The crony-corporatists are at it again. The Michigan Economic Development Corporation(MEDC) has announced millions in grants, loans and other incentives – http://www.michiganbusiness.org/press-releases/rare-isotope-facility,-new-business-expansions,-community-revitalization-projects-gain-state-approval/.
The Michigan Economic Development Corporation today announced Michigan Strategic Fund approval of economic development and community revitalization projects that in total will generate $362 million in new capital investment and create 1,444 new jobs in Michigan.
The trusty calculator tells us that the taxpayers in Michigan are spending over a quarter of a million dollars per job created. $250,692.52 to be precise. The good news? That’s better than the Obama stimulus which cost taxpayers $278,000.00 per job created – http://www.weeklystandard.com/blogs/obama-s-economists-stimulus-has-cost-278000-job_576014.html.
So Michigan taxpayers may sleep a little better at night knowing their spendaholic government is slightly more efficient than the feds at redistributing wealth.
The MEDC has a less than stellar record when it comes to delivering the goods. They also rely upon hand-picking the winners and losers in the freebies giveaway program. A report issued by the Mackinac Center for Public Policy illustrated just how inefficient the MEDC is – http://www.mackinac.org/11162.
The Michigan Senate voted to allow the MEDC to award more special favors and subsidies to hand-picked companies — rather than reforming the state’s tax, regulatory and labor climate in a way that would benefit all businesses — despite the fact that Center research shows fewer than one-third of the jobs promised by the MEDC come to fruition. The study also found that every $1 million in manufacturing tax credits given in a particular Michigan county is associated with the loss of 95 manufacturing jobs in that county. The Senate approved the additional money despite the fact the MEDC used up its allotment of tax credits for 2009 several months ago.
In the decade since the MEDC was created, Michigan has fallen from 16th to 41st among states in per capita GDP and is the only state with a negative GDP growth. Per capita personal income among the states has fallen from 16th to 34th and is now 11.2 percent below the national average, the lowest point it has been since the Great Depression.
Spending taxpayer money is at the top of the headlines here in Michigan because the state has a projected $1 billion dollar(give or take a few hundred million depending on who you ask) surplus coming in the next few years. Here’s where the standard left/right politics get amusing. The left is howling that a budget surplus is due to extreme austerity measures enacted by Gov. Snyder. The infrastructure is crumbling, schools are failing, roads are a disaster, etc., etc., etc. The only problem with that is the same situation existed prior to any cuts implemented by Snyder.
The right tells us that a tax surplus needs to be returned to taxpayers. The left views a tax surplus as ‘stolen’ money from the taxpayers and they agree it should be returned. Just not in the form of a tax refund. Rather they prefer it to be spent on big government. Here’s the democrat challenger to Gov. Snyder stating these very points – http://www.mlive.com/opinion/index.ssf/2014/01/guest_column_michigans_budget.html.
I guess it’s good that we can say the left and right agree upon something. That being a tax surplus was money stolen from the taxpayer. On the surface, the differences appear to be stark. The left thinks a surplus should be returned through a redistribution program such as the MEDC or some other infrastructure crony-corporatist arrangement. The right says give the taxpayers their money back directly through a tax cut. Unfortunately, here’s where Snyder shows his true big government, crony-corporatist roots and parts ways with the message from the right. He’s on-board with the MEDC and the way they conduct business since he overhauled it.
The MEDC or the prior MEGA under former Gov. Granholm have both shown to be failures. They never deliver on what was promised. They cost far, far too much for the number of jobs created. They reward only certain hand-picked companies on the inside of the Lansing gravy-train.
Tis the reason states like Michigan never escape the boom-bust cycle. They simply can’t get out of the way when government should, preferring to insert themselves on the way up to limit growth and on the way down as well to ensure to protract any downturn. I like to call it shampoo government. As the instructions say, lather-rinse-repeat. And so Michigan will.