by Lowman S. Henry

July 09, 2019

Were Betsy Ross to return to life she would undoubtedly be astounded to find herself one of the most talked about historical figures over the recent Independence Day holiday.  She owes it all to an attention-starved washed up former NFL quarterback and a shoe company without a soul.
Former Pennsylvania Governor Ed Rendell once penned a book entitled A Nation of Wusses. He could write a sequel about Nike, a company of wusses, so under the thrall of perceived political correctness it actually pulled a sneaker imprinted with the nation’s first flag just because said mediocre football player objected.
As if Colin Kaepernick and Nike had not already done enough to contribute to the deep divisions that already afflict our nation, the historically inaccurate branding of the USA’s first flag – believed to have been sewn by Betsy Ross – as racist created yet another storm of controversy. The ridiculousness of the claim, and Nike’s knee-jerk reaction, cast a pall over the mid-summer holiday.
Within hours of Nike’s announcement that it was pulling the flag themed sneaker off the shelves Arizona Governor Doug Ducey announced the Arizona Commerce Authority was cancelling incentives it had awarded to Nike to build a new manufacturing plant in the state. In making the announcement Ducey stated “Nike has made its decision, and now we’re making ours.” He went on to say Arizona’s economy would do “just fine” without Nike.
All of this brings to the fore a larger issue: why would any state offer incentives for a highly profitable multi-national corporation like Nike to locate within its borders?  Nike is perfectly capable of building manufacturing facilities without state aide or incentives. In fact some officials in Arizona were questioning the effectiveness of the Commerce Authority even before the Nike kerfuffle. Ducey himself had already begun to reduce funding for the agency.
Government picking winners and losers by offering corporate welfare to politically well-connected companies is at epidemic levels all across the country.  Every state, and even counties and municipalities within states, want the jobs and tax revenue such companies generate.  But, as Arizona Senate President Andy Biggs pointed out “How are we going to quantify whether this agency is successful.”
Amazon raised to an art form pitting states and cities against each other with its recent competition for siting of its second national headquarters.  Known as HQ2 Amazon finally decided to divide the offices between Northern Virginia and New York City.  An uproar, lead in part by Democratic/Socialist Congresswoman Alexandria Ocasio-Cortez in whose district the headquarters would have been located, caused Amazon to scuttle its plans to co-locate there.  Virginia taxpayers, however, are still stuck with the bill.
Pennsylvania also engages in politically-driven corporate welfare.  Both Pittsburgh and Philadelphia vied for Amazon’s HQ2.  Local officials even refused to make public the amount of taxpayer dollars they were willing to spend to entice the company.  In the end, Pennsylvania’s overall poor business climate and regulatory burden out-weighed the taxpayer goodies promised by those cities.
Over the years the Lincoln Institute’s Keystone Business Climate Survey has periodically asked the owners and Chief Executive Officers of businesses whether they favor targeted incentives or a general easing of the business tax burden.  Consistently and by wide margins those who actually run businesses in Penn’s Woods say they would prefer to see such programs eliminated along with implementing tax cuts and regulatory relief to make the state more competitive.
At the end of the day the winners are Arizona taxpayers who don’t have to subsidize Nike and its feckless embrace of Leftwing sensibilities, and Betsy Ross whose fame for producing the first American flag shines even brighter. All things for Colin Kaepernick to ponder this Fall as he watches another season of NFL football from the comfort of his own living room.

Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal.  His e-mail address is lhenry@lincolninstitute.org.

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