The contradictions abound — many of them squarely on the shoulders of Gov. Tate Reeves — in Mississippi’s decision to provide $350 million in state incentives to land a factory in North Mississippi that will produce batteries for electric vehicles.
A year ago, when the Republican incumbent was running for reelection, he referred to China and the companies based there as an “existential threat” to Mississippi and the rest of America. As Mississippi Today reported, Reeves enthusiastically signed in 2023 two bills to limit what business the state could do with China or Chinese companies. It was mostly an exercise in political pandering, considering that China is one of the biggest overseas customers for Mississippi farmers and poultry producers. Fast-forward to this week, and Reeves became the lead cheerleader for providing huge amounts of taxpayer-funded incentives to a venture that not only depends on Chinese technology but also is partially owned by the company that will provide that technology.
Or consider how much Reeves has bad-mouthed Medicaid expansion, calling it “welfare” and saying that Mississippians need more in the way of self-reliance and less in the way of government dependence. Government-provided economic development incentives, though, are also a form of welfare, just dressed up in white-collar attire.
Or what about the rush with which these incentives were passed, as is always the case, so that the media and public interest groups don’t have time to look under the hood? Mississippi has spent more than a decade weighing the pros and cons of Medicaid expansion, and so far turned down its 10-to-1, and possibly better, payoff. But this electric battery deal was publicly disclosed only 24 hours before the Legislature was asked to approve it, with zero impartial analysis performed to see whether the investment is really justified.
When deals like this are done, the proponents always champion the number of jobs created and what those jobs will pay. What they don’t broadcast is what the public’s cost-per-job is, or consider who might be the losers as a result of these massive subsidies.
The battery plant is projected to create 2,000 jobs. At $350 million in incentives, that means the taxpayers are ponying up $175,000 for every job created. With that kind of subsidy, it’s no wonder the manufacturer can afford to pay average projected salaries of $66,000 a year, and use those high wages to steal workers from other nearby factories or other businesses.
Reeves and other Republicans like to talk about the free market, saying factors outside of government involvement — such as the quality of a business idea, the strength of a company’s leadership, and the law of supply and demand — should decide the winners and losers in the economy. They interfere, however, with the free market when they decide to throw incentives at a company, giving it a competitive advantage over others.
People in the Holly Springs area, where the factory is going to be located, won’t complain, of course. Overall, it’s a great deal for them. For the rest of the state, probably not so much.
