I have argued here before that government "economic development" programs that pick winners and losers for selectively distributed "incentives" are in reality political development programs. A fine proof of this assertion was a PR stunt a few years back from Michigan House Republican leadership on a factory floor in Lansing.

The event's press release headline read, "Republicans Vow: We Will Fight for Every Michigan Job"; the text described how their multi-point "economic stimulus plan" would create jobs. It consisted of a smorgasbord of new and existing discriminatory tax break and subsidy programs.

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Unfortunately for the caucus, then-Speaker Rick Johnson's office accidentally faxed the Mackinac Center an associated internal strategy document with columns that listed the programs to be created or extended, followed by ones indicating the "political value" and "press value" of the idea.

Totally missing was any mention of the economic value of the programs. In other words, the purpose of the exercise was to create the illusion of "doing something" about the ailing state economy, not to really do something.

Among the big ideas was extending the sunset on the Michigan Economic Growth Authority, the state's chief business tax incentive program. The Center has shown twice (in 2005 and in 2009) that this program at best creates no new jobs and may actually destroy them.

The Michigan House Republican leadership's press release is worth quoting at length:

"Speaker Johnson, R-LeRoy said Republicans have a strong track record on helping Michigan businesses create jobs and strengthen the state's economic engine. Now, he said Republicans will used [sic] what the [sic] learned in the 1990s to help turn around Michigan's economy." Johnson himself was quoted in the release saying, "We are going to fight for every Michigan job to preserve our way of life, and we won't stop until every person in Michigan who wants a jobs [sic], has one."

The Great Lakes State has lost 527,500 jobs since those words were uttered.

Has Johnson or any other of the politicians who backed this array of targeted incentive programs in 2003 asked for forgiveness? Unlikely.

No one should be surprised that politicians may not care as much about the jobs of strangers in Ishpeming or Lansing or Detroit as they care about their own. And that's what this cynical exercise was really about.

In short, government economic development programs are just expensive political public relations programs primarily intended to benefit politicians, not citizens. They give lawmakers the opportunity to crow - at little cost to themselves - about their ability to create a "job bonanza" with a wave of their political wands.

The public should force politicians to wave goodbye to these programs and instead create a fair field with no favors by lowering the cost of living, working, investing and creating jobs in Michigan for all people and all businesses - not just a favored few.


See also:

Legislation needed to address MEGA audit findings 

MEDC: 'Stop Pointing Out Our Failures'

Thirty-One MEDC Salaries Top $100K

MEDC-Endorsed Bet on Horse Track Now Under Investigation by Wayne Co.

MEGA Careful?


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The Mackinac Center for Public Policy is a free market, non-partisan educational institute workings towards a freer and fairer government. Our main focuses are in the following policy areas: Fiscal, Education, Energy and Environment, Labor, and Criminal Justice. Learn more at www.mackinac.org/issues

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