There is a curious attitude in some quarters that holds
that government redistribution of wealth from taxpayers to certain business
investors is somehow morally superior to skipping the redistribution but
allowing businesses in general to keep more of what they earn.
In recent weeks we have
seen government employee groups and union
bosses characterizing a state budget deal that includes a substantial business
tax cut as a sellout that does not “guarantee” a single job
being created. At the same time, these same special interests constantly praise
the bailout of two of the formerly “Big Three” automakers.
At the Detroit Regional Chamber’s Mackinac Policy Conference
this past weekend, UAW President Bob King provided a case study of this
attitude. In an interview with the Detroit
Free Press, King said this about Michigan’s just-concluded business tax and
budget cuts: “I think the extremism in the budget and this ideology, of giving
everything to business, we’re giving $1.9 billion (in tax breaks) to business.
What are we getting in return? The hope that maybe they’ll spend that money and
create more jobs here in Michigan? I don’t buy that.”
In contrast, on the bailout of General Motors and Chrysler
he said: “We're bringing many manufacturing jobs into this country because
Democrats under the president's leadership understand the importance of
manufacturing to the U.S.” Last week, King joined
former Michigan Gov. Jennifer Granholm and former Ohio Gov. Ted Strickland in
praising the bailout. Granholm credited the funds with creating and “saving
In other words, it’s “good” when General Motors and
Chrysler receive money from taxpayers, but “bad” when other businesses are
allowed to keep more of what they earn. In this worldview, jobs are only
created when government bureaucrats get to pick and choose which politically
connected companies receive taxpayer money.
In this, union bosses and politicians demonstrate an
implicit understanding of the job-creating impact of business investment — at
least when it benefits their select group. However, their hostility to
private free enterprise creates a contradiction for them, which they resolve
with a preference for capital allocation by bureaucrats and
politicians instead of through voluntary market processes. The result is redistributing taxpayer dollars — including taxes taken from successful private
businesses — to politically well-connected firms that may or may not have
a viable business model.
This is not the American way. Government shouldn’t be a
“player” in the economy, using politics to pick winners and losers. It should
instead be a neutral referee, ensuring a level playing field for every business
with special bailouts for none.
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