September 2011


Governor Bentley proudly announced that Alabama will give  over $70 million dollars to an out-of-state corporation to come to Alabama.

As part of the deal, the state will give the Illinois-based company as much as $40 million in cash payments over a period of time as the company hits employment benchmarks. The document says Navistar can collect $10 million for site work at the one-mile-long facility. . .

Local governments in the northwest Alabama area have also committed almost $20 million in cash incentives for the project, according to the document.

So we will continue to travel the same path to economic instability, brittleness and dependence.  Evidence continue to show the dangers of the Governor’s strategy but also show another path toward resilience and security: empowering locally owned businesses. For instance, listen to the history of Buffalo,

By 1986 three-quarters of Buffalo’s regional economy was controlled by absentee-owned firms. This economic shift from local to non-local ownership of commerce generated record profits in the earlier part of the century, but precipitated long-term social and economic losses in the latter because multinational businesses simply were not as dedicated to the area.  For instance, one study revealed that between 1965 and 1980, companies headquartered outside of the Buffalo-Niagara region were twice as likely to close as locally-based ones. When these local firms closed, and the influential families that ran them left town, they also abandoned their philanthropic responsibilities to the area. Independent business leaders were also engaged in local political and economic issues but when multinational representatives replaced them, the local political and economic discourse no longer revolved around Buffalo’s best interest. Economically, the city lost its import-substituting businesses.  Socially, it lost its community pillars.

Unfortunately Buffalo’s leaders have done little to recognize the importance of, let alone revive, the local sector.  The best example of the city’s allegiance to top-down development is Canal Side, a massive waterfront redevelopment plan, which was to be anchored by mega-retailer, Bass Pro.  The city and county took the greater part of a decade to plan this single project and earmarked $14 million for it.

But while elected leaders set aside millions for this waterfront strip mall, they gave nearly nothing to entire blocks of existing local retailers. Too often the community bears the burden of any substantive Main Street development.  One example is Grant Street, a two-mile long, distressed retail strip populated by dozens of local shops (including grocery, hardware and home supply stores).  For decades these shop owners have tightened their belts to continue serving their neighborhood and yet, between 2006 and 2009 received an appalling $21,000 in business grants from the city. Ironically, after nine years of negotiations, Bass Pro (having no real ties to the city) declined Buffalo’s multi-million dollar offer effectively stunting the area’s greatest silver-bullet development.

Doesn’t this sound like Alabama. Imagine what Alabama locally-owned businesses and communities could do with the $70 million being handed to Navistar, the latest “silver-bullet” development. What paltry sum has been invested in locally-owned businesses and historic town squares across Alabama?

Buffalo businesses and citizens though are trying to pursue an alternative path.

Residents and proprietors have embraced Buffalo First’s localism initiative for a host of reasons, the most compelling of which has been economic.  According to research firm Civic Economics, when a person patronizes local independent businesses, over three times more of their money is re-spent in the local community than had they made their purchase at a national chain.  This is critical to a struggling metro like Buffalo because it helps to root the few dollars generated by the city, in the city.  Localism makes sense because it makes cents.

Sometimes the local economic multiplier effect is far greater when businesses commit to maximize local procurement.  For example, Buffalo’s largest community-owned natural foods store, the Lexington Cooperative Market, has pledged to source locally whenever possible.  Because of this, it boasts that roughly 51 cents of each dollar spent there is re-spent in the local economy.  This happens when the Co-op uses the money that shoppers spend to pay local producers, suppliers, farmers, service providers, and the Co-op’s 70 employees.

Even though supporting local businesses provides greater economic velocity and multipliers, the best reason is:

In addition to boosting economic multipliers, businesses like the Co-op perform another key function that national businesses cannot—they create community wealth.  Larger employers may boast that they create “jobs” (even if they are low-wage) but local businesses create wealth because someone who lives in the area owns it.  Income is measured by one’s hourly wage or salary but wealth is measured by one’s assets, valuable items a person owns (such as a home, business, art or equipment) that can be converted to cash and can be passed on from one generation to the next or from one neighbor to the next.  While income helps to pay the bills, assets give people the power to put down roots, to create and to grow.  Every local proprietor in Buffalo has this advantage.

Thomas Jefferson wrote to James Madison: “the small landholders are the most precious part of a state.” He might say today, the small, locally-owner business owners are the most precious part of the state. It is this wealth-creation which breeds political and economic independence. Paerhaps

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Per First Read:

*** Why hasn’t Romney caught fire? Both the New York Times and Washington Post today focus on Romney and why he has been unable to excite Republican primary voters so far, despite his improvements on the stump and on the debate stage. Yet here’s one reason both articles don’t really mention: his past positions on issues. While there’s been so much focus on Rick Perry’s record (his support for in-state tuition for illegal immigrants, the HPV vaccine mandate) just look at Romney’s: Only six years ago, he supported abortion rights; in 1994, he sent a letter saying he’d be a stronger advocate for gay rights than Ted Kennedy; according to a 2006 article, he supported a path to citizenship for law-abiding illegal immigrants; he has said that his Massachusetts health-care law should be a model for other states; and he said back in June that humans have contributed to the world getting warmer — and that it’s important to reduce emissions to combat that. All of those positions are anathema to conservatives. A question: Does this Republican electorate want to “settle,” gravitate behind the most electable? When they’ve “settled” in the past, many conservative leaders have regretted it (see McCain or Dole or Bush 41).

*** Romney addresses the flip-flopper charge: Speaking of Romney and his position on the issues, he yesterday addressed the perception that he’s a flip-flopper, per NBC’s Jo Ling Kent. “In the private sector, if you don’t change your view when the facts change, well you’ll get fired for being stubborn and stupid,” he said in a town hall in New Hampshire. “Winston Churchill said, ‘When the facts change I change too, Madam.’” Of course, it was just last week when Romney suggested he doesn’t change positions. The American people “can tell when people are being phony and are pandering to an audience,” he said, “and you’ll see that in politics. You’re not going to see that in my campaign.”

 

Because President Obama’s jobs-bill will tax those making more than $1 million per year at higher rates, the GOP and Tea Party are yelling that he is waging “class warfare.”

What would the Founder’s do?

  • Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise.” –Thomas Jefferson to James Madison, 1785. ME 19:18, Papers 8:682
  • “Taxes should be proportioned to what may be annually spared by the individual.” –Thomas Jefferson to James Madison, 1784. FE 4:15, Papers 7:557
  • “The rich alone use imported articles, and on these alone the whole taxes of the General Government are levied. … Our revenues liberated by the discharge of the public debt, and its surplus applied to canals, roads, schools, etc., the farmer will see his government supported, his children educated, and the face of his country made a paradise by the contributions of the rich alone, without his being called on to spend a cent from his earnings.” –Thomas Jefferson to Thaddeus Kosciusko, 1811. ME 13:41
  • “The great mass of the articles on which impost is paid is foreign luxuries, purchased by those only who are rich enough to afford themselves the use of them. Their patriotism would certainly prefer its continuance and application to the great purposes of the public education, roads, rivers, canals, and such other objects of public improvement as it may be thought proper to add to the constitutional enumeration of federal powers.” –Thomas Jefferson: 6th Annual Message, 1806. ME 3:423
  • “In fact, the poor man in this country who uses nothing but what is made within his own farm or family, or within the United States, pays not a farthing of tax to the General Government, but on his salt; and should we go into that manufacture as we ought to do, he will pay not one cent.” –Thomas Jefferson to Pierre Samuel Dupont de Nemours, 1811. ME 13:39

I suppose we will have the answer to my question soonAs Perry has sustained major damage over his “heart” for the complexity of illegal immigration, Perry’s campaign rolled this out today attacking Romney on RomneyCare:

Time ran article entitled Pro-life Christians Challenge Congressional Republicans on Mercury Regulation which provides some encouraging voices showing that being pro-life is more than being anti-abortion:

You might not expect evangelical Christians to get involved in a political fight over mercury regulations. But when the Environmental Protection Agency proposed in March to tighten limits on industrial mercury emissions, the move caught the attention of an influential group of religious environmentalists who are now butting heads with pro-business Republicans seeking to weaken the regulations in the House on Friday afternoon. . .

Yet this delay faces strong opposition from the rule’s supporters, including evangelicals who argue that mercury pollution is an immediate crisis for the unborn. At the forefront is the Evangelical Environmental Network, a coalition of religious leaders that calls its work “grounded in the Bible’s teaching of the responsibility of God’s people to ‘tend the garden’” of Earth. The group’s leader, Rev. Mitch Hescox, is a registered Republican who worked in the utility and coal industries for 14 years before becoming a pastor.

Taking the fight to Republican critics of the EPA move, the EEN is mounting an ad campaign targeting Republicans Whitfield, Upton and Barton for opposing mercury restrictions while running on pro-life platforms. “I expect members of Congress who claim that they are pro life to use their power to protect the life, especially the unborn,” says a local pastor and mother in one of the ads. “I can’t understand why Congressman Ed Whitfield is fighting to stop the EPA from enforcing its plan specifically meant to protect the unborn by cleaning up dangerous mercury pollution.” The ads have run on 120 Christian and country radio station in Whitfield, Barton and Upton’s districts for the week prior to the Train Act vote. More than 100 evangelical pastors and leaders have also signed the “Evangelical Call to Stop The Mercury Poisoning of the Unborn,” including representatives from over 10 Christian colleges, National Association of Evangelicals President Leith Anderson and Christianity Today’s Editor-in-Chief David Neff. The United States Council of Catholic Bishops submitted similar concerns. “A national standard limiting mercury and other toxic air pollution represents an important opportunity to protect the health and welfare of all people, especially our children and poor and vulnerable communities,” wrote Bishop Stephen Blaire. “While there are short-term costs involved in implementing this standard, the health benefits of such a rule outweigh these costs.”

Here, here.

However, when Christians do not toe the GOP partisan line, listen to  the disdain aimed in their direction:

Even so, some of the Republicans under pressure are suspicious of the EEN’s motives. “This is an activist environmental group parading under the banner of evangelical Christianity and the right to life,” Whitfield’s chief of staff John Sparkman told TIME. “I don’t think it will have resonance in our district.”

We see which issue has greater priority for these “pro-life” legislators: the commands of their corporate masters.

Unfortunately, the TRAIN Act passed the House on Friday afternoon with a 249-169 vote, but President Obama has indicated his willingness to veto this type of legislation if it passes the Senate.

That’s thrilling news to pro-life evangelical leaders who differ with Obama on plenty of other issues, including abortion and stem cell research. But on this issue, Obama and evangelical environmentalists agree that, as the EEN’s Hescox argued, the pro-life position requires protecting children and the unborn from industrial pollution. “‘Let the little children come to me, and do not hinder them, for the kingdom of God belongs to such as these,’” Hescox said, quoting the Bible with emphasis. “We are denying our children a full and abundant life by threatening them with mercury.” If the bill passes the House on Friday, that’s a message Hescox and his allies are sure to bring to what they hope will be a more receptive Democratic-led Senate.

The Open Statement to Congress from these Evangelical leaders can be found here.

I have recently been trying to express how our lawmakers and, especially, we, as citizens, must view the interaction between the government and business enterprises, especially the role of the government in regulating the economy. Bob Goudzwaard nails it:

In classical antiquity two distinct words were used to describe human economic activity: oikonomia and chrematistike. Oikonomia (the origin of our word economics) designated the behavior of the steward whose task it was to manage the estate entrusted to him in such a way that it would continue to bear fruit and thus provide a living for everyone who lived and worked on it.  Central to this concept, therefore, was the maintenance of productive possessions on behalf of everyone involved. Chrematistike, however, meant something quite different. The word expressed the pursuit of self-enrichment, for ever greater monetary possessions, if need be at the expense of others. It is remarkable to observe that in western civilization the meaning of the word economics has  increasingly become synonimous with chrematistike, while progressively it lost the meaning of oikonomia, the careful maintenance as steward on behalf of others of all that is entrusted to man.

A business is not run economically if it is efficient merely in a monetary sense. It is economically responsible only if it possesses the ability to render a net economic fruit.In terms of a normative-economic-cost-benefit analysis, many financially viable businesses may be called economic fiascos, whereas the opposite might be true of a number of businesses which are losing money. As an example of the first we might cite producers of goods which can actually be only marketed by means of intensive advertising campaigns, but which pollute the environment (either during production or consumption), are energy intensive, and use up the world’s supply of non-renewable resources.  Another example would be would those firms which damage the health of their laborers during the process of production  (health, too, is an economic good!), fail to use their workers’ mental capacities, or even brutalize them by over-doses of mechanization and deadening drudgery.  Corporations can also fail economically — despite great apparent success from a financial point of view — in their operations in developing countries. . .

Business enterprises, in other words, should be genuinely economic organizations, that is, institutions of stewardship. That is the key norm by which they should be judged, without neglect of market forces . . .

In listening to each GOP presidential debate so far,  I have been increasingly disappointed to hear all of the candidates, many of whom I believe to be Christians, fail to advocate a vision anywhere near what is stated above.  I do not think I have heard the words justice, morality, fairness, or common good mentioned at all, much less in relation to the economy or any business practices. All too often, these candidates have adopted and baptized a partisan view of political economy, a mongrel offspring of libertarianism and corporatism. There is certainly a misconception today that the goal of good politics should be to try to get away with as little as possible on the wrongful belief that the best government is the least government. We must recover the full-orbed view of government that it has the important duty to be the champion of public justice and equity.

As I have stated before:

As part of their obligation to pursue stewardship, businesses and corporations must treat their workers with basic human dignity within the workplace. Workers cannot be treated as just simply another “cost of production,” rather they are persons made in the image of God worthy of decent and honest treatment.

Many argue we no longer need worker protections in the workplace; just let the market handle it.

We need our lawmakers to not have tunnel vision and bend exclusively to the demands of business and the economy.

In a behind-the-scenes look at modern conditions at one Amazon warehouse, evidence remains that corporations continue to abuse their workers and show the need for the government to pursue justice within the workplace:

Workers said they were forced to endure brutal heat inside the sprawling warehouse and were pushed to work at a pace many could not sustain. Employees were frequently reprimanded regarding their productivity and threatened with termination, workers said. The consequences of not meeting work expectations were regularly on display, as employees lost their jobs and got escorted out of the warehouse. Such sights encouraged some workers to conceal pain and push through injury lest they get fired as well, workers said.

During summer heat waves, Amazon arranged to have paramedics parked in ambulances outside, ready to treat any workers who dehydrated or suffered other forms of heat stress. Those who couldn’t quickly cool off and return to work were sent home or taken out in stretchers and wheelchairs and transported to area hospitals. And new applicants were ready to begin work at any time.

The unequal bargaining position is compounded in today’s depression.

In a better economy, not as many people would line up for jobs that pay $11 or $12 an hour moving inventory through a hot warehouse. But with job openings scarce, Amazon and Integrity Staffing Solutions, the temporary employment firm that is hiring workers for Amazon, have found eager applicants in the swollen ranks of the unemployed. . .

The situation highlights how companies like Amazon can wield their significant leverage over workers in the bleak job market, labor experts say. Large companies such as Amazon can minimize costs for benefits and raises by relying on temporary workers rather than having a larger permanent workforce, those experts say.

“They can get away with it because most workers will take whatever they can get with jobs few and far between,” said Catherine Ruckelshaus, legal co-director of the National Employment Law Project, an advocacy group for low-wage workers. “The temp worker is less likely to complain about it and less likely to push for their labor rights because they feel like they don’t have much pull or sway with the worksite employer.”

Again, corporations merely see their workers as an expense.

The supply of temporary workers keeps Amazon’s warehouse fully staffed without the expense of a permanent workforce that expects raises and good benefits. Using temporary employees in general also helps reduce the prospect that employees will organize a union that pushes for better treatment because the employees are in constant flux, labor experts say. And Amazon limits its liability for workers’ compensation and unemployment insurance because most of the workers don’t work for Amazon, they work for the temp agency.

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