Governor Describes Film Subsidies as Jobs Program, so "Why Not Give Them Spoons?"

The headline of a story in today's Detroit Free Press characterizes Gov. Jennifer Granholm's understanding of the state film production subsidies: "Goal of film tax credit is jobs, not more revenue."

There's a story from the 1960s about the late economist Milton Friedman visiting a large public works project in a third world country that was funded by U.S. foreign aid. Given the substantial investment, the famous economist was surprised to see thousands of men with shovels moving dirt one spadeful at a time. He asked his host, "Why don't they use bulldozers?"

"It creates more employment this way," came the response.

"Ah, it's a jobs program," said Friedman, who had imagined the taxpayer dollars were being provided to improve productivity and living standards.

One suspects that the great man's host was surprised by his follow-up question:

"Then why not give them spoons instead of shovels?"

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Perhaps the economics courses given to Harvard law students don't explain that any project with a negative return on investment is by definition an unsustainable loser.

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