Hello, My Name is . . .
While reading Slashdot this morning, I came across this story:
“Raleigh City Councilman Bonner Gaylord is offering to name his unborn children after the co-founders of Google Inc. in an attempt to convince the company to build a high-speed Internet network in Raleigh.”
While lots of communities lately have been making offers to rename their stadiums, landmarks and towns after corporations in a bid to lure in local investment, this is the first time I’ve seen someone offer to name their as yet unborn children after a company’s founders simply to get a network. Granted, there have been stories about parents naming their kids after their favorite brand – “ESPN Real” being one a fellow Slashdotter pointed out – but most of these have been driven by a parent’s (misguided, in my opinion) desire to make their child stand out in some way. What makes this story stand out, is that this is the first instance I am aware of where a parent is voluntarily offering up his child’s identity to a corporate host. What’s worse, to me anyway, is that he seems to be doing so to get a better Internet connection. Call me foolish, but there is not enough porn in the world to justify this kind of stupidity. It’s one thing to rename a building, but a child?
Am I over-reacting? Probably a little bit. But here’s the thing: this is a human being we are talking about. An unborn human with no interest in market economics, jobs creation, tax revenues, or faster bandwidth. A child that will forever be reminded that his father’s need for money, or just plain notoriety, outweighed his duty to act as a loving parent. Maybe the kids (the wife is bearing twins, by the way) will be able to come to terms with dad’s actions at some point in their futures, but why saddle them with the knowledge that they were used by their father as a tool before they were ever born?
Madness, I tell you, madness.
But let’s step back and think about a related trend in dealing with corporate America, the idea that giving corporations all they ask for will ultimately prove rewarding to the people doing the giving.
Thanks to years of tax cuts, and the tendency of the mobile rich to locate their revenue in places where municipalities can longer reach it, many states, cities and towns, now in the throes of economic recession, are finding their coffers a little less full. Their solution, more often than not, is to compound the problem by offering even more tax cuts to potential corporate suitors, or to augment the cuts with subsidies or tax credits that essentially give the corporations a free pass on paying anything back. “It’ll create jobs,” they tell us, implying that the employed will be able to make up for the lack of corporate tax revenues in the form of sales taxes and increased resident income taxes. Implying that the people will be expected to pay for a company’s presence.
The flaws in this logic are simple, and many. First of all, a corporation is going to try and pay its employees the lowest possible wages in any given market. Thus, resident incomes are not likely to increase, and without significant increases, sales taxes are likely to remain fairly flat as people aren’t going to magically find the money needed to buy luxury goods. Without this money, municipalities will likely be forced to cut services, and generally speaking, education, health and safety will be among the first to go. Cut education and you lower the value of your residents to potential employers, cut healthcare, and you force your residents to pick up a tab they hardly afford, cut safety and no one will want to remain – you will lose your attractiveness to both the business you seek to lure, and the residents you need to retain. Second, there are absolutely no guarantees that any monies given to a corporation will be returned to the state in the form of wages or sales taxes. What’s to stop a corporation from a) importing its own cheap labor, and b) doing what any of us would do; shop elsewhere for equipment and goods from cheaper sources (ever hear of this thing called “globalization”)?
For examples of how being too eager to please a corporation can backfire we need look no further than the recent free-for-all that took place as many states sought to lure Hollywood eastward with the promise of lower taxes and cheaper filmaking.
[In the interest of space, I’m only going to focus on this one industry for this post. Abundant examples exist covering the automotive, banking, retail and insurance industries.]
In 2007, the state of Iowa adopted a program of offering incentives to film companies that would allow the studios to recoup as much as 50% percent of their production costs. Unfortunately, accusations that Hollywood repaid the state’s kindness by artificially inflating production costs (a criminal probe was launched) have resulted in the revelation that the state may be on the hook for as much as 150 million dollars (Source)), and that is after a number of film projects have withdrawn from the state due to the controversy. In Michigan, Republican Senator Nancy Cassis says, “The film credits are being subsidized by taxpayers at an estimated cost of $150 million in 2010 . . According to the Senate Fiscal Agency, the state needs more than 20,000 small businesses, or almost 148,000 taxpayers with an income of $45,000, just to pay for the credits next year.” In Connecticut, a report by Connecticut Voices for Children “showed that only 11% of the $113.2 million of state revenues lost through the ‘film tax credit’ subsidized production expenses that were classified as ‘actual Connecticut expenditures.’” The Massachusetts Department of Revenue reports a similar finding that “only 16 percent of the wages paid by subsidized film productions went to Massachusetts residents.” So where is the money that was supposed to appear?
While these are just a sampling of some state’s single industry’s subsidy nightmares, they don’t illustrate the one key trait of a corporation that everyone is aware of, yet everyone refuses to articulate: Corporations have no responsibility to honor their commitments to anyone other than themselves. Their one purpose is to create/increase shareholder value, and if that means pulling up shop and taking their business, factories and office suites elsewhere, they will do so without a moment of consideration for the thousands of lives they may leave in ruin. When elected officials bend over backwards to offer gifts such as subsidies and their children’s names as bait to a corporation, they are failing to realize that they are offering themselves and their constituents up to an entity that does not respect the concept of loyalty, and never will. It is simply not in their job description.
So Mr. Bonner, take a long hard look at your wife’s tummy. Imagine the children nestled together inside in the dark and the warmth and ask yourself: “Did I really have the right to use these beings, these pieces of myself, as pawns in a political game?”