- Policy Resources
- News & Analysis
- Your State
PSN on April 17, 2006 - 11:41am
What makes this change in policy most striking is the dismal policy
of corporate subsidies that it is (still too slowly) replacing. The
community organization, Good Jobs First,
has been the premiere chronicler of tax subsidy boondoggles handed out
to corporations by state and local governments, corporate handouts that
do little to spur healthy growth and that usually leave public
treasuries too empty to address other public needs:
alone has received $1 billion in taxpayer money for a retailing model
that not only generally fails to spur additional growth but quite often
undermines healthy retailing districts in its vicinity
- Southern states have paid out billions of dollars in subsidies to foreign car companies without getting any equity for taxpayers and at a cost per job that has often undermined other public investments.
- New York City
has wasted hundreds of millions of dollars on subsidies to "retain"
companies, where there were usually no long-term commitments that the
firms actually keep jobs in the city and state.
And most of these corporate subsidies don't create new jobs, but, at
best, pit states against each other in bidding to influence the site
location of jobs that would have been created in any case.
In contrast, the new state policy model concentrates on investments
that create new jobs and industries, not just cannibalize jobs from
other locations, and investments that actually generate new revenues
for the government because the state itself has an equity stake in the
new growth created. States use control of their own capital sources,
from state venture capital funds to public pensions, to leverage local
investment by private investors. And instead of trying to bribe big
corporations to come to a location, this approach to public investment
more naturally builds the skilled workforce and local network of firms
that convince multinational firms to build a branch in a location on
the merits of its underlying economic vitality.
What is striking is that the idea that wealth should
benefit the community directly is quietly becoming a commonplace. This
community-oriented concept is the polar opposite of the Bush ownership
principle that wealth should be concentrated among individuals
(especially those at the top)ï¿½
[T]hese approaches differ from traditional social programs in that
they do not depend primarily on taxing and spending--at a time when the
ever-deepening fiscal crisis will continue to constrain traditional
strategies. Many also anchor jobs firmly in local communities--at a
time when globalization and runaway corporations threaten local
Alperovitz emphasizes that "most of the strategies have enjoyed
unusual support that transcends traditional left-right divisions--above
all because at the local level, practical solutions to problems matter
far more than ideological rhetoric, even to conservative Republicans."
There are still rightwing groups that want to hand all public
capital, such as our state pension funds, over to distant Wall Street
managers (see this week's Eye on the Right),
but more and more state government leaders are committed to the idea
that our public capital is best invested with an eye to revitalizing
our states' economies and reinforcing community-owned wealth that can
be reinvested for further growth.
By contrasting such positive community-led investment with the
failed policies of corporate tax giveaways, progressives can take
control of the jobs debate in their states