Arizona’s addictive subsidies game
I don’t really like the phrase “crony capitalism,” even though I’ve used it from time to time.
The “crony” implies impropriety. When it comes to the subsidy game, there’s some of that.
But the far larger problem is that both political parties support subsidies for private businesses. “Crony capitalism” is a label politicians lob at the subsidies favored by the other side. Their subsidies are called “economic development.”
In reality, economic growth is maximized when government treats all businesses alike. Subsidies distort capital investment, consumer markets and public finance. Yet politicians of all stripes cling to them, and they tend to proliferate like rabbits.
A couple of examples from this session of the Arizona Legislature.
Arizona State University owns a lot of property and is beginning to allow commercial development on it. However, it is also extending its cloak of exemption from the property tax to the commercial outfits that set up operations on its property. The most well-known is the massive State Farm local headquarters.