Suboptimal Subsidies For Suckers

As American corporations continue to collect record profits, let's remember that it's coming at the expense of schools, roads, infrastructure, highways, bridges, and social programs.  In many cases, that's direct loss:  the business world now expects cities, counties and states to give corporations massive tax incentives or they simply walk.  The problem is that taxpayers are now giving $80 billion yearly to corporations in what it in effect massive bribes, as the NY Times investigates.

The Times analyzed more than 150,000 awards and created a database of incentive spending, which is searchable on the newspaper’s Web site. The survey was supplemented by interviews with more than 100 officials in government and business organizations as well as corporate executives and consultants. 

A portrait arises of mayors and governors who are desperate to create jobs, outmatched by multinational corporations and short on tools to fact-check what companies tell them. Many of the officials said they feared that companies would move jobs overseas if they did not get subsidies in the United States. 

Over the years, corporations have increasingly exploited that fear, creating a high-stakes bazaar where they pit local officials against one another to get the most lucrative packages. States compete with other states, cities compete with surrounding suburbs, and even small towns have entered the race with the goal of defeating their neighbors. 

While some jobs have certainly migrated overseas, many companies receiving incentives were not considering leaving the country, according to interviews and incentive data.

And almost a quarter of that comes from one state:  Texas.

The Times analysis shows that Texas awards more incentives, over $19 billion a year, than any other state. Alaska, West Virginia and Nebraska give up the most per resident. 

For many communities, the payouts add up to a substantial chunk of their overall spending, the analysis found. Oklahoma and West Virginia give up amounts equal to about one-third of their budgets, and Maine allocates nearly a fifth. 

In a few states, the cost of incentives is not significant. But several of them have low business taxes — or none at all — which can save companies even more money than tax credits. 

Far and away the most incentive money is spent on manufacturing, about $25.5 billion a year, followed by agriculture. The oil, gas and mining industries come in third, and the film business fourth. Technology is not far behind, as companies like Twitter and Facebook increasingly seek tax breaks and many localities bet on the industry’s long-term viability.

This is what should be the final, paradigm-shattering and myth-shattering moment of the ridiculous notion of the "job creator class".  it should end the myths of the "makers versus takers" too, because every industry sector gets billions a year directly from taxpayers.  It's organized extortion on a national scale.

The next time Rick Perry says Texas can't afford to expand Medicaid for Texas's poor, ask him why his state is giving nearly $20 billion to businesses in taxpayer money every year. 

This is why we can't have nice things:  American corporations are some of the biggest takers on the planent.

The View From The Top Of The Slope

Time for a substantial round of "I told you so's" about the debt ceiling deal that has put us on top of the "fiscal cliff slope".  Pay attention, because I've got a lot to say.

First of all, it's not like I didn't call this a year ago or anything, right?

The size of the debt hike -- easily getting the country through 2012 without having to bring it up during the election -- and the timing seems to indicate to me that A) this was done on purpose, B) it was done to pants the GOP, and C) most importantly the Obama administration understands full well that raising the debt ceiling was going to be portrayed by the GOP as an impeachable offense no matter what the President actually did about it.   So the White House is looking to get this out of the way.

Pretty sure this was the plan all along, and the GOP is now facing having to blow their vacation or miss their big chance at portraying the President as the most vile of all villains when of course previous Presidents jacked up the debt limit all the time, including Dubya's seven times and Reagan's 18 times.   Your move, Republicans.  You already lost that fight once.

You mad, bro?  If you ask me, President Obama's got them by the short hairs.  Again. 

All that still applies.  That deal led directly to where we are right now.  Remember that last spring, the Village declared the deal an utter disaster for the President that would cost him reelection:

But interviews with most of the central players in those talks — some of whom were granted anonymity to speak about the secret negotiations — as well as a review of meeting notes, e-mails and the negotiating proposals that changed hands, offer a more complicated picture of the collapse. Obama, nervous about how to defend the emerging agreement to his own Democratic base, upped the ante in a way that made it more difficult for Boehner — already facing long odds — to sell it to his party. Eventually, the president tried to put the original framework back in play, but by then it was too late. The moment of making history had passed.

The actions of Obama and his staff during that period in the summer reflect the grand ambitions and the shortcomings of the president’s first term.

The emoprog Villagers too proclaimed the President was done.  Jon Chait accused President Obama of selling out liberalism.

Chait argues that President Obama wanting a deal -- any deal, mind you -- led him to treat the GOP as good faith partners when they were clearly not.  Republicans, he goes on to say, were going to screw POTUS and the country no matter what Obama did.  This is where Chait's argument turns into purist whining:  There was nothing President Obama could have done that would have changed the outcome of the GOP screwing us over (indeed, the GOP is now signaling that it will simply ignore the debt deal), and at the same time he didn't do enough to change the outcome.  It's just meaningless stupidity, brought about by the "liberal" Washington Post unloading this hit piece on the President, and Chait absolutely takes the bait, re-fighting the same arguments we had in 2010 and 2011 about "but if Obama had done THIS and LISTENED TO HOW SMART I AM..." five minutes after saying there was nothing he could have done.

There's nothing productive about this civil war re-enactment other than Chait scratching his own "Tell Obama what to do" itch that so many of our professional pundit class seem to suffer from.  But generating that itch was the entire point of the Kaplan piece.  Chait performed admirably, attacking the President from the left.  After all, attacks from the right aren't working too well, since the wingers keep putting most of their ammo into their own feet.  Whenever the left is winning, we have to be demoralized into our own worst enemies, and we're damn good at it.

And yet despite the best efforts of folks like Chait, President Obama continues to have outfoxed all of his critics and put the GOP in a massive bind, again.  Because all of them underestimated President Obama.  Again.  And now they look very foolish.

Again.

You would think people would stop betting against the President on things.  But some people never learn.

Now the right is scrambling to find any way out of this mess.  Increasingly they are pointing out that the same Simpson-Bowles plan they hated before would at least have the added benefit of making liberals miserable as well, so that they should push that plan:

Best case scenario: Republicans catch Democrats off-guard, and (much or most of) the plan is adopted.  At the very least, GOP negotiators would gain major leverage in fashioning a less horrific final compromise.  Worst case scenario: Democrats firmly reject the plan, further talks stall, and the we go over the cliff.  But even under this scenario, Republicans would have very prominently done their part to try to avoid the impasse, and the public's assignment of blame would be rendered far more complex than simply, "the Republicans did it."  Bottom line: I'm not completely convinced that this is the best course of action, but given the dismal alternatives, it's at least putting out there for consideration.

Simpson-Bowles as the GOP's starting point?  That's a complete Obama win.  And that's the view from the top of the fiscal slope, where President Obama is in control of the long game and always, always has been for the last 4 years.

Once again.

StupidiNews, Weekend Edition!

• As World AIDS Day marks another sober milestone, China may now be the HIV pandemic's largest victim.
• Economic conditions and lack of a national immigration solution have combined to rank 2011 as the lowest yearly birth rate since 1920 in the US.
• Midwestern lawmakers are asking President Obama to direct the Army Corps of Engineers to keep the Mississippi River clear as drought has dangerously lowered the water level.
• A former GM engineer and her husband have been convicted in federal court in Detroit for stealing trade secrets from the automaker and trying to sell them to Chinese competitors.
• The US Supreme Court will take on a challenge to the practice of patenting human genetic material for testing for and treating diseases like cancer.