Saturday, August 3, 2013

WEDC Not A Good Model For Deploying Scarce Resources

The Journal Sentinel actually had a good idea, Governors Should Swear Off Poaching. Our economy doesn't gain anything by Wisconsin stealing jobs from Illinois - the so-called war among the states. It merely realigns jobs without any growth occurring. 

Yet, once the Journal began drilling down further into their editorial's details, things got way off course.
Walker deserves credit for helping launch the Wisconsin Economic Development Corp., which is a good model for deploying scarce resources even if poor management at the agency resulted in a series of embarrassing mistakes.
Good Jobs First actually published The Risks of Privatizing State Economic Development Agencies in January 2011.
Transferring state business recruitment functions from government agencies to private entities is not the panacea that its proponents suggest. In fact, the track record of those few states that have taken the step is filled with examples of misuse of taxpayer funds, political interference, questionable subsidy awards, and conflicts of interest. Rather than making economic development activities more effective, privatization often is little more than a power grab by governors and powerful business interests...
Most of the seven states that currently make use of economic development PPPs have experienced a variety of performance problems. These include the following:

 Misuse of taxpayer funds (Rhode Island, Florida and Wyoming)

 Excessive executive bonuses (Virginia, Florida, Michigan and Wyoming)

 Questionable subsidy awards by the subset of PPPs that have a role in that process (Michigan and Rhode Island)

 Conflicts of interest in subsidy awards (Florida, Utah and Texas, which makes limited use of PPPs)

 Questionable claims by the PPP about its effectiveness (Wyoming, Florida, Utah and Indiana)

 Resistance to accountability (Florida and Michigan)
Why does the Journal continue to push an idea that has failed everywhere it has been tried? Why do they still defend such a bogus program, even after it has been shown to be an embezzling debacle here in Wisconsin?

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