People who extol the efficiency and morality free markets face a constant problem: Many of the politicians who claim to be on their side really just support another kind of welfare. Corporate welfare. It is frustrating, because real capitalism has nothing to do with the corrupted Crony Capitalism that infects both major American parties.
I was encouraged to see that argument in two very different newspapers over the past few days. Check out this editorial from yesterday's Pittsburgh Tribune-Review slamming Harrisburg's decision to shower subsidies on the very successful Dick's Sporting Goods. Here's part of the argument:
Ed Stack, Dick's CEO, accepted the $2 million opportunity grant, $2.1 million in job creation tax credits, $500,000 in customized training grants, $1.25 million in infrastructure development program grants and $5 million from the Pennsylvania Department of Transportation.
This is in addition to the state's job creation and opportunity grants exceeding $600,000 given to Mr. Stack's company a few months ago.
Never mind that Article VIII, Section 8, of the Pennsylvania Constitution explicitly prohibits the commonwealth from pledging or lending its credit "to any individual, company, corporation or association."
Politicians cannot use taxpayer dollars to reward those they favor. Government must ensure a level playing field instead of tilting it toward the rich and powerful insiders.
Now check out this column from Jay Hancock in today's Baltimore Sun.
THE MARYLAND Constitution seems rather clear on corporate welfare. "The credit of the State," it says, "shall not in any manner be given, or loaned to, or in aid of any individual association or corporation."
No mixing government and business, in other words. No public debt to aid private investors. No government borrowing or loan guarantees, at least in the very narrowest interpretation, for nongovernment corporations.
These days, of course, Maryland economic development officials use your tax dollars to run their own little merchant bank - a portfolio of loans and other business financing worth hundreds of millions of dollars. This week Baltimore officials took a big step toward underwriting a $305 million loan for a privately run convention center hotel.
Is the Cato Institute just getting better at distributing talking points, or are people just waking up to the corporate shakedown? Either way, this is a step in the right direction. Capitalism is a powerful system, and people who think it works need to be vigilant about policing its integrity. So kudos to the Tribune-Review, the Baltimore Sun and Mr. Hancock.
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