LaFaive said the MEDC didn't put any facts to support its claims in Tuesday's open letter. The letter stated that the MEDC has "gained ground" in establishing new industries and that it has played a part in making the state "the national leaders in high-tech, high-skilled, cutting edge, research and development driven job creation."
"Here's an idea," LaFaive wrote in an e-mail. "If the MEDC leadership feels that criticism of the agency is unfair or wrong, it should at least try to repudiate with evidence of its own the hard data brought forth by those of us who question the agency's work."
Mackinac Center President Joe Lehman said the think tank's research isn't jeopardizing businesses coming to the state.
"The only jobs our research might jeopardize are those at MEDC headquarters," Lehman wrote in an e-mail.
A study by the Kalamazoo-based Upjohn Institute presents what many — including LaFaive — consider the most positive view of the MEGA program's effectiveness. It found that the program provided a net gain of 18,000 jobs spread out over 11 years, or about 1,636 jobs for each year.
By comparison, the state of Michigan had a net loss of 203,240 jobs in 2008 alone, the last complete year of data provided by the Bureau of Labor Statistics.Ouch. One case study showed that these credits aren't worth the cost: Analysis of Michigan Film Subsidies: Two Years, $117m - and No Film Job Growth
A standard right wing talking point is that tax cuts for the rich and corporations create jobs.
This is, actually, true. They create jobs overseas.
The tax cuts’ two bills, in 2001 and 2003 – changed laws so that personal income tax rates were reduced, exemptions for the Alternative Minimum Tax increased, and dividend and capital gains taxes also cut.
Yet in the debate, it seems of no moment to either side whether the tax cuts were effective in achieving their goal of spurring business investment and making the US economy more competitive.
Our own examination of US non-residential investment indicates that the reduction in capital gains tax rates failed to spur US business investment and failed to improve US economic competitiveness.
The 2000s – that is, the period immediately following the Bush tax cuts – were the weakest decade in US postwar history for real non-residential capital investment.
Not only were the 2000s by far the weakest period, but the tax cuts did not even curtail the secular slowdown in the growth of business structures.
http://crooksandliars.com/ian-welsh/tax-cuts-rich-create-jobs-outside-us
The logic of this is simple enough. If you have money to invest, you're going to invest it where it'll return the most. Right now and in the past couple decades that is either in leveraged financial games, or it is in economies which are growing fast and have low costs. The US does not have high growth compared to China or Brazil or many other developing countries. It has high costs compared to those countries as well.
If you can build a factory overseas which produces the same goods for less, meaning more profit for you, why would you build it in the US?
Until that question is adequately answered, by which I mean "until it's worth investing in the US", most of the discretionary money of the rich will either go into useless speculative activities like the housing and credit bubbles, which don't create real growth in the US, or they will go overseas.
There are a number of ways this question can be answered.
- You could slap taxes on foreign capital flows;
- you could slap tariffs on foreign goods produced in low cost domiciles so that companies have to produce in the US to have access to the US market;
- you could push industries which are hard to outsource but don't actually decrease American competitiveness. The housing bubble increased the cost of doing real business in the US by inflating real estate costs. A massive buildout making every building in the US energy neutral or an energy producer would increase US competitiveness.
- you could try and do what America once did: have a tech boom. If the future is being produced in a country then everyone has to invest there and when things are changing fast you can't offshore production, because speed matters and offshoring is slow. This is why real wages increased during the tech boom of the 90s.
There are other answers as well, but the point is simpler: you must answer the question "why invest in the US instead of a low cost, high growth country?" Until you answer that question tax cuts will not only not do any good, but in a sense will do harm, by increasing the speed at which jobs are offshored out of America.
Sigma releases SD1 flagship digital SLR: Digital Photography Review
Sigma releases SD1 flagship digital SLR: Photokina 2010: Sigma has announced the SD1 digital SLR, which uses a brand new 46Mp 1.5x crop Foveon X3 sensor (4800 x 3200 x 3 layers). Designed as the company's flagship camera, the SD1 has a ...
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robert shumake
Sigma releases SD1 flagship digital SLR: Digital Photography Review
Sigma releases SD1 flagship digital SLR: Photokina 2010: Sigma has announced the SD1 digital SLR, which uses a brand new 46Mp 1.5x crop Foveon X3 sensor (4800 x 3200 x 3 layers). Designed as the company's flagship camera, the SD1 has a ...
Arrowheadlines: Chiefs <b>News</b> 9/21 - Arrowhead Pride
Good morning Chiefs fans! Another serving of Kansas City Chiefs news waits below. I have mixed thoughts after watching most of last night's game. The 49ers looked good, but shot themselves in the foot a few times. I'm hoping Arrowhead ...
Eric Boehlert: Fox <b>News</b> Has a Christine O'Donnell Problem
Why? Because now Fox News has to explain to viewers why O'Donnell is ready to serve in the US Senate even though she's not ready to appear on Fox News Sunday. Awkward.
The Mackinac Center for public policy found that the MEDC should be credited with only 1 in 4 jobs that it claims to have created, and even then that assumes those jobs wouldn't have been created anyway. (Audit: MI firms getting $millions in tax credits didn't create jobs promised, money thrown down toilet) The auditor general confirmed those figures. Mackinac's Michael LaFaive laid right into the open MEDC letter that criticized critics:
LaFaive said the MEDC didn't put any facts to support its claims in Tuesday's open letter. The letter stated that the MEDC has "gained ground" in establishing new industries and that it has played a part in making the state "the national leaders in high-tech, high-skilled, cutting edge, research and development driven job creation."
"Here's an idea," LaFaive wrote in an e-mail. "If the MEDC leadership feels that criticism of the agency is unfair or wrong, it should at least try to repudiate with evidence of its own the hard data brought forth by those of us who question the agency's work."
Mackinac Center President Joe Lehman said the think tank's research isn't jeopardizing businesses coming to the state.
"The only jobs our research might jeopardize are those at MEDC headquarters," Lehman wrote in an e-mail.
A study by the Kalamazoo-based Upjohn Institute presents what many — including LaFaive — consider the most positive view of the MEGA program's effectiveness. It found that the program provided a net gain of 18,000 jobs spread out over 11 years, or about 1,636 jobs for each year.
By comparison, the state of Michigan had a net loss of 203,240 jobs in 2008 alone, the last complete year of data provided by the Bureau of Labor Statistics.Ouch. One case study showed that these credits aren't worth the cost: Analysis of Michigan Film Subsidies: Two Years, $117m - and No Film Job Growth
A standard right wing talking point is that tax cuts for the rich and corporations create jobs.
This is, actually, true. They create jobs overseas.
The tax cuts’ two bills, in 2001 and 2003 – changed laws so that personal income tax rates were reduced, exemptions for the Alternative Minimum Tax increased, and dividend and capital gains taxes also cut.
Yet in the debate, it seems of no moment to either side whether the tax cuts were effective in achieving their goal of spurring business investment and making the US economy more competitive.
Our own examination of US non-residential investment indicates that the reduction in capital gains tax rates failed to spur US business investment and failed to improve US economic competitiveness.
The 2000s – that is, the period immediately following the Bush tax cuts – were the weakest decade in US postwar history for real non-residential capital investment.
Not only were the 2000s by far the weakest period, but the tax cuts did not even curtail the secular slowdown in the growth of business structures.
http://crooksandliars.com/ian-welsh/tax-cuts-rich-create-jobs-outside-us
The logic of this is simple enough. If you have money to invest, you're going to invest it where it'll return the most. Right now and in the past couple decades that is either in leveraged financial games, or it is in economies which are growing fast and have low costs. The US does not have high growth compared to China or Brazil or many other developing countries. It has high costs compared to those countries as well.
If you can build a factory overseas which produces the same goods for less, meaning more profit for you, why would you build it in the US?
Until that question is adequately answered, by which I mean "until it's worth investing in the US", most of the discretionary money of the rich will either go into useless speculative activities like the housing and credit bubbles, which don't create real growth in the US, or they will go overseas.
There are a number of ways this question can be answered.
- You could slap taxes on foreign capital flows;
- you could slap tariffs on foreign goods produced in low cost domiciles so that companies have to produce in the US to have access to the US market;
- you could push industries which are hard to outsource but don't actually decrease American competitiveness. The housing bubble increased the cost of doing real business in the US by inflating real estate costs. A massive buildout making every building in the US energy neutral or an energy producer would increase US competitiveness.
- you could try and do what America once did: have a tech boom. If the future is being produced in a country then everyone has to invest there and when things are changing fast you can't offshore production, because speed matters and offshoring is slow. This is why real wages increased during the tech boom of the 90s.
There are other answers as well, but the point is simpler: you must answer the question "why invest in the US instead of a low cost, high growth country?" Until you answer that question tax cuts will not only not do any good, but in a sense will do harm, by increasing the speed at which jobs are offshored out of America.
robert shumake
Sigma releases SD1 flagship digital SLR: Digital Photography Review
Sigma releases SD1 flagship digital SLR: Photokina 2010: Sigma has announced the SD1 digital SLR, which uses a brand new 46Mp 1.5x crop Foveon X3 sensor (4800 x 3200 x 3 layers). Designed as the company's flagship camera, the SD1 has a ...
Arrowheadlines: Chiefs <b>News</b> 9/21 - Arrowhead Pride
Good morning Chiefs fans! Another serving of Kansas City Chiefs news waits below. I have mixed thoughts after watching most of last night's game. The 49ers looked good, but shot themselves in the foot a few times. I'm hoping Arrowhead ...
Eric Boehlert: Fox <b>News</b> Has a Christine O'Donnell Problem
Why? Because now Fox News has to explain to viewers why O'Donnell is ready to serve in the US Senate even though she's not ready to appear on Fox News Sunday. Awkward.
robert shumake
Sigma releases SD1 flagship digital SLR: Digital Photography Review
Sigma releases SD1 flagship digital SLR: Photokina 2010: Sigma has announced the SD1 digital SLR, which uses a brand new 46Mp 1.5x crop Foveon X3 sensor (4800 x 3200 x 3 layers). Designed as the company's flagship camera, the SD1 has a ...
Arrowheadlines: Chiefs <b>News</b> 9/21 - Arrowhead Pride
Good morning Chiefs fans! Another serving of Kansas City Chiefs news waits below. I have mixed thoughts after watching most of last night's game. The 49ers looked good, but shot themselves in the foot a few times. I'm hoping Arrowhead ...
Eric Boehlert: Fox <b>News</b> Has a Christine O'Donnell Problem
Why? Because now Fox News has to explain to viewers why O'Donnell is ready to serve in the US Senate even though she's not ready to appear on Fox News Sunday. Awkward.
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