Good money after bad? Michigan Government ..your "partner"

The Industrial Policy Blog references a news article ,and notes the state of Michigan is spending another $30 million to advertise Michigan as a tourist destination.  The author points out correctly, that this is not the first time Michigan has gone down this road, and also suggests that for money to be spent on this project of boosting tourism, it must be taken from somewhere or someone first.  Administrations from both parties have used tax dollars to promote business, tourism, and other economic enhancing projects in the past.

But what is the end result, and at what cost?  Michigan’s tourism industry has always been one that pretty much spoke for itself.  What more do you need than water on all sides, an abundance of scenic beauty and some pretty damned nice people.  I have lived here all my life, and after looking around the country in my travels, cannot fathom living anywhere else.  And allow me to point out there some pretty nice places in the US of A that are remarkable in their own right.  So why do we advertise?

Advertisers will provide a litany of reasons for continued promotion of a product in light of its decreased or increased demand.   In Michigan however, it may well be the need to show that the Democratic controlled Michigan government is trying to do something..  ANYTHING..  to prove it cares.  However the “investment” in advertising for what everyone knows already, is questionable in light of increased travel costs and high fuel prices due to the same problems causing troubles in our manufacturing centers as well.

There was a grand proclamation by state economic development officials earlier this month.  Certainly, they must have hoped anyone who was paying attention, was alumni of the Detroit Public school system.

Since their formation in 2006, the $95-million Venture Michigan Fund and the $109-million Michigan 21st Century Investment Fund have invested in six venture capital firms with either a headquarters or an office in the state. These firms have used the money and other capital to invest in 11 fledgling Michigan companies that have added 40 workers in recent years.

OK breaking out my abacus and my bag lunch.. add  3, subtract 44, divide it all by cherry pie, and.. viola! you have a Lot of money spent to get 40 jobs!  hmm my abacus must be broken, I keep coming up with over $2 Million and a lot of change per job.. OK let me try the Computer..  ok.. poke 3 keys forward. and..  um  and add…. huh.. I am going to have to let the press know..  Pentiums must still have that floating point error and I keep coming up with $2.7 some million per job.. Anyhow Ill get the hammer out to fix my calculator as well later.  In the meanwhile, you’ll have to take my word for it that it really seems like a lot of money spent on each job created.

My point is that Michigan government, while stealing from your wallet for that which sustains it, is also taking a little extra to dabble in speculative activity.  Instead of creating a lower tax, lower regulatory and burdensome environment, has decided IT WILL DECIDE who wins and who will lose.. at least until we all do.  Films are more important than cars, Bio tech is more important than Maytag, renewable Fuels is more important than Food..  The list is nearly endless, and as a result of disdain for REAL industry, we circle back to the tourism part of it, which for all of its nifty imagery cannot make up for the REAL jobs created by a dying industrial base.

Michigan needs to stop squeezing the life out of the business that is here, stop pretending it is a market manager, and allow business some breathing room in which to fully experience the wonder that is this state’s people, and resources.  The small profits we make in business become much smaller when those wonderful executive branch fund managers become our silent but not so impressive partners in business.

Governor, I will say it again.  Get out of my pockets.  I am still trying to wear these and your hands are too big.

6 comments for “Good money after bad? Michigan Government ..your "partner"

  1. September 17, 2008 at 2:40 pm

    Good writing. Keep up the good work. I just added your RSS feed my Google News Reader..

    Matt Hanson

  2. September 17, 2008 at 11:59 pm

    “Governor, I will say it again. Get out of my pockets. I am still trying to wear these and your hands are too big.”


  3. Clydes Dale
    September 18, 2008 at 8:34 am

    I feel that the entire AD campaign is some “soft” political advertisments for Jenny and the Dems given the HARSH economic realities of MI. She is trying to make everyone FEEL better so they won’t VOTE THE BUMS OUT.

    Same with the MEDC Jeff Daniels ads: “invest in MI and we’ll give you money” it is a fine campaign but why run the ads in Detroit and Ann Abor and Lansing. Just about all the ad money should be spent OUT OF STATE to attract vacationers and investors TO MICHIGAN – not to market to Michigan folks to stay here and paly golf – that does little to GROW anything. Both the PURE MICHIGAN campaing and the JEFF DENIALS ads should run in Columbus, Cleveland, Chicago, Pittsburgh, Indy, Cinncinatti, Wisconsin, etc.

    Vote the Dems out! Stop Taxing us to death.

  4. Richard Schneider
    September 18, 2008 at 10:21 am

    Well, what will it be? Hire some good help or pay my taxes? Being is business is so hard…. maybe I will just go to the beach and play tourist.

  5. September 18, 2008 at 11:58 am

    I am totally amazed that there are people out there that are still defending this strategy. My fellow Michiganders have to step up and throw out the big spenders in November. As bad as it is, people need to wake up and pay attention. We need to send Jeff Daniels back to his little theater and fix our business environment first. They are laughing at us.

    Rose Bogaert, Chair
    Wayne County Taxpayers Association

  6. Ed Burley
    September 18, 2008 at 3:13 pm

    The main problem I see with the tourism industry is that most jobs that are created by it are those pesky old “dead end jobs” that pays minimum wage and that the Left decries. Even if this $30M directly resulted in the creation of 3,000 jobs, the end result would be the same – a bunch of workers not making enough to live on (especially with Jen and her ilk taking more and more in taxes).

    The one beautiful thing about creating out-of-state tourism (from out of state to here) is that any money spent by them here is taxed at the Michigan rate (sales, gas, etc.) and benefits our government by having out-of-state folks fund some of our tax burden. That’s where the whole strategy of spending advert money to generate tourism comes from. There are several problems with this reasoning, however.

    As already has been pointed out, this makes no sense when the advertising is being done in Detroit and Ann Arbor. It needs to be done nation-wide. That MIGHT justify a portion of the $30M. Secondly, in order to make back the $30M from sales tax, and gas tax; we’d need about 300,000 tourists who spend approx. $1,600 each in taxable goods, and about 75 gallons of gasoline while in Michigan.

    This is as shady a scheme as claiming that building casinos is creating jobs – all the while taking money from hard-working folks in order to pay the per-cap to the American Indians all over the state. All the while, the folks working there are working those “dead end jobs.”

    We definitely need a new governor.

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