New Rules Project - Retail - Curbing Corporate Welfare

Here's a thought-provoking piece about corporate subsidies: New Rules Project - Retail - Curbing Corporate Welfare: "Subsidies are rarely provided to locally owned businesses. Instead, these businesses often see their tax dollars used to subsidize their biggest competitors."

Maybe my notion of America is outmoded, but I tend to think that small businesses are some of our most inefficient companies as well as the seedbeds of some of our greatest innovations. I have mixed feelings about government subsidies.

On the one hand, I think a business should fend for itself. On the other hand, I can see the benefit in the government helping essential industries weather tough times - or ramp up new technologies - so that we don't get into a situation where, for instance, we import all our wheat from China and then they cut us off. In a case like that, it would take years to reestablish adequate agriculture to meet such a need. If the theory of Peak Oil - that known oil reserves are being drained faster than new ones are found while nations like China and India increase their consumption - is true, we'll be in quite a pickle if oil becomes unaffordable before we have alternatives in place. Even if the Middle East has thousands of years of oil left, they could cause us tremendous economic harm by choosing not to sell to us.

England was a superpower going into World War I, but it was a has-been by World War II. England was a coal-based economy when the world was becoming an oil-based economy. The U.S. is an oil-based economy; developing countries are less entrenched in oil than we are (for instance, few nations have far-flung suburbs filled with SUVs that drive 1 person to a job many miles away). Developing nations like China, with their bicycle-filled cities and without our massive debt, could adjust to an energy shift more easily than we could. So I think that it's a good thing for our government to invest in alternative energy.

On the other hand, I'm a small business person. LOL. Sounds a little like "little person." Anyway.... It is not efficient for businesses to be investing time and humanpower (like manpower, but politically correct) in looking for government subsidies. That time should be spent building the business. And the thought of paying MORE in taxes than a direct competitor - effectively paying my competitor to drive down my profits - rankles.

On yet another hand, the City of Folsom provided subsidies to Intel, and Folsom was transformed from a backwater distant suburb of Sacramento, to a thriving city with expensive homes, extensive parks, and a brand-new, state-of-the-art high school. Intel paid Folsom back in spades.

Maybe this isn't an either-or question, but a do-it-right question. I haven't a clue how we get backroom deals and lobbyist contributions out of the equation, and put the public good back at the forefront, but it needs to happen. WalMart's opponents ignore the economic value of WalMart's cheap prices (some studies suggest that the combination of stagnant wages and rising prices worldwide these past few years would have been tremendously disruptive if not for the cost-reducing influence of WalMart, Chinese goods, and similar discount providers, and those are worldwide statistics, not just American studies). But I don't see how any community can look at a proposed WalMart and say "yeah, that's gonna be *great* for this town!" And, well, the public costs of disposing of cheap, disposable, impulse-purchase, breaks-easily WalMart crap .... ah, that's a rant for another day.

I guess the most basic question is, how do we put integrity back into government? How do we get our elected representatives to do what's right for our cities, states, and Nation, without regard for the legislator's personal gain?