Wednesday, December 17, 2008

High-Tech Corporate Whores

I almost hesitate to write unflattering things about Google, given its Big Brother-like power as the world's most popular search engine -- and its NSA-like ability to monitor what we're all up to on the Web. It very kindly provides the template and system on which this blog operates, all for free. So if this blog suddenly vanishes tomorrow, and they find my body floating in the Arkansas River, you'll know where to look for suspects.

But it still has to be said, even if it gets me blackballed by a great search engine: Google is a shameless corporate whore that is ripping off the taxpayers. And it's not alone among highly-profitable high-tech companies. While most of the nation is debating whether to throw a lifeline to an old-style "heavy" industry based in Detroit, and focused on the shameless pleadings of Big 3 CEOs, Silicon Valley and the high-tech sector are also taking taxpayers to the laundry -- though quietly and stealthily, by calling the handouts "incentives" instead of "bailouts."

Google, for instance, though it recently made news by turning down a $4.7 million grant from the state of North Carolina, to help the company build a new data center in the town of Lenoir, still has commitments from the state for an "incentives package" worth more than $260 million, in electricity subsidies, sales tax exemptions and property tax waivers. All for agreeing to do business in the state. Read the complete story here.

This obviously isn't a company in trouble. Google is a highly profitable enterprise that could and should pay its own way. But like many American companies, Google can resist anything but temptation -- which means it isn't going to turn down the money states and localities are throwing its way, in a cutthroat bidding war for economic development and jobs.

These company-pouching activities create the illusion of "job creation," when, in fact, they're only moving jobs around the map, based on who is willing to pay more in corporate bribes. This does nothing to grow the economy as a whole. It fosters a mercenary mindset in corporate boardrooms, state legislatures and city halls, all across the country. And worst of all, it's exploitative of taxpayers, who ultimately foot the bill for these corporate welfare payouts.

But not all North Carolinians are thrilled about subsidizing one of the most successful companies in the world. "The Google incentives are being challenged in state court by the North Carolina Institute for Constitutional Law, which alleges that special breaks for the company violate the state constitution's requirement of fair and equitable tax treatment," reports the AP.

Few such objections are being heard in Tennessee, however, where Hemlock Semiconductor (an interesting name) just received a total of $200 million in state and local "incentives" to relocate to the town of Clarksville (read the whole nauseating story here.) Nor is much of a fuss being made in Utah, where eBay, the very successful on-line flea market that keeps me supplied with second-hand shirts, just shook down taxpayers for $27 million in "incentives," in order to bring a computer center to the Salt Lake Valley.

In fact, such corporate welfare scams are endemic today. If you doubt it, follow this link to the archive of "corporate welfare"-related news stories posted at It will blow you away. And it won't stop until the taxpayers rise up and collectively say they've had enough.

Polls indicate that most Americans are wary of a federal bailout of the Big 3, and understandably so, yet these same Americans seem sanguine, and sometimes even supportive, about the corporate welfare giveaways proliferating under the guise of "economic development incentives." We'll have to overcome this sort of cognitive dissonance if we're going to get the "panhandlers in pinstripes," of all stripes, out of our pockets.

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