The bathwater is dirty, and the baby is only a log… A log all prettied up and presented to be something it is not, the Michigan Economic Development Corporation (MEDC) is merely a floating object with more in common to a Baby Ruth than a healthy baby… perhaps with a pink ribbon tied around it to fool the casual onlooker.
The MEDC was established under the Engler administration in 1999 to promote business development through targeted tax breaks, incentives, and by working with communities and prospective businesses for future development. It has since proven itself to be simply another bloated arm of Michigan government and good only as a mouthpiece for propaganda that supports the governor’s plans. A fact, which upon further inspection should ring quite hollow when examining recently revealed data:
The record, however, shows that most of the promised jobs never come to pass. Specifically, the Mackinac Center analysis found that job promises contained in MEGA tax credit agreements are actually more than triple the eventual job counts: For every 1,000 jobs that the MEDC announces, only 294 are created.
Anyone who truly understands the nature of politics could have predicted THAT result.
Anyone who understands the most rudimentary economic principles knows the MEDC is not needed.
The very method in which the MEDC or any other governmental “economic development” concern supposedly “creates” jobs or other manufacturing business interest is to do what? Distribute, or otherwise reward financially the targeted business. They arrange tax breaks, tax credits, outright payments, and do whatever it is that is needed to make a more economically friendly environment for the new business prospect.
It seems odd that it wouldn’t have already clued the leadership of the state in to the fact that lower taxes, and capitulating governments encourage business growth. The very tool used for the cherry picking of select business types is unacceptable for application to the established businesses in the state both in manufacturing and otherwise. In 2005, then MEDC spokesman Paul Krepps said:
for every $1 the state forfeits in single business tax credits, it gains $4.35 in new tax revenues. So far, 28,812 jobs have been created at a tax credit cost of $75.1 million under the MEGA..
“If we do not offer these incentives, other states will gladly take advantage of the situation to win the jobs, investment and tax revenue at our expense.”
From: Kmart can afford to shop for government incentives to move headquarters. by
Source: Knight Ridder/Tribune Business News, 11/1/2004.
Via: HighBeam™ Research
COPYRIGHT 2004 Knight-Ridder/Tribune Business News
Oh my… Other states. Speaking of which.. when providing an incentive to a business for movement INTO Michigan, shouldn’t the new concern be from somewhere else? Included in the article noted above is the offering of:
“$4.3 million in tax credits for Mobius Microsystems Inc. to move its headquarters from Ann Arbor to downtown Detroit.”
Oh yeah.. We’ve seen that before, and though Mobius apparently didn’t like Detroit:
After much debate, we decided to maintain the office in Michigan, which ultimately moved back to Ann Arbor, and create the Headquarters in Silicon Valley where the appropriate talent and resources are consolidated.
They still maintained an office in Michigan. …Add it to the CRAP in the Tub, because as I mentioned, we have seen THAT before.. You know.. The MEDC giving Quicken Loans $6.4 Million to move its employees from Livonia? you know.. Livonia… Michigan?
Throw it out.. That water is dirty. In Fact it is SO DIRTY that it is getting harder to see through:
Through 2008, MEGA has offered tax credits of $3.3 billion in more than 500 deals with select businesses spanning as much as 20 years into the future. In the program’s early years, data about each of these deals was easy to obtain and utilize. Not anymore.
For example, there was a time when MEGA’s annual report to the Legislature — required by state law — ran to 19 pages or more, with each page containing a detailed description of every deal and an accompanying narrative. Today, the report is effectively a two-page spreadsheet.
That should be a little more than a modest concern driver. When dealing with the big bucks, there is usually few reasons to “hide” details of grant details, conditions met, or other qualifying factors concerning the dispensation of your TAX Dollars.. In third world countries we usually associate this practice with the following words.. “Graft,” Corruption,” “Political Payback, ” “criminal acts…” You know.. comfort words.
Where there is Smoke.. there is surely fire.. but maybe a little bathwater thrown back at it will put it out.. And if whats left after dousing the flames doesn’t evaporate, maybe it will fertilize ..a little more:
A POO hauling company which sprays your fertilizer all over the ground to make your food.. mmm yummy! (and green) oh yeah that IS essentially peeing in a bucket… well kinda
Which reminds me of a Joke..
“Whats Green and Brown and spread all over?” A: Your money through the MEDC.. oh.. Its supposed to be funny? Sorry.