Thursday, August 7, 2014

To listen to the business-oriented types, Walgreen’s should have left Illinois

I’m always suspicious of people who rant and rage about our local governments being anti-business.

They have an attitude that at times seems to think government is to be subservient to business. Whereas I have always viewed its purpose as to maintain a balance between the interests of government and others in our society.

SO WHAT SHOULD we make of the recent decision by Walgreens, which recently purchased a significant interest in a British pharmaceuticals company, to keep its corporate headquarters in suburban Deerfield rather than shift it to the United Kingdom – a move that would have significantly reduced the new, larger company’s tax burden.

The move created a lot of political hostility. Sen. Richard Durbin, D-Ill., was leading efforts to penalize the company if they made the move, and both President Barack Obama and Gov. Pat Quinn both made it clear they supported Durbin.

But when the decision became publicly known this week, Wall Street reacted negatively. Word that the company wasn’t going to move and seek lower tax obligations caused the stock market to plunge.

The value of shares of stock in Walgreens began to drop Tuesday afternoon, then fell by 14 percent Wednesday morning. Stock traders had it valued at $59.62 per share on Wednesday – significantly lower than the $76.39 per share all-time high the stock hit back in mid-June.

THOSE PEOPLE WOULD have considered the company to have made the smart move by literally making the overseas move.

Now I don’t know that I buy into the Durbin rhetoric about Walgreens losing its customers by making the overseas move because we’re “too patriotic” to support a British company.

Despite the people who spew “Buy American” rhetoric, I often sense that people will go for whoever will give them the cheapest price on any particular good or service they desire.

CVS probably would mop the floor with Walgreens if they could undercut the competition at the cash register – regardless of where Walgreens is located.

BUT I DID think that the decision to remain in the Chicago area was a positive one, and not just because I can’t keep count of all the times I have made a Walgreens purchase during my lifetime.

It is one of those companies that has become an innocuous part of what it means to be a Chicagoan. Yet those who only view the bottom line would have wished for a move.

What should we think of the political ramifications of this move? After all, our top political officials were all ready to crucify Walgreens for wanting to make an overseas move for financial reasons.
All except for Sen. Mark Kirk, R-Ill., who to the best of my knowledge never said anything about the issue, and likely would have kept quiet if the move had taken place.

HELPING TO KEEP a corporate presence in Illinois ought to be something we think a government official ought to do. Perhaps it is something we ought to take into account as a positive when trying to figure if Quinn is worthy of another term in office.

It will be interesting to see if Republican challenger Bruce Rauner somehow tries to use this against the governor in the weeks leading up to Election Day. Because Durbin's Senate challenger, James Oberweis, on Wednesday said Dick deserves "scorn, not praise," for taking his Walgreens-related stance. Will Rauner feel compelled to say the same about Pat? Or will he have the sense to keep his mouth shut on this issue?

I’m sure from the perspective of those people whose business orientation overtakes all other sense of our society, they can come up with a way to justify blasting Quinn for his viewpoint on the Walgreens issue.

But perhaps the rest of us ought to take this set of circumstances and keep it in mind as evidence that perhaps the rhetoric of Quinn being “anti-business” isn’t as simple-minded as they’d have us believe and that perhaps he’s doing a few things right!


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