From: art@world.std.com (Al Thompson)
Newsgroups: ne.politics
Subject: Re: Lotus as a public charity
Date: 9 Sep 92 18:04:12 GMT
	<BZS.92Sep8192807@ussr.std.com>
Followup-To: ne.politics
Organization: The World Public Access UNIX, Brookline, MA

In article <BZS.92Sep8192807@ussr.std.com> bzs@ussr.std.com (Barry Shein) writes:

   From: art@world.std.com (Al Thompson)
[...]
   >
   >There is something wrong in Lotus wanting concessions to keep its payroll
   >in Cambridge?  Lotus owes nothing, zero, zip, nada to Cambridge.  If
   >Lotus doesn't like the way Cambridge does things they are free to pack up
   >and go to some place that does things more to their liking.

   Conversely, is there anything wrong with Dan making the citizens of
   Cambridge aware of the concessions being asked for (from those
   citizens' tax base) and being considered, presumably on their behalf,
   by their elected representatives?

Of course not, and I didn't say, or even hint there was.

   And, further, perhaps making other communities aware that if Lotus
   moves in they may well play hardball with local govt and might not be
   the sweet thing at first perceived?

When you have communities sucking air it seems to me that bringing in a
payroll  the size of Lotus' is a real plus even if the company gets tax
breaks.  Ususally the economic activity generated way offsets the taxes.

   I think at this point both parties (Lotus, Dan's point of view) are
   merely playing their own strong-hands in these negotiations. What's
   the problem?

Quite simply the tone of his post was that Lotus' threatening to move was
somehow dirty pool and they were bound and determined to put a stop to
it.  I guess they want to take it over by eminent domain kinda like the
way Oakland CA tried to force the Raiders to come back after they moved
to LA.

   >   I need to cast some doubt on the desirability of Lotus as the object of
   >   such governmental largess.  One line of reasoning I am pursuing is that
   >   Lotus' idea of how substantial its competitive disadvantages are must
   >   be reviewed in light of its intellectual property stance.
   >
   >Fine, why would you want to keep them?

   Or, conversely, why does Lotus want to stay if they don't like the tax
   situation? Clearly they hope to stay, Lotus does not bargain (even
   forcefully) if they have no intention of staying (at least one would
   hope not.)

Maybe they want to stay, maybe they don't, I frankly don't know or care
for that matter.  They may well be the position of needing to make a
decision on whether to stay or go and the local tax situation has to be
an important variable.

   >  Another is
   >   to question whether this subsidy ($800,000 per year for 15 years, plus
   >   the regulatory and housing costs) is, in fact, a sufficient and fair
   >   exchange to ensure that Lotus will remain a taxpayer and important
   >   employer in Cambridge.  That Lotus is, for all its financial success,
   >   still largely a one-trick pony is another angle possibly worth pursuing
   >   as we evaluate the long term viability of this company.
   >
   >Then just let them go.  I'm sure that Reading or Natick or Athol would be
   >glad to see them.

   Only if Lotus will add at least $800K to the tax-base for the next 15
   years, beyond the expenses they incur to the town (sewage, police,
   fire, etc.) Otherwise those communities are fools, right?

What about the economic activity generated by a company with such a large
payroll?  I know if I owned a lunch counter in Athol you can bet your
knickers I'd want them in the 'hood.

   And that would be beyond the opportunity costs, of course (i.e. if the
   same available footage could be rented to one or more companies who
   will pay similar taxes without asking for concessions then go with the
   latter, unless they are just non-existant they'll do most anything
   Lotus will do as far as jobs etc. goes.)

I don't follow this at all.

   Perhaps Dan's point is that Cambridge is being played the fool and he
   would like to make people aware of that fact, before they jump at what
   may well be fool's gold.

Could be, but his post was a solicitation for the community to put
pressure on the City Council to resist.

   I know, now we start on the litany of speculations of the value of
   Lotus to Cambridge, and vice-versa.

   I just want to know one thing, if I moved my small business to
   Cambridge (and Lotus got these tax concessions) which is more likely:

	   a) Cambridge will offer me proportionately similar
	   tax considerations to what Lotus gets?

Of course not.  Now, grow your company to $500Mbucks and the payroll that
goes along with it I'll bet they'd try the same thing.

	   b) Cambridge will try to tax me proportionately more
	   to make up for Lotus' concessions?

Cambridge will try this in any event.

	   c) Cambridge will trim its budget soas to accommodate
	   the givebacks without any net effect (other than decrease
	   in services) to other businesses and individuals.

Well, if you look at some of the cockamamie stuff that goes on in the
People's Republic what would be so bad about that?  It might inspire
them to get rid of that idiotic rent control.

   I'd bet a dollar it's b.) Hence, don't expect me to run to any town
   that does these kinds of givebacks to the big boys any time soon, at
   least not until I'm a big boy and can get my piece.

Kinda inspires you to grow doesn't it?

   And I suspect that collectively small businesses like mine add up to a
   bigger piece of the economic picture in Cambridge than Lotus.

Got an idea for you:  Get together with a bunch of other small guys and
form a trade association.  Then go "pull a Lotus" collectively.

   --------------------

   Post Script:

   Actually, I have no particularly strong feelings one way or the other
   on the issue, I'm not even a Cambridge resident.

   But I feel like I walked in on a bargaining session between two
   parties and Al is standing there shouting at the buyer ``c'mon, pay
   the guy, he has to make a living'' as if the buyer didn't have needs
   also (Al, do you always buy full retail out of sympathy to the poor
   businessperson who would otherwise have to do with less?)

No, not at all.  The tone of the original post was that Lotus was somehow
a bad guy for attempting to bargain.  I don't think bargaining like this
is at all bad.

   It's called bargaining, and if taxes are the issue then it would seem
   politics are a leverage simply because if there are less taxes paid
   than either the rest of the body politic will have to pay more, or do
   with less.

   There has to be some forum for finding justice beyond only taking your
   collective ball and going home.

Why?  I don't owe it to Cambridge to keep my business there if I'm Mr.
Lotus, or Mr. Draper or even Mr. MIT.  It's not an issue of justice, it's
an issue of economics.

   You make it sound like Dan is doing something fundamentally unethical
   just because he's searching for strong cards for his interest. T'aint
   so.

I certainly didn't mean to make it sound like I thought he was doing
something unethical.  To me, the tone of his post was that the Evil
Barons at Lotus were doing something unethical and we shoul rally around
the poor downtrodden citizens of Cambridge to help save them.

   I think this is politics at its best, both sides make their strongest
   case, and may the best entity (corporate or otherwise) win.

Which is exactly why I posted what I did.