Saturday, March 26, 2011
- The Circle Of Graft
In a move sure to frighten and confuse Democrats and union officials across the country, Caterpillar corp. is reacting to the massive Illinois tax hike by moving someplace else.
Krugman and the rent seekers (what a great name for a punk band huh?) will probably say that this is a good thing for Illinois because those low paying manufacturing jobs can now be replaced by high paying jobs in the clean energy industry. Nothing increase averages wages like a big fat subsidy.
But the truth is,EVERYONE should have seen this coming.
I like to think of labor in calorie terms because it puts intellectual labor and physical labor on par with one another, as they really should be. Caterpillar is going to go where they can get the highest return for theirs. The parasite that is the Illinois state government is taking too much nutrition. Caterpillar has realized that if they simply move, then they can do much better while doing the same work.
The union may control the votes that the politicians want, but business controls the jobs that the union wants. It's all about the great circle of Graft. Business provides jobs and benefits, unions provide votes, and politicians provide political influence to unions, ans subsidies to business. Everyone is happy except the non-union tax payer who has to make the whole equation balance out while the union guys use their 4th mandatory coffee break to fill out their disability forms.
But America is on to them now - reality has caught up to the big labor movement. It's really only the political class in Illinois that's still a little behind the curve. And that's why they decided to opt for a massive tax increase to try to balance the budget, instead of ditching the unions like they're doing in more rational locales. Unions want to pay people more to do less, and the only way that works is if they siphon off money from the rest of us.
Illinois is trying to be the next Michigan. But without a GM to bribe people for them in Washington, I can't imagine this is going to work out well for them.