But Tesla demanded — and won — so many breaks from the state of Nevada that the deal is an affront to any true believer in free-market economics. This is from the Chronicle:

Nevada won the fierce, five-state competition to host Tesla Motors’ planned $5 billion battery factory by offering a package of tax breaks and credits that could be worth $1.2 billion over the next 20 years, according to terms released by state officials Thursday. … Tesla won’t have to pay sales tax for 20 years. The company also won’t have to pay real property, personal property and modified business taxes for 10 years.

The size of the deal and the scope of the tax breaks makes this feel more like South Korean crony capitalism — the government in Seoul is a de facto partner of conglomerates like Samsung and Hyundai — then American capitalism.

But as Dan Morain points out in his Sac Bee column, this is increasingly common:

Nevada is simply following a trend. The Washington, D.C.-based nonprofit organization, Good Jobs First, tracks such giveaways. Tennessee gave Volkswagen $554 million in incentives. Mississippi gave a $1.3 billion package to Nissan in 2000. Oregon gave $2 billion in incentives to Intel.

“Unfortunately, it is common to see subsidies of this size,” Leigh McIlvaine, a research analyst for Good Jobs First. “There seems to be a perception on behalf of companies that they should be paid by the public sector to finance that growth. It is looking like an entitlement.”

California lawmakers are not shy about opening the treasury to help companies. They approved $420 million in tax breaks this summer for Northrop Grumman and Lockheed Martin, on condition that they build new bombers in California.

Milton Friedman: Big biz a foe of free market

I get the argument that Tesla is a unique company, and that Northrop and Lockheed are fairly unique as well, so the argument that these government gifts are hugely unfair to their rivals isn’t as apt as it when it’s made about tax breaks given to specific companies in more competitive industries. But at some point, I share Milton Friedman’s concerns, as noted by the Heartland Institute in 2012, about government and industry acting in synch.

Friedman exemplified the generous spirit behind the desire for free markets: they benefit the less-wealthy by leveling the playing field, allowing people to succeed on their merits instead of through political power bought with big money. Friedman had nothing but contempt for crony capitalism and the use of government to suppress market competition, although he was too polite and good-natured to express that feeling in any way but through sound economic arguments.

Friedman himself put this sentiment another way in a 1977 article for Reason magazine:

The two greatest enemies of free enterprise in the United States … have been, on the one hand, my fellow intellectuals and, on the other hand, the business corporations of this country.

Maybe it’s pointless to worry about this six years after the federal takeover of the banking system, General Motors and Chrysler during the financial crisis, but there’s something really ominous about big government partnering with and/or propping up certain favored big businesses.

The initiatives they work on then become, in the lexicon of 2008, “too big to fail.” It’s not hard to imagine Nevada moving from tax breaks to direct subsidies if the Tesla “gigafactory” struggles to live up to its billing and needs help to survive — taxpayer help.

That is, much, much more taxpayer help.

By John Seiler

Surprise! The government-run company decided not to challenge the government tax increase. Government Motors, the leader of companies that were going to opposed the massive, $1 billion tax on out-of-state businesses called Proposition 39, has led a surrender.

The Contra Costa Times reported:

“The Yes on Prop. 39 campaign sort of declared victory today, announcing it would pull its television and radio ads after hearing that the companies once opposing the measure will do so no longer….

“The committee backing Prop. 39 today said it has been informed by General Motors, International Paper and Kimberly-Clark that they won’t oppose the measure any further. Chrysler and Procter & Gamble, the two other companies that once were part of a coalition opposed to closing the loophole, also recently stated that they would not oppose Proposition 39.”

More good reasons not to buy junkers from Government Motors, which still has $25 billion invested in it by the U.S. Government. Chrysler also got a massive government bailout, its second in 30 years (for now), but currently is not owned by the government.

This also shows how the whole election system is rigged. California is a banana republic with imported bananas.

By John Seiler

The problem with public-employee unions getting collective bargaining is that they then sit on both sides of the negotiating table. “This is our opportunity to elect our own bosses,” as union leader Ronda Walen put it in an election two years ago.

If you elect your “own boss,” then it’s not surprising that your “boss” — you — is over-generous with pay and benefits because other people — the taxpayers — pick up the bill.

As public coffers dive down in bankruptcy, people around the country are reacting.

In Wisconsin, Republican Gov. Scott Walker pushed through reforms that limited government-union power. A state judge just struck down the reforms, but there will be appeals.

In California, we have on the November ballot Proposition 32, the “Paycheck Protection Initiative,” which would ban unions heisting money directly from members’ paychecks.

Also, in Michigan, voters will need to reject Proposal 2, the so-called “Protect our Jobs Amendment.” The unions are pushing it because it would, among other things, “Invalidate existing or future state or local laws that limit the ability to join unions and bargain collectively, and to negotiate and enforce collective bargaining agreements, including employees’ financial support of their labor unions. Laws may be enacted to prohibit public employees from striking.”

Basically, it would ban the Michigan Legislature from itself passing something like Walker’s reforms. Initiatives still could do so by effectively repealing Proposal 2, should it pass.

Michigan is a heavily unionized state. But its unions, unlike in most places, largely are in the private sector, especially the United Auto Workers union. The problem is not private-sector unions. If you don’t like the UAW, you don’t have to buy GM, Ford or Chrysler cars. You can buy something else.

But with government unions, you have no choice — except to move. Otherwise, if you stay put and subject yourself to their tyrannies, you become their tax slave.

Of course, the limit eventually is reached when the tax slaves’ backs start breaking from the immense load placed upon thems, which is where we are now, especially on the public pension issue.

The government-worker unions can elect their “own bosses” all they want to, but now, like in “Spartacus” (1960 movie picture above), the tax slaves are revolting.