Copying Alabama's Business Model

Southern Republicans like Alabama Sens. Richard Shelby and Jeff Sessions and Louisiana Sen. David Vitter are complaining a lot about the "business model" of American automakers.

By that, I guess they mean that they pay union wages that they contractually agreed to and they pay pensions and health care benefits to the people who worked for them for decades and which were promised to the retirees.

This is a bad idea in the eyes of the Southern Republicans. But hey, the South's idea of a "good" business model in the 19th century was slavery so let's not take their input too seriously.

They updated their idea of a "good" business model in the 20th century. Then it became taking every federal dollar they could get their hands on -- to the point that in 2005 Louisiana took in $1.78 for every dollar they paid in federal taxes (No. 4 in the nation) and Alabama took in $1.66 (No. 7 in the nation.) Michigan, home of those horrible overpaid union workers, paid in $1 and got back 92 cents, good enough for 37th in the nation in 2005, according to the Tax Foundation.

The Southern business model also includes living in hurricane-prone, make that hurricane-certain, regions. When the big storms come, those overpaid union workers in Michigan pay their taxes to put things back together again in Louisiana and the rest of the gulf coast, for which generosity they are now being repaid by Senators Shelby, Sessions, and Vitter.

The Southern business model has another feature -- taking tax dollars and handing it to foreign corporations to make cars to compete with American car companies. But don't take my word for it. Here's what Peter Karmanos, CEO of Compuware, wrote recently to Shelby:

"As it turned out, Alabama offered a stunning $253 million incentive package to Mercedes. Additionally, the state also offered to train the workers, clear and improve the site, upgrade utilities, and buy 2,500 Mercedes Benz vehicles. All told, it is estimated that the incentive package totaled anywhere from $153,000 to $220,000per created job. On top of all this, the state gave the foreign automaker a large parcel of land worth between $250 and $300 million, which was coincidentally how much the company expected to invest in building the plant."

So that's the business model that Southern states now believe in and what they want the American companies to copy. At $200,000 per job, times 2 million jobs (being conservative) that comes out to $400 billion in subsidies. Not a measly $14 billion in loans, but outright subsidies.

Yeah, let's adopt that Alabama business model.