Government to the rescue?

Government to the rescue?

In Illinois and Indiana last week, we saw the all-too-visible hand of government granting favors to businesses.

Late last week, the Illinois Legislature approved, and the governor signed, the so-called Future Energy Jobs bill, which includes electricity-rate increases for Ameren and ComEd customers that will funnel $235 million a year to Exelon. In return, Exelon will not close two nuclear power plants — one in nearby Clinton and the other in Cordova, northeast of the Quad Cities. A combined 1,500 jobs were saved.

Also last week, President-elect Donald Trump flew to Indiana for a jobs victory tour of the Carrier furnace plant in Indianapolis. At Trump's urging, Vice President-elect Mike Pence (still the governor of Indiana) and United Technologies CEO Greg Hayes struck a $7 million deal that keeps about 800 factory jobs in Indiana. The company had earlier planned to shut down two of its Indiana operations and move production to Mexico.

While both actions were orchestrated by different officials in different states with different companies, both show how politics crush policy whenever government wants to prop up the private sector.

The Illinois legislation is a vast improvement over the original bill, which resembled an overloaded Christmas tree. Gone are changes to how customers are charged for monthly usage and subsidies for coal-fired power plants. Also off the table are other contentious issues, such as prevailing wages for building clean-energy projects and a controversial proposed transmission line in northwestern Illinois.

Proponents point to more than jobs for why the bill was worth approving:

— Guaranteed rate caps. Ameren projects that costs would increase no more than an average of 12 cents a month. In fact, an Ameren official testified last week in the first years of the program, the average residential customer would see a rate cut.

— Both plants will stay open for 10 years, instead of six.

— Energy-efficiency and system-reliability improvements.

— A revised renewable-energy portfolio.

Rightfully, the bill had opponents, who saw untenable contradictions:

— A rate hike to bail out a large, profitable corporation — in a state that already exports electricity.

"We're going to subsidize a company," said Rep. Mark Batinick, R-Plainfield, "so that they can sell their power out of state, so that out-of-state users can enjoy lower rates."

— A special-interest bill instead of a solution to the state's fiscal crisis.

"What are we doing, listening to this bill right now?" asked Rep. Sam Yingling, D-Round Lake Beach. "We don't have a budget, and our so-called stopgap budget is just weeks away from expiring."

As in Illinois, the politics behind the Carrier subsidies revolved around the good news of jobs saved. But on closer inspection, policy and reality say something else.

First, Trump heralded the jobs he and Pence saved. Indeed, about 800 jobs that would have moved to Mexico will stay in Indiana. But left unsaid are the 1,300 jobs that are still going south. Indiana got a third of a loaf, not a whole one. We doubt Trump will tweet that.

Second, this is just one factory in a country with thousands of factories — many of which will be looking for Carrier-like deals. Will the new president negotiate incentive packages for all of those, too? That would be an anti-taxpayer, not a pro-business, position.

Finally, the marketplace — for goods, services, labor and talent — will decide which businesses thrive and which shut down. If a government subsidy is necessary to make a particular company, development, technology or industry viable, then it's not viable.

If government wants to help job creators, it should get out of the way.

Sections (2):Editorials, Opinion

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
yates wrote on December 04, 2016 at 2:12 pm

Electricity, gas furnace....bad. Solar panels, wind turbines, wind farms....Good. Which has screwed the tax payer the most?