GuyFawkes38
04-25-2011, 10:47 PM
Well, sort of.
I consider myself a news junkie. Yet I had no idea this was going on. From the USA Today (http://www.usatoday.com/money/economy/2011-04-26-job-creation-shovel-ready.htm):
Ohio has launched what appears to be the biggest intervention in the private economy by a state government since at least the Great Depression, according to a USA TODAY review of historical data. The state is preparing new industrial parks and high-tech office buildings, loaning money and giving grants to businesses, and subsidizing clean energy, websites, nanotechnology and warehouses, among other things.
The state will spend $1.4 billion on economic development this year. Indiana, by contrast, will spend $37 million; Florida $11 million. California has 25 people working full-time on economic development. Ohio: more than 400.
Ohio’s attempt to revive its economy is a real-life case of how states act as a laboratory of democracy. This industrial state is testing a provocative economic question: Can government direct the economy into the future, or is that best done by a free market?
It’s unclear whether Ohio’s gamble will pay off.
A USA TODAY review of two dozen of Ohio’s state-funded projects found many behind schedule or failing to deliver the jobs or investment returns promised.
Ohio is heading down a path Michigan tried on a smaller scale but is abandoning.
Michigan spent about $100 million to $250 million annually on economic development during the past decade, first under Republican Gov. John Engler, then under Democratic Gov. Jennifer Granholm. The effort — even with an extra, one-time injection of $400 million in 2007 — couldn’t stop the state’s economic slide from a collapsing auto industry.
Michigan’s new governor, Republican Rick Snyder, plans to cut economic development spending to $50 million. Instead, he wants to reduce business taxes by more than $1.5 billion and shift the burden to the personal income tax.
Ohio State University economist Mark Partridge says government efforts to plan an economic revival seldom work.
“Politicians and economic development officials overestimate their ability to forecast the future — to predict the next Silicon Valley or even to know beforehand that a Silicon Valley is going to occur,” Partridge says.
Government’s poor record of picking winners and losers means that even well-intentioned programs can hurt more than help, he says.
“A tax incentive for one firm means I have to raise taxes on everyone else or cut services,” Partridge says.
Read the whole thing.
This year, Ohio politicians are distributing well over a billion dollars of taxpayer cash to businesses. What could go wrong.
I consider myself a news junkie. Yet I had no idea this was going on. From the USA Today (http://www.usatoday.com/money/economy/2011-04-26-job-creation-shovel-ready.htm):
Ohio has launched what appears to be the biggest intervention in the private economy by a state government since at least the Great Depression, according to a USA TODAY review of historical data. The state is preparing new industrial parks and high-tech office buildings, loaning money and giving grants to businesses, and subsidizing clean energy, websites, nanotechnology and warehouses, among other things.
The state will spend $1.4 billion on economic development this year. Indiana, by contrast, will spend $37 million; Florida $11 million. California has 25 people working full-time on economic development. Ohio: more than 400.
Ohio’s attempt to revive its economy is a real-life case of how states act as a laboratory of democracy. This industrial state is testing a provocative economic question: Can government direct the economy into the future, or is that best done by a free market?
It’s unclear whether Ohio’s gamble will pay off.
A USA TODAY review of two dozen of Ohio’s state-funded projects found many behind schedule or failing to deliver the jobs or investment returns promised.
Ohio is heading down a path Michigan tried on a smaller scale but is abandoning.
Michigan spent about $100 million to $250 million annually on economic development during the past decade, first under Republican Gov. John Engler, then under Democratic Gov. Jennifer Granholm. The effort — even with an extra, one-time injection of $400 million in 2007 — couldn’t stop the state’s economic slide from a collapsing auto industry.
Michigan’s new governor, Republican Rick Snyder, plans to cut economic development spending to $50 million. Instead, he wants to reduce business taxes by more than $1.5 billion and shift the burden to the personal income tax.
Ohio State University economist Mark Partridge says government efforts to plan an economic revival seldom work.
“Politicians and economic development officials overestimate their ability to forecast the future — to predict the next Silicon Valley or even to know beforehand that a Silicon Valley is going to occur,” Partridge says.
Government’s poor record of picking winners and losers means that even well-intentioned programs can hurt more than help, he says.
“A tax incentive for one firm means I have to raise taxes on everyone else or cut services,” Partridge says.
Read the whole thing.
This year, Ohio politicians are distributing well over a billion dollars of taxpayer cash to businesses. What could go wrong.