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A Conversation with David Cay Johnston (Part 2 of a 4 Part series) By: Jonathan Bille  |
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 Welcome to part two of a conversation with David Cay Johnston, author of “Free Lunch, How The Wealthiest Americans Enrich Themselves At Government Expense (And Stick You with the Bill). Part one of this series is available in the archive of this column. You may want to go back and read that first.
DCJ: “How old are you?”
(I answer) 35
“Well, I’m 59. I’m twenty-four years older than you. When I started out as a reporter in 1968, I was 19 years old. I was covering small cities and county Governments, and a principal part of the job that everybody understood, was that you were the watchdog for the taxpayers money. So I would scrutinize the budget of the county and the school district, and if they had contracts with somebody – if somebody got a no bid contract for a lot of money we’d be all over that thing.
Now lots of journalists that I meet today – I’m astonished, they go, ‘That’s the way they do it. I don’t understand what your problem is? Of course they do no bid contracts!’ And you tell them that Halliburton – soldiers have always fixed their own food and washed their own clothes, or paid locals to do it. And you tell them that Halliburton gets $100.00 a load to do laundry for soldiers.
‘Ah well, war zones are expensive.’ But we didn’t do that in World War II, we didn’t do that in Vietnam!
That is my focus.
We have created a Government in which (not everybody among the wealthy), but a significant portion of the super wealthy (and the super wealthy are people who can afford their own jet), a significant portion of the super wealthy and large corporations generally, and going in and saying to the Government, ‘Give us money!’
Now they always use the argument that, ‘we’re creating jobs.’
I have a very simple observation about economic development and job creation especially when it comes to a retail store or a hotel or anything that’s on the retail level, as opposed to basic research – if you want to go do basic research exploring chemistry of physics, there’s no business model for that. That has to be funded through the Government or philanthropy – which really means the Government because of the size of the money, but when you’re talking about a retail outlet, shopping mall, hotel, automotive dealer, restaurants, department stores, discount stores and big box retailers – if it is a sound investment, the market will make the investment. If it isn’t a sound investment, why in the world would you and I want to be forced to have our tax dollars put into that unsound investment?
Now that doesn’t mean that there aren’t occasions when the Government intervening in the market may not be a good thing. There is something called Market Failure – and so if you have a terribly impoverished community that nobody is investing in, and the Government by doing something may be able to improve that – I don’t think it’s necessary, by bringing in retail stores, what you really need to do is create jobs!
So if the Government in Buffalo, NY for example, were to decide to employ a lot of inner city people in a bunch of projects to replace a blighted area, where all the houses are unoccupied, with a park and hire locally to do the work, because it’s not high skill work, that might have a beneficial effect. In this we can think about how it will make things better – but the Walton family? The richest family in America? They can’t afford to build their own Wal-Mart stores?
The Walton’s need my help? – Look at the job creation – and they are not creating jobs.
Government collects a lot of data and can tell you exactly how many people are on welfare or disability and how much they were paid, but you know, there’s no Government database that will tell you how much the Walton’s got in welfare.
And the deal sheet fro the proposed BassPro for downtown Buffalo, that I mention in “Free Lunch” – the deal sheet is available, it’s out there, I’ve got it. The deal sheet shows $65,000,000 of specified costs, and then a whole list of items for which no value is attributed. So I talked to a bunch of people about how much that other stuff is? – and the figures ranged widely but the total cost, depending on who you talk to is, $90,000,000 to $130,000,000.
I’m sorry, we’re going to take 130 million dollars of Buffalo taxpayer money and give it to a bate and tackle and hunting rifle shop? It’s laughable the minute you step back and think about it.
But so long as the news media writes about TIF (tax increment financing) – what does tax increment-financing mean? It doesn’t mean anything to people. What it really means is that the owners of the stores get to use the sales tax to pay the costs of building the store.
And here’s the greatest mystery. Why aren’t the local merchants raising holy… Why aren’t the local merchants organizing and saying why is our local or State Government giving money to our big competitors to run us out of business?
Let’s assume that we’re going to move to a model of business socialism instead of a market economy. Well then, let’s give it to the little guy – why are we giving it to the big guys?
(Part 3 Continued Next Week)
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