Are subsidies beneficial to Mississippi?

Opinion

March 3, 2007

By Wyatt Emmerich, syndicated columnist The Laurel Leader-Call Sat Mar 03, 2007, 06:18 PM CST

The strange thing is we will never know whether the huge subsidy of the Tupelo Toyota plant is good or bad for Mississippi.

We know the direct subsidy is $350 million right off the bat. That’s the amount Mississippi will borrow to aid the Toyota plant. State officials have yet to disclose the amount of future tax breaks. If the Nissan plant is a guide, the total subsidy will be about a half billion dollars.

That’s a big chunk of change for 2,000 guaranteed jobs. State officials are already hinting the final job number may be close to 4,000 but that’s wishful thinking. Since auto companies have been able to effectively sell jobs, it’s doubtful they will deliver any more than their contractual obligation.

So let’s look at the math: a half billion divided by 2,000. That comes to a whopping $250,000 per job.

At that cost, Mississippi could just hold a lottery and give 2,000 people $250,000 a piece. The lucky winners could invest it in mutual funds and make $25,000 at a 10 percent return. Even if the lucky winners took jobs flipping burgers, they’d still make more money than the $20-an-hour top wage promised by Toyota.

There are so many interesting angles to this issue, it’s hard to know where to begin.

We know that it’s almost difficult for politicians to resist spending other people’s money if it will help them get elected.

Just as Musgrove tried to ride the Nissan plant to reelection, Barbour is following in his footsteps. Certainly this will shore up the Tupelo area vote, a traditionally Democratic area where he was vulnerable.

Our governor — like the governor before him — will receive accolades for his economic development skill. Perhaps so, but writing the fattest check is not a particularly difficult task to master.

Where are the numbers justifying the magnitude of the subsidy? I crunched more numbers buying my house than the Musgrove administration crunched on the Nissan deal. I challenge the Barbour administration to release the numbers justifying the Toyota subsidy.

I can see this from a Democratic administration. They don’t have much faith in free enterprise. But it is profoundly disappointing that a conservative of Haley Barbour’s ilk has so little faith in the free market. This is nothing more than state corporatism. Perhaps a better description is corporate welfare.

The Democrats have long promoted redistribution of income, which at least has some social equality benefit. This new trend of corporate welfare takes from the middle class and gives to the politically connected.

I’ve got news for everybody: Involving government in business doesn’t work. Ask the Russians. Ask the Chinese. Ask the Cubans. In fact, the government just corrupts the entire process and destroys the fabric of our economy.

America is rich and powerful because we have embraced free enterprise. It is not rich and powerful because of huge corporate subsidies. Doesn’t anybody out there believe in the free market anymore? Let Toyota raise its own damn money and compete with every other business in Mississippi.

Government’s role is to support a level playing field. These big subsidies to private companies are exactly the opposite of government’s legitimate role.

Every businessman in this state competes for capital and labor. It is a slap in their faces to take their money and give it to a Japanese multinational so it can hire away their best employees.

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