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Home Publications Blogs Beat the Press Tennessee Republicans Don't Believe in a Free Market

Tennessee Republicans Don't Believe in a Free Market

Wednesday, 12 February 2014 07:32

The NYT has a fascinating piece about threats that Tennessee Republicans are making against Volkswagen if they recognize a union formed by its workers. Apparently, these politicians believe they are better able to run a car company than the Volkswagen's managers. This is an interesting view coming from people who usually claim to be supporters of a free market and to believe that the government should not interfere in the running of a business.

Comments (9)Add Comment
Predator Corporations Force States to "Compete" in a Race to the Bottom
written by Last Mover, February 12, 2014 8:36
State Senator Bo Watson, who represents a suburb of Chattanooga, warned on Monday that if VW’s workers voted to embrace the U.A.W., the Republican-controlled Legislature might vote against approving future incentives to help the plant expand.
“The members of the Tennessee Senate will not view unionization as in the best interest of Tennessee,” Mr. Watson said at a news conference. He added that a pro-U.A.W. vote would make it “exponentially more challenging” for the legislature to approve future subsidies.

So incentives to expand are subsidies from the state.

So union wages are subsidies ... yet non-union wages are not effectively subsidies to corporations?

So union subsidies must be reduced so they can be trumped by state subsidies to expand?

Well Senator BoBo, according to that reasoning the Tennessee Senate should also ban CEO contracts loaded with subsidies at a ratio of 350:1 compared to wage income for workers.

Just think, all those companies that could have located in Tennessee and expand but didn't. If only Senator BoBo and his friends would have used state government to intervene in free markets and violate the freedom of contract between CEOs and the boards they appoint and who appoint them ... to reduce CEO subsidies ... so state subsidies could keep the company in Tennessee and expand.

Then Tennessee could hold its head high, having won once again the race to the bottom among states to desperately lure corporations into their state with subsidies and underpaid labor.
Moral Hazard
written by sufferingsuccatash, February 12, 2014 9:32
The introduction of a moral hazard into the market place by the free market Confederate Party. Say it ain't so. The true free marketeers' biggest fear is that the market might occasionally produce a small rebel cohort who might assert themselves by taking action on a set of ethical or moral principles. That requires political intervention to eliminate---for the good of the market, of course.
TN doesn't believe in taxes either
written by Anna Lee, February 12, 2014 10:41
Amazon is sending anyone who lives outside TN but requested goods to be sent inside TN (e.g. a birthday gift for a nephew) a warning that they may owe taxes in TN. So, if I buy from Amazon and they charge me taxes in my home state, TN expects me to pay full taxes to TN too. I didn't research exactly what the TN law is but my relative said it had something to do with the goods being actually delivered from a warehouse inside the state. Now imagine if full state sales tax were paid by every state goods traveled through or every state where they stopped and moved the load from vehicle to vehicle at a warehouse. Is VAT far behind? I thought the right hated taxes. Oh yea, not when it's other people's children's toys.
written by Kat, February 12, 2014 10:44
That's great. Mr. Watson should definitely take his case directly to the people of Tennessee: "In the future, we will only give away a half a billion dollars in taxpayer money if we can meddle with workers' freedoms and ensure that wages will not rise."
That should be a real winner.
written by Dennis, February 12, 2014 5:02
To me the story also seems to imply that VW will only be able to freely contract with its employees because it is sufficiently independent and powerful to avoid being bossed around by southern politicians. Republicans who present themselves as supporters of 'free markets' may often assert that the price mechanism will reward those who avoid cronyism in order to focus on the efficiency of their businesses - but in real life the privilege to do so may not be readily available to any little shyster who has not made arrangements with those who either grant or remove the decisive market distortions (subsidies).
Oh, I get it ...
written by Squeezed Turnip, February 12, 2014 8:27
So, if I get this straight, the republican mantra of "small government" is complete and utter bull. What they really mean is "small-minded government."
Out back behind the woodshed
written by John Parks, February 12, 2014 8:47
Well I don't know much about politics, and certainly don't know Tennessee politics, but threatening a multinational, and the employees they have hired, does not seem to be a prudent political move.

I suspect Mr. Watson, will be issuing a well phrased non-apology apology fairly soon.

I also hope that he doesn't! It will be interesting to see how his arrogance and stupidity will be accepted by his constituents.
That will better educate me about Tennessee politics.
written by watermelonpunch, February 13, 2014 11:24
This seems to be an odd comment:
Concerned that a U.A.W. victory would hurt Tennessee’s business climate, Gov. Bill Haslam has warned that auto parts suppliers might decide against locating in Chattanooga because they might not want to set up near a unionized VW plant.

Since when do auto parts suppliers care where they get their market share?
Isn't their priority to sell their stuff???
What difference does it make?
the point ....
written by Squeezed Turnip, February 16, 2014 4:52
... was to intimidate workers to vote against their own best interests ("if you vote in the UAW, we will hobble your factory"). Apparently, it worked.

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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.