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Home Publications Blogs Beat the Press Corporate Subsidies Go Wild in Texas

Corporate Subsidies Go Wild in Texas

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Monday, 03 December 2012 05:10

The NYT had an excellent piece detailing the process whereby corporate subsidies are dished out in Texas. It reports that the subsidies come to around $19 billion a year. This is approximately $2,200 per household. As the piece points out, the incentives have been handed out with little apparent regard to the number or quality of jobs created. As a result, there is little evidence that the incentives have had benefits for most Texans.

The piece is part of a series on state subsidies for corporations. The first piece ran yesterday.

Comments (5)Add Comment
...
written by Ron Alley, December 03, 2012 7:47
Those articles, together with a bit of reflection, show how crony capitalism at the state level differs from crony capitalism at the federal level.
where does the money go?
written by pete, December 03, 2012 12:00
Of course these things are horrible since the state is picking winners and losers, like rescuing GM at the federal level...a more growth friendly environment without additional incentives would be preferred. Indeed TX is really just being greedy since it already has solid growth. Most states resort to these when their regs/unions/taxes are burdensome.

state subsidies
written by jennifer reft, December 03, 2012 12:12

As the piece points out, the incentives have been handed out with little apparent regard to the number or quality of jobs created. As a result, there is little evidence that the incentives have had benefits for most Texans.
I cannot remember the group that published it but eariler in the year a report came out looking at all states and how they mangaged subsidies for business. The purpose of the report was not to make judgements on whether subsidies where good or bad, but looked at how states gave them out and how they evaluated the impact. Only a handful of states do ANY type of proper anaylsis on this issue, while the numbers may be larger the situation in Texas is the norm.
One of the many amazing stateements in that piece:
King White, a consultant who helps Amazon choose locations, would not comment on the online retailer but said that companies in general had come to view incentives as entitlements. “Everybody thinks they deserve something,” Mr. White said. “ ‘If I’m creating jobs, what’s in it for me?’
Want to bed this is somebody who considers Social Security an "entitlement" that "we" as a nation cannot afford?
Texas: home of high inequality and low education
written by David, December 03, 2012 11:49
@pete: Texas ranks 43rd in income inequality in the US (GINI coefficient of 0.469), though that's still (for now) better than the world in general. In 2011, Texas ranked 33rd, just below average, in STEM education, and #24 (also below average) overall. This from a state that has an economy that would rank it as #10 in the world.

The citizens of Texas have to bribe companies to go there, since the population is lacking a trained workforce and the state school board is run by people who believe the world is 6000 years old. This is how they got a governor like Rick Perry. But land is cheap and plentiful. and so are people, in Texas. Small towns desperate for decent jobs will often offer all they have to encourage companies to locate out of the metro areas.
school teacher
written by Batavicus, December 04, 2012 8:11
Indeed, Jennifer. Another amazing statement from Gov. Perry in regards to persistant high poverty: "He said creating jobs was the best way to help Texans, who “don’t want government assistance when they can do it themselves.”"
Perry doesn't seem to grasp the irony here; certain businesses don't have any problem grabbing as much gov't assistance as they can.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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