The Michigan Economic Growth Authority is a discriminatory tax credit program sold as a way for Michigan government to "create or retain" jobs here. This week it even offered a special deal to a for-profit arm of the SEIU labor union. Ironically, the MEGA deal was offered in part to address the union's complaint that it is at a disadvantage due to Michigan's "high labor costs," compared to two other states SEIU was supposedly considering (one of them with a "Right to Work" law reviled by the union). This according to a document obtained by Detroit News business writer Daniel Howes (State tax credit to labor union is baffling, November 20). 

Apparently lost on state officials is that labor unions exist to artificially raise labor costs by wresting higher worker pay from employers - regardless of whether the productivity of their union employees justifies the increased compensation. This is yet another example of Michigan's so-called "economic development" programs working at cross-purposes with the stated goal of expanding our economy.

Several years ago the Mackinac Center categorized the reasons listed by MEGA beneficiaries for considering locations in other states. The summarizing graphic below is instructive. A full 30 percent cited uncompetitive labor costs in Michigan - more than any other reason

Every time the state hands out targeted tax credits or subsidies to a particular business or industry it is implicitly admitting that Michigan's costs for employers are too high. If that is true for a lucky handful of corporate welfare recipients, it's also true for all the other 100,000-plus Michigan job providers on the hook for the this state's burdensome business taxes, including the Michigan Business Tax and its 22 percent surcharge.

Granting these "targeted incentives" is demonstrably a failed policy. Systematic research shows these "targeted incentives don't work, but that hasn't stopped the state from picking ever more "winner" corporations as the beneficiaries of MEGA tax break deals.  It would be far better to eliminate the MBT and surcharge for all Michigan businesses, thus making MEGA superfluous. The lost tax revenues could be easily replaced with any number of ideas for savings advanced by the Mackinac Center.

The Michigan Economic Growth Authority is a discriminatory tax credit program sold as a way for Michigan government to "create or retain" jobs here. Systematic research shows it doesn't work, but that hasn't stopped the state from picking ever more "winner" corporations as the beneficiaries of MEGA tax break deals.

This week it even offered a special deal to a for-profit arm of the Service Employees International Union. According to a document obtained by Detroit News business writer Daniel Howes (State tax credit to labor union is baffling, November 20), the MEGA tax break was offered in part to address the disadvantage of Michigan's "high labor costs" compared to two other states SEIU was supposedly considering (one of them with a right-to-work law reviled by the union).

Apparently lost on state officials is that labor unions exist to artificially raise labor costs by wresting higher wages from employers - regardless of whether the productivity of their union employees justifies the increased compensation. This is yet another example of Michigan's so-called "economic development" programs working at cross-purposes with the stated goal of expanding our economy.

Several years ago the Mackinac Center categorized the reasons listed by MEGA beneficiaries for considering locations in other states. The summarizing graphic below is instructive. A full 30 percent cited uncompetitive labor costs in Michigan - more than any other reason.

Every time the state hands out targeted tax credits or subsidies to a particular business or industry, it is implicitly admitting that Michigan's costs for employers are too high. If that is true for a lucky handful of corporate welfare recipients, it's also true for all the other 100,000-plus Michigan job providers on the hook for this state's burdensome business taxes, including the Michigan Business Tax and its 22 percent surcharge.

Granting these "targeted incentives" is demonstrably a failed policy. It would be far better to eliminate the MBT and surcharge for all Michigan businesses, thus making MEGA superfluous. The lost tax revenues could be easily replaced with any number of ideas for savings advanced by Mackinac Center scholars.

Paul Kersey, director of labor policy, was a guest on "The Frank Beckmann Show" today on WJR AM760. Kersey discussed a $2 million refundable tax credit the Michigan Economic Development Corp. awarded to the Service Employees International Union.

Kersey blogged about the issue yesterday, raising several questions that legislators and taxpayers should be asking about this unique deal.

At a press conference Tuesday announcing several new recipients of discriminatory state tax breaks granted by the Michigan Economic Growth Authority, Gov. Jennifer Granholm repeated a number of false or misleading statements about this state government's policy of picking winners and losers, and its effects as a substitute for genuine labor, regulatory and tax law reforms.

Here is a closer look at Gov. Granholm's comments (quotes taken from the MIRS Capitol Capsule, subscription required):

Gov. Granholm: "First of all, what everybody needs to remember is that these are all performance-based, that we would not be paying a credit if it were not for the fact that the company's going to be hiring people. If they don't hire the people, they don't get the credit."

Score: Misleading. See "MEGA Tax Credits Are Not Without Cost" to discover seven reasons this program imposes large burdens.

Gov. Granholm: "The studies demonstrate that the return on the investment is far greater than the tax credit that is given."

Score: False. There are no such "studies." There has not been any systematic, independent research demonstrating that MEGA tax breaks create jobs or improve the economy. The independent research that does exist shows the credits either have no effect or actually generate declines in employment. MEGA's "parent," the Michigan Economic Development Corporation, has not even attempted to rebut these studies.

Gov. Granholm: "The people who are hired pay income tax; there is a spinoff effect. So the benefit of having these incentives, as you can see from today, these would not happen if not for these incentives."

Score: Irrelevant. What matters is the net effect of the program — whether it creates more jobs than it costs. The existing research indicates that it does not.

Gov. Granholm: "Every state is doing it."

Score: True.

Gov. Granholm: "There's no doubt that we need to restructure our tax system, but the decline in revenues is not attributable to the MEGA grants. The decline in revenues is clearly attributable to the overall, structural changes in our economy."

Score: False. The decline in Michigan tax revenues is due to overall economic decline fueled by state government having adopted policies that make firms located here unable to effectively compete with ones in other states. In fact, Michigan's tax system has shown itself to be more resilient than other states'.

Michigan legislators have introduced two bills (HB5558, HB5559) that would increase tipping fees to place trash in landfills. If passed, the current fee of seven cents per cubic yard will rise to $7.50 per ton. The increased fees are estimated to raise $145 million, according to Gongwer News Service. This could not come at a worse time for economically struggling Michigan households. Any increase in tipping fees would of course be passed on to consumers and businesses in the state already in the worst economy in Michigan since the Great Depression. The money raised by fee increases would go to local governments for recycling programs.

Democratic lawmakers in the House (no Republicans supported the legislation) argue that Michigan households and businesses should take the economic hit to help keep Canadian trash out of the state. There is no indication, however, that inflicting additional economic hardship on our residents will prevent Canadian trash from crossing the border into Michigan. It would most likely require a considerably higher fee than $7.50 a ton to make it uneconomical for Canadian trash haulers to use Michigan landfills. In fact, waste has historically crossed Michigan borders in both directions between Canada and surrounding states. Michigan is a net importer of solid waste from Canada while at the same time a net exporter of hazardous waste to Canada.

Contrary to rhetoric often heard, Michigan has no shortage of landfill space. Many local communities welcome local landfills in their area due to the jobs they bring as well as tax revenue generated from the facilities.

Many local governments in the state are complaining they have insufficient revenues to provide basic services such as police, fire, and maintaining roads. Receiving additional money for recycling would seem to be low on the priority list for most local government managers.

This suggests any such tax should be recycled to the trash bin.  

Michigan politicians are fond of blaming the domestic auto industry's decline for all the state's problems. But "auto industry" just doesn't mean what it used to here. For example, domestic auto sales have fallen by 49.8 percent since their 1999 peak. Over the same period, however, inflation-adjusted state tax and fee revenues have only declined by 15.9 percent.

If the auto industry were the 800-pound gorilla of the Michigan economy the politicians try to convey, the revenue loss would have been much greater. Apparently, this gorilla weighs less than advertized.

Perversely, the same politicians who promote auto declines as the source of Michigan's travails also cite this as a reason to raise taxes. They imply that state tax revenues are disproportionately based on a single "old economy" source, and so our tax system is "out of sync" with the current economy.

They are wrong. Tax revenues are down in Michigan, but in proportion to the decline in overall employment here — not just automaker employment. In fact, Michigan tax revenues are tracking the state's economy much more closely than in most states. Our tax system has actually shown itself to be more resilient than other states'.

While Michigan's school funding "crisis" rages on, the Alabama Board of Education just came up with a plan to balance the state's education budget in one day.

Unlike Michigan, Alabama's state Board has the tools needed to contain the out-of-control labor costs that generate our public school establishment's perpetual and self-imposed funding debacles. Last week, they came up with two ways to balance the state education budget:

Implement a modest increase in the amount school employees contribute (6 percent) to the Alabama Teacher Retirement System.

Freeze the amount of the state's contribution for employee health insurance benefits.

With these two steps Alabama's education funding problems will be solved. If Michigan's state Board of Education had comparable powers, it could similarly resolve our school funding issues with two simple steps:

• Require salaried school employees to contribute 2 percent of their pay to the Michigan Public School Employee Retirement System. This would save school districts approximately $144 million annually, or about $90 per pupil, according to data from the Center for Educational Performance and Information.

• Require school employees to contribute 15 percent to the cost of insurance premiums. This would save $290 million, or $180 per pupil. (The 2008 average private-sector employee health insurance contribution in Michigan was 22 percent for a family plan premium.)

Of course, if Michigan's state Board of Education had similar powers, there's no reason to imagine it wouldn't be just as much a captive of school employee unions as most local school boards. In the final analysis, the real difference between the two states is the outsized political power of public employee unions here.

Nevertheless, viewing our problems through this lens does clarify them.

A Detroit News editorial cites David Littmann, senior economist for the Center, on what can be done to strengthen the dollar.

Jack McHugh, senior legislative analyst, participated in a panel discussion recently where a representative sampling of Michigan residents addressed issues ranging from education reform to welfare spending, according to the Lansing City Pulse.

The MEDC's decision to extend a $2,000,000 refundable tax credit to the Service Employees International Union is, to put it mildly, very questionable. This is a deal that warrants the strictest of scrutiny from the media and the public. The following are just a few of the questions relating to this grant for which the public deserves answers:

SEIU is the collective bargaining agent for more than 12,000 state employees. Will this grant affect the relationship between the state as employer and the SEIU as a union? Was there a quid-pro-quo involved?

In 2008 the SEIU received close to $6.4 million from the state of Michigan in the form of union dues and agency fees, to which the union is entitled under the terms of collective bargaining agreements it negotiated from the state. While final figures are not available, they should receive close to that amount in union dues and agency fees again this year. Hasn't the SEIU received enough from taxpayers already?

Our own study of union financial reports indicates that only 47.2 percent of SEIU dues are spent on representation. A typical non-profit spends close to two-thirds of its budget on its core programs. Is it wise for the state to subsidize such an inefficient organization?

In our recent report on public-sector labor law we showed that as a government employee union, the SEIU is in a position to affect government operations through collective bargaining. The negotiation process empowers SEIU to impact the state's budget and operations. Is it appropriate for the state to provide funds to an organization with such particular influence over state government itself?

SEIU itself is a very politicized organization. At the national level it is allied with the discredited Association of Community Organizations for Reform Now (ACORN), which has been accused of voter registration fraud in several states. A quick check of the SEIU's Michigan State Council Website (MEDC's own announcement links here!) shows SEIU support for insurance regulation, the federal stimulus package, state tax increases and national health care legislation. Can MEDC guarantee that the "Member Action Service Center" that its funds are to be used for will not be a political operation itself? Can MEDC guarantee that the facility will not be used for political activities after hours? Shouldn't such a heavily politicized group be barred from receiving any discretionary grants from the state?

Rightly or wrongly, many employers see unionization as damaging to their economic prospects. Will this facility be used by SEIU or other unions as a base of operation for organizing? As employers learn that the state is using economic development funds to subsidize union activity, will this have a negative effect on the state's efforts to attract other employers?

Even if the state's motivations are entirely pure, there are numerous ways that SEIU could abuse this grant. The value of MEDC itself is dubious and this grant is especially so. We will be examining this decision very closely, and urge Michigan taxpayers to pay close attention as well.

An unusual joint hearing occurring right now of two state House committees on Michigan's film subsidy program brought to mind a letter received last summer from Janet Lockwood, director of the Michigan Film Office. The letter was in response to a Mackinac Center press release describing how the subsidy program may actually destroy jobs.

Lockwood's arguments were without economic merit, but perhaps one point deserves to be rebutted.

At issue was the Mackinac Center's critique of the Michigan State University report that claimed the film subsidy program had "created" 1,102 year-round equivalent jobs since April 2008, and yet excluded 100 percent of the $48 million worth of associated costs. Including the costs would dramatically reduce the supposed jobs. In response Lockwood argued:

"Furthermore, as the (movie industry) infrastructure in Michigan grows over time, a larger portion of such rebated funds will remain in the state's economy. This is the primary reason that the REMI analysis conducted by Michigan State University did not deduct the cost of the incentive from the spending that occurred as a result of these film projects."

This claim is specious. A hypothetical possibility that a greater proportion of future subsidies will remain in Michigan (as opposed to being "repatriated" back to Hollywood, presumably) provides no rationale for excluding current costs.

In addition, one of the MSU authors told me on April 27 that their purpose was simply to measure the "economic impact of the film industry expenditures, not necessarily the incentive program." While pointless, that exercise does not encompass any part of Lockwood's byzantine rationale for why hypothetical future benefits justify ignoring real current costs.

Here's the bottom line: No economic (vs. political) case can be made for robbing taxpayer Peter of $48 million, giving it to filmmaker Paul, and expecting both to be better off. The state should stop trying, and stop pretending that this is about "economic" rather than political development.

(Editor's note: The House Tax Committee and House New Economy and Quality of Life Committee will hold a joint session at 9 a.m. today in Room 352 of the State Capitol Building. This text was e-mailed to all members.)

Dear Joint House Committee Members:

It has come to my attention that you will be meeting today to discuss the Michigan film incentive program. As you consider the testimony and documents presented by various parties, be advised that certain items with seemingly pristine pedigrees may be deeply flawed.

For example, a Michigan State University film subsidy "impact" study (funded by the Michigan Economic Development Corp.) published last winter had some merits, but these are overbalanced by the fact that its model excluded 100 percent of the costs associated with the program. This is analogous to an accountant leaving the liabilities off a company's balance sheet and concluding it has a high net worth. (For details refer to "Special Effects: Flawed Report on Film Incentives Provides Distorted Lens," published by the Mackinac Center.)

A valid study would have shown not only the program's costs, but also would have recognized how the higher tax burden those costs impose may contribute to Michigan job losses, especially since this film subsidy program came hard on the heels of the October 2007 $1.4 billion tax hike. Including such costs would not only be more intellectually honest, it would help make the program more transparent.

One more thing: It's confusing and misleading to refer to this as a "tax credit" program. It is in fact a cash subsidy in the form of a tax credit program. Sadly, the Michigan Film Office's secrecy prevents us from calculating the amount of cash subsidies vs. tax breaks. At least one Senate Fiscal Agency analysis, however, suggests they are largely cash handouts.

At its monthly board meeting today, the Michigan Economic Growth Authority voted to give a state business tax credit worth $2 million over five years to the corporate subsidiary of the Service Employees International Union for an operation that will provide administrative services for the SEIU and other local unions. MEGA is considered the "flagship" of the state's growing empire of "economic development" programs and authorities.

The MEGA board's action was included in a press release posted on the website of the Michigan Economic Development Corp., which says the union will invest $3 million in this entity, to be located in Wayne County's Redford Township, and was given the selective tax break "to help convince the company to expand in Michigan over competing sites in Missouri and Florida."

The press release explains that the purpose of this union arm is "to provide administrative services for ... local labor organizations" (which probably means labor union locals around the country). It does not explain why the board considered the union's "competing locations" threat to be credible given that one is in a "Right to Work" state, rather than the kind of gamesmanship common when governments play the "picking winners and losers" game. Nor did it explain whether the tax break is merely a political payoff to one of the state's most politically powerful special interests — a union representing many government employees.

Supposedly, this union operation will create "322 new jobs, including 224 directly by the company ... (and) an additional 108 indirect jobs," according to the MEDC.

It is certainly just a coincidence that the new union operation will be located in (or immediately adjacent to) the district represented by the speaker of the Michigan House. (Redford Township is also expected to give a property tax break to the union entity.)  It is also certainly a coincidence that the recipient of this discriminatory tax break is considered a leading sponsor of the Association of Community Organizations for Reform Now (ACORN), and that the union and ACORN are deeply engaged in political campaign-related activities in Michigan.

H/T — James Hohman, for quickly spotting the item soon after the press release was posted.

Apparently in terms of federal stimulus money and thousands of new jobs allegedly created, the luckiest place to live in Michigan is in the 48933 zip code. According to the U.S. Postal Service Web site, 48933 is none other than Lansing, our state capital.

The federal recovery reporting Web site, recovery.gov, lists this Lansing ZIP code as receiving $1,217,275,548 and creating 17,966.9 jobs. Recovery.gov credits Michigan with "creating/saving" 22,514 total jobs. By my math, Lansing accounts for almost 80 percent of the jobs "created" statewide.

If you go by the state's calculations of 19,190 jobs "created/retained," ZIP code 48933 would account for nearly 94 percent of the state's stimulus job creation.

See the screenshot below for the top jobs created/saved in Michigan by ZIP code or view the complete list here.

The second highest ZIP code on this list, 48909, is also Lansing. With a combined jobs total of 19,021, federal stimulus awards break down to $100,580.71 per job in these two Lansing ZIP codes.

If one uses money for nothing as a gauge, however, the sixth ZIP code on this list may indeed be the luckiest. ZIP code 48183, for Trenton, is getting $109,648,796. Jobs created or saved? Zero.

The unluckiest in both areas would be poor little 49819 of the central Upper Peninsula town of Arnold.  Like dozens of other ZIP codes on this list, 49819 also logged zero jobs created or saved, but also came in dead last. Its federal award amount: $230.

"Pirate Radio," in theaters now, is a silly and inconsequential movie that represents a missed opportunity to show the negative impacts of government overreaching into what should be a private enterprise. In this instance, British government bureaucrats stymie a broadcast outlet for rock music in the mid-1960s.

The film is set in the North Sea waters off the coast of England in 1966 and 1967, which were watershed years for rock'n'roll as The Rolling Stones, The Kinks, The Who, the Small Faces and a plethora of British and American acts were exploring sonic and artistic breakthroughs. Unfortunately for Britain, however, the state-controlled BBC - the only licensed radio in the United Kingdom - only played 20 minutes of rock music each day.

As a result, pop music fans had to rely on broadcasts from Radio Luxembourg or from ships anchored in international waters - thereby generating a large audience for new music and creating a market for advertisers eager to capture young mod listeners. Readers seeking a reasonable facsimile of what real pirate radio might've sounded like should buy a copy of The Who's 1967 masterpiece, "The Who Sell Out," which is complete with radio drop-ins, station jingles, advertisements and killer tunes.

Rather than focusing on how governments can overreach beyond their justifiable role in regulating, among other things, broadcast frequencies for radio stations, "Pirate Radio" succumbs to the cinematic credo of sex, drugs and rock'n'roll while simplistically depicting its government antagonists (including actors Kenneth Branagh and Jack Davenport, the latter sophomorically given an obscene name,) as driven by nothing more complicated than sexual repression and inexperience with chemical inebriants. In the meantime, the radio disc jockeys and their hangers-on party like rock stars in between ponderous pronouncements that the music they play - rather than the innate human need for creative freedom and the liberty to express it espoused therein - represents their primary reason for being.

One last cavil: One doesn't have to be a boater, former disc jockey or even editor of a science magazine to know that it's impossible to play vinyl records on a choppy sea, especially when a boat is three-quarters submerged. While this might guarantee more songs to market on a bestselling soundtrack - despite the inclusion of many songs that were released well after the 1966-67 timeframe - the film as a whole leaves a free-market, small-government advocate with little to appreciate.  

A pattern of sorts is starting to emerge: When one hears numbers of “jobs created or saved” by various government programs, it appears to be more and more likely that such numbers were pulled by someone out of the vicinity of his or her own back pocket. Consider:

• Three weeks ago, Gov. Granholm touted the success of her “No Worker Left Behind Program." According to the state, 72 percent of participants managed to either find a job or retain their existing job. But without a comparison group of non-participants, it is impossible to say whether or not NWLB really helped workers find or keep jobs.

• At about the same time, our Mike LaFaive noted that the Michigan Economic Growth Authority’s job creation figures were wildly inflated; at best, actual job creation by MEGA amounts to only 29 percent of the numbers claimed by the state agency. LaFaive found evidence that MEGA spending actually had a negative effect on jobs: For every $1 million in MEGA credits dished out, employment appeared to decline by 95 jobs in counties where the MEGA projects were located.

• Now we see evidence suggesting that many of the jobs claimed to have been preserved or created under the federal stimulus program were entirely fanciful. We suspect this is so because a listing of the jobs by congressional district has listings for districts numbered from 00 (I believe that would be South Detroit, which was made famous by that Journey song) to 83 (it’s in the Upper Peninsula somewhere around Shockandawe).

As the economy continues to struggle, both nationally and especially in Michigan, it will be tempting for politicians who have promised to boost employment through government spending to resort to statistical tricks to make their programs look like they are working better than they actually are. As always, such statistics should be viewed with extreme skepticism. Making up job numbers is starting to become a habit for the defenders of big government.

My colleagues at Watchdog.org and its state-level affiliates were the first in the nation to break the story that the $787 billion federal stimulus package "has doubled the size of the House of Representatives, according to Recovery.gov, which says that funds were distributed to 440 congressional districts that do not exist."

This includes Michigan. In its first installment of promised quarterly online reports, Recovery.gov lists 10 new districts to the Great Lake State's phalanx of 15 U.S. House seats (the center column, by the way, is the number of "new jobs" reported):

Interestingly, a closer look at the stimulus awards in these non-existent congressional districts (see spreadsheet here) includes a community policing grant of $29,507 for the city of Midland, in congressional district "00." Midland is home to the Mackinac Center, whose office building is within a stone's throw of the district headquarters of Congressman Dave Camp. Rep. Camp serves Michigan's 4^th Congressional district. Stimulus awards totaling more than $810,000 reported in the "21st" district were given to recipients in Mount Pleasant, Alma and Shepherd, cities which are also technically in Rep. Camp's district. (Incidentally, one person representing more than one congressional district may be a constitutionally questionable practice.)

"I guess we know why Michigan's unemployment rate is going up despite all these claims of new jobs. They're being created out of thin air," said Camp's spokesman, Sage Eastman.

Judging by some of the comments included by the local-level folks, inputting this information was not easy, many getting their reporting instructions at the last minute. Writes one seemingly frustrated award recipient in Rapid River:

"Impossible registration process.  Unable to reach help desk in less than 2 hours, registration process ultimately took an extra week to accomplish."

 And this entry from a recipient in Sand Lake:

"Process to register was not clear.  We did not even know we received ARRA funds until October 7, 2009.  Each registration area required 24 - 48 hours to activate.  This entire process is convoluted and should have been a seamless process.  Had some type of notification been sent when the funds were awarded the report would not have been late.  There were many technical error(s) with the registration process."

According to Watchdog.org, the federal recovery Web site operates on an $84 million budget. One would think such hefty price tag would ensure more accurate reporting. Instead, it says nearly $6.4 billion was used to "create or save" fewer than 30,000 jobs in these 440 "phantom" congressional districts. That's almost $225,000 per job.

Just don't tell us we need to fill those congressional seats.

John Hood at National Review Online yesterday called Michigan the "epicenter of the fiscal earthquake," referring to the overspending crisis created by Gov. Jennifer Granholm and the Legislature.

Hood said there are alternatives to using tax increases and more federal bailout money to solve Michigan's budget problems, and that Michael LaFaive, director of the Center's Morey Fiscal Policy Initiative, "has plenty of ideas." Hood also linked to LaFaive's bio, which gives access to every article, commentary and study LaFaive has authored during his time with the Center.

A Detroit Examiner columnist Friday cited Michael Van Beek, the Center's director of education policy, on Michigan's refusal to pursue school reforms that could help the state secure federal funding.

Van Beek detailed the situation here.

A Mackinac Center July Viewpoint was prescient, to say the least.

The piece, written by Oakland County Deputy Executive Robert Daddow, an adjunct scholar with the Center, was titled "A Perfect Storm: Batten Down the Hatches or Drown," and detailed the need for local governments to address falling property values, home foreclosures and property taxes when budgeting for the future.

The Oakland Press Saturday reported that industrial and commercial property values in Oakland County could be 40 to 70 percent lower in two years and that some school districts could shut down as a result of the revenue drop.

Thursday's Wall Street Journal carried an article about Republican candidates for federal offices who are favored by establishment GOP power brokers, and how these candidates are suddenly finding themselves on the business end of the grassroots "Tea Party" opposition in many states. The article notes that this is creating heartburn for the National Republican Senatorial Campaign Committee because the GOP was behind finding these more establishment-minded politicians in the first place and now can't sell them to even the GOP primary voters.

There are two interesting dots to connect here.

First, remember when the tea parties and the health care town hall protests first sprung up and how this led to accusations from Nancy Pelosi and others that these were not real grassroots people, but instead political puppets of the GOP?

Hard to square that with what has happened now that these people are looking around for candidates they can support, isn't it?

The big lesson for the politicians to draw from this is that these droves of people are not taking time away from their busy lives to help out (or hurt) any particular political establishment. Nancy Pelosi and Paul Krugman are now learning this. But are the Republicans?

The Journal notes that those NRSCC-chosen candidates are trying to make peace with the Tea Party types. The establishment candidates in Connecticut and Illinois, each former supporters of cap and trade, have reversed their position on this matter in an effort to "reintroduce themselves as fiscal conservatives." One of them, former Congressman Rob Simmons in Connecticut, is trying to drive home the point by parading around the state with a tea bag in his pocket.

So, Mr. Simmons, you once supported a dubious global warming policy that would stunt the nation's economic growth and kill jobs, but now you've got a tea bag in your pocket. This means people should now trust you over somebody who didn't have such bad judgment in the first place?

Does that tea bag just fix everything?

While it is always nice to be pandered to, the lesson for the Tea Party movement is not to get fooled again by ANY party or candidate. As Jack McHugh and I noted in our "Tea Party Toolkit":

An experienced patriot treats the promises of politicians and political parties with equal (and substantial) skepticism. Use political parties only as tools toward your ends, not theirs. Your loyalty is too valuable to sell so cheaply.

In other words: Putting a teabag in your pocket doesn't make bad ideas taste any better.

The whole toolkit may be found at www.mackinac.org/10508.