mourningdovemotherhood

Posts Tagged ‘jobsohio’

Ohio’s History Repeats Itself: A Return to Plunder Laws

In inequality, Midwest, Politics on August 30, 2011 at 11:47 am

courtesy flickr creative commons - http://www.flickr.com/photos/calliope/

I just started my third year of law school (hence the slowdown in posting to the blog), and I am in the midst of finalizing a comment* on the (un)constitutionality of the Kasich administration’s JobsOhio initiative. For those of you not familiar with JobsOhio, last spring the Ohio General Assembly enacted and Kasich signed into law  a bill privatizing the state’s Economic Development department. What this means is that Kasich can appoint private industry executives to a board of directors (which was initially going to be headed by Kasich, until they realized it was blatantly unconstitutional) and channel funds to private corporations (and it just happens they all were campaign donors or are people he is fairly friendly with), all under the guise of “creating more jobs”.

In my opinion, JobsOhio is pretty horrible. And I believe it is certainly unconstitutional. But as I have done research on this, what has really struck me is how much the more things change the more they stay the same. We have been here before. History repeats itself. Insert your favorite cliche.

The reason why the Ohio constitution prohibits using public finds for private enterprise in the first place is because we went down this road before, and it ended with corruption and waste. The pertinent constitutional provisions came about because of some not-so-different laws passed in the early- to mid-1800s. At that time Ohio was a young state and very much in need of greater transportation to get goods to market. There was a boom in industry, with the need for trains, canals, and better roads. The public wanted them all built, and in the flurry of activity, allowed their legislative representatives to enact laws that would channel state funds to private companies willing to build the infrastructure.

Unfortunately, while some train tracks and canals were built, the state took on huge amounts of debt. Much of the debt was never repaid by the corporations (many of which took the money and ran); train tracks were never built, or if they were built, they were often duplicate routes and were an efficient use of tax dollars.  Money was channeled to cronies. And areas of the state in need of infrastructure were not served. In sum, huge amounts of public funds led to a whole lot of nothing. A backlash ensued, and the public demanded accountability for the use of their money. The result was a new state constitution that placed huge limits on public financing of private enterprise.  And in the end, after the new constitution went into effect, the railroads were still built and canals dug, all without use of the public coffers. 

The moral of the story is this: taking the public money and giving it to private corporations leads to a whole lot of BAD. It leads to corruption and waste. Ohioans of the 19th century called laws that funded these acts “plunder laws”. It seems plunder laws have returned, this time with promises of jobs and new industry rather than new roads and canals.

My prediction: we will see fraud, we will see money channeled to cronies, and we will see an uneven use of funds benefiting some state regions more than others.

Let’s heed the wisdom of those who went down this road before. Let’s follow our constitution, and rather than repeat mistakes of the past, prevent them from happening all over again.

* For those sane individuals who have wisely steered clear of legal education, a “comment” is a short academic legal article