Boeing's Everett factory could see additional work on the planned 777X model of airliners. Credit: Jetstar Airways/Flickr
Rhetoric over the future of the 777X program flew to new heights when Seattle Socialist-elect Kshama Sawant said at a union rally that Boeing's threats to move jobs out of state amounted to "nothing short of economic terrorism because it's going to devastate the state's economy."
Boeing has been accused of "blackmail," "extortion," and of sending ransom notes to the state to get new tax breaks, regulatory concessions and new transportation spending to make its stay here more palatable. On top of that, they've demanded major concessions from the Machinists Union. Despite the Legislature's rushed approval of a $8 billion package of goodies for the company, the Machinists said "no" to their item on the company's wish-list.
Boeing is now playing the dating game with up to 15 potential re-location sites ranging from California and Utah to Texas and Alabama.
"Terrorism" is an extreme characterization for what Boeing is doing, but the consequences could still be damaging. The loss of jobs — especially well-paying union jobs — will be painful. But also damaging is a self-inflicted sense of panic.
"We have become a fearful state where our aspirations are subordinate to our fears. We cannot even ask questions, but must do as we’re told. Corporatism, and its ceaseless rewards for the 1 percent, is a fealty demanded of both parties, even as the 99 percent — working families held hostage — reject their captor’s demands." Who said that? Radical Sawant? No, former Democrat state representative Brendan Williams, writing a Seattle Times oped about Boeing's bullying.
While the Machinists have been set up to play the scapegoats in the drama — the public may fault them for being selfish by rejecting a better deal than many of us get — the fault is really within ourselves. There is much talk about a race to the bottom, but we've greased the skids in that race by giving Boeing so much in exchange for jobs.
The outrage is that it has not bought us any loyalty in return. It hasn't altered the corporation's fiduciary responsibility to the bottom line. It hasn't brought us love or gratitude or a future we can count on. This isn't terrorism. This has the earmarks of an abusive relationship. We just can't imagine life without the lug.
We've given Boeing senators, congressmen, governors and legislatures. We've designed a tax system to suit them, freeing the company from onerous burdens the rest of us can't shuck off. For decades we've pursued policies that have forgiven Boeing's worst excesses, from corrupt and outrageous corporate behavior to ridiculous defense contracts. We've enabled pork-barrel spending on its behalf, and we've hooked ourselves to the yoke of the most regressive-tax system in the country to help make it happen.
For politicians who are inheriting decades of enabling, we can't expect that they will go cold turkey. No elected in the state — save perhaps council-member-to-be-Sawant — wants to be known as the guy or gal "who lost Boeing." They will do what they can to salvage the situation.
But playing this game does real harm. The new Boeing tax breaks make it that much more difficult to reform the tax system because it removes potential revenue streams that could flow from the haves to the have-nots. Boeing's tantrums make it all the more difficult to institute income or corporate taxes that could lift the burden from the rest of us. Plus, every major corporation in the state can validly make their own mini-extortion case.
It's not enough to say that living wages are a reasonable return on our collective investment, especially with when you remove stability, reliability and predictability from the equation. If Boeing is no longer loyal to place, why should this place be loyal back? With the 777X headed into the sunset, we ought to accelerate planning for a Boeing-free future. We also ought to re-consider the kinds of contracts — literal and social — that we will sign with private companies.
Tax breaks in Olympia are easy to create, almost impossible to roll back. Even if one doesn't oppose public subsidies for corporations, or public-private partnerships in general, we need to rethink the practice, attach more strings or drive harder bargains. The only way to do that is to let the chips fall where they may. It could be that letting Boeing walk will make us stronger in the long run. There's no real happy ending to Boeing's version of the "Hunger Games."
There is language in Washington's state constitution that suggests its drafters have been plenty skeptical of the influence of corporations — there's even a section prohibiting state public officials from accepting free passes on the railroads, a holdover from the robber baron days when such perks were a path to corruption by the Boeings of the 19th century. Such skepticism needs to be renewed.
There is temptation for policymakers outside Olympia to treat local enterprises as mini-Boeings. Take the current deal to build a new basketball/hockey arena in Seattle's SoDo. Critics like attorney Cleveland Stockmeyer — who plans to litigate the issue if it ever goes into effect — argue that the city's agreement with Chris Hansen's arena company violates both the letter and spirit of I-91. Voters approved the city law by 2-to-1 in 2006 banning public subsides for sports facilities without specific profits guaranteed in return. It was a ban passed, by the way, over the objections of the city council. Subsequently, the city — Mayor Mike McGinn and the council — were pretty clear that while they tried to craft a deal to conform to the law, they were committed to evading its spirit.
There is room for legal debate over the deal's language and what constitutes a "subsidy," but a couple of things are clear. Hansen has received special treatment. The NBA, for one thing, demands it. Public investment is required in order to get a franchise. The terms of the SoDo deal are not ones a private citizen would get. Hansen's enterprise is being shielded from taxes, and undoubtedly there will be additional public investments required to mitigate impact on the Port of Seattle and the industrial area's transportation grid. There will also be public expense in repurposing Key Arena, a city-owned property that will be obsolete the day the new arena opens.
Does it make sense? That's debatable. The fact is, the city is going out of its way to enable a project that potentially threatens the Port and union jobs. Given that NBA owners have repeatedly demonstrated their standards of acting in the public interest elsewhere, can we truly rely on the promises of trust, good will and shared risk that such a public-private partnership requires? Despite guarantees, sports franchise owners are not unfamiliar with the Boeing "we're gonna move elsewhere unless we get a better deal" bargaining chip. Just ask Sacramento.
In other words, it's time to take stock of the Boeing marriage and ones that mimic it. It's time to untangle a decades-old pattern of enabling. It's time to realize that if it is wrong for our legislators to get free rides from the robber barons, it is wrong to let them get free rides from us.