On That Big Crony Capitalist Announcement
GAUNTLET DROPPED … AND PICKED UP
We got called out this week by a reader for failing to cover a “big” economic development announcement in the South Carolina Upstate.
That announcement? A $1 billion capital investment by Tokyo-based Toray Industries, Inc. on a Spartanburg, S.C. manufacturing facility for composite fibers that Palmetto government officials claim will create 500 jobs.
“I doubt we read anything from FitzNews regarding a $1 billion dollar plant in the Upstate,” the reader wrote. “It might be hard for you to find a way to take a dig at (Nikki) Haley, while making the report which we all knows goes against your agenda.”
“So man up and print the news that is fit to print,” the reader added.
First of all we know not to take such announcements at face value because the promised jobs routinely fail to match expectations … or even materialize. Then there’s the matter of how much taxpayer money is shelled out to secure such announcements … irrespective of whether they “hit” or “miss.”
In this case, we’re looking at $10 million in direct borrowing to purchase land and infrastructure for the company – and that’s before we even get to the massive tax breaks the company will receive.
How much will those amount to? Good question …
Two separate studies in the last three years (here and here) rank the Palmetto State among the very least transparent states in America with respect to disclosing details of “economic development” incentive packages.
And that’s before we get to the matter of these incentives shifting (and raising) the tax burden on existing individuals and small businesses – who account for the vast majority of jobs yet receive no such preferential treatment.
Our reader has heard these arguments before, though, and isn’t buying …
“I know you are not a fan of these packages, but in today’s world it is the only way to compete, and make no mistake South Carolina is finally starting to compete,” they wrote.
Maybe that’s true … but that could be
After all, let’s not forget that our neighboring states are much more cognizant of the down side to government-subsidized “economic development” than South Carolina (not to mention much more receptive to policies that have been proven to create jobs).
As opposed to policies that produce more lost decades …
Maybe our reader is right, though. And maybe we’re dead wrong. But so far the numbers bear out our view … and even if they didn’t, forcing one group of businesses and taxpayers to shell out their hard-earned money on handouts for other businesses is a flagrant violation of equal protection.