TW: Hypocrisy is such a delicious political trait. Southern states have provided over $2.3 billion in state subsidies attracting foreign car firms to their states. The foreign automaker model is not complicated, use young workers (without legacy retiree costs) and state subsidies to compete effectively with U.S. automakers. Have management decisions contributed? Presumably. Are they solely or even majority responsible for the foreign company success? Not likely.
From Washington Independent:
"To hear Southern Republicans tell the story, the financial burdens facing Detroit’s automakers are self-made troubles to be settled by the laws of Adam-Smith capitalism.
“We don’t think it is the role of government to intervene,” Sen. Jim DeMint (R-S.C.) told the Fox Business Network last week. “We need to let the market and the laws work the way they are already in place.”
Yet this argument — that the government has no business interfering in free markets — ignores an increasingly frequent tradition among Southern states, which have fronted billions in local taxpayer dollars in the past two decades to attract foreign auto plants
Supporters of these deals contend that the economic activity spurred by the arrival of the automakers is worth the up-front costs. Yet some experts say that, considering the ever-growing size of the incentive packages, there’s little evidence to support that claim.
“It’s exceedingly difficult to determine whether the returns warrant the original incentives,” said Matthew N. Murray, executive director of the University of Tennessee’s Center for Business and Economic Research. “It’s just hard to show that it’s going to produce enough tax revenue.”
http://washingtonindependent.com/22236/cars
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