Friday, September 05, 2003

So How Much is Boeing Worth?

Some, such as Bitweever, have questioned whether communities should be providing incentives to giant corporations such as Boeing to set up operations in their community. It's a good question. The question comes up because Tulsa is trying to attract Boeing with a sales tax bond issue called Vision 2025. The answer is that providing such incentives is a worldwide fact of economic life and if a community or country refuses to face this fact pragmatically that community will not get that investment. To not face that fact is as futile as refusing to recognize gravity.

Should we provide incentives (tax breaks, subsidies) for every company? It depends on what they bring to the economic table. It depends on numbers and types of jobs they bring and how much ripple effect they have on the community's economic health. Yes, we must pick and choose on the basis of the benefits they bring. Boeing is a no-brainer. Here's why:

Economic clusters form around behemoths like Boeing and AA. You can't take the subsidy, divide it by how many people work at Boeing, and get anything meaningful as a result (although nay-sayers try). The spinoffs from a Boeing investment in Tulsa would ripple far beyond just the jobs at Boeing. Thousands of small businesses in Tulsa would get business from Boeing - everyone from printers to aircraft parts subcontractors. It doesn't stop there. The printers and the subcontractors spend their increased income on dining out, buying computers, etc etc. Companies like Boeing, CITGO, AA etc create a vortex of economic development that reaches deep into all of our lives. Are they worth attracting, even with calculated incentives? Yes.

That, is economic reality.

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