Tucson Weekly columnist Jim Nintzel recently accused the Arizona Daily Independent of “innuendo, plagiarism, fabrication, gossip and general bullshit” in a pre-election “Skinny” column. Name-calling took the place of responsible journalism and the research it requires. In the November 24 Weekly, Nintzel – under a photograph of Pima County Administrator Chuck Huckelberry – wrote:
“When Raytheon Missile Systems made its long-rumored announcement that it would be bringing 2,000 new jobs to the community last week, it was a major win for Pima County’s economic development efforts.” He went on to continue his vendetta against re-elected Supervisor Ally Miller, deriding her as “Queen Nut” for raising legitimate questions about taxpayer-funded “incentives” to profitable private corporations. Raytheon has posted a net profit for three quarters in 2016 of $1.6 billion.
Nintzel, a reliable cheerleader and attack dog for the county establishment, often fails to go beyond the official press releases even when there are stories behind the stories that deserve investigation and exposure. He is far from being the only reporter to do so. But that is the job of a free press, the Fourth Estate, to cut through the BS, the spin and smoke and mirrors, and get to the facts. And report them to the public so that informed decisions may be made.
While job creation is vital to a community, and Southern Arizona surely needs all the jobs it can get, the question is rarely asked about what happens to those left behind. Raytheon, for instance, has laid off hundreds of local workers in recent years, along with employees in New Mexico, Rhode Island, Massachusetts and Virginia. The defense contractor received some $282,760,407 in subsidies to attract jobs to places like Tucson, and spent nearly nine million dollars in political campaign contributions over the last two decades to get them. Will the corporation, in the long run, have a net loss or gain in jobs? Has anyone even asked that question?
It is not clear if things like Pima County building a road or buying “buffer” land is included in the cost of “incentives.”. We do know that the Free Trade Zone status granted Raytheon reduces their property taxes by two-thirds. And Raytheon pays federal taxes at an average rate of 16 percent compared to the 25 percent rate their employees pay Uncle Sam. Reducing corporate property taxes shifts the tax burden onto homeowners and small businesses to the tune of $16 million over ten years.
Millions of American jobs have gone overseas and across the border. Those losses are the ones we hear most about. Globalization and “free trade” have not served American workers very well. But what about the jobs lost when a company, which came into an area based on “incentives,” decides to leave for another area’s “incentives?” In too many cases the employer, if they are large, leaves a whole town behind. The tax base is shattered, there are no replacement jobs, homes lose their value, and people lose hope…because there is no hope. Some say taxpayer-paid “incentives” for corporations is “socialism for the rich and free enterprise for the poor.”
There has been much ado about Caterpillar coming to Tucson, even though the company was laying workers off locally. The company took over Bucyrus International in 2010, a company that had been in South Milwaukee, Wisconsin, for over 100 years. Now 900 workers there are being laid off, following hundreds more cut loose in recent years. The mayor of South Milwaukee told the media that company officials told him only 10-15 jobs will go to Tucson in 2016, and perhaps 200 over the next five to seven years.
According to the 2010 census South Milwaukee has a population of just over 21,000 mostly-white people in 9,000 households. Many are over age 45. The loss of nearly a thousand jobs in this small community is devastating. And Arizona taxpayers are paying $52 million to bring Caterpillar here, with the Rio Nuevo board covering $2 million in executives’ relocation costs and looking for $50 million for a new building for the company. Meanwhile Pima County is providing space at a county-owned building. Tucson gains some jobs, mostly executive transfers, with taxpayers putting up some $100 million while an entire community is being destroyed.
Caterpillar has received $350,848,881 in 382 “incentives” from around the country while donating over $7 million to political campaigns.
Monsanto’s Pima County “incentives,” primarily support for Free Trade Zone status to reduce their property taxes by two-thirds, stirred up a mixed bag of opposition, forcing a Board of Supervisors vote to be postponed to February 21. Not discussed in the news coverage was Monsanto’s planned cutting of some 2600 jobs nationally, over 11 percent of its workforce. Or the closing of three research and development centers in Wisconsin, Connecticut and North Carolina with a loss of 90 jobs. The Marana R&D greenhouse will, according to the company, generate 40-50 full- and part-time jobs over the next five years.
Monsanto received a further “incentive” from the Marana Unified School District Governing Board which accepted a one-time payment of $500,000 in lieu of the nearly $4 million in tax revenue they would have received over the next five years.
Another “success” in Huckelberry’s November 22 Economic Development Plan Update is HomeGoods plan to build a 100-acre distribution center touted to, over years, create 900 jobs. According to then-Star reporter Patrick McNamara last year, the home furnishings retailer would get $1.6 million in first-year tax and fee write-offs, exceeding $6 million over 15 years. The Tucson/Pima County “incentives” package adds to the $9 million the company’s parent, TJX, has received in 53 other “incentives” cases.
McNamara, who now works for Pima County’s Propaganda Department, didn’t mention the 4,400 jobs lost when TJX closed its Fall River, Massachusetts, Distribution Center a few years ago.
In the 1920s corporations were called Robber Barons because they sought maximum profits without regard for their employees, community or environment. The Great Depression brought about Franklin Delano Roosevelt’s New Deal which reined in corporate excesses with taxes and regulation. The Reagan Era saw deregulation, continued by both Democrats and Republicans, along with globalization. Yesterday’s Robber Barons are being called Crony Capitalists today, using political contributions to create conditions for maximizing the bottom line.
Bill Clinton’s repeal of the New Deal Glass-Steagall Act created the conditions for the Not-So-Great Recession. But instead of putting the screws to the financial speculators that brought America to its knees, the Obama bailout rewarded the architects of the recession with huge bonuses. As is popularly said, they bailed out Wall Street and forgot about Main Street. And tens of millions of working and middle class Americans got hurt.
Now President-elect Donald Trump has pledged to bring back American jobs, and many are watching the Carrier Corporation’s planned move to Mexico as the first test. Given deregulation and tax law, bringing back jobs from China and Mexico and elsewhere around the globe may be difficult, but perhaps something can be done about communities in the United States being put into competition for the jobs that remain. Maybe limits can be put on corporations playing one area against another for “incentives” that drain community resources.
Consider a national clearing house to take a close look at the real reasons for a company’s need to relocate, and ways to solve problems that might exist which could keep them where they are. Some will holler “government interference in private business” and they will be right, but history has shown that without some governmental restraints, Crony Capitalism cares only about rewarding itself at the expense of you and me. Some companies should fail, and others should be provided assistance to survive.
Adam Smith’s “invisible hand” disappeared a long time ago as federal, state and local government “incentives” and tax breaks and weak laws and subsidies helped boost profits while the recipients expressed outrage at calls for “governmental interference.” Or despair over the “will of the people” in raising minimum wages. The needs of the bottom line and the needs of communities and workers can be balanced, as they were for about 40 years. For that to happen, a discussion needs to start, and the media and its columnists need to go beyond putting their byline on some corporate or county press release and calling it journalism.