Mike Lillis notes the staunch commitment to the free market that underlies the principled opposition of reactionary Southern senators to the auto bailout:
“You look at the South,” [Sen. Richard] Shelby said. “You take — not just Mercedes in my hometown — but BMW, Honda and all of them. These companies are flourishing with American workers made in America.”
But the flourishing of the transplants didn't come without significant taxpayer help. Shelby's Alabama, for example, secured construction of a Mercedes-Benz plant in 1993 by offering $253 million in state and local tax breaks, worker training and land improvement. For Honda, the state's sweetener surrounding a 1999 deal to build a mini-van plant was $158 million in similar perks, adding $90 million in enticements when the company expanded the plant three years later. A 2001 deal with Toyota left the company with $29 million in taxpayer gifts.
Alabama is hardly alone. Corker's Tennessee recently lured Volkswagen to build a manufacturing plant in Chattanooga, offering the German automaker tax breaks, training and land preparation that could total $577 million. In 2005, the state inspired Nissan to relocate its headquarters from southern California by offering $197 million in incentives, including $20 million in utility savings.
In 1992, South Carolina snagged a BMW plant for $150 million in giveaways. In Mississippi in 2003, Nissan was lured with $363 million. In Georgia, a still-under-construction Kia plant received breaks estimated to be $415 million. The list goes on.
Moreover, in terms of the national interest, this kind of subsidy war is in many respects even worse. While countless jobs will permanently vanish if Detroit is allowed to fail (including many not directly associated with the auto industry), these kinds of subsidies just result in jobs being created in one state as opposed to another. (While I think that the Supreme Court was ultimately right not to rule these subsidies unconstitutional under the Commerce Clause, I must admit that a small part of me still wishes that they had done so.) But, certainly, any claim that Republican opposition to the bailout is rooted in any kind of commitment to libertarian economic principles is a joke.
--Scott Lemieux
