When government favors businesses

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Vacuuming up taxpayer dollars does not always serve citizens' best interests.

THE WORD USED most often by decision-makers in the public sector is "incentives."

But let's call it what it is - corporate welfare and, often, crony capitalism.

When government coercively collects money from the pockets of everyday people, then finds ways to turn it over to favored private enterprises, that's redistributing income. In the past, conservatives reflexively have condemned the idea of fiscal redistribution schemes. These days, though, it appears that reluctance only applies when money is redistributed from the well-to-do to the poor. When money flows up, that's an "incentive."

LET'S TAKE A LOOK at some of the stories that made headlines in Wisconsin this past week.

• In Mount Pleasant, Wisconsin, where the supposedly $10 billion Foxconn development will take place - courtesy of $3 billion in "incentives" from Wisconsin taxpayers - several property owners were not sufficiently obedient when government officials told them to get off their land to make way for progress. The owners did not want to submit to a forced sale. The properties include a dozen or so homes, most quite nice, and hundreds of acres of farmland. So the Mount Pleasant village board has declared the properties "blighted" and plans to use eminent domain to force out the reluctant sellers.

• In an Eau Claire case, the Wisconsin Supreme Court ruled in favor of allowing municipalities to make cash grants to developers for projects aimed at mitigating blighted properties. Eau Claire officials were working with a company to create an arts center in the downtown. The Institute for Law and Liberty brought a lawsuit, claiming the property was not blighted at all and Eau Claire simply was using taxpayer dollars to show preference for a developer's plans. Meanwhile, the League of Wisconsin Municipalities praised the 5-2 ruling, stating allowing cities to use resources to promote development is crucial.

• As part of the incentives for the Foxconn development, Wisconsin asked the federal government to provide about a quarter billion dollars for highway improvements. The feds ponied up $86 million less than the ask, but Gov. Scott Walker said the project will go forward as planned. That means your federal tax dollars will be spent to get Foxconn what it wants, and more of your state dollars will be spent to help the company as well. Meanwhile, the state will ignore a long list of road and bridge needs elsewhere.

LET'S BE CLEAR: We are not saying the Foxconn development is a bad thing, or that Eau Claire won't benefit from an arts center. Nor is this directed at any particular development that has taken place in Beloit or Rock County with the help of public dollars.

Rather, we are arguing the public sector - which exists to represent the people, not to pick business winners and losers - needs to step back, take a collective deep breath, and reassess this whole notion of handing out money to developers like party favors.

And in our view that's especially applicable when governments are kicking people off their land because officials prefer what a developer proposes to do.

We get it. Political leaders representing states and municipalities fear they won't be able to compete when developers come around with their hands out unless they provide ever-larger incentives to private enterprise. And maybe that is true.

To us, though, that means the reassessment must be national, not local. Government at all levels should begin a dialogue on how much of the escalating incentives war really produces benefits that would not otherwise occur.

ANY NUMBER OF academic studies suggest there are serious questions about the efficacy of taxpayer-financed incentives for growing jobs and business expansions. That's because businesses primarily chase profits, not incentives.

Piling up taxpayer goodies can influence, to some degree, where a business chooses to grow but not whether it will. Viewed in that perspective, what's really happening is taxpayers in one location are pitted against taxpayers in other locations in a competition to see who will dig deepest into taxpayers' pockets to benefit private investors - who are going to expand somewhere anyway, incentives or no incentives, because they need to for market reasons. So, essentially, the tax-paid incentives become free money to socialize the investors' risk while profits remain privatized.

Problem is, governments have trained business decision-makers and stockholders to believe they are entitled to tax dollars. And what was good enough last year is not good enough this year, let alone next year and the year after.

WHEN THE NEXUS of business and government reaches the point where perfectly good private properties and farmland are condemned and seized as "blighted" in order to reward favored developers, American liberty has been infringed and corrupted.

We are reminded of former General Motors chairman Charles E. Wilson's statement in the 1950s: "What's good for the country is good for General Motors, and vice versa."

Sometimes. Not always.

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