Listen To You Tell Me Texas Friday 6/19/15
Jeffrey Immelt probably isn’t a household name but the company he runs is. Immelt is the CEO of General Electric – the company founded by Thomas Edison.
GE makes everything from light bulbs to jet aircraft engines. It was chosen in 1896 as one of the original 12 component companies of the Dow Jones Industrial Average. It is the only one of those 12 that is still a Dow component company today.
GE is a worldwide powerhouse – the kind of company that commands attention.
Which it did earlier this month as a result of an email that Jeff Immelt sent to GE employees. Immelt announced that GE has formed an “exploratory team” to consider moving its corporate headquarters out of Fairfield, Connecticut to a state with a “more pro-business environment.” Why? Because of the new taxes signed into law by Democratic Connecticut governor Dannel Malloy.
The taxes are a part of a $40 billion dollar budget that imposes new levies on the traditional Democratic boogey-men – i.e. corporations and wealthy individuals. This comes even as Connecticut ranks dead last among the 50 states in annual economic growth according to the Commerce Department.
It never occurs to Democrats (and too often it doesn’t occur to Republicans) that companies and wealthy individuals have the capacity to pack up and move. As lawmakers in Connecticut have piled on ever more taxation and regulation, companies and the people who work for them have left.
Hartford, Connecticut was once the insurance capital of the world. Des Moines, Iowa now holds the more legitimate claim to that title. Connecticut’s three largest cities, Bridgeport, New Haven and Hartford, all have smaller populations today than they did in the 1930s.
If GE relocates, it would be a huge rebuke to the State of Connecticut. There is no way to put a positive spin on losing an iconic American company to a rival state.
Said rival states have no qualms, however, about making the pitch. Governor Mike Pence of Indiana has some ideas on a new home for GE. As does Greg Abbott of Texas.
Both states boast low taxes and a business-friendly regulatory climate. Both states are run by Republicans
If GE leaves Connecticut, Democrats will predictably denounce the move as mean-spirited and motivated by greed. But it will never occur to them to look in the mirror and ask themselves; ‘What is it about Texas or Indiana that would make GE want to move there?’ Nor would they ever ask themselves, ’What is it about Connecticut that would make GE want to leave?’
This Sunday we mark the 227th anniversary of the ratification of the U.S. Constitution. A key part of the brilliance of that document lies in the degree of sovereignty retained by the states – sovereignty that enables and encourages states to compete with one another. This is something that high-tax liberals in states like Connecticut should keep in mind.
That GE might, in its own self-interest, pack up and move to a more accommodating state is exactly what the founders intended.