The Corporate Welfare Mentality
Team 4 Pittsburgh has a well-done, but disturbing, story and video on why government bureaucrats hand out "economic development" grants to companies.
Usually, government officials claim that taxpayer "investments" will "creat jobs". But that is quickly debunked:
Thankfully, there are a few quotes from Matt Brouillette to break up this insanity, noting how "economic development" spending doesn't grow the economy, how projects are chosen on political merit rather than economic merit, and the redistributing funds from successful business to failing models hurt is a perverse incentive.
Usually, government officials claim that taxpayer "investments" will "creat jobs". But that is quickly debunked:
Jim Parsons: But in a recent interview, Wittlin, a Pittsburgh native, said he'd make films here even without financial incentives.Responding to a question about why many taxpayer-funded "loans" are never paid back, Allegheny County Redevelopment Authority head Dennis Davlin answers that it is the government's role to give money to businesses plans doomed to fail.
Mike Wittlin: "Guys like myself and Mike Dolan, we'll keep making movies here probably regardless."
Davin says the redevelopment authority has a responsibility to take risks that no private lender would. ...We all know that government officials tend to be loose with "investments", because they are spending other people's money, but rarely will they come out and say that they don't really care whether the project they give our money to is viable.
Jim Parsons: "If a company goes to a bank to try to get a loan and the bank says uh-uh, why would you do it?
Dennis Davin: "I think for us, it's a simple answer. That's part of our role. And our obligation."
Thankfully, there are a few quotes from Matt Brouillette to break up this insanity, noting how "economic development" spending doesn't grow the economy, how projects are chosen on political merit rather than economic merit, and the redistributing funds from successful business to failing models hurt is a perverse incentive.
3 comments:
Thanks Nate for bringing this to our attention. This piece is loaded with bureaucratic gems:
Jim Parsons: "Would it be typical in the private sector for a $1.3 million loan to be handed out with no monthly payment schedule? And just that the proceeds of the sale or lease of the property are to be used to repay the loan whenever that happens?"
The "economic development" Kings and Queens should be ashamed of themselves; taking money from taxpayers who have proven they can produce and giving to those who consume without producing.
Dennis Davin: "No, but that's why we're the public sector.
ooops the above is out of order. the Kings and Queens comment should be after Dennis Davin's classi, "...but that's why we're the public sector."
Can any of these economic bright-lights provide one scintilla of evidence to support their contention that these "economic development" grants have created more jobs than they have destroyed?
In typical liberal fashion, they have conveniently ignored the negative impact of taking money from profitable businesses and productive citizens. How many jobs would have been created if they had just allowed profitable businesses to expand? How many jobs would have been created if they'd allowed productive citizens to spend the fruits of their labor on products and services they desired?
Every elected representative should be forced to read Bastiat's "The Seen and the Unseen" before taking the oath of office.
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