Heavens to Betsy!

July 3, 2019

At 2 a.m. Arizona time yesterday while we were sleeping, Governor Doug Ducey released a tweet denouncing Nike for cancelling plans to produce a Betsy Ross Flag version of sneakers—all designed to hit the 5 a.m. Eastern Time Fox News cycle.   It was political theater that we’re not used to seeing the Governor engage in.  Lots of heat generated, getting people aggravated about putting or not putting particular flags on shoes.  Yikes! You might even discover you’re not wearing a shoe with a flag and tomorrow is the 4th of July.  The Betsy Ross Nikes are nowhere to be found.

The more relevant question is not whether or not Nike produces Betsy Ross inspired sneakers—but to what degree should government be subsidizing/incentivizing corporate behavior?  The tweet came with an order to cancel up to $1 million in state subsidies for Nike.

Incentives by anecdote are not how you evaluate whether they are working.  In 2011, Arizona began rolling out half a billion dollars in corporate tax reductions, and while job growth has picked up recently, the state’s unemployment rate remains higher than the national average.  The Pew Charitable Trusts notes that Arizona is one of a dwindling number of states that doesn’t effectively evaluate its corporate tax breaks.

At the Grand Canyon Institute, we’re dedicated to bringing more light than heat and evaluating not what Nike chooses to put on its shoes but when benefits granted corporations are in the public’s interest.