Common sense: not dead yet

By Ken Frederic | Apr 12, 2018

Examples of mindlessness these days are so numerous that a contest for the most absurd media headline would necessarily be limited to a specific date. Among conservatives, there is no doubt that there is also a pervasive liberal bias in major media outlets, and a study by Tim Groseclose of UCLA and Jeffrey Milyo of the University of Missouri says there is liberal bias in even the supposedly conservative Wall Street Journal news pages and the Drudge Report.

A long-lost Facebook post first raised my interest in LD 1781, "An Act to Encourage New Major Investments in Shipbuilding Facilities and the Preservation of Jobs". It caught my attention because it suggested (or maybe actually said) that a legislator had repeated that mindless and shopworn “corporate welfare” talking point.

A search of Maine media coverage of LD 1781 showed headlines in the Bangor Daily News, Lewiston Sun Journal, and Ellsworth American all repeated that “corporate welfare” talking point. [In fairness to those papers, following the links shows the headlines apply to guest columns and letters, not editorials. The Portland Press Herald links were plainly labeled as letters.]

Those letters were remarkably similar, if not quite identical. Even the protest signs and opposition testimony followed the same template, sometimes rearranging the order of the points. Those were:

1. Tax breaks are "corporate welfare."

2. BIW is owned by General Dynamics and does not need assistance.

3. The value of the package was cited at $60 million, which is the 20-year value of a $3 million-a-year tax reduction.

4. The General Dynamics CEO received $21 million in compensation “last year,” which was sometime between 2013 and 2017, depending on the specific letter.

5. General Dynamics bought back $14.4 billion of its own stock (or $13.7 billion, or $12 billion)

6. General Dynamics is the fifth largest DOD contractor and has $ 31 billion in revenue, four times that of Maine. Another writer claimed $60 billion.)

7. Maine could not "afford" to "give" General Dynamics money that was needed for education, health care and other priorities.

8. BIW should be building solar panels, windmills, and high-speed trains, not warships.

9. Maine needs the money for health care, education, combatting climate change and feeding its starving children.

Some "testimony" was creative, claiming BIW was responsible for climate change, that the sonar used by its ships was killing Maine children, and that stock buybacks were responsible for the economic stagnation over the last eight years. One writer urged that Maine or the city of Bath seize BIW and sell it to a private entity. Another recommended taxing the machinery as well as the real estate at BIW. Yet another asserted that defense spending returned less than half as many dollars to the local economy as spending on education and health.

That LD 1781 passed with overwhelming bipartisan majorities is evidence that our Legislature was unpersuaded by the templated opposition to the bill. Readers will make individual assessments of whether the opposition arguments were as mindless as they were repetitive. What is not a matter of opinion is that Maine is one of the highest-taxed and least business-friendly states in America. General Dynamics is a sophisticated contractor not married to building ships in Bath, and the corporation will not subsidize BIW from its other businesses. If taxation in Maine drives the BIW overhead high enough that the facility cannot compete with yards in other states, General Dynamics will move existing work and stop spending the money to write losing proposals for Bath. Four or five thousand jobs will be lost. There will be no future for BIW unless another buyer is enticed with much larger tax incentives.

Our Legislature made a rational decision and rejected the nonsensical opposition to LD 1781. We all owe thanks to legislators for supporting this bill and putting the health of Maine’s economy ahead of pandering to a noisy, mindless rabble whose motives are beyond my understanding and, I would propose, beyond their own.

Comments (1)
Posted by: Ronald Horvath | Apr 12, 2018 11:10

So, what you're saying, Ken, is that you're OK with this form of corporate hostage taking, holding Maine jobs for ransom if General Dynamics doesn't get it's own way.  I could've guessed.


"FALLS CHURCH, Va. — The defense contractor General Dynamics is buying CSRA for almost $7 billion with the latest Senate proposals pushing defense spending aggressively higher.

Shares of CSRA Inc., an internet technology company, soared more than 31% before the opening bell Monday.

President Donald Trump signed a budget bill on Friday that provides $700 billion for the Pentagon, giving it $94 billion more this budget year to spend on troops, training, ships and other hardware. It's the biggest year-over-year windfall since the budget soared by 26.6% in 2003, when the nation was fighting in Afghanistan, invading Iraq and expanding national defense after the 9/11 attacks.

Next year, the figure is expected to jump to $716 billion.

General Dynamics said that it will pay $40.75 per CSRA share. That's a 32% premium to its Friday closing price of $30.82. The deal includes an additional $2.8 billion in debt.

Chairman and CEO Phebe Novakovic said in a printed statement that the acquisition will help General Dynamics provide cost-effective internet technology solutions to the Department of Defense, intelligence community and federal civilian agencies.

The defense sector has made huge gains over the past year under the new administration with a number of friction points rising globally.

The Standard & Poors 500's index that traces aerospace and defense stocks has risen almost four times as fast as the S&P 500 over the past 12 months."


"Maine citizens should be outraged that General Dynamics is coming to the taxpayer trough once again for $30 million to subsidize its operation at Bath Iron Works! This corporate welfare (which was recently downsized from a $60 million request) has already cost our state $200 million since 1997! The bill now before our Legislature, L.D. 1781, must be defeated.

General Dynamics, the sixth largest defense contractor in the world, had $31.3 billion in revenues in 2016 and is so profitable, according to the Providence Journal, that it is doing stock buybacks to the tune of $12.9 billion.

The company also recently had its tax rate reduced by the Trump administration from 30 percent to 21 percent.
This will fatten its, and other megacorporations’, bottom lines significantly. Still, it wants more. For example, Pfizer, the pharmaceutical giant, will reap an $11 billion gain as a result of this tax break. Billions folks, we’re taking billions.

So why does General Dynamics want millions more from Maine, the 33rd poorest state in the nation? One word: greed. General Dynamics, and other corporations, like Amazon, seek to play states and municipalities off one another if not given huge tax incentives to operate in their locations.

According to Robert Reich, secretary of labor under President Bill Clinton, these tax breaks seldom work to the taxpayer’s advantage.

We want to live in a democracy, not a kleptocracy. We must stop Bernie Madoff-type corporations like General Dynamics, where enough is never enough, from scamming taxpayers by subsidizing their losses and privatizing their profits at our expense."

-Don Kimball,


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