It’s time to kill the Wisconsin Economic Development Corporation.
This Frankenstein’s monster of a cobbled together, “private-public partnership” has proved to be an unaccountable, incompetent, out-of-control disaster. The state should just shut the whole thing down and not replace it.
The Wisconsin State Journal has been reporting on a mix of apparent political payoffs and administrative incompetence that led the WEDC to invest hundreds of thousands of dollars in questionable business ventures without proper vetting. And this has resulted in the apparent loss of those dollars without producing the jobs promised.
But even if the WEDC had made itself free of politics and even if it was competently administered, it would still be a bad idea. That’s because taxpayer handouts and risky loans in the name of economic development have not been proved to work.
In 2012 The New York Times did a major study of economic development programs in America and found that more than $80 billion is spent each year by states, counties and local governments on tax breaks, low- or no-interest loans and outright grants in the name of job creation. Yet, success stories are hard to come by, and accountability ranges from weak to nonexistent. Even where new jobs have actually been counted, nobody can say for sure how many of them would been created anyway without the handouts.
In other words, the record of the WEDC is not much different from similar economic development agencies all across the county. That’s because the very idea of government-sponsored economic development programs is a hazily defined enterprise at best. If economics is the dismal science, economic development is weird science or, more accurately, no science at all.
Government should just get out of the economic development game altogether; it should stop chasing companies or offering any kinds of incentives at all. That just leads to harmful, lowest-common-denominator competition between communities.
Instead, government should do what we know will pay off: invest in the public realm. That means investments in public education from preschool through postgraduate work; in infrastructure like transportation of all sorts; in public amenities like parks and trails; in programs and regulations that yield clean water and air; and in policies that yield a better, healthier workforce, like higher minimum wages and mandatory health care, child care and the like.
What we know is that modern economic growth is all about a skilled workforce and that that workforce is more mobile than ever. Businesses go where the workers are, and the workers go where the quality of life is the best. So everything government does — which is pretty much what it has traditionally done — to improve the public realm is all that government should do. Build the best possible environment in every way, and the business investment will follow. Anything more exotic is just a waste of resources.
So, yes, WEDC is a disaster, but it’s pretty much just your run-of-the-mill typical economic development agency mess. And that’s because the whole thing rests on a fundamentally discredited notion. Do away with it and get back to basics.
