The NC Google deal gets analyzed by BusinessWeek

The July 23rd issue of BusinessWeek takes an in depth look at the process by which the state along with Caldwell County and the Town of Lenoir got taken to the proverbial cleaners by corporate giant Google. The story outlines with great balance how Google set about taking advantage of the desperate economic conditions afflicting Caldwell County due to furniture manufacturing closures. I encourage everyone to read the story and then reflect on whether that is the way we ought to do business in North Carolina. This so-called "targeted incentives" issue will be a recurring topic in my campaign and on this blog. It's an issue that virtually every knowledgeable observer or participant in the economic development system (maybe except those making money off of it) agree either privately or publicly that it is bad public policy. Unfortunately, the lame rationale for all of this corporate welfare is that "everybody else is doing it, so we have to also."

There are several points I'd like to make that need elaborating on in order to give a more complete picture of what's at issue here. First, is the secretive process employed throughout the negotiations. The government officials were sworn to secrecy by Google officials and threatened when the press on one occasion ran a story about the prospects of Google coming to North Carolina. The sales tax break specifically for Google was slipped through the Legislature with no acknowledgement that it was exclusively for Google and with no meaningful debate or discussion. Land was acquired without telling the owners that the purchase was being made for corporate billionaire Google. The several hundred million dollars in subsidies for this one company was a done deal before the press or the public had any real knowledge of what was going on. While that might well be ok when businesses negotiate with each other, when it is the public's tax dollars, it is simply not acceptable. What goes on the back room rarely results in serving the public's best interest.

Secondly, what the story does not develop is the negotiating tool of continuing to threaten to locate the server farm somewhere else...like South Carolina or Iowa. North Carolina officials must not have realized that the same pitch was being made in those states and others and the same threatening game being played..."give us our incentives or we will go elsewhere." It's convenient now for those striking the deals and caving in to Google's demands to ignore the fact that in addition to locating a server farm in Caldwell County, Google also located server farms in South Carolina, Iowa and other states. Once again the game was played. Another corporate giant profits. And the tax payers and other businesses in the state lose. Google, whose 1st quarter profits in 2007 was in excess of $1,000,000,000 (that's a billion, friends) ends up not having to pay property taxes in Caldwell County while everyone else does. If this process doesn't make sense to you and it sure doesn't to me, then head back to our website and sign up to help. I'm the one candidate willing to take on this issue.