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That's OK, the press conference was worth the squandered millions

March 17, 2010

When politicians enact "economic development" tax breaks, their goal isn't to help the economy; it's to provide opportunities for press conferences to boast about the "new jobs." Once the press conference ends, so does their interest. David Brunori tells how this plays out in Massachussetts:

The Boston Globe in an excellent March 14 article reported that Massachusetts has given away hundreds of millions of dollars in state and local tax breaks to companies that created few or no jobs. Indeed, many of the recipients of the tax breaks actually moved jobs overseas or just laid workers off. For example, Nortel Networks received $2 million from the state and promised to add an additional 800 workers to its staff of 2,200. Today Nortel has 145 employees in the state but continues to enjoy the tax breaks.

That's why we shouldn't have been surprised that Iowa's film credit program was grossly mismanaged. The politicians wanted to meet starlets and have happy stories about the film crews they bribed to come here. It's no fun checking invoices to make sure the money isn't plundered.

UPDATE: More here.