'The Nation writer Ed Kilgore pens a telling profile of how South Carolina's economic development priorities are perceived around the nation. It's a cautionary tale i n light of the governor's pledge to travel the land cheerleading for the state. In short, Republicans love it (emphasis added):
Just take a look at the broader policy context of the steps Walker is taking in Wisconsin. While simultaneously battling unions and calling for budget cuts, he’s made the state’s revenue quandary much worse by seeking to cut corporate taxes and boost “economic development incentives” (another term for tax subsidies and other public concessions) to businesses considering operations in Wisconsin. This is philosophically identical to the approach taken by new South Carolina Governor Nikki Haley, who hired a union-busting attorney to head up the state labor department and touted the state’s anti-union environment as a key to its prospects, explaining, “We’re going to fight the unions and I needed a partner to help me do it.” Despite large budget shortfalls, she’s also proposed to eliminate corporate income taxes and pay for it by restoring a sales tax on food. The common thread here is the quasi-religious belief that reducing business costs for corporations is the Holy Grail of economic development, while all other public and private goods should be measured strictly by their impact on the corporate bottom line.
Even before the arrival of Haley, this was the default model of economic growth in Southern states for decades—as the capital-starved, low-wage region concluded that the way it could compete economically with other states was to emphasize its comparative advantages: low costs, a large pool of relatively poor workers, “right to work” laws that discouraged unionization, and a small appetite for environmental or any other sort of regulation. So, like an eager Third-World country, the South sought to attract capital by touting and accentuating these attributes, rather than trying to build Silicon Valleys or seek broad-based improvements in the quality of life. Only during the last several decades, when Southern leaders like Arkansas’s Bill Clinton and North Carolina’s Jim Hunt called for economic strategies that revolved around improving public education and spawning home-grown industries was the hold of the “Moonlight and Magnolias” approach partially broken. And now it’s back with a vengeance, but no longer just in the South.
Members of the modern Republican Party, and the “Tea Party movement” in particular, gravitate naturally toward models of growth that treat public programs and investments as mere obstacles in the path of dynamic corporate “job creators.” Many look South in admiration: Just last week, Minnesota Tea Party heroine and possible presidential candidate Michele Bachmann visited South Carolina and told an audience that she was happy to join them in a “GOP paradise.” And Scott Walker is hardly alone among Midwestern Republican governors in pursuing an agenda that combines business-tax cuts and other incentives with attacks on public investments and Southern-style hostility to unions. That’s also the agenda of Ohio’s John Kasich, and while Michigan’s Rick Snyder and Indiana’s Mitch Daniels have stepped back from efforts to assault collective bargaining rights, they are devotees of the idea that low taxes and deregulation are essential to economic growth, regardless of the impact on public services and investments...
...The Tea Party’s love of “Moonlight and Magnolias” economics also fits with its disturbing affinity for other Old South concepts, which developed during Dixie’s long era of resistance to unionization, “big government” meddling with economic and social life, limits on natural resources exploitation, and judicial tampering with property rights and state’s rights. Most remarkable is the spread of “Tenther” interposition and nullification theories, which hold that the states should have special sovereign rights to thwart federal policies in ways not considered legitimate since the eras of Reconstruction and the civil rights movement. These have been widely touted by conservatives across the country (notably 2010 Senate candidates Sharron Angle of Nevada and Joe Miller of Alaska) and even by House Majority Leader Eric Cantor (who has spoken warmly of the “Repeal Amendment” that would let states collectively kill federal laws).
The problem with this Southern theory of growth is that it won’t work: Economic development experts usually deride “Moonlight and Magnolias” approaches to job creation, noting that they track the outmoded first and second “waves” of basic economic development theory—which emphasized crude economic races to the bottom—as opposed to third and fourth “waves” that focus on worker skills, quality of life, public-private partnerships, innovation, and sustainability. If Wisconsin and other states—not to mention the country as a whole—end up adopting these atavistic economic ideals, they will simply begin to resemble the dysfunctional Old South societies that spawned them in the first place.
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