Tale of Two Cities ….

Fridays Journal Sentinel had dueling stories on the front page and I am not even sure they understood the irony.

The first story comes from Racine. The Spending Revolt tour bus was in Racine for a “stop spending my children’s money” rally.

Most spectators, though, were drawn by rhetoric for lower taxes and smaller government, espoused by the likes of Grover Norquist of Americans for Tax Reform and Tim Phillips, president of Americans for Prosperity.

“A lot of people are out of work and hurting,” said Annette Richey, 62, who described herself as a stay-at-home grandma. “They’re upset and they’re mad.”

“I think we need a change,” said Richey, who is voting Republican. “I don’t like the way the economy is going.”

Julie Bailey, 35, a medical lab worker, brought her 9-year-old daughter Skylar to the rally. She is eager to get to the polls and vote Republican.

“The public has been screaming for the last year and the politicians haven’t been listening at both the state and federal level,” she said.

Bailey said Republicans, if they get into office, should not take tea party voters for granted.

“The ones I vote for promise to reduce the size of government and repeal Obamacare,” Bailey said. “I’m going to watch them. This is not a one-time, one shot for me. I’m going to watch them for the rest of my life.”

So in Racine we have a rally of “we need to stop spending and keep government out of our lives” people.

Then we can travel a few miles north to contrast that with this story.

Quad / Graphics Inc. said Thursday it will create up to 1,300 new jobs in Wisconsin, including hundreds of immediate openings, as the Sussex-based printer gets $46 million in tax credits and closes five plants outside of the state.

As part of the deal to increase Quad’s employment in Wisconsin, Gov. Jim Doyle’s administration offered the company $46 million in enterprise zone tax credits – aimed at attracting and retaining jobs by reducing the company’s tax liabilities.

Thursday’s announcement was the largest and the latest in a string of economic-development and job-creation announcements by the Doyle administration this month.

Just in the past three weeks, including this week’s announcements for Quad / Graphics and Bucyrus International, the administration has announced state aid through tax credits or loans that would create 2,923 jobs in the coming years.

Of those, 2,590 of the jobs would be created in the greater Milwaukee area.

Doyle has used the tax credits to help retain and create jobs at Bucyrus, Harley-Davidson Inc., Mercury Marine Inc., Republic Airways, Uline Corp., Marinette Marine, Oshkosh Corp., and now Quad / Graphics. Those companies will receive the credits after they increase their employment.

Officials in Doyle’s office and the state Department of Commerce declined comment Thursday.

“It’s a big deal to us,” Quadracci said. “We are a big believer in the state of Wisconsin, but at the end of the day you have to do what makes economic sense for the company. The incentives have been absolutely crucial.”

A state study of the Enterprise Zone program was released to the Journal Sentinel in June. The report found that at that time the state had committed up to $135.6 million in incentives over the two prior years to four major employers to keep or create 7,400 jobs in Wisconsin.

The state is so far on track to recoup that money through economic growth that will boost state taxes by roughly $164 million or more, the study found. The state Department of Commerce is still in the process of updating the totals from that report to reflect the awards made through the Enterprise Zone program since then.

Without the incentives, Quadracci said his company would have looked elsewhere to consolidate work.

“We would have had a real issue,” he said, adding that other states would have welcomed additional jobs

So to be clear, while the few dozen “tea partiers” were protesting government spending and involvement and lack of jobs in Racine, in Milwaukee, Governor Doyle was intervening using the government to intervene and committing to $135.6 million dollars of government money and bringing in 7.400 jobs to the State of Wisconsin. Something to think about on election day as to who has the better job creating ideas. It also shows as to why Krugman in his latest column, says:

The economy, weighed down by the debt that households ran up during the Bush-era bubble, is in dire straits; deflation, not inflation, is the clear and present danger. And it’s not at all clear that the Fed has the tools to head off this danger. Right now we very much need active policies on the part of the federal government to get us out of our economic trap.

But we won’t get those policies if Republicans control the House. In fact, if they get their way, we’ll get the worst of both worlds: They’ll refuse to do anything to boost the economy now, claiming to be worried about the deficit, while simultaneously increasing long-run deficits with irresponsible tax cuts — cuts they have already announced won’t have to be offset with spending cuts.

So if the elections go as expected next week, here’s my advice: Be afraid. Be very afraid.


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2 thoughts on “Tale of Two Cities ….

  1. No, Progressive, YOU don’t understand the irony in you pointing out these two stories. The $136 million in TAX INCENTIVES is NOT the same as giving each company a blank check for $136 million…it is telling them that they will provide tax breaks of $136 million if the companies invest…sort of like a TAX CUT…but I guess the irony is lost on you.

    Call it “tax incentives” if you like, but at the heart of the incentive is a reduction in the amount of taxes the company is paying. And the company is reinvesting in the state.

    So, why can’t we give the same breaks, or cuts, or incentives to ALL companies? Why can’t the evil rich corporations use this money to create jobs? THat’s EXACTLY WHAT THEY ARE DOING NOW.

    So in your reasoning, Krugman would be WRONG.

    And where is your argument for providing money to these RICH CORPORATIONS? What? The Quadrachi family isn’t RICH ENOUGH ALREADY? So much for supporting those evil rich people.

  2. No its not the same as giving them a blank check, it is however government help and intervention. Yes it is a reduction in the amount of taxes paid by the company which is really an investment by the community that it will pay off in the end. There is no guarantee.

    Why cant we give the same breaks to all companies? we should to all companies that commit to keeping jobs here. I have no argument for providing “incentives” for companies to stay here and provide jobs(within reason).

    The point of this post is that this is not even remotely the “free market”. What it is is what works best in this country(and always has) a partnership between government and private industry. When both parties benefit we get along well and both parties win IE… tax breaks for keeping jobs in the US.

    Unfortunately the “tea partiers” in the first part of the story would(unless they were pure hypocrites) would be against such a partnership, also on the other end, the republicans have taken this too far in terms of the win/win has turned into multi-national companies only win. IE…tax “incentives” to move jobs overseas.

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