San Francisco – California




© Harold Davis


Responsibilities Of Companies And The Government




A recent editorial suggests that “Effective limits on subsidy chasing … companies… will have to be implemented and follow the European model”.


Why is it that whenever people don’t like something that is happening in our economy they say we should do it like they do in Europe?


Europe does not perform better, it is not leading the world in new discoveries or national income per capital – we are.  We are more disruptive, more changing and more leading.


So back to the subject:  Cities providing incentives to companies to locate with them.


There are many factors besides incentive subsidies that determine where a company will locate a new facility.  Consider the reason Boeing, Chevron and Google relocated – being treated as the goose that lays the golden egg and thereafter being smothered with demands and taxes that make it attractive to move out, and by failure to make improvements required for the companies to carry out their businesses.


So a city offers tax breaks and other incentives to a company to locate with them or to lure them away from another city.  The incentives recognize the great amount of income and jobs that a major development brings to a city.  But also it recognizes the cost of the business locating there.  The competition that Google carried out was somewhat disgusting and in the end the dollar incentives were not determinant.  I think such is usually the case – other factors are more important than the financial incentives.  But in light of the huge taxes and jobs they bring, helping companies out with their location costs makes sense.  Most of us would agree.  It should not be up to the government where companies locate, or some will just go to another country.


Let us remember where the jobs and wealth are created; it is not by the government or the protesters; it is by companies.










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