Numlock Sunday: Pat Garofalo on monopoly power at the ballot box
By Walt Hickey
Welcome to the Numlock Sunday edition.
This week, I spoke to Pat Garofalo, who writes the Boondoggle newsletter all about corporate subsidies and monopoly power in American government.
Obviously, this past week was an election in America, and I wanted to talk to Pat because his work is so much at the state and local level and a lot of those races can fly under the radar while the nation’s attention is turned to places like Nevada and Arizona.
We talked about how the best predictor of a state doling out corporate tax incentives is a governor up for reelection, how different candidates were helped and hurt by their stances on these issues, and we revisited the HQ2 debate several years later to see who really came out ahead.
Pat can be found at Boondoggle , on Twitter at @Pat_Garofalo, and at the American Economic Liberties Project and Fight Corporate Monopolies. If you know someone in your community working on these issues who Pat should know, get in touch.
This interview has been condensed and edited.
Pat, thank you so much for coming back on.
Of course, I'm always so excited to be here.
This past week, we had an election in America.
I know a lot of people were focused on a lot of the big races for the impact that they'll have in American government. But I really love your angle on American government, and particularly local government and state government.
And I just wanted to talk about what Election Day meant for your beat. Do you want to talk a little bit about what that is and what you care about a lot?
I focus on state and local government and, in particular, policies that reduce corporate power. That's a really big problem at all levels of government, corporate concentration, corporate capture of government. It's bad for the economy. It's bad for our democracy. It's bad on a whole host of levels.
But states and cities, actually, are on the front lines of that fight and have a lot of power and a lot of ability to do things. They're the people in elected office who are really closest to it, right? The folks who are having to deal with the Amazon warehouses in their neighborhood, and having to deal with the misinformation on Facebook in a very, very real way all the time.
Something that was really interesting to me, and I wrote about this in my newsletter, Boondoggle, was that in a couple of states, the Democrats really leaned into a message around corporate power and, for lack of a better term, populism. I don't use that word a lot because it does, historically, have some ugly connotations. But it really is what they were doing. They were leaning into a message around corporations, price gouging and price fixing. The reason that you're experiencing inflation at the grocery store is not because of any magic inevitability, but because corporations are leaning into their pricing power.
You had, in two key states, Minnesota and Pennsylvania, the Democrats really, really, really leaned into this. In Minnesota, the Democrats won a trifecta. They won the governorship, they held the House that they previously held, and they flipped the state Senate unexpectedly. There were some rumblings that could happen, but I'm not sure anyone was really like, "Yeah, the Senate's going to flip in Minnesota," but they did it.
They have a bunch of great champions who have really, really worked hard on this corporate power, worker power messaging, addressing a lot of the harms that corporations have foisted onto families and onto workers. But then also, they had maybe built the sort of most unexpected Democratic hold in the country. Lots of folks are going to talk about Senate races, House races, and Democrats who won unexpectedly.
Keith Ellison, the attorney general in Minnesota, his polling was grim just a couple of weeks ago. It was looking really bad. And he gutted it out. His focus has been almost entirely on taking on corporations, taking on Big Pharma, taking on Big Ag. Really, really leaned into it. He's a really great champion on those issues; he's backed it up with cases he's filed and he won. I think it was just really promising for the folks who do the sort of work that I do to see that message resonating.
A similar thing happened in Pennsylvania where, again, lots of folks are focusing on John Fetterman winning their federal Senate race, or on Josh Shapiro winning their governorship. Both hugely important wins. But a lot of the same messaging that those two used was also embraced, and let's say even more embraced, by the House Democrats in Pennsylvania. They have some reps in the Statehouse, Sara Innamorato and Nick Pisciottano, and a really great leader in the Senate, Katie Muth, and they put out a really aggressive corporate power agenda: antitrust, price gouging, price fixing.
They ran on it, and they talked about it, and they wrote op-eds, and they held hearings. It really seems to have resonated. We're not sure yet, the Democrats in Pennsylvania in the House are claiming that they flipped the chamber to the blue team — we don't know for sure yet, but it's looking really good. That was almost out of nowhere; it's been years since they controlled the Pennsylvania house.
I think trying to attach any overarching theory to an election in a country as diverse as ours and as large as ours, with so many things happening, so many different levels of government, is really silly. I don't want to say, "Yes. They won only because of that." You can't take away the effect of the abortion decision in the Supreme Court. You can't take away the effect of so many Republicans running on election denialism.
But I think pairing those with this really aggressive framing on corporate power and explaining why things are happening in the economy to real people? Democrats talk a lot about "kitchen table issues," but I think these folks in Minnesota, Pennsylvania, you really got what that means. Talk about why prices are going up. Talk about why gas is so expensive. Talk about why you feel so insecure in your job all the time.
And they did a really good job of it, and it turned out to be successful. And that was very, very encouraging for me, as someone who does this work.
A lot of the work that you do pretty acutely is raising, basically, serious concerns about the times when states will literally just give a pile of money to a company to either buy them off so that they set up in that state as opposed to a different state, or just give them money because they claim that they need the money.
They need the "incentives."
On that point though, it did seem like this election actually rewarded folks who cut those checks a lot!
Absolutely, that's something you see a lot. One of the overarching themes in the research that's done around "economic development," you can call it, but I tend to call it corporate subsidies, corporate incentives, because economic development sounds like nice happy framing, and these deals are very much not that. They don't work for communities, for state economies. I can try and shy away from that phraseology of economic development, even though it tends to be what most folks favor.
Anyway, the research on that subject area has shown really consistently that there's no economic benefit to these deals. Handing a bunch of money to Facebook to build a data center, handing a bunch of money to Foxconn to build a manufacturing plant, doesn't actually do anything for the local economy. You don't create job growth. You don't create wage growth.
But what they do benefit is incumbent politicians. There's a really big vote premium for incumbents for engaging in this deal-making because they build political capital. They get to have their name in the paper. They get to send out a glowing press release about all the jobs they created that won't actually materialize, but never mind. They get to go to the ribbon cutting. They get to do all this stuff.
One of my favorite stats in the research on this subject area is that one of the most reliable ways to predict if a state is going to increase its corporate subsidy spending in any given year is not to look at any economic indicator. Don't look at jobs. Don't look at poverty. Don't look at GDP. Just check and see if the incumbent governor is up for reelection. If the incumbent governor is up for reelection, there's a really good chance corporate subsidy spending is going up compared to states where the incumbent governor is not having to go out on the campaign trail.
That really proved itself this year. You had Kathy Hochul in New York, a huge deal for a new Buffalo Bills Stadium, a massive $5 billion deal for a semiconductor plant. You had Brian Kemp in Georgia, a massive deal for Rivian, the electric car maker, a massive deal for Hyundai. You had Mike DeWine in Ohio, a massive, massive $2 billion deal for Intel. Again, semiconductors, you're sensing a trend here. Gretchen Whitmer in Michigan, who did really well and won her race going a way that looked shaky, even just a few months ago? Huge, huge, huge corporate subsidy spender.
I think you'll notice that I'm listing folks from both parties here, because this is really not a partisan problem. It's like an elites versus everybody else problem. All of those governors won big, and it's not solely because of these deals.
The final one, I missed someone, is Laura Kelly in Kansas who negotiated a massive deal with Panasonic, $800 million. Folks who know my writing and who heard me talk to you before know that I really, really hate the secrecy around these deals, and this was a massively secret deal with Panasonic. Nobody knew where the money was going until the day the whole package was announced. She won again.
Now, to be clear, these folks didn't win solely because of that. Some of those folks, I'm happy won. I'm glad Whitmer won. I'm glad Kelly won. Those are hard states for Democrats, and they're important states. In the case of Michigan, it's a hugely important 2024 state, and I don't want anybody messing around with the federal elections that year. I'm happy they won, but it pains me that they won after engaging in these truly, truly harmful deals for their community. I think it reinforces this very bad, very ugly trend of these giant corporate subsidy deals.
I've been working on this subject area for a long time, go back to 2008 when I first started tracking this stuff. The trend has actually been that the public has gotten madder about it, and more elected officials have come to oppose it in that time. I'm largely optimistic about the direction that that subject area is going. But seeing so many governors really lean into it, and definitely not be hurt politically, and probably helped on the margins politically, was discouraging.
The one exception I would throw out there, and this is a long answer to your question, is Hochul in New York. I'm interested to dig into the details because I think she may have actually been hurt on the margins.
Oh, I think she was.
Because she won by not as much as a Democratic incumbent will usually win by in New York. And it was really interesting to see her Republican opponent attack her from the left on the Buffalo Bills deal.
During the debate, he hit her for not just handing money to a billionaire, but doing it at the expense of tribal peoples and tribal rights in the state. He was defending the Seneca Nation against this handout to billionaires, and he's Republican taking on a Democrat. I think she made herself way more vulnerable to that sort of thing by doing this massive giveaway.
I know folks love the Buffalo Bills, but it doesn't even seem like this handout is particularly popular, even in the part of the state where you're going to see tons of Bills fans. I think it did hurt her on the margins. Maybe that's slightly encouraging, she maybe did pay a little price for doing it. I don't think that was the case in the other states, I think it really did help. I'd argue it probably helped quite a bit, with Kelly in Kansas and Kemp in Georgia.
I think it's been a really interesting time for these issues. You wrote about, somewhat notoriously, the Kansas City disarmament. You've seen advancement on a lot of these issues. You've seen a lot of progress on a lot of these issues. What are you looking forward to?
There are a few things. I think the idea of getting the secrecy out of these deals has really, really gained a foothold. We're part of a coalition, we helped organize it and launch it, called Ban Secret Deals. I really love the project. It's super bipartisan, in that we have both national and state groups from all over the political spectrum. Folks who do not agree on anything. We've got from reactionaries to socialists in this thing, who for different reasons oppose this sort of secret deal-making. I'm very excited about the foothold we've gained on that idea about just banning that practice of keeping these deals secret until they're announced.
I think you're going to see at least the handful of states, maybe more, have legislation banning the secrecy in these deals. We had a really encouraging vote in the New York Senate last year on a Ban Secret Deals Bill that passed 61 to nothing. Folks will know, in this age of political polarization, not many things pass even the state chamber unanimously, and this one did. It was a huge deal! First time there was a successful vote on this sort of legislation anywhere in the country. I feel really good about that.
I think that idea, which was considered really goofy a few years ago when the first champions organized around it, is taken very seriously now and has got an obvious fix to this problem. I feel good about that.
I think the trend is generally in the right direction. There are more and more champions who are willing to step up and say that this stuff is nonsense at the state level. I think, in a way, that incentivizes the secrecy; I think the secrecy has gotten more extreme, and we're seeing more corporations go to greater lengths to hide these deals because the awareness is going up. Folks like me and all the great folks I work with have been pretty successful in getting the word out, and in showing the harms, and in making known the clear, corrupt outrageousness of these practices. So the corporations are resorting to secrecy in order to get around the activists and the community folks.
One of the great things about doing this is that there are ideas that folks on the ground can just run with in their community. There's a great little group down in Asheville, North Carolina, that's doing a bunch of great organizing: They're called Reject Raytheon, around a secret deal for a defense plant. Now they're broadening it out and getting more general and doing some Statehouse work.
That sort of thing, I think, is really great to see because it shows that, in the long run, I think we're going to win because we're right. We're right on the substance, we're right on the politics, we're right on the policy. I feel very good about the long-term arc even if, every now and again, I have to deal with the governor reaping a lot of political rewards.
To that point, I feel like one of the first conversations that you and I ever had about this topic, right after your book came out I think, was that was the HQ2 era.
At the time, folks like AOC caught a whole lot of shit for not wanting an office complex for the price that the state was going to give them. They thought it was a waste of money. Looking back, you've got to think that Arlington has a little bit of buyer's remorse for paying for a massive Amazon office complex in a new world of hybrid work.
Totally. I 100 percent agree with you that was a really important galvanizing moment for the movement. It showed that winning was possible. One of the biggest hurdles to trying to organize on corporate subsidy stuff is, honestly, just defeatism.
People think there's no way to win. Things have been this way for so long. They're always going to be this way. The folks we're fighting against are too powerful. We cannot win so why bother? HQ2 showed that, no, actually you can win, if you get political buy-in, if you get the right characters. AOC is a great one. State Senator Michael Gianaris was really outspoken against the deal. You can actually win on the merits. Amazon left, and I don't think New York is worse off for it. Amazon expanded in the city anyway.
Then you compare that to, I live in DC, so the actual HQ2 is now in northern Virginia, right across the river from where I live, and to exactly your point, there's this huge question about whether it's even necessary. They're not getting the economic bounce that they expected from the facility because Amazon doesn't need all these office workers and they're not coming into work. And there was supposed to be a giant bounce in hotel taxes; it's never materialized.
I think that gets at an interesting and important aspect of these deals, which is that states and cities buy into really long-term agreements with corporations when, out of necessity, these corporations are going to change their business models and their approach to whatever line of business they're in over a 30-, 40-, 50-year timeframe. They are going to break the promises they make to the community, not even necessarily out of nefariousness, but just because things change.
And HQ2 is just a great example of that. It just doesn't make sense now, in a post-COVID world, to have this giant hulking 5,000-person headquarters in northern Virginia anymore. But the state is on the hook for a ton of money for it.
It's an interesting time, man. Anyway, I'm just glad that we were able to have you on. I know that you've been very busy these days. I know that you've got all sorts of stuff going on. I suppose, where can folks find you and follow your work?
I write the Boondoggle newsletter. It's boondoggle.substack.com. Please subscribe. Check it out. I am on Twitter, as long as it still exists, @Pat_Garofalo. The underscore is really important. If you leave the underscore out, you're going to be following a Republican member of the Minnesota House of Representatives. Which is also one of the reasons that I love working in Minnesota and we're doing a bunch of work there, is because I'm going to redeem the name in the state.
I work at the American Economic Liberties Project. It's economicliberties.us. And also for Fight Corporate Monopolies, fightmonopolies.org. Those are two great places to go check out, see our work, you can see on the Fight Corporate Monopolies website some really great champions from across the country who are working on anti-monopoly legislation and reform and are really great.
Actually I have an ask for your readers and listeners, if you don't mind. If there is somebody in your community at the state or local level who is actually doing great work on corporate power issues and I don't know about them, please let me know because we'd love to get them connected to folks across the country.
It really is a movement. There's something really helpful and useful about just getting people who are in the trenches on this stuff together, sharing information, sharing tactics, sharing best practices, talking about what works, talking about what doesn't. It's just hugely, hugely, hugely valuable as a policy tool.
If there's somebody out there who I don't know about, please let me know because we'd love to connect with them.
Amazing, all right, thank you!
Thank you. Anytime.
If you have anything you’d like to see in this Sunday special, shoot me an email. Comment below! Thanks for reading, and thanks so much for supporting Numlock.