selectively giving away free money to big business is straight corruption. there is no other way to put it. everyone involved should lose re election and get investigated by the financial crimes unit.
but i dont think "leave it up to the market" is a better idea. investments like this just need to be transparent, open to everyone and set up strict punishment for stealing the money with prison for executives.
if they wanted to actually create jobs they would support small companies and set up open competitive programs based on project quality. or start a state investment bank giving super low interest loans so factories can expand without cutting profitable divisions like in china.
One idea I like is directly funding apprenticeship. It pays for job training and classroom instruction on a per-individual basis. The jobs are in long-term career sectors like advanced manufacturing, shipbuilding, aviation, healthcare, and technology.
In Georgia, the employer is reimbursed $2,500 when an apprentice starts and up to $10,000 when they finish. They can also get up to 75% of the apprentice's hourly wage covered during their initial on-the-job training.
> One idea I like is directly funding apprenticeship. It pays for job training and classroom instruction on a per-individual basis. The jobs are in long-term career sectors like advanced manufacturing, shipbuilding, aviation, healthcare, and technology.
This is basically what grad school does too. I'm into funding education further any day of the week. For higher education, I'd only add a string attached like "must practice trade in state that funded you if job is available for x years or must pay back funding pro rated".
It will just be abused like the money for in-home daycares and elder care is.
I'd rather they just lower our taxes and quit squandering our money on these programs that never work. I never once hear democrats looking to lower taxes or remove wasteful spending, it's practically encouraged. They defend SNAP recipients buying soda and candy even while admitting there's a correlation between SNAP recipients and having diabetes and being overweight. They do the wrong thing and know it and expect us to ignore that and keep funding these programs.
Our public transportation infrastructure literally cost 10x per mile than France or Hong Kong. That's not waste to you? For what California has spent/is spending on high-speed rail from nowhere to nowhere, China blanketed their country?
Notice you also left out police. How's our spending working there?
> open competitive programs based on project quality
This will never, ever happen. There will always be bonus points available, even if they're awarded to "conservative"-leaning feel-good attributes like veteran-owned sponsor businesses.
These investments are likely to always fail at their declared purpose. Better to put the money towards free childcare and maybe trying to convince parents to read to their kids.
It's straight corruption, no matter of big or small business. It should have been randomized blind selection of business who have existed for more than a year, and the granted money pays for new employees' taxes. Blind selection takes out the path to corruption (not who you know to get the fund). Randomized to be fair. Government is bad at picking winners or losers anyway. Business more than a year to screen out frauds. Granted money for new employees' taxes to encourage hiring new employees. Paying the taxes only so that the money can be spread out to more people.
They're always handed out as political favors or lotteries at best. How is a lottery sustainable or scalable? These solutions do not work. It's at best virtue signaling and at worst corruption (as OP says).
>There doesn’t seem to be any lesson-learning happening...
Which would indicate that creating jobs was not the actual reason for the grants. Given how trivially easy it would be fix the problem (simply make the grant contingent on the creation of jobs, otherwise it converts to a loan), the real purpose is probably a matter of generating headlines and raking in campaign contributions (with occasional full-on kickbacks probably happening as well). All of which it apparently does well enough that politicians continue to do it.
Correct, reporting this is doing nothing to stop it. People don't directly see the impact of it on their paychecks or budgets so they forget about it the hour after they read about it. The next politician can do it without fear of reprisal
> Hohman examined eight major projects—"those that offered $100 million in payments and received significant media attention"—totaling $2.7 billion in promised incentives
> All told, the governor said that her major subsidy projects would create 20,595 jobs in Michigan
Even using these numbers that works out to $135k/job, which is bonkers!
Not really, if the job lasts 30 years it will absolutely offset itself with local economic activity. These people will pay taxes, buy homes, visit doctors and much more.
People will truly justify anything. My god. We can't even hold governments accountable for waste because people will bend over backwards to justify any amount of spending.
It's both. A mix of incentives (that were not paid out) and land reclamation (which did cost money):
> Ford, meanwhile, lowered its job creation estimate from 2,500 to 1,700, though so far it has created zero, and received no state money, as the building is still under construction. The state did, however, spend another $780 million on site preparation.
Most of the claims in the article are slightly obfuscated as to which actually involved any real net cash flow. Even the bottom line:
> Of the $2.7 billion offered, $1.8 billion has been spent—transferred either to companies or to local economic development agencies.
Doesn't make it clear what the local economic development agencies actually did with it - whether the projects were otherwise necessary, etc. Some of the spending was likely defensible even if the originally intended project fell through. Lots of it probably wasn't defensible. Michigan (and every other state) gives a lot of money to 'developers' in ways that don't look great if you bother to look into it at all.
Michigan's state budget probably totaled ~$700 billion over the past 8 years. So this accounts for up to 0.2% of the budget.
Two things
1) we dont know if the state might have lost more jobs if these incentives weren't provided
2) the deeper issue is that the auto makers compete with state backed companies in other regions
I'm not saying we need to copy state backed but the climate is desperate
Michigan has relatively business-unfriendly laws and regulations.
Apparently their tax system is quite favorable to businesses, but taxes are only one (small) part of the equation. The taxes matter more once a company is making a lot of money.
In short, tax incentives and random per company “investments” (bribes?) are not enough to offset certain laws and regulations Michigan has.
I am not saying those laws and regulations are bad. I am just saying that targeted tax incentives and investment for specific companies are the wrong way to solve the problem.
Democrats are structurally incompetent. I've never seen them use tax dollars in a fiscally responsible way. I was always a registered democrat, but their complete incompetence and lack of efficiency has really turned me away from them. I don't trust them to spend money effectively or wisely. In California we are taxed extensively but then spend hundreds of billions on trains that don't exist, homeless programs that clearly do nothing but make the problem worse, our roads are in shambles, and quality of life crimes are all but completely ignored. Every state where democrats are in majority seems to be poorly managed.
The money spent on site and land clearing results in a big empty field? Yes, yes it did, that’s what those words mean. If we’re going to bribe companies to do a thing, we should at least accept when they did do it.
This is not the first time this type of thing happened almost looks like a laundering scam. Companies that do this should face real and very expensive consequences. But we know that will never happen.
The tfa says that almost all of this went to big public automakers. Enraging. I initially thought that this was going to some small biz thing that at least would slosh the money around through the owners. But nope - corp welfare!
The government just gave money to every executive in the company, and your argument is that because the company stock is also held by pension funds, they were supporting pension funds? Makes little sense.
Just giving the money straight to the pension funds would be much more efficient. This method enriches a bunch of non-contributors along the way.
Claiming the state “spent” money when it’s something like a tax incentive is completely disingenuous bullshit. This article does this in spades to come up with this huge billion dollar figure.
“We won’t collect additional property taxes on this new thing you’re building for 10 years” is not the same thing as spending money. If a business doesn’t start there instead you don’t get any money at all. So in both scenarios you get no tax revenue but without the business you hurt your own economy.
It’s not taxpayer money being sent away. It’s tax collection policy and if we claim tax exemptions are spending money, then the government is also spending billions on non-profits and low income households.
but i dont think "leave it up to the market" is a better idea. investments like this just need to be transparent, open to everyone and set up strict punishment for stealing the money with prison for executives.
if they wanted to actually create jobs they would support small companies and set up open competitive programs based on project quality. or start a state investment bank giving super low interest loans so factories can expand without cutting profitable divisions like in china.