According to U.S. Census Bureau data, from 2017 to 2021 1 out of 5 new arrivals to Phoenix came from California. No doubt all sorts of factors inform a move, housing prices most notably, but job opportunities invariably loom large. Arizona has a pro-business reputation that has manifested itself in a lot of economic growth. Absent broad prosperity in the Grand Canyon state, it’s no reach to say that the inflows from California and beyond would be much smaller.
That’s what’s so puzzling about “Fair Access” ballot initiatives (SCR1007 and HCR2011) that are presently sailing through the Arizona state legislature. SCR1007 and HCR2011 would prohibit public entities within the state from contracting with private businesses that are said to be “discriminating” against firearms manufacturers, along with other businesses associated with the sector. Up front, is the alleged “discrimination” really a complaint about business practices or in truth a veiled complaint from politicians that certain businesses don’t necessarily share their politics?
From there, the legislation brings to mind an observation from philosopher Friedrich Nietzsche: “Beware that, when fighting monsters, that you yourself do not become a monster.” Arizona legislators would be wise to internalize Nietzsche’s wise counsel. And in internalizing it, legislators should recognize that in using the state’s power to browbeat corporations, they’re placing a bull’s eye on the very small-government, pro-business ethos that has proven such a magnet for the people and businesses so instrumental to the state’s economic success.
The aggressive actions of the state’s right-of-center political class are especially surprising given how much conservatives and Republicans have long clamored not just for limited government, but also for freedom from government meddling in the activities of businesses. Except that with SCR1007 and HCR2011, we have Republicans cheering on politicians using the power of government to force businesses to act as they want them to, and without regard for what doing as politicians tell them to will mean for their profitability and overall health. More on the latter in a bit. For now, it just gets worse.
The unhappy reality is that Arizona’s taxpayers will pay for the Arizona political class’s disappointing efforts to politicize business activity. Think about it. How many businesses that allegedly discriminate against gun manufacturers will no longer be able to bid on contracts from the state, and in bidding, help to exert downward pressure on contract prices?
Considering the financing of state initiatives, how many financial institutions will no longer get to compete for city and state bond issuances solely because their client mix doesn’t meet the standards of the state’s legislators. Take J.P. Morgan, a globalized financial institution with thousands of employees in Arizona, but also other banks and investment banks of similar size and scope. Based on mere suppositions about the political views and motives of those inside these financial institutions, the legislation making its way through the statehouses in Phoenix will effectively bar some of the best financial minds from bidding on the financing of crucial city and state projects. To say that borrowing costs will rise absent the participation of top banks and investment banks is a statement of the obvious.
Back to the client mix of J.P. Morgan and others, there’s a big difference between the clients businesses choose to serve and actual discrimination. Which similarly should be a statement of the obvious. Without knowing the internal stance about guns within any bank or investment bank, that some don’t finance the activities of firearms businesses isn’t the same as discrimination. More realistically, there are all sorts of sectors that Goldman Sachs, JPM, Morgan Stanley, Citi and others don’t finance either because they lack expertise in them, they lack the resources to direct substantial human capital toward them, the work isn’t profitable enough, the reputational risk associated with the work is inimical to shareholder returns, or all four.
More broadly, why would freedom-focused Arizona politicians want to meddle in the doings of corporations as is? Rather than telling businesses what to do in order to score cheap political points, Arizona’s rhetorically pro-growth, pro-job, pro-taxpayer, and pro-business politicians should be getting out of the way so that the businesses operating in the state and serving the state can do well for it by prospering within it. Instead, Arizona’s opportunity-desirous citizenry faces a situation right now whereby its politicians will raise the cost of the state’s government by raising the cost of doing business within the state.
It’s time to step back from what makes little sense. To a high degree, Arizona has been made great by people who appreciated the state’s less government is better government approach to governing. Arizona politicians charged with serving the people should keep Nietzsche in mind as they become the proverbial monster in blind pursuit of what they imagine monsters to be.
Republished from RealClear Markets
