Politicians must refrain from dragging the rest of us into their personal red-blue battles.
Subsidies and other forms of government assistance to private businesses are inefficient. They skew the market and direct precious resources to enterprises chosen by the government rather than by customers. They are also influenced by political forces. Government decisionmakers providing contracts, loans, and subsidies to businesses controlled by relatives, friends, supporters, or allies is an old story. Al Gore, a key Obama fundraiser and former vice president, benefited greatly from "green energy" subsidies during the Obama administration. President Trump attempted to host the G7 Summit at his own Florida hotel, allowing him to profit millions of dollars from the United States and other countries. State and local governments have numerous similar stories to tell.
However, there is a new wrinkle: governments rewarding or penalizing businesses as part of a partisan cultural battle. In some recent situations, it appears that the corporations in question were seen to be on "our side" or "the other side" of a political issue, rather than being funders or friends of policymakers. Because of the political views of some of Chick fil A's owners, certain Democratic lawmakers said Chick fil A was not welcome in their communities a decade ago. When nearly everyone pointed out that such a regulation would be in violation of the First Amendment, the movement rapidly crumbled.
But now take a look. Gov. Ron DeSantis and other Florida Republicans are attempting to punish the Walt Disney Company for expressing a political viewpoint that, ironically, is nearly identical to that of the Chick-fil-A owners. They were not deterred by First Amendment warnings, but the case will be taken to court, where the Constitution is frequently upheld. The Republican county commissioners in Sarasota, Florida, awarded Rumble, a video platform popular with Trump supporters, $825,000 to relocate its headquarters from Toronto to Sarasota County. This was done right away by the company. So quickly, in fact, that it's difficult to believe a $825,000 award was the deciding factor for a corporation that plans to invest $50 million in the region. The county commission, under duress, scrapped its whole economic incentive scheme, including the Rumble award. "With economic incentives, we're picking winners and losers," said a conservative activist on the committee who had earlier suggested that critics of the grant were "the same people who think you should be burning flags." That does not sit well with me as a government official." Listen, listen, listen.
Meanwhile, Governor Gavin Newsom of California launched a new state program of tax incentives and subsidies for businesses coming to California from "states that have implemented limits on reproductive rights and anti-LGBTQ+ policies."
"Hobby Lobby and Chick fil A are the good folks," Ohio Republican Senate candidate Josh Mandel tweeted in the midst of it all. The wicked guys are Disney and Twitter."
I believe it is OK for a governor to tell businesses that his or her state has cheaper taxes and less regulation, or that it does not discriminate against any of the company's employees. All of these are excellent reasons to favor one state over another. Governments should not, however, provide subsidies and tax incentives to select businesses while excluding others. First, since it is inefficient and will slow economic growth and lower living standards. The second reason is that it encourages favoritism and corruption.
But, perhaps most crucially, this politicization of everything, this pulling of enterprises into culture battles on the left and right, is damaging to civil society and democracy. You should be allowed to take your kids to see a movie or have a chicken sandwich without feeling compelled to make a political statement. Liberal societies thrive by keeping the majority of the population out of politics. Politicians should refrain from dragging everyone else into their red-blue battles.