Economic Blackmail

Economic Blackmail

Where I come from, this is called extortion.

Rural municipal economic development is now so in bed with large corporation executives that the large corporations can now threaten to leave unless the city makes an investment in the company with no guarantee of return benefit to the municipality. (See: gift or donation.)

In this article Apogee pits two cities against one another asking each for a donation. Whichever city provides the most lucrative donation to the company will be the city the company will invest in plant improvements. Note, there is no commitment by Apogee for more jobs, just an expansion of the physical plant to help them gain “competitive advantage”. The commitment from Apogee in return for the sizable “gift” from taxpayers is that they will invest in “manufacturing process improvements” over 3 years.

Why would executives go to Wall Street anymore for capital infusions? Now they can simply manipulate municipalities against one another asking for taxpayer-funded handouts.

This article shows the donation offer from Owatonna, Minnesota: $4.9 million. What kind of gift is Statesboro, Georgia going to offer up? $5 million?

Forget the obvious flaw in the process, the real concern is that corporate executives have figured out they can now threaten municipalities and leverage them against one another for capital infusions into their company without a return promise to the taxpayers. This is dangerous and borders on extortion.

 

Comments are closed.