Smart Ideas: Should Congress Clamp Down on Amazon-Style Corporate Welfare?

Plus: A Post-Trump future for the GOP in the Midwest.

Crystal City, in Arlington, Va., was included as part of one of the sites for Amazon’s second corporate headquarters Tuesday.
AP Photo/Cliff Owen
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Nov. 13, 2018, 8 p.m.

HQ2-style bidding wars are corporate welfare at its worst

Derek Thompson, writing for The Atlantic

“Every year, American cities and states spend up to $90 billion in tax breaks and cash grants to urge companies to move between states.” Not only is the practice "redundant," with cities paying companies “to do what they were going to do anyway,” but it triggers wasteful bidding wars between states. Kansas and Missouri, for example, recently spent “half a billion dollars” on corporate incentives for a few companies, “changing the commutes of 10,000 Kansas City workers” without ensuring that the companies receiving the benefits would actually bring the jobs they promised. Even when companies “do hold up their end of the bargain, it’s still ludicrous for Americans to collectively pay tens of billions of dollars for huge corporations to relocate within the United States.” If Congress can’t ban the practice outright, it should at least “make corporate subsidies less valuable by threatening to tax state or local incentives as a special kind of income,” and publicly discourage the “culture of corporate subsidies.”

Drug-price disclosure could backfire

Syed Kaleem, writing for STAT

A measure requiring pharmaceutical companies to disclose list prices of drugs in their commercials, which passed the Senate in August, “will be ineffective in terms of reducing drug prices—and is likely to backfire.” The requirement is partly a scare tactic, as “list prices are used by drug companies as the starting point for negotiations with pharmacy benefit managers and insurers. Consumers usually pay much less than the list price, often just a copayment at the pharmacy.” A better method would be to “include the average estimated out-of-pocket cost for consumers who have insurance."

GOP gaining strength in Midwest?

David Byler, writing for The Weekly Standard

When looking at the GOP’s Midwest performance last week, Pennsylvania stands out as a warning sign that things could get hairy for President Trump in 2020, but “the Ohio results and the Michigan results aren’t as bad for the GOP as those in other states." Republicans won the governor race in Ohio, and in both states the Republican Senate nominees made decent showings against incumbents in a tough environment. "We can’t extrapolate too much off one midterm result, but it’s possible that those states have moved right more generally and that the 2016 results (where Trump made significant gains) aren’t completely tied to Trump and Trump alone.”

Republican Reps. Justin Amash of Michigan and Jim Jordan of Ohio AP Photo/J. Scott Applewhite

Parliament can’t renegotiate Brexit terms

Therese Raphael, writing for Bloomberg Opinion

If the House of Commons rejects British Prime Minister Theresa May’s Brexit deal, the government must decide “within 21 days about how it will proceed.” May has said her plan “is the only route to an orderly exit”—and she may be right. Labour has pushed back hard. May's former Brexit secretary “David Davis … said on Thursday that defeat in the Commons is looking like a probability.’ … Shadow Brexit secretary Keir Starmer himself warned this week that a ‘blind Brexit’—one in which the future terms are unclear—would be bad for business.” And if Parliament rejects May’s plan, the EU is not likely to change its position: The EU’s chief negotiator Michel Barnier “knows that the U.K. government, for all the technical notices it has been releasing on that eventuality, is unprepared for a no-deal outcome.”


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