The world's largest industrial company needed a few million dollars from local government to convince it to stay in Asheville.
As the Citizen-Times described it:
The details of the complex deal, labeled locally as Project X, were finally unveiled after weeks of secrecy. Buncombe County commissioners and Asheville City Council held public hearings and voted to approve just more than $4 million in cash incentives over the next 10 years for a company that went unidentified for months.
The 'Project X' company is General Electric - a multi-national mulit-billion dollar corporation. GE also gets lots of tax breaks, incentives, and loopholes.
The New York Times reported:
The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States. Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.
I have argued against government providing business incentive grants to companies for a host of reasons.
I believe only large companies get the deals, because they can employ the lobbyists, accountants, and lawyers needed to win preferential treatment from government.
I believe in free markets and free people who send signals about what works and what doesn't. The idea that a few government bureaucrats can accurately predict market forces and outcomes is the fatal conceit of all central planners.
When a business moves out of a city, it is sending a signal to the market: That the city is not a good place to do business; That the workforce is not skilled or educated enough; That the government is corrupt; That the product can be made more efficiently somewhere else.
So, when government intercedes in the market to prop up businesses through bailouts or incentives, it short-circuits the market signals. What should have been lessons learned about a particular city, go unnoticed - prompting mal-investment. This is unsustainable without an ever-growing amount of government subsidization.
I believe in equality.
I believe governments can woo businesses - both large and small - by treating everyone equally under the law. If reducing tax and regulatory burdens are important factors for incentives, then they should be applied to all other businesses, too.
I am also a realist.
I am under no illusion that these types of deals will continue to be done, as long as businesses can extract the money from government, and so long as government officials never suffer repercussions for handing it over.
I have been arguing against these deals for more than a decade.
I haven't won a single time. Perhaps despite the rhetoric, Americans of both political parties are comfortable with using government to buy jobs. Perhaps our countrymen are pretty okay with corporatism. But perhaps they can be a little more honest and stop pretending they desire equality under the law and an end to crony capitalism.