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Idaho's Weekly Journal of Local & National Commentary  Week 3914

 

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by Free Market Duck

Idaho taxpayers subsidize new Micron plant in China
(Mar 23, 2007)

Boise, ID – Whoa girl friends, gather ‘round, listen up and shut up.  Corporate welfare is alive and well in Boise, Idaho.  What happened?

   Remember way back in 2005, in the foggiest recesses of your little memory chips, when Gov Dirk Thornprick (now promoted to National Zookeeper) and the Idaho Legislature’s GOP Culture of Corruption gave Micron a multi-million dollar corporate tax break, ostensibly to build a billion dollar computer facility in Boise, Idaho?  And since then, nobody has ever heard of, seen, or smelled Micron’s Billion Dollar Mystery Plant?  But your residential property taxes went way up to cover Micron’s property taxes that went way down?

   Well, guess what, Margie?  The Micron Mystery Plant just popped up in the Xi’an High Tech Zone in Shaanxi Province in China.  Surprise!

   Micron’s new $250 million facility – it’s cheaper in China – is set to employ 2,000 new employees while placing a hiring freeze at their North American operations… hey, that’s here in Boise, right?  This is Micron’s 2nd manufacturing facility in Asia.  In 2006, Micron supplied 14% of China’s DRAM chips and Micron is the 3rd-largest supplier with federally-indicted cohorts Samsung and Hynix leading the pack.  Remember Samsung, Hynix and Micron in their simultaneous monopoly price-fixing and dumping activities, if that’s possible in economics? (See Is Micron a DRAM victim or a DRAM crook?  More... )

   Contrary to popular left Liberal belief, a special tax break for Micron is not free market capitalism.  Micron’s tax break is an example of corporate welfare, special interest legislation, from the government of Idaho to one of its corporate buddies.  Corporate welfare is no different than left Liberal welfare, i.e., food stamps, housing subsidies, extravagant public education expenditures, National Health Care, detox centers, and ad infinitum for America’s huge welfare state.  The real problem is not taxation but rather spending.

   The real answer is for the state to stop spending in its perpetually elusive daydream of creating a “fair” welfare state, usually based upon presumed “needs” of the welfare recipients.  A needs-based welfare state can never exist, and, in fact, the idea of needs-based welfare is an oxymoron, or contradiction, at its basic premise since it illogically tries to establish reciprocal rip-off rights.  Whose “rights to receive” trump your “rights to receive” and who gets to decide?  “Rights” can only mean “rights to give” or “rights to voluntarily exchange.”  Freedom to trade produces a free market.  “Needs-based” welfare turns the state into Santa Claus, dispensing YOUR tax money to special interest groups.

   And that's exactly what the Kempthorne Regime did when it granted a lower property tax limit for Micron in 2005 on the premise that Micron would expand its local facilities in Idaho.  But since Idaho's welfare state expenditures are considered fixed or rising, you, the residential taxpayer, are currently subsidizing the corporate welfare of Micron.  The solution, however, is not to raise taxes on Micron to perpetuate the welfare state mentality, but rather to lower state expenditures and, thus, the taxes on everybody.

  In a true free market in which the only function of government is to protect individual rights and ensure an objective playing field with an objective judicial system, the welfare state – including corporate welfare for Micron – goes away.  A perfect example that Idaho should strive for – if it really wants to become rich and attract more business -- is the free market capitalism of Dubai, whose population is about the same as Idaho and is one of the most diverse, multi-culturally, and wealthiest in the world.  They do not lack for school systems, transportation, or medical facilities and, yet, have virtually NO TAXATION.  It is a free port.  This small nation has a government with almost nothing to do, no power plays, almost no crime.  They have only one small job to perform:  referee the objective free market.  And it works.

   One last point:  all the recent hullabaloo about Boise needing an expensive Community College system in the Treasure Valley in order to provide employees for Idaho businesses has just been blown to smitherines by Micron’s new facility in China.  If you think Micron built its latest facility in China – and its other Asian facility in Singapore – because Micron couldn’t find enough local employees who graduated from Jr. College in Boise, Idaho, you are living in a Welfare State Fairytale.  Labor is just one small expense for global businesses, the globe is getting flatter and flatter, and college grads will gladly travel from colleges all over the world to wherever companies locate.  The provincial notion that businesses will flock to Boise, Idaho, if we simply build a Jr. College system is like the notion that people must physically enter a Boise bank downtown to deposit their paychecks or obtain cash in Boise for their trip to Europe.  ATMs are global and so is the Internet.

   Micron is trying to give you a hint, Idaho.  Take your pick.  Stop the taxing and spending and re-create Idaho as a free trade zone.  If you do, Idaho will become the Dubai free port of America and Idaho will have so much free market wealth you won’t believe it.  Or, Idahoans can continue to subsidize companies like Micron with their residential property taxes while Micron moves to China and Idaho becomes an even bigger bankrupt Welfare State based upon outdated Socialist Fairytales.  Your choice. – FM Duck

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