The [Im]morality of Corporate Welfare

Editor's Note: This essay was written by Wid Lyman, ERG founder.

Let’s take the bribery of Ford Motor Co. to locate an EV battery plant in Marshall, for instance. Sure, Tennessee was bribing Ford, too, but does that make Michigan’s bribery okay then? Does that make it okay for Sen. John Damoose (R-Harbor Springs) to be the only Republican on the Senate Appropriations Committee to vote in favor of the subsidy? Or for senators Damoose and Joe Bellino (R-Monroe) to join the Dem’s in voting for the bill on the floor? Certainly NOT, for the following moral reasons:

1. Thou shalt not steal … In order to give Ford the nearly $1.75 billion promised by the State for this project, the government must take it from hard-working Michiganders, the vast majority of whom experience no benefit from this “investment.” If Ford miraculously ‘creates’ the 2500 jobs it has promised, it will have cost those Michigan taxpayers a mere $700,000 per job! How much did you get for your job? Stealing from the many to gift the few (mainly UAW workers in this case) is unconscionable. French economist Frederic Bastiat called it ‘legal plunder.’

2. Do not be unequally yoked … Ford’s relationship with the China-based company Contemporary Amperex Technology Co. Ltd., the world’s largest EV battery company, means we are, once again, abetting the communist Chinese in their effort at world domination – a big mistake. Gov. Glenn Youngkin of Virginia got it right when he pulled his state out of negotiations with Ford for that plant.

3. Thou shalt not lie … According to the Center for Economic Accountability (a non-profit dedicated to championing the free market), since 1995, billions of dollars in subsidies have been funneled to auto companies in MI, yet there are now 185,000 fewer manufacturing jobs. “There is no independent evidence that these subsidies have been anything other than ruinously expensive failures for the people of MI.” So not only is the gift to Ford and the UAW an improper use of our money, it is also a good example of the popular definition of insanity: doing the same thing over and over and expecting different results. As the Mackinac Center for Public Policy believes: “The way to increase jobs is not to write checks to a handful of big companies. It’s to improve the state’s business climate”- the climate we CAN do something about.

4. Thou shalt not covet [these jobs] … Subsidies for ‘green’ projects or initiatives, which could not and would not flourish in a true free market, distort our economy and allow green activists in government to impose their ‘sustainable’ agenda on the people who fund the subsidies. By ‘socializing’ the EV industry, governments will be able to force consumers into less reliable and more costly vehicles. This expands the human hardship and suffering that we see around the world due to foolish and harmful energy mandates (e.g. Sri Lanka) and dangerous work conditions in Chinese mining and manufacturing (e.g. the cobalt mines in Africa). Get the subsidies out of the way, and let the markets decide! If Ford wants to set up shop in Tennessee or Kentucky, then let them.

So, make no mistake, corporate welfare is a deeply moral political issue, and calling it only a fiscal concern does not make it so. Billions of dollars and millions of lives are involved, which begs the question: How many Republican voters in Senate District 37 think their senator’s ‘Yes’ vote for this subsidy represents them? Even Marshall’s voice in the Senate, Thomas Albert, a Republican, voted against this bill, noting, “I want jobs and economic development for the Marshall community … but not at any and all costs. This is why governments fail time and time again at economic incentives. You have to know when to walk away from a deal.” And sometimes you walk away because it’s the morally responsible choice. This is one of those cases.

Let’s hope that U.S. Senator Rubio’s (R-FL) efforts at stopping this Ford deal at the federal level are successful. Understanding the threat, he has introduced legislation that would block tax credits for EV batteries produced with Chinese technology. As Rubio stated: “Taxpayer dollars should never be used to support PRC [People’s Republic of China] champions.”