32 min
Numlock Sunday: Pat Garofalo asks if the government accidentally banned corporate incentives in the COVID bill The Numlock Podcast
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- News
By Walt Hickey
Welcome to the Numlock Sunday edition.
This week, I spoke to Pat Garofalo who writes the wonderful newsletter Boondoggle. Pat appears in Numlock all the time, here’s a recent thing of his I covered in February:
Lawmakers in 11 states have introduced bills for the 2021-22 legislative session that would form an interstate compact to eliminate tax giveaways to corporations. Right now, companies play states off one another, goading them into bidding wars over who gets less money to host the corporation. For many states, who see new businesses as a way out of their problems, this has become an increasingly standard practice, but if every time a company wants a new HQ it’s a 50-party bidding war, eventually we’re going to not collect taxes from businesses anymore. To avert this, the states are eyeing a disarmament, not unlike what Kansas City, Missouri and Kansas City, Kansas worked out in 2019. If the compact enters law, states will agree not to use tax incentives to poach jobs from the other states in the compact. This isn’t particularly new, as there are 200 ongoing interstate compacts and each state is in an average of 25.
Pat’s beat is one of my favorites, he covers one of the most pervasive ways the big and powerful fleece the government at the expense of the small and not as powerful. Today in another special podcast edition of the newsletter, we talk about the botched Foxconn deal, why everything is suddenly a “campus,” the Peace of Kansas City and whether or not the federal government accidentally screwed over every local corporate tax incentive project.
Pat can be found at his newsletter, Boondoggle, and his book The Billionaire Boondoggle is really great.
This interview has been condensed and edited.
Pat, thank you so much for coming on. You have a bunch of really cool stories coming out through both your day job and your newsletter, Boondoggle, but just taking a step back, do you want to talk a little bit about what you generally cover when it comes to incentives and how different cities try to woo different companies to various successful and unsuccessful ends?The tagline that I use is "how corporations are ripping off your state and city," and I got interested in this actually way back during The Great Recession. I was an economic policy reporter covering this fallout from the recession and the austerity push that was happening across the country. You saw all these wacky situations where cities were literally turning off their streetlights, while at the same time paying to give some billionaire a sports stadium. Then the more I started digging into this, I realized it wasn't just sports stadiums.It was hotels, it was massive sporting goods stores. It was every corporate headquarters in the country. There's been this long, decades-long push amongst the corporate elite in this country to tell a story about how economic development happens in the U.S. and to reap rewards for doing things that way. And it's totally wrong. The way they're going about it and the way the politicians they have in their pockets go about it is just backwards. It's just the completely wrong way to build local economies. That's the sort of work I've been doing ever since.The Amazon HQ2 thing was a huge illustration of this, where, basically, it inverted the way that lots of local economics should work and turned cities into bidders for a headquarters that was going to happen nevertheless.Right, and that one was an interesting anomaly in this system that corporate America has built because it was so public. Jeff Bezos, the CEO of Amazon, was so brazen about it and pitting all these states and cities against each other. The really problematic aspect of this to me is actually how much of it happens in the dark, how much of it we don't know about. These deals are often presented by local officials as a fait accompli. They come out and announce it before any other resident, any other local official can have a say, a
By Walt Hickey
Welcome to the Numlock Sunday edition.
This week, I spoke to Pat Garofalo who writes the wonderful newsletter Boondoggle. Pat appears in Numlock all the time, here’s a recent thing of his I covered in February:
Lawmakers in 11 states have introduced bills for the 2021-22 legislative session that would form an interstate compact to eliminate tax giveaways to corporations. Right now, companies play states off one another, goading them into bidding wars over who gets less money to host the corporation. For many states, who see new businesses as a way out of their problems, this has become an increasingly standard practice, but if every time a company wants a new HQ it’s a 50-party bidding war, eventually we’re going to not collect taxes from businesses anymore. To avert this, the states are eyeing a disarmament, not unlike what Kansas City, Missouri and Kansas City, Kansas worked out in 2019. If the compact enters law, states will agree not to use tax incentives to poach jobs from the other states in the compact. This isn’t particularly new, as there are 200 ongoing interstate compacts and each state is in an average of 25.
Pat’s beat is one of my favorites, he covers one of the most pervasive ways the big and powerful fleece the government at the expense of the small and not as powerful. Today in another special podcast edition of the newsletter, we talk about the botched Foxconn deal, why everything is suddenly a “campus,” the Peace of Kansas City and whether or not the federal government accidentally screwed over every local corporate tax incentive project.
Pat can be found at his newsletter, Boondoggle, and his book The Billionaire Boondoggle is really great.
This interview has been condensed and edited.
Pat, thank you so much for coming on. You have a bunch of really cool stories coming out through both your day job and your newsletter, Boondoggle, but just taking a step back, do you want to talk a little bit about what you generally cover when it comes to incentives and how different cities try to woo different companies to various successful and unsuccessful ends?The tagline that I use is "how corporations are ripping off your state and city," and I got interested in this actually way back during The Great Recession. I was an economic policy reporter covering this fallout from the recession and the austerity push that was happening across the country. You saw all these wacky situations where cities were literally turning off their streetlights, while at the same time paying to give some billionaire a sports stadium. Then the more I started digging into this, I realized it wasn't just sports stadiums.It was hotels, it was massive sporting goods stores. It was every corporate headquarters in the country. There's been this long, decades-long push amongst the corporate elite in this country to tell a story about how economic development happens in the U.S. and to reap rewards for doing things that way. And it's totally wrong. The way they're going about it and the way the politicians they have in their pockets go about it is just backwards. It's just the completely wrong way to build local economies. That's the sort of work I've been doing ever since.The Amazon HQ2 thing was a huge illustration of this, where, basically, it inverted the way that lots of local economics should work and turned cities into bidders for a headquarters that was going to happen nevertheless.Right, and that one was an interesting anomaly in this system that corporate America has built because it was so public. Jeff Bezos, the CEO of Amazon, was so brazen about it and pitting all these states and cities against each other. The really problematic aspect of this to me is actually how much of it happens in the dark, how much of it we don't know about. These deals are often presented by local officials as a fait accompli. They come out and announce it before any other resident, any other local official can have a say, a
32 min