“No Man’s life liberty or property is safe while the legislature is in session”.

- attributed to NY State Judge Gideon Tucker

Tuesday, September 28, 2010

Regarding Michigan's State Investments In Battery Producers

Jennifer Granholm, Michigan's governor, was recently on CNBC crowing loudly about how the state has invested in battery makers which chose to locate facilities in Michigan.

Beaming happily and egged on by a typically-clueless Maria Bartiromo, Granholm gushed about how the state had attracted business to the state to create jobs by investing government, which is to say, state taxpayer money, in the companies.

When I heard this, my first thought was,

'How much more corrupt can you get?'

Far from providing a level playing field for industry, Granholm's form of crony capitalism makes the state the heavy-handed goon, with legislative and police powers, which can fend off any legitimate competition from the state's pet investments.

From what I gathered, Granholm's team selected new battery makers as the recipients of the state's capital. In time, it's reasonable that a group of workers skilled in related production and design may develop. Perhaps some of them will have better ideas on how to design and produce similar batteries.

What if a group of them seek to attract capital and set up a new company?

Won't it be in the state's interest to obstruct that? After all, a new competitor to a company in which the state has invested could result in losses, or fewer profits, for the taxpayer-backed firm.

It doesn't take much thought to see how dangerous and potentially corrupt the practice of state's investing in private enterprise can be, does it?

As soon as the state become a partner in a particular business, it has an interest in using its absolute powers to prevent competition from arising, or punishing it if it does.

Rather like, well, the US government owning GM. It has a vested interest in its car producer besting competitors.

It's very disturbing to see this occurring at the state level. And, worse, to see a governor trumpeting it as a positive thing.

Of course, Baritromo never thought to grill Granholm on these issues. If such a question even entered Maria's head, it's likely she chose future access to the governor over doing a thorough, journalistic interview on the topic of Michigan favoring some businesses over others with its investment capital.

It marks just how fascist our economy is becoming. And I use the word literally, not emotionally, i.e., according to this description,

"Where socialism sought totalitarian control of a society’s economic processes through direct state operation of the means of production, fascism sought that control indirectly, through domination of nominally private owners. Where socialism nationalized property explicitly, fascism did so implicitly, by requiring owners to use their property in the “national interest”—that is, as the autocratic authority conceived it."

Granholm's investments in private companies certainly follows this logic, doesn't it? And, having Michigan investment dollars as capital, the companies involved are more prone to suasion by the state on matters of labor, unions, and who knows how many other aspects of the businesses?

It's an entanglement that should never occur in the US, whether at the federal or state level. It boils down to government favoring one or more businesses over others, and then being suspect of using government power to favor its pet investments.

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