By Bradley Harrington
“There is a decisive difference between the loans supplied by private lenders and the loans supplied by a government agency. Each private lender risks his own funds.” — Henry Hazlitt, “Economics in One Lesson,” 1946 —
In times of economic downturns, sensible people watch their financial expenditures even closer than usual, making doubly sure everything they purchase provides a benefit worth the money they’re spending.
That’s a jewel of wisdom, however, that never made it into Wyoming state government memos:
“The State Loan and Investment Board on Thursday [Oct. 5] approved loaning an additional $12 million to a pharmaceutical manufacturer that is expanding its operations in northern Wyoming … The board — Gov. Matt Mead and the four other statewide elected officials — unanimously approved the new loan for Cody Laboratories, which is a subsidiary of the Philadelphia-based Lannett Co.” (“Pharmaceutical company lands new state loan,” WTE, Oct. 6).
Now, if you think “additional” means that Cody Labs has been slopping at the public trough before, you’d be absolutely correct:
“The board last year approved an $11 million loan to the company for the same expansion. The additional loan approved Thursday will bring the total to $23 million.”
And the purpose of this “loan”? A previous news release tells that story:
“… Cody Labs officials originally thought its expansion project would cost $45 million and create 39 new jobs. However, the company now figures it will cost $50.5 million while creating 57 jobs.” (“Cody business seeks loan from state of Wyoming,” WTE, Oct. 2.)
So, let’s do the arithmetic: The taxpayers, allegedly, can expect to receive 57 jobs in return for having their pockets plundered to the tune of $23 million, which means: Each of those jobs costs $403,508.77.
So, even if every one of them paid $103,508.77, that’s still an additional $300,000, PER JOB, that we’ve flushed down the toilet to achieve that result. Money us taxpayers could have been using to feed our families. What a deal!
Now, if that’s not enough to prove the incredible density of this whole “economic development” fiasco, imagine yourself walking into your local bank and asking for a $23 million handout in order to “create jobs.” What do you think the chances are that your bank will approve that loan BEFORE it determines your interest rate and terms of payment? Right up there with finding out the moon’s made of green cheese, right?
Ah, but you would be severely underestimating the destructive financial disasters that accompany GOVERNMENT attempts to meddle around in business it has no business being involved in: “The interest rate and other details of the Cody Labs loans are still being worked out, officials said.” Sweet for Cody Labs! Not so sweet for you and I.
Would you, Dear Reader, approve that “loan” under those circumstances? I didn’t think so. Yet you are the stupe who’s going to pay for it, like it or not. Whatever happened to the day when “private lenders risked their own funds,” instead of grabbing our wallets at the point of a government gun?
But wait, there’s more: “Cody Labs President Bernhard Opitz told the board that the loans will help the company expand its production and research, allowing it to sell products globally.”
Really, Mr. Opitz? Your parent organization, Lannett Co., Inc. (LCI on the NYSE), has, for your fiscal year which closed on June 30, “Sales or Revenue — $637.34 million; Sales or Revenue Growth — 12.59 percent; Cash and Short-Term Investment — $144.83 million; and Total Shareholder’s Equity — $561.12 million” (The Wall Street Journal, “Lannett Co., Inc.,” www.wsj.com).
So, Mr. Opitz, your company could fund that expansion several times over and barely notice the difference. WHY are you standing in front of that board instead, free-lunch hat in hand, as opposed to funding your own growth as true capitalists do? And why would Wyoming want YOUR kind of tax-draining “business” anyway?
Nor is this kind of “corporate welfare,” allegedly demanded by the supposed flaws of unadulterated capitalism, anything new under the Sun, as one historic thinker put it succinctly: “State intervention in economic production arises only when private initiative is lacking or insufficient.”
Those words could easily have come out of the mouths of any of our five board members. The man who actually uttered them, however, was none other than Italian dictator Benito Mussolini, in his push to “modernize” the Italian economy with Fascist controls (“The Labor Charter: The Corporate State and its Organization,” Article 9, 1927).
So, Mr. Opitz, do you really think we’re that stupid? Quite obviously, you do — and, just as obviously, we are.
Bradley Harrington is a computer technician and a writer who lives in Cheyenne. Email: firstname.lastname@example.org.
NOTE: This column was originally published in the Wyoming Tribune Eagle on October 15, 2017. Here is this column’s original downloadable PDF file.
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