Wal-Mart and the malevolence of Maryland

by BD Pisani - 2006 feb 12

Our astute friend Keuka Lake Kenny circulated an interesting email yesterday that featured a newspaper article regarding Maryland's punitive tax war against the Wal-Mart Corporation. Interesting indeed...

Company CEO Lee Scott's corporate-friendly response was published this past Friday in, of all places, that uber-liberal citadel of the Fourth Estate, The Washington Post. Talk about entering the lion's den, because there is only one nationally-recognized newspaper with a more powerful editorial mandate to promote leftist propaganda than the Post (and that other bird cage liner's initials are NYT).

The story line behind Maryland's assault on Wal-Mart, in its simplest form, is this:

  • Leftist governor and state assembly in total control of government;
  • Labor unions hate and are at war with non-union Wal-Mart;
  • Big Labor leans on political hacks to punish Wal-Mart in any way possible;
  • Leftist governor and state assembly check political coffers, check favors owed;
  • Leftist governor and state assembly concoct tax scheme that only punishes Wal-Mart, as no other corporation doing business in Maryland fits the criteria;
  • Big Labor and leftist political lackeys smile smugly;
  • Wal-Mart retains benign disposition, offers an aggrieved but gracious response, and continues merrily on its way earning billions - smiling smugly.

As you know, one must always follow the money (or payola) to understand the why of something and at this point, you really should read the article.

Well. At some level Mr. Scott, I am sure, truly believed the good-guy corporate citizen mantra when he stated: "Though the General Assembly passed a bill that affects our company and our company alone, we will not flinch in our commitment to our customers, our associates and the communities we serve. Working families want us in Maryland, and we're staying in Maryland."

However, the bottom line for any business is net profit. The B2 Journal is equally certain that Wal-Mart also conducted an exhaustive Cost/Benefit Analysis on their situation in Maryland and found that it would still be profitable to not only continue operations but expand as well, despite the state's narrowly-focused bushwhacking of Wally World sans union.

It must be noted that in the past, Wal-Mart has shown little hesitancy to relocate from or avoid expanding in local jurisdictions that have attempted similar ploys. The recent Chicago expansion is a classic example. Faced with a hostile democratic Mayor and a gaggle of boot-licking Aldermen, Wal-Mart simply opted to construct a new facility one block outside of Chicago's South Side boundary to avoid contrived persecution.

So it is doubtful that Wal-Mart's decision to stay the course in Maryland is based solely upon its well-known and considerable corporate magnanimity or a Mother Teresa-like concern for the good denizens of that state. Oh no; you must follow the money, remember?

Whispers of change ...

Besides, there are now very serious political winds of change blowing in Maryland: softly to be sure but like the outer bands of a cyclonic storm, subtly yet steadily growing in intensity as the storm's center surges nearer. That traditionally ultra-liberal Old Line state may soon undergo a radical political shift and perhaps the malevolent legislation will be repealed. And perhaps the state's insane gun laws will be sunseted. And perhaps pigs will fly.

Aside from the obvious ethical and moral standards being trampled by Maryland's political and labor thugs into the fertile Chesapeake Bay alluvium, it is just plain bad business practice for any state to act in such a favor-laden, interest-driven, politically-motivated manner.

Such political power ploys ultimately cause more harm to the state's and citizens' economic base and union affiliations than the normal business processes of any dozen Wal-Mart Corporations combined. And oh by the way, where do you think most of those rank and file union members do their shopping, hmm? In the interest of fairness, however, union leaders may not because they have the wealth that affords them the ability to shop elsewhere.

Floridians are all too familiar with this sort of extortion. The International Business Machines (IBM) Corporation operated a booming Personal Computer Division in the city of Boca Raton during the '70s and '80s. Booming, that is, until Bob Graham was elected governor. Graham (perhaps the worst Florida governor in 50 years and despised to this day by Old Conchs throughout the Florida Keys) attempted something similar to the Maryland fiasco with the backing of a compliant liberal state legislature.

Graham's personal monument to stupidity was the Universal Tax and targeted corporations with manufacturing facilities within Florida as well as overseas (there were just a handful then) for extraordinarily punitive state taxes. IBM Corporate performed a C/BA, determined that it was no longer justifiable or desirable to maintain or expand manufacturing in Florida, and shut down the PCD. IBM segmented and relocated the manufacturing processes to Austin, Texas, Boulder, Colorado, and Tucson, Arizona. Printer operations went to Lexington, Kentucky.

POOF! Florida, Broward and Palm Beach Counties, and the Cities of Boca Raton, Deerfield Beach, and Delray Beach lost 13,000 high-paying jobs, extensive tax revenues from the division's sprawling 48-building campus, and lucrative local business trade when all those well-paid, big-spending employees sold their homes and relocated to other states.

As if that wasn't bad enough, a future tax cash cow stemming from an additional 7,000 jobs and huge campus slated for an expansion facility to be built in Gainesville was lost as well. IBM sold the 2,500 acres to be used for the new manufacturing site in Alachua County and moved on to more corporate-friendly states that appreciated clean industry and upper middle-class incomes. Thank you Bob Graham.

... Or maybe not

Socialist elites who hold the political reins of power are forever beholden to and must routinely placate the whims of special-interest groups such as Big Labor. Now mind you, all politicians of every political bent can be coerced by special interests, but leftists in particular have no new, innovative ideas for cost-effective governance, are by definition not capitalist-friendly, and therefore must rely on such power blocs, a servile segment of the population wedded to social welfare programs, and tax increases to retain and perpetuate power.

They must always toe the special-interest line, even when it means causing serious economic harm to not only their own like-minded constituents but to all citizens, or risk losing their political funding, powerful election organizing apparati, and guaranteed votes. They will never change because they cannot.

Perhaps those Maryland hacks and others of their ilk should take a closer look at the fine, steaming kettle of fish in which now stews GM and Ford...