a euphamism for corruption at all levels and corprate ownership of a swindled nation. Here in Virginia, even our stated ID's and driver's licences identify us not as citizens but as "consumers." The dictatorship of big business cannot be a democracy, but it can and must become fascism if left to fester on it's natural course of development.
GREGORY THE GREAT: Good points. I noted these trends years back and visualize modern economics as a new take on pharaohs (corporations) and slaves (world's workers). The one difference that keeps slaves from recognizing themselves as such is the FREEDOM to shop, no matter that credit debt is equivalent to a whole new take on debtors' prisons, wherein since these have become "virtual" institutions, no overhead (apart from book keeping, a cost passed onto said slaves) is required! Progress! (HA)
Gail,
re: Jerome Corsi's article, thank you, he makes valid points.
Corsi seems to say that globalization advocates will attempt to alleviate some of its worst aspects by giving a tax break to lower wage earners. Not because they give a damn about the workers or income inequality, but to prevent a popular uprising against globalization which would put a dent in their considerable cash flow and net worth.
Siouxrose,
Your credit card debtors' prison analogy is spot on. Indeed, many middle class Americans have become "virtual" slaves.
Another way in which modern slaves are deceived about their condition is the extensive use of propaganda by government and their cohorts in big business. One writer summed it up well; I am paraphrasing, propaganda is to a democracy, what a club is to a dictator.
The reason Americans are able to purchase so many durable goods at low cost and live so well is because the products are essentially produced with slave labor in China, India and elsewhere. Lax environmental laws in those parts of the world also serve to keep costs down.
It is sad to say; but true, our daily purchases only serve to perpetuate virtual slavery and environmental destruction in the third world. American consumers have become unwitting partners in crime with big business. We benefit from high quality, low cost goods; however, it comes at the expense of workers in other parts of the world and the environment.
The Davos Agenda Class Privilege-- Over Our Dead Bodies
When is enough, enough? Has Gov't Been Outsourced? While we are spoonfed frivilous news by the the Big-8 Corporate Cartel now a propaganda tool which ended our free press in the 90's, the Davos Demagogues are hammering the last nails in "Democracy." You don't want the candidates they insidiously promote & often praise with faint, very faint criticism. The PTB (powers-that-be) have been running the U.S. in Davos Switzerland, independent of the people since the 90's.
Chaos--helps, it keeps the people in stress mode & ill-equipped to re-tool democracy to what it was before the Davos Agenda took off in the 90's. The slick Davos Demagogues determine U.S. policy in Switzerland. What a cool idea to keep their offshore agenda within running distance of their secret bank accounts. NAFTA's 1,000-plus pages give international investors extraordinary rights to override government protections of workers and the environment. It sets up secret panels, rife with conflicts of interest, to judge disputes from which there is no appeal. It makes virtually all nonmilitary government services subject to privatization and systematically undercuts the public sector's ability to regulate business. "NAFTA happened," said the then-chairman of American Express, "because of the drive Bill Clinton gave it. He stood up against his two prime constituents, labor and environment, to drive it home over their dead bodies."
As the well respected journalist Christopher Hitchens says in his book: "No One Left To Lie To": "The legacy of Bill Clinton is the expiration of American liberalism," and "the Clinton machine, if successful, will become the model of pseudo-democracy for the coming century." Looking at their "legacy," Clinton's latest grandstand, to finance a museum dedicated to --what!?--- Woodstock!? has gotta!! be a joke. I mean-- do military generals hold benefits for Pacifists? Their mission since they began w/Lieberman, 30 years ago or more has always been , to surround themselves with the most predatory of the "uber" powerful; their jihad was not against republicans, it was against liberals.
NAFTA and the end of corporate regulations was only the beginning. The Clinton/Republican alliance then pushed through the WTO agreement and the subsequent deal with China that traded off more US industrial jobs in exchange for protections for US investors in that huge Asian market. Not only has this produced a massive trade deficit with China and further downward pressure on US wages, it has also sent some 250,000 jobs from Mexico to China, as the Mexican exodus causes further upheavel in the U.S.
Clinton "Bashing?" Say What? Political scrutiny of all the Clinton's "screw the people" radically conservative milestones have been Shut Down --across the board. His administration was the most conservative in modern history but most of the intrepid souls that dared inquire about anything but his sexual proclivities were, unfortunately, intimidated or bought off. And you all Know! the Clintons have the power, influence & bux to engineer, pretty much what they please. Few, unconscionably few, Americans have the faintest clue about the halacious SCOPE of fundamental hard-right reforms engineered by Bill in the 90's, even Hillary's claim to fame with her often mentioned Health-Care "initiative" is her secret--for two good reasons-- Big Insurance Corps & Big Pharm.
The Clinton's pity-party & the Monica-martyrdom gave them a free pass for a decade and a half-- It worked! like a charm, to shut down any inquiry and, especially scrutiny that might reveal their rightwing legacy but, voters need a break!, an end to the secrecy, duplicity & strategic misguidance---- We need some authentic! opposition to Clinton/Bush-- from banks, the market and insurance companies to the battlefield--Enough is Enough.