A Rebuttal to the MEDC's Wall Street Journal Letter Part III

Yesterday, I published the second part of this essay, which uses an MEDC letter-to-the-editor in the Wall Street Journal to illustrate the agency's pattern of using illegitimate rhetorical devices in response to serious critiques, including distractions, irrelevancies and non sequiturs. Part I was published Wednesday. Here's third and final part:

Main: Hemlock Semiconductor, the global manufacturing leader in polycrystalline silicone, used in everything from computer chips to solar panels, and a subsidiary of Dow Corning, has expanded near Midland numerous times in recent years with MEDC assistance.

Relying on anecdotes is a time-worn tactic used by the MEDC and all defenders of governments picking winners and losers by granting discriminatory tax breaks and subsidies. Certainly many of the "winners" do well, but since they represent but a tiny fraction of the state's overall economy, so what? Especially if the great mass of non-beneficiary firms are still burdened with unreformed tax, regulatory and labor law regimes, as they are in Michigan. The one thing you will not see from the MEDC is systematic research from independent scholars examining the real effect of this central-planning strategy on the overall economy.

Beyond that, the MEDC can never prove that a particular company highlighted in one of its anecdotes would not have located in Michigan even without the special treatment. Instead, they use the job-promises of executives - before whom they have dangled millions in financial goodies -  as "evidence" that the dangling made the difference.

Moreover, every time the MEDC hands out "assistance," it implicitly admits that the cost of doing business in Michigan without special treatment makes the state uncompetitive.

Incidentally, the Hemlock Semiconductor firm singled out by Main already has an incentive to exist and grow in Michigan - it is owned predominantly by Dow Corning, located near the new plant getting all the MEDC fiscal gifts.

Main: We compete every day for new business investment and jobs with an aggressive economic diversification strategy.

Governors all the way back to Kim Sigler in 1947 have been creating and expanding economic central planning programs under the flag of "diversification." If these programs worked, Michigan would have been fully diversified by the time Gov. John Engler launched his version, the MEDC, in 1999. If Michigan is being diversified, it's by default; manufacturing jobs are disappearing in this state.

We're trying to compete with ineffective economic tools that don't work. The systematic, independent, empirical evidence for this conclusion is found in the Mackinac Center's new report on the MEDC.

Main: The decline of manufacturing is indeed a sad fact of American life but innovative, visionary businesspeople will find great value and opportunities in Michigan.

The 500 chief executive officers of private companies who responded to a 2009 survey by CEO Magazine ranked Michigan the 49th worst state in which to do business. Real business leaders, and real markets, have spoken on the MEDC's vision. Greg Main and Michigan's other government central planning apologists need to improve their vision with new theoretical lenses.

Permission to reprint this blog post in whole or in part is hereby granted, provided that the author (or authors) and the Mackinac Center for Public Policy are properly cited.