Steady march toward capitalism continues
By Charlie Mitchell
This is not handwringing, just fact: Capitalism as it existed long ago is firmly out to pasture.
Don’t even hear the word very often.
Most of Mississippi is celebrating, with justification, tax and other inducements approved for two private employers that, in coming years, promise to bring 2,500 jobs to the Jackson area and 1,000 to the Gulf Coast.
Similar joy was felt 16 years ago when former Gov. Ronnie Musgrove signed a $363 million incentives deal to entice Nissan to invest $1.4 billion and offer up to 5,300 jobs near Canton.
Mississippi needs jobs, and involving public dollars to create private employment started way back in 1936 with Gov. Hugh White.
It should be noted, though, that the price and frequency are increasing. And secrecy is paramount.
The incentives cost per job for Nissan was $68,500. To attract Continental Tire to Hinds County and facilitate expansion of Topship LLC in Gulfport, the cost has been estimated at $78,200 per job.
Numbers-crunchers do a marvelous job of explaining how the yield will outstrip the investment, but there are unsettling aspects of public-private partnerships.
The politics of these arrangements is, well, bipartisan. When Musgrove, a dang old trial lawyer Democrat, showed up in 2003 to watch the first vehicle roll off the Nissan line, he was joined by arch-conservative Republican former U.S. Sen. Trent Lott. Both were happy to look into the cameras and applaud a great day for Mississippi — because it was a great day for Mississippi.
While many in public office still love to proclaim, “Government should not be in the business of picking (private sector) winners and losers,” when a project succeeds, the “partners” are proud.
It’s also no surprise that a deft dance commences when promises vanish in the mist and taxpayers are left to cover millions — if not billions — of losses.
That happens, too.
Solyndra is a name that makes Barack Obama cringe.
During the president’s first term, the start-up company that was to be America’s answer to made-in-China solar panels, received $1.5 billion in loan guarantees. President Obama visited the plant, glad-handed everyone there while patting himself on the back for his foresight and ability to help people.
Solyndra went bankrupt. And a billionaire part owner of the firm was an Obama fundraiser.
Mississippi’s highest-profile sweetheart-deal-gone-bust was a $55 million loan the Legislature approved in 2003 for Mississippi Beef Processors to build and operate a slaughterhouse in Yalobusha County. Eventually the plant owner served a stint in prison, but no elected official was deemed accountable.
The state auditor at the time is governor now. In 2005, Phil Bryant told Governing magazine that the Legislature had not done its homework. “Rushing to please every company is something we have to be careful of,” was Bryant’s quote in an article. “In our haste, we did some things we would have never done otherwise. We ignored basic business and industry principles.”
This time, before and after the Legislature fell all over itself to OK the packages for Continental and Topship in a one-day special session, Bryant assured everyone that due diligence was done and requisite guarantees are in place. The state does have a better process for vetting projects. But the hard fact is there is risk.
“Socialist” (meaning a government-managed economy) is still a cuss word when mumbled by old men conversing over their morning coffee. But farmers grow the crops they are told to grow. Industries, such as Continental Tire and Topship, are, in essence, in partnership with lawmakers. Health firms derive most of their income from government programs or “private” insurance policies that meet government requirements.
In our minds there are vast differences between the “managed economy” of China and “managed capitalism” in the United States, but free enterprise as it existed 100 years ago has vanished. Real separation no longer exists between private enterprise and the halls of government.
At all levels — city, county, state and federal — closed-door deals are negotiated every day that require “investment” of public assets in private ventures. Often “we the people” are winners, but in today’s democracy our voices matter less and less.
Charlie Mitchell is a Mississippi journalist. Write to him at email@example.com.