Jul 09 2008

“Unaccountable Corporations”, or “Unaccountable Government”?

Category: capitalism,corporations,corruption,economyharmonicminer @ 12:00 pm

It’s popular on the Left to bash corporations, and, by extension, capitalism, for just about every evil under the sun. When you dig a little deeper into most corporate abuses (the really big ones, that is), you tend to find that the real problem was government, which is the only way corporations can get enough power to do really bad things. Regulations, set-asides, sweetheart deals, mandated monopolies (it isn’t a monopoly if the government gives it to you), etc., are only possible when government sticks out its hand to corporations and says, “If you pay me now, I’ll pay you later.” True capitalism, which does NOT include giveaways by government to large corporations (or anyone else) would not include things like this.

With all the propositions and bond measures that California voters are regularly asked to approve, you might have forgotten all about Proposition 1C, or even what it is. But it’s worth revisiting, because state leaders have plans to spend funds from this $2.85 billion bond in ways radically different than what Californians thought they were getting when they voted “yes.”

A little background: Proposition 1C was one of the four infrastructure bonds that Gov. Arnold Schwarzenegger and the Legislature put on the ballot in 2006. Its title was the “Housing and Emergency Shelter Trust Fund Act.”

Here’s how the Attorney General’s Office described Proposition 1C on the November 2006 ballot:

“For the purpose of providing shelters for battered women and their children, clean and safe housing for low-income senior citizens; homeownership assistance for the disabled, military veterans, and working families; and repairs and accessibility improvements to apartments for families and disabled citizens …”

But wait until you see where some of the money is now going.

Last week, the state Assembly approved a $26.4 million payment of Proposition 1C funds to help pay for the development of the 16-acre park that’s part of the Grand Avenue Project in downtown Los Angeles.

That project’s wealthy developers are slated to collect nearly $177 million in tax breaks and other subsidies.

The park is a key selling point of the overall project- some lovely green space to boost the values of the 2,600 condominiums and rental units, the 400,000 square feet of retail space, the 275-room hotel and the 50-story iconic tower that will neighbor it. As such, the project’s developers should be covering the park’s entire cost – not draining funds that voters expect to be helping the homeless.

This bait and switch, although immoral, is not, technically, illegal. Dig deeper into the language of Proposition 1C – the part very few voters actually read – and you’ll see that much of the money was slated for “development,” including “open space,” which can include park giveaways to developers.

What do you want to bet that most of the coverage of this emphasizes the evil corporate abusers of the public trust, and not the government stooges who make it possible in the first place? Who is more at fault, the corporations who make donations, or the government agencies that prostitute themselves?

Without government hookers, there would be no corporate johns.

UPDATE: A reader emails,

It isn’t just a matter of government hookers, since hookers can only entice, not force, the participation of johns. It’s more as if hookers had the ability to force johns to select from the menu of, uh, services they provide, and johns were forced by law to compete for the hookers’ services by making bids to various pimps. In this scenario, the pimps are the legislators, the regulating agencies are the hookers, and the corporations are the johns, who have to pay the pimps and tip the hookers.

I can’t disagree.

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