The New Command Economy

I was just listening to CNBC when Gov Jennifer Granholm (D) Michigan came on to tell about the opening of a new plant that makes solar panels and batteries in Michigan.  The question was asked about what kind of incentives the states had to give the company.   She responded we gave them “a whole slew of incentives”.  Then Michelle Caruso-Cabrera of CNBC asked how these incentives have worked in the past.  Michelle cited previous times when Michigan has provided loans for movie production and broadband companies and has not seen the amount of job creation that they initially expected and were left with bad loans from some of these companies.  Michelle then cited how Michigan raised taxes on businesses last year. 

I bet every state provides these kinds of “incentives” to industries that they are trying to lure away from other states.  In order to pay for the incentives, the states then raise taxes on everyone else including businesses that are already in the state.  Other than the easy analogy of greasing the palms of businesses being like what the corruption laws make illegal in other instances, I believe this is a covert command economy.  Do you think a tobacco company that would create as many jobs as this solar panel manufacturer would get the same business incentives?  Maybe it would.  Basically, this is another case of the tax code being so complicated that some get away with paying low taxes while the rest of us have to pay much higher taxes.  We have preferred industries that do the sacred work of building windmills or have union employees that are subsidized by everyone else.  Why not let companies decide where to build their plants based on your educated work force, tax system, labor laws, etc?  Rather than the governor or legislators picking which industries they want to support.  You can bet those industries are also greasing the palms of the governor back with campaign contributions and lobbyists.  Yet no one sees this as corruption.  In my mind she admitted on national TV that she just committed corruption and no one cares.

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This entry was posted on Thursday, September 10th, 2009 at 9:50 am and is filed under Government Spending, Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

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2 Responses to “The New Command Economy”

  1. Taylor Says: September 10th, 2009 at 10:51 am

    Obama thinks Granholm is a genius and she has advised him on economic and green issues. Its good to know that Michigan’s economy is being held out as an example for the rest of us to emulate.

  2. Brittney Says: September 10th, 2009 at 10:59 am

    I read a tax blog written by a guy who writes often about this very issue. Here is a link to a list of these types of posts on his blog:

    http://www.rothcpa.com/mt/bingbong.cgi?tag=tax%20credits&blog_id=1&IncludeBlogs=1

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