Boeing Bones Wichita

It’s a tired old mantra among supposed free market conservatives that government regulations and taxes hurt business and cause unemployment. And while that may be true for small businesses that don’t have any political pull, when it comes to large corporations it is total bullshit. The latest example comes with this story from Bloomberg Businessweek about the closing of a Boeing factory in Wichita, Kansas:

Boeing Co.’s decision to shut down its Wichita, Kansas, plant after more than 80 years betrayed public officials who helped the planemaker win a U.S. Air Force contract for midair refueling tankers, the city’s mayor said.

Boeing didn’t consult with city officials or ask for financial incentives to stay put before announcing its decision yesterday to close the Wichita plant with 2,160 workers before 2014, Mayor Carl Brewer said in a telephone interview. The company had indicated that winning the Air Force tanker work last year would support 7,500 local jobs, Brewer said.

“They weren’t totally honest with us,” Brewer said. “We thought the relationship was a lot stronger.”

Sucks to be the sucker, doesn’t it, Mayor Brewer? So how much corporate welfare are we talking about here?

The community and state have taken steps to retain the company’s aircraft works and jobs. Since 1979, Wichita has issued more than $3.5 billion of industrial revenue bonds to help Boeing finance plants and facilities, city figures show. The manufacturer received $650 million in property-tax relief.

“Boeing is a poster child for corporate tax incentives,” state Representative Jim Ward, a Wichita Democrat, said in a statement. Kansas will be “less trusting” in awarding such benefits in the future, Ward said. Boeing got sales- and property-tax breaks and infrastructure investment “at every level of government.”

Yeah, we’ll see whether Kansas is really going to be less trusting and likely to bend over in the future. In fact, I’ll place a wager on NOT right this very minute. Anyone want to take me up on it?

The article also brings ups another point which I think is important:

Wichita’s loss may be a harbinger of what’s to come for cities and states around the nation that depend on defense industry employers as budget deficits squeeze Pentagon spending. Cuts of as much as $1 trillion may be made over a decade under a congressional deal to extend the U.S. debt ceiling last year.

The cuts in defense war spending have so far not been much more than cosmetic, and yet the shock waves are already being felt in the real economy. As such, this is just a little preview of the economic carnage to come as the empire is slowly forced to dismantle the military-industrial complex.