Corporate Welfare Bums

David Lewis in much younger days. 

The first time I was eligible to vote in a Canadian election was back in 1972. I voted for the NDP, well to the left. That might sound odd; nowadays I find myself apparently on the right. But given the same issues, I would vote the same way today. My politics have not changed. The position of the goalposts has. Or rather, the position of centre field. Or rather, the teams have changed ends.

The Liberals, in government, had imposed martial law two years earlier, during the “October Crisis” (non-Canadians may need to Google this). This may or may not have been justified, but it was an extreme step, and should not have been done without paying some price at the polls. Such a thing must not be allowed to become politically easy. As a liberal, I could not vote Liberal.

The PCs, unfortunately, the main opposition, on the right, had supported the move. So I could not vote for them as an alternative. Worse, the main plank of their platform was to impose wage and price controls, extreme government interference in the economy. Big government to the max, almost to the level of, yes, Fascism.

Leaving the NDP, the one party to have opposed the imposition of the War Measures Act in peacetime. But that's not all. They campaigned on lowering taxes. But even that was not all: the central plank in their platform was to end “corporate welfare”--handouts and breaks to big corporations.

They were then the small government, civil libertarian party. This shows how much things have changed. In those days, the left was not the party of big government, and the right was not the party of small government. “Conservative” used to mean big government, elitism, and nanny-stateism. “Liberal” used to actually mean liberal.

This reverie is brought on by the recent announcement by Amazon that it is building a second headquarters in Washington and NYC. And they are being given huge tax incentives to do it. Corporate welfare.

This is as noxious now as it was in 1972. Governments should never be in the business of favouring one business over another. This is an obvious violation of human equality, as well as lousy economics and a waste of money. It is obvious, too, that it is graft—the politicians give money to already rich corporations, and the corporations can be expected to remit back to their re-election campaigns. The elite help one another out, perpetuating themselves, with the money of the poor.

Does the payout mean more jobs for Washington or New York? I doubt it. The money paid to Amazon is necessarily taken from higher taxes on all other local businesses, money they then cannot use to hire more workers. Paul grows flush as Peter grows poor.

And it distorts natural market forces, reducing overall profitability or raising consumer costs for everyone. Is it a good thing if it really does attract Amazon to locate in a place where their infrastructure or labour is going to cost them more? With the difference paid for by the general public?

Of course, a smart businessman is unlikely to be so influenced. Trusting in future government policies is a shaky proposition. Without the tax break, one may in the near future suddenly be unprofitable.

Which means, then, that the tax break does nothing but hand over money for no public benefit.

The ideal solution would be a law at the federal level, in either the US or Canada, that prohibited such tax breaks and corporate welfare. This would be of benefit to everyone; so long as there is no such law, it is politically difficult for New York politicians, for example, not to offer tax breaks, knowing that Texas or Michigan will. And then, if Amazon locates in Detroit or Houston, they will be blamed. A similar rider could be written in to all free trade agreements, to prevent it from being done at the national level.

Amazon is pretty profitable. It does not need a taxpayer subsidy.

How about it, Jagmeet Singh? The pundits say you Dippers are struggling because you cannot find an issue to distinguish yourself from the Liberals. Corporate welfare in Canada is extreme and shameless. The Liberals won't touch it, because they are deep in that trough. They all retire from politics to jobs with Bombardier or Power Corp or Canada Steamship Lines. This issue could appeal to a wide base. Rediscover the heritage of David Lewis!