"Southern states, which have fronted billions in local taxpayer dollars in the past two decades to attract foreign auto plants"

I mentioned in a previous post that Southern GOP Senators claiming to defend the free market in the Big 3 Bailout was largely BS. I've no doubt that Ideology played some small part in their positions, but the main reasons were Sectionalism and protecting their constituents, and skewering Labor Unions who are a major Interest Group in the Democratic Party. I mentioned that Southern Auto Plants have received government favors in order to be lured to those southern states. I term that Government Intervention.

Here's Matthew Yglesias:

"Nice piece from Mike Lillis at The Washington Independent about the tenuous commitment to free market ideology shown by the union-busting southern conservatives who want the domestic auto industry to die, in order to benefit Dixie-built cars from foreign-owned firms:

“We don’t think it is the role of government to intervene,” Sen. Jim DeMint (R-S.C.) told the Fox Business Network last week. “We need to let the market and the laws work the way they are already in place.”

Yet this argument — that the government has no business interfering in free markets — ignores an increasingly frequent tradition among Southern states, which have fronted billions in local taxpayer dollars in the past two decades to attract foreign auto plants. Those incentives, arriving in the form of tax breaks, training for new employees and even land, have enticed BMW to South Carolina, Mercedes to Alabama and Nissan to Tennessee. The result of the government subsidies has been the steady emergence of the South as an auto-manufacturing powerhouse. Some are dubbing it the “New Detroit” – a region where real estate is cheap and the labor’s not unionized.

Not coincidentally, these Southern states are represented by the same coalition of GOP senators who led the fight against the recent Detroit bailout proposal. That legislation would have provided $14 billion in emergency bridge loans to General Motors and Chrysler, both of which say they lack the finances to survive the month. Rallying behind the animated opposition of GOP Sens. Bob Corker (Tenn.), Richard Shelby (Ala.), Mitch McConnell (Ky.) and South Carolina’s DeMint, Senate Republicans killed the legislation.

This is, of course, but a small slice of the larger southern politics tradition which has always insisted since the end of the Civil War that cheap labor and a low-tax, low-service, high-inequality social and economic system are the key to prosperity. This approach left the South perennially poorer than the rest of the country, but over the past couple of decades this made-in-dixie failed approach to economic development has come to dominate national policy. Not coincidentally, during this period the United States has begun to fall behind high-wage, high-service, low-inequality northern European countries in terms of average living standards."

If people are resorting to incentives to lure industry and jobs to their area, it's not immediately clear how that lowers wages and living standards for that area. It might be true that it has a negative effect on the whole country, but, then, there wouldn't be any Sectionalism, which there clearly is. I list Sectionalism under Interest Groups.

Nevertheless, this does provide yet more evidence that we don't have a "Free Market" system, but, rather, a Mixed Economy or Welfare State, in which various Parties and Interests vie for Government Largess, which, to be fair, they are helping to pay for. This would seem to give them some claim on government aid, depending, of course, on the merits of each individual case.