Collusionism Part II: The Cult of Job Creation
Ancient civilizations sacrificed their people to gods of the sun and war. 21st-century America sacrifices its people to the gods of Job Creation.
C’mon in, friend. Have a seat. You look like a bona fide Job Creator. Have I got a deal for you! What would you say if I told you I would give your company $3 million for every permanent job you created? Alright, we both know I won’t be the one footing that bill, that’s for the taxpayers to take care of. Oh and you’d have to build a factory to get this money, but what you make in that factory doesn’t need to benefit the people in this community. Hell, it doesn’t have to benefit the world at all. It can be toxic plastics that collect in our oceans and kill wildlife. It can make the children near the facility susceptible to rare pediatric cancers. And your factory can spew out 400,000 cars worth of greenhouse emissions. If the surrounding community is ungrateful enough to complain about tap water tasting like dead fish or their air smelling like sulfur, don’t worry, the state will just send an expert out to smell the air and tell those ingrates that everything is fine. Here’s the kicker - your company and your shareholders don’t even need to be American let alone from this state for you to get all these taxpayer-funded goodies. So what do you say? Is $3 million for every job you create enough to get you to say yes?
If this deal sounds too good to be true, you are wrong. This is the very sweetheart deal the State of Pennsylvania gave to Royal Dutch Shell to build a hulking plant known as the Ethane Cracker Plant in Monaca, on the banks of the Ohio River. While the tone of the negotiations was surely different from the playful hypothetical sketched out above, the terms of the deal are the same. In exchange for over $1.6 billion in tax benefits, the Shell Cracker plant, which opened in 2022, now employs just 500 full-time workers. While construction of the plant brought in thousands of out-of-state workers providing a temporary boost to desperate Rust Belt businesses, the cost for each of the remaining “good jobs” comes out to over $3 million in taxpayer-funded benefits to the UK-based corporation. A case might be made for government subsidizing industries of tomorrow that could radically increase the health and wealth of the community. But the Shell Cracker plant is doubling down on our polluting past rather than investing in the industry and energy of tomorrow. The plant creates plastic products and is fueled by fracked ethane, emitting toxins that earn the areas of Louisiana housing similar factories the nickname “Cancer Alley.”
The Shell Cracker Plant is a horrible deal for the taxpayers of Pennsylvania, and an even worse deal for the surrounding community who feel they have been “sacrificed” by the politicians who claimed the project would revive their dying economy. But the Cracker Plant is a great deal for Pennysylvania politicians and an even greater deal for the all-powerful Oil and Gas lobby that owns them. Shell and its fracking friends get to supercharge their profits with $1.6 billion in tax incentives then turn around and direct just a tiny sliver of that money to the lobbying operations and campaign donations needed to keep Pennsylvania Republicans licking the boots of the Oil & Gas Lobby and to keep Pennsylvania Democrats shaking in their own boots in fear of being branded “job killers.” This state-subsidized creation of a Job Creator Aristocracy makes no sense within the logic of either capitalism or socialism. But it makes perfect sense within the economic system we truly live in, a political-economic order we named Collusionism.
We defined Collusionism last week as a self-reinforcing, reciprocal feedback loop between business and political elites. This Collusionist loop implants itself once (1) the business elite’s best strategy for profitability is to seek favorable treatment from political leaders rather than servicing the needs of their customers, and (2) the political elites’s best strategy for electability is to seek financial backing of the business elite rather than to meet the needs of their constituents. This feedback loop is especially strong in Pennsylvania, which has devolved into a Collusionistic petrostate since the much-hyped “Shale Revolution” dawned in the late 2000s. Like most Collusionist schemes, the wooing of the Shell hellscape to Pennsylvania was a bipartisan effort. Democrat Tom Wolf eagerly finished the job started by his GOP predecessor Tom Corbett, whose political rise was fueled by the dark money of fracking tycoons like Aubrey McClendon. Despite the tremendous cost to taxpayers of sucking $1.6 billion out of the state budget and the tremendous cost to the quality of life of those who have to live near the plant, the Pennsylvania political class justifies their largesse to Shell on the grounds of “job creation.”
State-subsidized for-profit “job creation” is the golden calf of Collusionist societies. In capitalism the entrepreneur risks his capital, pays laborers what the market commands, collects revenue from sales, and enjoys as profits whatever is left over after costs. In socialism, the government puts the people to work and pays them to labor, while society supposedly enjoys the surplus value created by the laborer over and above his wages. But in Collusionism, we the taxpayers foot the bill for the laborer’s wages in the name of subsidized “job creation,” we foot the bill through subsidies and tax breaks while the corporations keep whatever is left over for their own profits, funds they can then funnel into the campaign system to gain an even tighter grip on the politicians who are supposed to regulate them. In capitalism, the entrepreneur bears all the risk of hiring workers and reaps all the rewards. In socialism, society bears all the risk of hiring and reaps all the rewards. In Collusionism, society bears the financial risk of employment while the Job Creator Aristocracy reaps the reward.
Collusionism should never be mistaken for a hybrid of capitalism and socialism. The logic of Collusionist job creation inevitably crowds out and undermines the functioning of these competing systems. As Collusionism takes hold and the campaigns are awash in corporate cash, non-Collusionistic politicians become increasingly incapable of running competitive campaigns promising direct government job creation like in the socialist or Social Democratic model. Similarly, corporations competing in a Collusionist environment know that funds are better “invested” buying friendly politicians to pay them $3 million per job created, rather than compete in a capitalist fashion based on providing customers with the best goods and services at the lowest price. The amplifying power of the Collusionist feedback loop erodes the ability of honest politicians to create jobs through direct government hiring and honest capitalist entrepreneurs to create jobs based on the signals of the free market. All that remains is a Collusionist machine that churns out politicians unfairly advantaged by dark money corporate contributions and corporations unfairly advantaged by cushy taxpayer-funded incentives.
Last week we highlighted the features of Collusionism by examining the wealth formation of two corporate executives, Tesla’s Elon Musk and UnitedHealthcare’s Brian Thompson. Musk is a master of the Collusionist “job creation” boondoggle, evidenced by his ability to get the State of New York to build a $1 billion GigaFactory in Buffalo for Tesla to manufacture state-of-the-art solar shingles. Tesla never came through with mass production of the shingles and instead currently employs mainly low-skill, low-wage workers to perform menial tasks like labeling photos to train self-driving cars. Financial statements reveal that the facility and all equipment are valued at $94.8 million, a dramatic collapse in value from the nearly $1 billion in taxpayer money spent to build it.
The exorbitantly expensive and chronically underperforming for-profit American healthcare system is also a creature of the Job Creation Cult. For healthcare industry executives like Thompson, their ability to extract obscene profits from a helpless population is protected by cowardly Collusionist fears of being accused of “Job Destruction.” In explaining why he favored the corporate-friendly Affordable Care Act over a single-payer universal healthcare model that could have saved thousands from early death and millions from bankruptcy, Barack Obama said the quiet part out loud, admitting his decision was based on the fear of destroying “one million, two million, three million jobs [filled by] people who are working at Blue Cross Blue Shield or Kaiser or other places. What are we doing with them? Where are we employing them?” In our Collusionist Age, such an assessment sounds like trademark Obama common sense at its finest. The absurdity of Obama’s stance only sinks in when we realize he comes from a lineage of Democratic presidents who once had no problem thinking of ways for the federal government to directly put eager Americans to work, whether it was electrifying the Tennessee Valley, constructing the Golden Gate Bridge or launching the Apollo Program to put the first man on the moon.
Collusionism is the political and economic manifestation of the ominous future William Butler Yeats foresaw in The Second Coming, “The best lack all conviction, while the worst are full of passionate intensity.” The system only works through the complicity of benign Collusionists in the Democratic Party making endless concessions in the name of “job creation” to avoid attacks by the shamelessly malignant Collusionists in the GOP. Obama’s surrender to the healthcare lobby to protect “jobs” feels natural and inevitable, the only way to keep power out of the hands of Republicans who unapologetically praise the vampiric presence of for-profit health insurance in American society. A similar collapse can be seen in Pennsylvania Democrats like John Fetterman and Josh Shapiro who have gone from championing the citizens’ rights to clean air and water to becoming willing collaborators with the Oil and Gas lobby’s “job creation” scam, leaving no other choice for the voters than Pennsylvania Republicans who might as well be paid agents of Range Resources and CNX.
But all these short-term Democratic concessions to Collusionist power beg an important question. How much is too much to pay for a good job? $3 million in tax benefits to the corporations? Nearby school children facing significantly increased rates of asthma and leukemia? Releasing significantly more emissions into a Western Pennsylvania region that remains one of the worst in the country for air pollution? In an age of Collusionism, it seems like there is no price too high to pay for a “good job” created by a politically connected corporation. This should come as no surprise. The political and corporate elites reap the primary financial and professional rewards of these boondoggles while the costs fall mainly on the average citizen. Until the people rise up against the Collusionist power and hold these elites accountable, we will continue to see the taxpayers and their innocent children sacrificed to the golden calf of Job Creation.