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Sunday, 19 April 2015 14:42

Big businesses as a threat to free enterprise: A Q&A with The Washington Examiner’s Tim Carney

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As the senior political columnist for the Washington, D.C.-based conservative publication The Washington Examiner, Tim Carney writes regularly on the entanglements of business and government. An outspoken advocate of easing regulations and getting rid of the vast majority of business incentive packages — or “corporate welfare” — Carney says he finds himself in growing company with Republicans, particularly in the increasingly crowded GOP presidential field, as well as with Democrats.

Carney was in Grand Rapids recently to speak at Acton Institute, a Catholic free market think tank. His talk was titled “Is Big Business a Threat to Free Enterprise?” He spoke with MiBiz about some of the ongoing strategies to curtail corporate welfare as well as the unique situation in which the Great Lakes states find themselves.


So, is big business a threat to free enterprise?

My answer is yes. I think the big business lobby is the single biggest threat to free enterprise. I come at this from a perspective of being a defender of free enterprise. I think it’s what is best for economic growth, I think it’s morally justifiable and I think it’s what is fairest. A lot of people on my side worry about the far left — Sen. Bernie Sanders or Ralph Nader or environmental groups. I say those aren’t the real threats because they don’t wind up winning. The real threats are big businesses that seek special protections, either regulatory protections or corporate handouts that kill competition and compromise the free market. That is really the enemy if you’re standing up for free enterprise.


Economic development agencies regularly say that companies won't come to Michigan if Indiana or Ohio gives them a better incentive package. How can states break that cycle?

If you’re offering subsidies or incentives, you’re more likely to get that particular business, but what you could be doing with that money is lowering taxes all around — or doing broad-based infrastructure improvements that make it a better business environment for everybody.


What states do a good job of that currently?

Rick Snyder has actually acknowledged this and says he’s trying to limit the number of tax credits in the state. I think that because the Great Lakes states have a ton of governors who all espouse a belief in free enterprise, they could all make an interstate compact against special incentives. (Then they could) get in a race of just having a more broadly pro-business environment without getting in a race to try to bribe companies to come. And then everybody would win.


How so?

If a governor said, ‘I’m not going to give special handouts, but I’m going to cut taxes and lower unnecessary regulations, as well as have good education and good infrastructure,’ he would get a million small businesses coming in. But he wouldn't necessarily get the big corporate headquarters. Then the governor doesn’t get the big ribbon-cutting ceremony and it’s not as politically powerful. But it would be economically beneficial to the state.


Can these issues of corporate incentives be addressed at the federal level? Or is it better left to states?

The worst examples are probably at the state and local levels. The worst examples, to me, are the licensing laws that keep out smaller businesses like food trucks and hair-braiders. There are lots of corporate welfare programs on the federal level. Some of the regulatory protectionism that happens happens on the federal level. But a Republican leader who said he was against privilege for business could really change the tone in the American economic-political debate.


On the local levels, many corporate expansion or relocation deals include some sort of incentive packages. How would an official looking to end that practice go about addressing it?

You start by looking at which regulations are unnecessarily burdensome and add tax code complexity that get in the way of some of these deals and address those. You describe it as a tradeoff. We won’t have as many goodies and we won’t have as many roadblocks. Developers who wouldn’t take the deal are developers who aren’t really providing value. Developers who think they will create more value will take that deal. A lot of times, businesses don’t necessarily hunt out special favors from government. The government is handing them out and they feel they would be losing out if they didn’t take them.


Grand Rapids is represented by Justin Amash. You both appear to have similar political beliefs. What has been your analysis of him since he’s been in Congress?

Justin Amash is one of my favorite members of Congress, if not my favorite. Amash has made real enemies in the Republican political circles by being too much in favor of free enterprise. Part is because of his foreign policy, but the most important part is his upsetting local chambers of commerce by being too much of a free enterprise advocate.

Interview conducted and condensed by Nick Manes.

Read 4032 times Last modified on Sunday, 19 April 2015 14:54

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