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Governor Longley's Architects Of Transformation

John M Daigle, Perry Hudson, Philip W. Hussey, Jr, James L Moody, Sr, P.Andrews Bixon, Rand N.Stowell, Jr Reccomendation to Jame's B Longley, Governor  of Maine in the year 1976

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John M Daigle was president of Casco Bank Trust Co and Casco Northern Corporation. Perry Hudson was the general manager of New England Telephone. Phillip W Hussey, Jr, owner of  Hussey Seating Company. P. Andrews Nixon was the head of the largest distributor of residential heating fuel in New England and the operator of the Dead River chain of 20 c-stores in New England. Rand N Stowel Junior was the CEO, President of United Timber Corp, a family owned forest products company with multiple subsidiaries including wood products manufacturing, saw milling operations and extensive timberlands making it one of Maine's larger businesses. In later years Stowel formed the Predictive Control Systems LLC. In 2001 Stowel was sued by his partner in Predictive Contril Systems for back pay. It would be interesting to apply the reasoning presented by Stowel's legal defense concerning the "corporate veil" to the formation of the the Maine Development Corporation & Maine Capital Corporation and the relationship of those corporations to the use the profit motive of private investors (see below) - but that is for a later post.

  James L Moody Sr is credited on the report, but it seems more likely that it would have been James L Moody Jr. The senior Moody was a teacher, while the younger Moody was the chief executive of Hannaford for 19 years and thereafter a board member for another five years. Under Moody, Hannaford grew from a small Maine wholesaler to a $2.9-billion regional grocery retailer.

The Report- Governor's Task Force For Economic Redevelopment, Recommended Legislation For An Economic Development Program -110th Congress, calls for the elimination of local referendums on municipal bond issues

2, eliminate the requirement for a local referendum on municipal bond issues.-Governors Task Force for Economic Redevelopment-1976

 According to Marshall J Tinkle, in his discussion of the Home Rule Amendment, legislation previous to 1962's Maine Municipal Industrial Buildings Bonds Referendum, which authorized municipalities to issue bonds for private industrialization was declared unconstitutional because it was not for a public use.

 "As noted in the literature, the amendment ( Home Rule , Section 2 ) makes it clear that general obligations may now be used to assist private industry for certain purposes" .....this section applies only to general obligations of municipalities and not to forms of financing that do not create municipal debt or liability" The Maine Constitution: A Reference manual by Marshall J Tinkle

BALLODPEDIA shows that 66.31 % of Mainers voted for the Constitutional Amendment:

Maine Proposed Constitutional Amendment No. 2 (1962)
Approved  Yes

Once again we find a ruling class of individuals in Maine who regard the constitution as dispensable if it is contrary to what they want to do. In 1976 private collaborators with the Governor of Maine propose to change by statute, that which has been established by the consent of the governed and embedded into the Maine Constitution. The report goes on to recommend that two corporations be chartered by special acts of legislation,.

The statute for the Maine Capital Corporation. includes this justification for the establishment of a new form of government to replace that dusty old constitution- the public-private relationship:
The Legislature finds that one of the limiting factors on the beneficial economic development of the State is the limited availability of capital for the long-term needs of Maine businesses and entrepreneurs. In particular, the lack of equity capital to finance new business ventures and the expansion or recapitalization of existing businesses is critical. This lack of equity capital may prevent worthwhile businesses from being established; it may also force businesses to use debt capital where equity capital would be more appropriate. This creates debt service demands which a new or expanding venture may not be able to meet successfully, causing the venture to fail because of the lack of availability of the appropriate kind of capital.
 This impediment to the development and expansion of viable Maine businesses affects all the people of Maine adversely and is one factor resulting in existing conditions of unemployment, underemployment, low per capital income and resource underutilization. By restraining economic development, it sustains burdensome pressures on State Government to provide services to those citizens who are unable to provide for themselves.
To help correct this situation, it is appropriate to use the profit motive of
private investors to achieve additional economic development in the State.
This can be accomplished by establishing an investment corporation to provide equity capital for Maine businesses and by establishing limited taxcredits for investors in the corporation to encourage the formation and use of private capital for the critical public purpose of maintaining and strengthening the state's economy.

It's a good thing they implemented that- otherwise we might have huge general welfare in this state  on top of the huge corporate welfare system needed to sustain Maine's centrally managed economy. The architects of Maine's transformation justified their moves by saying they would save the state money by relieving the state of the burden of providing assistance to the most unfortunate at the bottom of the economic scale. The architects solution for this burden created a new taxpayer burden in support of a system which  has aggressively expanded into a corporate welfare system for the upper end of  the economy - for those creating jobs providing higher than average incomes. Those  citizens who are currently unable to provide for themselves are not likely to find an opportunity in the upper end jobs market- far more likely they might get a foothold on improving their own circumstances by finding a job in the retail sector and other opportunities existing below the upper end of the scale. The burden of both welfare system lands on the middle class - the backbone of a free enterprise system, which promotes opportunities at all levels of the economy for those with individual will and motivation to improve their own circumstances through the application of their own talent and skills.

The language used begs for analysis:

"It is 'appropriate' to use the profit motive of private investors to achieve additional economic development in the state?"

Is not that already being done and who should know that better that the leaders of private industry in the state of Maine? The profit motive has always been the motivating force of economic development and any economic development which occurs is always "additional economic development". No one can argue the truth of such a statement on its own merits

 syntactical. relating to or determined by syntax2.(logiclinguisticsdescribable wholly with respect to the grammatical structure of an expression or the rules of well-formedness of a formal systemAdjectives and Adverbs
DefinitionsAn adjective is a word or set of words that modifies (i.e., describes) a noun or pronoun. Adjectives may come before the word they modify.

The word "appropriate" is used as a modifier in the first sentence.  It does not grammatically apply to the paragraph which follows that sentence which is advocating that the recommended way to use the profit motive of private investors to create additional economic development is to appropriate the use of the taxation system to increase the profit of private investors:

This can be accomplished by establishing an investment corporation to provide equity capital for Maine businesses and by establishing limited tax-credits for investors in the corporation to encourage the formation and use of private capital for the critical public purpose of maintaining and strengthening the state's economy.

Interesting line of reasoning - the tax credit will benefit the profit motives of private investments and this serves a public purpose- but the public has no direct share in the profits. The public purpose is defined collectively as "economic development" - the private profit motive is defined as pertaining to special interests.

 The statute for the Maine Capital Corporation does not say that the tax credit for investors is refundable but the tax credit wouldn't have any significant value of it wasn't refundable when factoring this 1977 statute which blanket exempts small business investment companies from taxation . Refundable tax credits mandate the tax payers to make a cash payment to the holder if no taxes are owed.

This raises another Constitutional question-one pertaining to the power of taxation: The heads of industry are recommending the use of tax credits to benefit the profit motives of private investors- as noted previously- a special contingency which has not sworn loyalty to the Maine Constitution is advising those who have taken such an oath.

Article IX.General Provisions.
Section 9.  Power of taxation.  The Legislature shall never, in any manner, suspend or surrender the power of taxation.

Does a tax credit fall under the definition of suspending or surrendering the power of taxation, especially under the contemporary system in which there is a large network of government by tzars in the form of un-elected boards and administrators of the corporations chartered by special act of legislation?

The architects of Maine's transformation were the leaders of Maine's corporate culture- the biggest and most powerful businesses in the state. Corporate culture is essentially a collectivist culture, while Maine a state once fostered a myth of rugged individualism - now long gone history.

During the election season, LePage went into attack mode against general welfare as he stood on a record of hot pursuit of radically expanding corporate welfare! One can't blame a politician for following the ques. The public is made well aware of general welfare but kept in the dark about the extent of corporate welfare. The media has implemented general welfare as a political talking point, while  while preserving the veil that keeps corporate welfare hidden from the public. This is the same media which didn't even comment on the fact that Lepage's jobs bill was for the benefit of the state governed municipalities (legally local governments)  only!  The city states are separate islands within Maine with bills being developed exclusively for their benefit but paid for by the rest of Maine! It is parsed politically as a "public purpose (read collective) of maintaining and strengthening the state's economy." but the resources all go to strengthening the economy of those state governed municipalities only (once again to special interests). Something is seriously wrong with this picture.

The solution designed by the architects of transformations in the 1970's has become a system that benefits the upper end of the economy only- as if ONLY jobs that provide an income level higher than average for the community in which it resides spur economic growth but this simply is not true. If a business establishes employment at any level, it spurs economic growth but it is seldom the upper end jobs that provide solutions for those currently unable to provide for themselves- pursuant to the justification given by the faction of the economy represented by heads of industry for transforming a free enterprise system into a corporate state. Clearly the solution did not work as the number of people on general welfare has only increased since the free enterprise system was transformed into state corporatism.


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