Yesterday Sen. John Cornyn was in my hometown of Beaumont, TX for what was billed as a "roundtable discussion" to "highlight how local business owners in Southeast Texas have achieved success due to their own hard work and personal creativity, contrary to the President’s recent claim." When I saw the participants I couldn't let this assertion go unchallenged. A little research revealed that at least a few of these entrepreneurs did in fact have direct government help in developing their businesses. I know many of these men personally and I'm surprised to see them take part in Sen. Cornyn's political stunt that was framed to embarrass the President. His attempt to bring Washington partisanship to the local level aside, local leaders in Southeast Texas should be well aware that the region receives an enormous amount of benefit from government spending by way of tax breaks, incentives, grants, subsidies and military spending.
There were few worse places Cornyn could have used to try and make his point. The Port of Beaumont is the second largest U.S. military port in the world and ships about 48 percent of military cargo to Afghanistan and Iraq. According to the Port of Beaumont's website, "Since its creation as a governmental entity, the port has steadily expanded and improved its facilities in furthering its role as a major partner in worldwide commerce." Recent economic impact statistics show the Port of Beaumont produces more than 1,860 jobs and $129 million in personal income for Southeast Texans generating about $11.6 million in state and local taxes and $23.3 million in federal tax revenue.
Subsidies have also been a boon for Ike Akbari, Board Chairman, Greater Port Arthur Chamber of Commerce. When not discrediting government assistance programs Akbari is President of ITEX a development firm that specializes in among other things,"Development, Construction and Management of Section 42 Low-income Housing Tax Credit (LIHTC) properties using a variety of financing sources such as LIHTC, HOME funds and Community Development Block Grant (CDBG) funds." In other words federally-subsidized housing projects.
More below the jump…
These public-private partnership would seem like common knowledge and practice to participants like Robert Turner listed as Board Chairman of the Beaumont Greater Chamber of Commerce. The press advisory said "they built their businesses from the ground up without government assistance," but the Chamber website hosts a page dedicated to the "Revolving Loan Fund", part of the City of Beaumont's Small Business Loan Program. This welfare program "created to promote small business development and job creation in Beaumont" is funded by…(pause for drum roll)…the Federal Economic Development Administration. Robert Turner the first African-American to chair the Beaumont Chamber is also "the first African-American to successfully own and operate a General Motors dealership in Southeast Texas,". If you'll remember GM was bailed out by the federal government in 2009 to the tune of $50 billion. The company has so far only repaid taxpayers about half that while posting the largest profits in its history. Dan Akerson the company's new CEO said, "The Obama Administration did a good job…without the money, without the funding it would have been very problematic." When asked if the Romney strategy of letting "Detroit go bankrupt" would have made the company stronger Akerson said, "It would have been a bankruptcy for years and you could have written off this company and this industry in this country." Ironically, in his speech currently being taken out of context Obama used the example,
The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together. There are some things, just like fighting fires, we don’t do on our own. I mean, imagine if everybody had their own fire service. That would be a hard way to organize fighting fires.
In deed, and in 2008 when Turner's dealership caught fire it was the Nederland Fire Department that tended to the fire while the National Response Team investigated the source of the flames. "The NRT works alongside federal, state, and local officers in reconstructing the scene, identifying the seat of the blast or the origin of the fire, conducting interviews and sifting through debris to obtain evidence related to the explosion/fire, according to the ATF Web site." These government agencies may not have built his dealership but they no doubt helped mitigate loses and speed up recovery.
Probably most disappointing of the bunch is Joe Tortorice of Jason's Deli. I love Jason's model and fresh food but disappointed that the top guy doesn't recognize what government investment can do or has done the further many of the company's own progressive causes. In 2008 at the unveiling of Jason's solar power installations co-founder Rusty Coco told the Beaumont Enterprise, "it's a small, small portion of what we can really do, you know – baby steps.", but that he would like to see better incentives for businesses to go green. Tom Beck CEO of SHEC Energy a Canadian solar company was looking to relocate manufacturing to Beaumont because of, "good incentives for renewables".
Southeast Texas' largest industry is energy, specifically oil and gas, which seems to have no problem extracting incentives from the government. The Texas State Comptroller's website shows that in 2006 Texas State and local subsidies to the oil and gas industry totaled over $1.4 billion with federal subsides totaling $7.4 Billion. Those same oil companies donated over $1 million to Cornyn's campaign since 2007, who himself a government employee since 1984, receives an annual Congressional salary of $174,000 plus benefits and healthcare.
Here is the impetus for the "I Built This" charade. Obama's original comment with some context.