After a year of wrangling over how to help diversify Michigan’s economy, our visionary leaders in Lansing created a billion dollar, 21st Century Jobs Fund for investing in high-tech industries.
Unsurprisingly, the first order of business in the new legislative session was controlling access to this latest public trough.
The House Speaker and Senate Majority Leader created a joint oversight committee for pork distribution. The governor’s office finds this unnecessary, her press secretary making the equally disquieting suggestion that we ought to “leave it to the experts to decide.”
Before turning a billion dollars of taxpayer money into campaign fund-raising fodder for politicians, we would do well to look back on how such “If-we-build-it-they-will-come” plans have fared in the past.
Ominously, the first such undertaking was launched immediately after Michigan was admitted to the union in 1837.
Our state’s first governor, Stevens T. Mason, and a debutante legislature, eager to exercise their new authority and envious of the success of New York’s Erie Canal in spreading civilization westward, authorized the construction of a 216-mile long canal across the lower peninsula. The thinking was that a direct route from Lake St. Clair to the eastern shore of Lake Michigan would provide a significant shortcut to Chicago, avoiding the arduous, often dangerous, trek though the straits of Mackinac.
$5 million in bonds were sold and construction of the Clinton-Kalamazoo Canal begun by July of 1838. But even as thick woods and marshy ground slowed progress, rapid advances in railroad technology were making the whole idea of a canal obsolete.
Then in 1843 the contractor for the project went bankrupt. And so did the state treasury. The canal – having barely crossed the Macomb county line into Oakland – was abandoned near what is now the city of Rochester.
Michiganders were so soured by the experience that they amended the state constitution in 1850 to prohibit “investing” tax money in commercial projects.
But if there is one thing at which politicians are especially adept, it is circumventing limitations on their power. And the “Field of Dreams” philosophy of governing by technological prognostication has continued to this day.
In fact, for a more recent example we need only hearken back to 2002.
The emergence of the Internet as a giant step in the evolution of communications technology led then governor, John Engler, to wax eloquent about the rush of commerce to Michigan he could envision — if only our entire state were wired for high-speed access.
So, as one of the last hurrahs of his administration, he pushed through the creation of a $50 million Broadband Authority to catapult our state into the Cyber Age. The governor predicted at the time that the program would, in less than a decade, create half million jobs, and half a billion dollars in economic activity.
Half of the money has now been spent – a huge portion of it on offices (first in Ann Arbor, then relocated to Lansing), and a staff of 13, whose salaries average $100,000 a year.
Unfortunately, it never occurred to the dreamers in Lansing that technology would continue to advance at gigahertz speed.
Wireless “hot spots” are already popping up in high demand areas. Cell phone companies are in the testing phase of providing satellite laptop/Internet connections. Europeans are even trying out a system that will use existing electrical wiring to carry Internet transmissions.
Now, the aforementioned Senate Majority Leader, head cheerleader in the legislature for the Broadband scheme a mere four years ago, wants to pull the plug on that one.
No matter. The new game in town is a much richer sport.
The only thing that hasn’t changed from the canal barge days of Gov. Mason to the information superhighway era of Gov. Granholm is the hubris of politicians who think they can invest other people’s money more wisely than those who risk their own.
Although it wouldn’t generate much in the way of campaign contributions, what would actually attract new business to our state is reducing the tax and regulatory burden.
A good place to start would be eliminating the intrusive, misleadingly named, Personal Property tax that annually penalizes businesses in direct proportion to their investment in tools, machinery, and equipment.
Of course, I’m assuming here that the point is to build some product or provide some service for which there will actually be a demand in the world marketplace.
If the only purpose of the 21st Century Jobs Fund is to create jobs, we could just buy a few hundred thousand shovels, assemble a workforce in Rochester, point west, and tell them to start digging.
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More on economic regulation:
- Throwing our money down a rabbit hole
- Brave new diversity
- Wholesale whining
- Michigan’s titanic business climate
- Downtown disaster areas
- Prescription for controlling drug costs
- Brave new diversity
