In early 2008, state lawmakers passed an incentive program for filmmakers that provides refundable tax credits (potential cash subsidies) to those who produce films in the Great Lakes State. The program has been a public relations boon for its advocates. The glare of Hollywood lights and the excitement of "new jobs" seem to have convinced many people the program is a success. They should look more carefully.

For a variety of reasons, government subsidies targeted at particular industries have a terrible track record when it comes to boosting a state's economy.[2] This conclusion is supported by economic theory, history and empirical research. Hollywood magic cannot replace economic fundamentals.


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