Which is worse, getting tax money with no strings attached so that I can myopically bound through fields of innefficiency and lackluster quality; or shipping jobs overseas where labor doesn't end up costing $20-$25/hour after benefits, taxes and social security? It depends on if we are talking about "worse" for the country, a politician, the taxpayers, or the consumers. Let's take one example and see how it goes:
Amonix, in North Las Vegas, was given $21million to start up a manufacturing plant in N LV. This government program, deemed an overwhelming success, gives grants and loan guarantees to companies to build plants and produce products in the USA. The plant is closed now, about a year after opening...having laid off 700 employees and owing many companies LOTS of money. This plant didn't close because of the EPA or IRS...it closed the old fashioned way; poor quality, lack of training and a bad business model was given oodles of money without the pesky little detail of competition and capital investment managers looking at the details of production. Without this little oversight oversight...companies tend to fail, as the golden rule of capitalism (profit) was not the goal of the government, but employment and publicity was. To drive this point home...let's ask Harry Reid what he thinks about the company. Harry says that Nevada's Sunshine is on par with Saudi Arabia's Oil reserves. And we all know that the government threw money at every Bedouin who wanted to drill for oil...oh wait, they contracted the leading oil drilling, prospecting and safety companies throughout the world to lead on this endeavor...and it's worked out pretty well for them.
To be fair to Harry, this program has bipartisan support, which is more of a slam on Republicans, who are supposed to understand the need for independant private businesses not being interfered with by gov't meddling because it isn't healthy for competition when the gov't picks winners in a field. Many, though, blame the failure on one man, Brian Richardson. You see, he died in a plane accident and the company was rudderless after that. Another reason this should never have been financed publicly...can you see Microsoft investing in a startup that had no business plan that could be followed if the CEO died? Would Apple loan money to a guy who had nobody in his company that could run things in his stead? I doubt it, but at least it wouldn't be MY MONEY, it would be their risk. Anyways, who cares if Brian Richardson died, he didn't build anything, the government did that, right Barrack? So, yes...government is responsible for this failure.
Shelley Berkley was a huge proponent of tax money going to her pet projects, and she defends the stimulus waste by attacking people who have been warning us that this crony capitalism is not going to work. After all, just because someone can see a train wreck coming, doesn't mean he is driving the train. This leads to the charges of "outsourcing". What does it mean? How does it work, and is it easy to decide to do this? It depends, again, if we are looking at this from the perspective of a union, a politician, a businessman or an investor.
If I am a union boss, "outsourcing" is the most vile evil disgusting practice since genital mutilation and infanticide. If I am a union boss, the only way a company can get away from my predatory tentacles is for them to move their production off shore. Afterall, if they are not allowed to move, they have to pay for my vacations, higher wages, fewer hours, better benefits, limited disciplinary actions for fraud, theft, drug use, truancy etc. If I am a union boss, outsourcing manufactured products is the number one thing I should fear, and fighting it is the most important thing I can do to keep what I have.
If I am a politician, I have to decide if I want to get support from Unions or businesses. If I have to rely on union money, I have to fight their fight...regardless of whether I agree with it, or if it is in the best interest of the American people. My goal is to vilify businesses who don't bend to the whim and will of the unionized labor movement. If they leave the country, or relocate to states that are not as union organized/controlled, I must lambast them as evil and against the middle class. If they go bankrupt, I must commend them for staying in the fight for the middle class...regardless of whether or not all their employees just got laid off...the business owner did the right thing. Maybe to help this good business owner out, I will try to get some tax money, or federal grants to give him to help bail him out and keep his business (which failed) going with taxpayer money. It's all good press material too.
If I am a businessman, I have to look at whether it makes financial sense to stay put and keep doing what I am doing. If I am not making money, my company will fail, then I am at the will of the government to bail me out. If I move, I have to deal with the bad press, but I can stay in business...or, I can get rid of all manufacturing costs by shipping the jobs to China or India, then focus just on selling my product in the USA instead of manufacturing...the Fed laws and regulations are easier for businesses to follow if they are just retailers instead of manufacturers. So if it is too hard to employee people here, i can still stay in business if I outsource.
If I am an investor, I have to weight a lot of other factors. If a company gets gov't money, can I get my money out first if there is a filing for bankruptcy? If a company is involved in heavy labor contracts and this is keeping the company from being profitable...do I want to invest before it goes belly up and voids union contracts through bankruptcy litigation? What are my returns on investment with a company that is being run by the gov't? What are my expansion options if their is only union labor able to be used, vs the plans for expansion if I outsource? Can I make more profit if I invest in a plant in Shanghai vs Unionized States of America?
There is one certainty about the American Entrepreneur. We will survive. The politicians in charge can make a rule, enforce that rule, and punish people for breaking that rule...but as long as there is another way, we will find it. You can make it impossible to succeed here, we will go elsewhere. You can limit the amount of dollars able to be taken out of the USA, we will get foreign financing. You can tax profits brought back to the USA, we will create offshore accounts, businesses and have partners in other countries. You can give it your best shot...but remember that for every person you have writing a law, I have 4 lawyers and brilliant businessmen finding a way around it. The best and brightest Americans ARE NOT IN THE GOVERNMENT. We will win. We are the People.
-Rev
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