Posted by: JanF | February 9, 2011

“Open for Business”, Part 1 – Rearranging the Chairs

“Open for Business” is the latest catch phrase being used by Republican governors. As with many catch phrases it is clever but meaningless without context.

Tonight we will put the phrase “Open for Business” into context so that we can get a better look at it.

The problem starts with the word “open” which has no fewer than 19 different meanings. It is easy to see how confusion could result especially since confusion is actually a planned component of the packaging.

In it’s original use “Open for Business” was a sign put up in front of your small store along Main Street.

The latest use of the phrase, however, is more along these lines:

14a (1) : characterized by lack of effective regulation of various commercial enterprises
       (2) : not repressed by legal controls
    b : free from checking or hampering restraints

Of course one person’s “hampering restraint” is another person’s “environmental protections”, one person’s “repressive legal controls” are another person’s “educational standards”, and one person’s “free from checking” are another person’s “safety and health regulations”.

In tea party speak, “Open for Business” means:
1. Cut taxes on businesses
2. Remove environmental regulations
3. Cut taxes on businesses
4. Eliminate or weaken unions
5. Cut taxes on businesses
6. Defund the educational system including universities
7. Cut taxes on businesses

Did I mention that they want to cut taxes on businesses? That is their number one goal because they have “certainly” not moved past the discredited supply-side economic theory.

The other Republican talking point, you see, is that we need “more certainty for those in America who create jobs” with the implication that the only “certainty” that matters is how much you pay in taxes. There is little talk of the “certainty” of a living wage or the “certainty” of food and shelter or the “certainty” of clean air and water or safe roads.

Ready, set … start the race to the bottom

And here are the states lining up to be “Open for Business”:

New Mexico:

New Mexico Gov. Susana Martinez has pledged to fill a $450 million budget deficit without raising taxes. She wants a more business-friendly state with fewer regulations. But critics say her new policies only please oil and gas producers, who contributed generously to her campaign.

Ohio:

Republican Gov. John Kasich got the vote he wanted Tuesday from the Ohio House. It would privatize the state’s economic development effort by creating a non-profit corporation run by a nine-member board, headed by the governor.

JobsOhio would not be a state agency and the state’s open meetings law and public records law would not apply to it, although supporters said there would be sufficient public disclosure. Kasich has made it a key ingredient in his plan to make Ohio “open for business.”

It’s what the state needs at a time of unemployment hovering around 10 percent and thousands of jobs continuing to leave the state, he and his allies have said.“We need a different direction,” said Rep. Danny Bubp, R-West Union. “This bill does that….Ohio is at war with other states and countries for jobs.”

Wisconsin:

Walker had promised swift action to show that Wisconsin, in his words, is “open for business.” Even though most of his measures have received some support from Democrats, critics argue they are largely symbolic and will do little to actually create jobs or improve the state’s economy.

Senate Democrats said the latest tax cut measure, expected to cost the state $67 million over two years, was too expensive given the projected $3 billion shortfall in the two-year budget. They also said the tax bill, which would give businesses deductions worth $92 to $316 per job, wouldn’t be enough by itself to get businesses to hire more people.

Iowa:

Much of state government would see reductions, and possible layoffs, while commercial property owners and corporations would pay lower taxes under a budget proposal Republican Gov. Terry Branstad pitched Thursday.

No children would get free preschool classes and 36 state programs would be discontinued — all efforts to rein in spending, as Branstad promised in his campaign.

“This budget will make us competitive for new jobs,” Branstad said in his budget address to the Iowa Legislature.

Branstad said later that he’s already drafting letters to Illinois businesses, asking them to move to Iowa because their state is raising taxes and Iowa is going to cut its taxes.

Hands off my state, says Illinois

Not every state getting poached is taking it lying down:

Weeks after launching an advertising campaign that encourages businesses in Illinois to relocate to New Jersey, Gov. Chris Christie is heading to Chicago with the same message. The Newark Star-Ledger reports that Christie plans to meet with local business leaders about the “current economic climate” in the state, and possibly convince them to take their businesses east.

“Both New Jersey and Illinois are providing business leaders with certainty,” Christie said, according to the Star-Ledger. “In New Jersey you can be certain taxes are going down over the next three years, and in Illinois you can be certain they are going up.”

When Illinois Governor Pat Quinn heard about Christie’s efforts in January, he laughed them off.

“I don’t know why anybody would listen to him,” Quinn said. “New Jersey’s way of balancing the budget is not to pay their pension payment, not to deliver on property tax relief that was promised, to fire teachers, to take an infrastructure project — building a tunnel that had already been started — and end it and have to pay money back to the federal government. I don’t need that kind of advice from that guy.”

Because it is not all about taxes …

Governors trying to steal jobs from Illinois after its record tax increase find that employers consider a broader range of concerns :

[Taxes] are a single component of a complex mix of factors that includes workers, unemployment compensation costs and the litigation climate”, [Kim] Maisch [director of the Illinois chapter of the National Federation of Independent Business] said.

“Small businesses are different than corporate America,” Maisch said in a telephone interview from her Springfield office. “Many of them have two mortgages, as opposed to the CEO in Chicago making $10 million. They’re part of their community, their kids are in Little League, and you just don’t get up and leave.”

In Florida they are finding that out as well:

Five Florida regions dominate a list of the 20 cheapest areas in the nation to operate a corporate headquarters, according to the Bizcosts.com study study. The study adds to the evidence that it’s not exorbitant costs that are holding Florida back, despite the calls for lower taxes we hear out of Tallahassee.

It’s education, transportation and other quality of life issues.

Insiders familiar with [the Jet Blue] deal and others across the state have said a skilled workforce, good transportation infrastructure and availability of the arts and other entertainment often come up as sticking points when executives scope out Florida.

Ignoring the iceberg

The biggest problem with all these states declaring themselves “Open for Business” is that it does not do anything to improve the very real plight of American businesses and American workers. A business moving from Illinois to New Jersey does not add one penny of value to us as a nation. To use another catch phrase, all we are doing is rearranging the chairs.

And now is the chairs are being packed up and moved to other countries so we have even fewer chairs to arrange.

One case in point is the textile industry. Southern states like North Carolina lured textile factories with the promise of low wages, non-unionized workers and tax incentives. Those same companies felt no loyalty to their “new home” and moved to Mexico to China: “just as the industry had moved South during the 1880 – 1935 period to take advantage of lower production and wage costs, so too did the industry in the 1990s begin to shift production into other countries.”

Surprised? Why? If the only incentive is low-wages and no regulations there will always be a place just over the horizon that has lower wages and fewer regulations.

Tomorrow night we will look at how we might unite the states instead of pitting them against each other. It begins with a commitment to infrastructure and education … in fact the very proposals laid out by President Obama in his State of the Union address.

Imagine that.

(A version of this was originally posted on 02/09/2011 at BPI Campus)

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