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American Thinker ^ | February 12, 2009 | J.R. Dunn

[neverdem]

I hate to hear about "partnerships" between government and business, or between government and other organizations. When there is a partnership between an ant and an elephant, who do you suppose makes the decisions?
 - Thomas Sowell

We'll be hearing a lot about state-business "partnerships" over the months to come. Much of Obama's "stimulus" plan, and virtually the whole of the bank-bailout plan (if I'm deciphering Secretary Geithner's obscure and confusing outline correctly) are based on the concept. In fact, most of the country's financial establishment is already operating under such a compact.

That being the case, a close examination of the record of such partnerships is more than timely. And it happens that such a case was brought to my attention just this week.

The case involves the state of Ohio (specifically the Ohio Department of Development) and a small Columbus-based communications company called Leader Technology.

Leader Technology has established quite a reputation in a short time. It was Leader that supplied telecommunications capability for the state of Louisiana following Hurricane Katrina. Port Columbus and the Ohio Emergency Management Agency are clients, along with a number of colleges and secondary schools. (The company is endorsed by the Ohio School Boards Association.) To top it off, it has performed critical work involving national security. (Full disclosure: the owner's wife, Nancy McKibben, is a close friend and colleague.)

So everything was rolling along fine until the company was approached by the Ohio Department of Development (ODOD) and invited to take part in something called the Innovation Ohio Revolving Loan Fund, a program in which business loans on generous terms would be arranged for purposes of job creation.

Leadership was offered a four-part financing package amounting to $5.2 million to assist in creating 159 new jobs. The company received the first payment of $250,000, which was used to buy equipment.

Then things went off the rails in the style typical of bureaucracies. There was an election, and with the change of administrations there occurred, as is often the case today, a change in ideology. The Innovation Ohio Revolving Loan Fund, and the ideas behind it, were no longer acceptable. The program withered, and Leader never received the rest of the funds.

In 2005, the ODOD began pressuring the company for repayment, on the grounds that the promised jobs had not materialized. The fact that funding had never materialized either went by the board. The owners met with officials on two separate occasions to work out a repayment schedule, only to have the plans canceled by the ODOD's legal department on no plausible grounds. At the beginning of this year, the ODOD froze Leader's banks accounts, began efforts to seize payments from the company's customers, and effectively harass the company out of business.

The implications here go well beyond the travails of a small Ohio company. It's a chain of events that occurs continually in this country, wherever such policies of government-state "partnership" prevail. Recall the St. Louis businessman who was tricked by the Environmental Protection Agency into buying a polluted property and then fined  to near-bankruptcy. Leader had no difficulty with government as a client. (Though the company is still owed enormous amounts by the Feds.) Problems arose when this notion of a partnership was broached, not by the company or it operators, but by state government itself.

Difficulties are inherent in the very concept, and probably unavoidable, lying as they do in the nature of the organizational elements involved. A business is designed to act quickly for the purpose of making a profit. A bureaucracy is designed to stretch things out as long as possible while generating large amounts of paper. This dichotomy is inherent and unlikely to be overcome.

The end result will be what we have seen here. Leader's story may turn out well - the local paper, the Columbus Dispatch, has taken an interest, various local politicians are becoming involved, and an examination of the paperwork reveals that the mandarins of the ODOD falsified information in order to justify their campaign against Leader.

But it's clear that the Messiah's plans for the economy involve moving into this class of operations in a big way. At the end of that road lies a bastard system called "mercantilism", not socialism and not capitalism but combining elements of each, in which government figures set goals and then allow a small number of nominally private companies to bid for the privilege of achieving them. Every now and then, when the government finds it convenient, a company or two is seized and stripped of its assets, to encourage the others. In this kind of incestuous government-business marriage, last seen in the West in the early days of the Enlightenment, the public, workers, and customers come in dead last, if at all.

Let's hope that Leader finds its way out of the woods. The rest of us must take its story as a warning - there are worse things than slow economies.

J.R. Dunn is consulting editor of American Thinker.

[neverdem]

Ping

[Mr Ramsbotham]

In this kind of incestuous government-business marriage, last seen in the West in the early days of the Enlightenment, the public, workers, and customers come in dead last, if at all.

I believe the Nazis had a similar way of doing business.

[familyop]

...mercantilism, plutocracy and oligarchy, even.

[MurrietaMadman]

Maybe Fascism is one of those words only allowed in the space between the lines.

[walford]

“I believe the Nazis had a similar way of doing business.”

Private ownership with government control is the essence of fascism, so I call what is being described in this article — and what the Obama administration is working toward — by its correct title: National Socialism.

[Last Dakotan]

Government financing ping

[neverdem]

Obama's Busted Bubble (Excellent summary of Barry's leadership skills)

Change: The First Three Weeks (It's worse than you thought alert)

Fearmongers Never Quit

Tennessee: Memphis News Site Publishes Tennessee Concealed Carry Permit Holder List

Some noteworthy articles about politics, foreign and military affairs, IMHO, FReepmail me if you want on or off my list.

[SunkenCiv]

Thanks neverdem.

The implications here go well beyond the travails of a small Ohio company.

Maybe the state gov't can check into the private affairs of this small Ohio company and use doctored info and partisan media shills to smear everyone with an interest in the company. Oh wait, it's not the election campaign anymore.

[Alamo-Girl]

Thanks for the ping!

[hedgetrimmer]

Type public private into the keywords search on this site. This is OLD news!