The Ford Motor Co. reported a profit of $2.1 billion in the first quarter of 2010. The Missouri Budget Project reports that our state workers are the lowest paid in the nation.
So, of course, our governor and legislature are on their way to making those low-paid workers subsidize that billionaire company to the tune of $100 million.
IBM, which had a first-quarter profit of $2.6 billion, is into us for $31 million in state and local subsidies — a deal negotiated in secret that turns out to be a sweet one for a number of insiders, as the Missourian’s Abby Rogers reported Wednesday.
Meanwhile, in Washington, after several Republican senators balked at a provision in the financial regulation bill that would have required the biggest banks to pay for some of the new rules, the Democrats quickly agreed to move that burden to us taxpayers.
There’s nothing illegal in any of this. It’s merely immoral. And undemocratic.
Those are just the most recent examples of the corporate welfare that distorts our economy and shifts the costs of doing business from the rich and powerful to those who don’t have enough of either wealth or political power to defend ourselves.
You’ll notice I say “ourselves.” That’s because the losers in all this are you and me.
In the Ford giveaway, the losses are direct. *New state employees, most of whom will earn less than $25,000 a year, will have to start contributing 4 percent of their salaries to their pension program, which has long been one of the benefits that compensate for low-paid careers. They’ll also have to work two years longer in order to qualify for those pensions.
The House, Senate and governor all seem to be in agreement on that. What’s a lot less certain is whether Ford will keep its car-building in the Kansas City suburbs anyway. There are reports that already the decision has been made to move away the next generation of Escape vehicles.
In the case of IBM, Columbia gets the promise of several hundred good-paying new jobs. Whether those materialize or not, the agreement is already paying off for at least one of the businessmen who negotiated it and for the LeMone family and associates.
The costs to the rest of us will include the revenue lost to state and local governments from the promised tax breaks, plus the expenses of providing public services to our expected hundreds of new neighbors.
Supporters of this socialism for the rich will argue – do argue – that this is just the way the game is played these days. Cities and states compete with each other to lure or keep increasingly scarce private sector jobs. The evidence seems clear that they’re correct. Everybody’s doing it.
That doesn’t make it right. It doesn’t even make economic sense for the country as a whole. Suppose, for instance, that the Ford giveaway works. What that would mean for the nation is no net gain. Missouri wins; Kentucky loses. In the case of IBM, the jobs moving to Columbia or Dubuque are probably being taken from New York or some other higher-cost area.
The question is this: Other than grumbling, is there anything to be done? Columbia and the state of Missouri can’t unilaterally disarm.
For one thing, we can demand more oversight from our elected leaders. For another, we can insist that corporate subsidies not be funded by low-paid workers.
Beyond that, though, we citizens should stand up, catch the attention of our congressman and senators and echo the words Bill Clinton spoke so effectively in the '90s. Remember? It’s time to end welfare as we know it, he said. In 2010, just insert the word “corporate.”
George Kennedy is a former managing editor at the Missourian and professor emeritus at the Missouri School of Journalism.