Agenda - 06-03-2008-5b5e - Laserfiche WebLink

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to convince Mercedes-Benz to build new plants, and Kentucky was doling ' out $350,000 a job for Canadian steelmakers Dofasco and Co. Steel... Politicians, of course, condemn these tactics even while they are signing the checks. (1998, p. 10-11) Summary: Mainstream economists shrug these effects off as the inevitable outcome of competitive capitalism, but economist Michael Shuman (1998, pp. 12-14) shows that big-is-better biases pose four fundamental threats to communities and economies: • They guarantee that U.S. communities will continue to experience decline in both the quantity and quality ofjobs. • Sudden corporate departures impose huge costs on all levels of government. Not only does the abandoned community have to pay unemployment and welfare costs, its tax base shrinks as ancillary businesses close, property values plummet and loan defaults skyrocket. This depleted base and the costs of the original `incentive' often leaves the community unable to support basic services like schools, hospitals, street repairs, electric utilities, and police. • Bringing in big game erodes local culture and undermines local quality of life. The flood of national and international chain stores homogenizes communities until little sense of place remains. • Corporate dominance undermines local governance and the community's ability to plan for a healthy future. Competing for big fish companies undermines the standard tools of regulation and taxation that communities once used to maintain a reasonable give-and-take relationship with private firms. As a consequence, governments are increasingly driven, not by a consensus among the community's multiple constituencies, but by the most powerful corporations whose special interests dictate public plans. As Shuman notes, "The city of Atlanta follows the lead of Coca-Cola, Turner Broadcasting, and Delta airlines. Houston accommodates Exxon, Shell, and Arco. Seattle is beholding to Microsoft and Boeing. More and more communities have become company towns. It's just a matter of degree:" (1998, p. 14) The result is irony incarnate. While large corporations receive all kinds of public assistance, their preferred pattern is to cut jobs and costs at the expense of local well- being and safety, and move operations to foreign lands to increase profits even when they are making money. They do all this despite the largesse they receive from the public pocket. Cities are left with increasingly fragile local economies and rising costs, which lead to higher taxes.