The government of the St. Louis suburb of Hazelwood is negotiating with Ford. The governor has gotten involved, as well. Is Ford bidding on some government project worth billions? Does Ford stand accused of some dreadful infraction of one of the myriad rules and regulations under which it is compelled to operate?
None of the above. Ford is planning to close the plant, and Hazelwood specifically, and Missouri in general, want it to hang around. The reason is readily apparent: Ford is a cash cow. It pays millions in taxes to the state and Hazelwood, and its 2750 workers pay taxes as well. The schools in Hazelwood are principal beneficiaries of this largesse, so the state, which evidently regards the operation of schools as an important government function, wants Ford to stay.
It’s likely that the schools could be operated a great deal more economically, but when their financing consists in funds taken from individuals or companies under threat of fines and/or imprisonment for failure to "contribute," there really isn’t any reason to economize. Taxation is here shown to be akin to what would be, if done in the private sector: extortion, robbery, or downright theft. There’s always a euphemism for the lawless activities of our rulers!
For instance, Missouri is offering Ford incentives to remain in Hazelwood and be milked for the benefit of the local school system. In ordinary terms, this would be called bribery. (In fact, that was precisely what the government called it a few years ago, when U.S. airplane manufacturers were caught offering bribes — er, incentives — to foreign governments.) The bribes being offered Ford don’t seem very attractive. The details are not available to the reader of the morning paper, but what Ford is expected to give in return is an expenditure of half a billion dollars in the plant, and a promise to keep the 2750 workers working for eight to fifteen years, depending upon the particular bribe accepted. To a non-economist, it would seem obvious that the very reason Ford is planning to shut the plant is because it cannot do those things.
One aspect of the negotiations which stands out is the total failure of anyone to discuss, or express concern about, what the plant actually does. It manufactures cars. The sale of the cars has been disappointing, making it unprofitable to continue to operate the plant. Doesn’t anyone care about that? Will a juicy bribe offered to Ford cause prospective buyers to rush to the Ford dealer to order a car? Will Ford’s spending half a billion on the plant, and promising to keep on the workers for eight to fifteen years bring about a surge of new orders? Shouldn’t there be some link, however tenuous, between the negotiators and reality?
And why should all the responsibility fall on Ford? It is offering a product which the public apparently doesn’t want, at least in large numbers. Why shouldn’t the public become involved? Government itself offers countless "services" which no one wants; perhaps some don’t even know that the services exist. Does that mean they aren’t compelled to buy them anyway? If it is somehow fair to expect Ford to remain in Hazelwood, and to maintain its operation despite inadequate sales, wouldn’t it be equally fair to offer bribes — i.e., "incentives" to Missourians to buy the cars? How about a few bucks off your taxes if you buy one of those Explorers? Or, what about a fine if you buy some car other than an Explorer? Maybe a jail term for buying a foreign car — unless it’s one in which Ford has an interest, like Jaguar, or Mazda. Let’s see a little imaginative lawmaking here! At the very least, the people of Hazelwood, whose schools are threatened by Ford’s departure, should be required to buy Explorers for the next eight to fifteen years. Sauce for goose and gander, right?
Of course, Hazelwood, and Missouri, could get out of the school business altogether, since they seem to have little expertise at it. Parents of school children could negotiate with private educators for the best education for the buck and probably end up with better-educated kids at a lower cost. Ford could re-locate or shut down its plant, economizing its operations, and possibly preventing price hikes necessary to keep all those workers working, and the plant renovated, despite lack of customers. In a word: freedom.
It’ll never happen!