selectively giving away free money to big business is straight corruption. there is no other way to put it. everyone involved should lose re election and get investigated by the financial crimes unit.
but i dont think "leave it up to the market" is a better idea. investments like this just need to be transparent, open to everyone and set up strict punishment for stealing the money with prison for executives.
if they wanted to actually create jobs they would support small companies and set up open competitive programs based on project quality. or start a state investment bank giving super low interest loans so factories can expand without cutting profitable divisions like in china.
One idea I like is directly funding apprenticeship. It pays for job training and classroom instruction on a per-individual basis. The jobs are in long-term career sectors like advanced manufacturing, shipbuilding, aviation, healthcare, and technology.
In Georgia, the employer is reimbursed $2,500 when an apprentice starts and up to $10,000 when they finish. They can also get up to 75% of the apprentice's hourly wage covered during their initial on-the-job training.
> One idea I like is directly funding apprenticeship. It pays for job training and classroom instruction on a per-individual basis. The jobs are in long-term career sectors like advanced manufacturing, shipbuilding, aviation, healthcare, and technology.
This is basically what grad school does too. I'm into funding education further any day of the week. For higher education, I'd only add a string attached like "must practice trade in state that funded you if job is available for x years or must pay back funding pro rated".
It will just be abused like the money for in-home daycares and elder care is.
I'd rather they just lower our taxes and quit squandering our money on these programs that never work. I never once hear democrats looking to lower taxes or remove wasteful spending, it's practically encouraged. They defend SNAP recipients buying soda and candy even while admitting there's a correlation between SNAP recipients and having diabetes and being overweight. They do the wrong thing and know it and expect us to ignore that and keep funding these programs.
Our public transportation infrastructure literally cost 10x per mile than France or Hong Kong. That's not waste to you? For what California has spent/is spending on high-speed rail from nowhere to nowhere, China blanketed their country?
Notice you also left out police. How's our spending working there?
California high speed rail has been a mess. Which is likely in part because politics dictating routes has raised the costs and timelines substantially. On a smaller scale SF was building a new subway in 2013 that had been on the drawing board for years. I remember thinking maybe I'd ride it to work one day. Opened in 2023 or 2024, after I had moved offices twice and then went to work from home. It's not a terrible line but because it had to go to the center of our Chinatown instead of 2 blocks over, it took quite a bit longer and became the deepest subway line in the city. Several other bits of stupidity too in that project but a big piece of the delayed timeline was that tunneling in SF is hard.
Plenty of other transit projects exist that have made real differences. Personally I'm a fan of the simple improvements: revised bus routes with dedicated bus lanes and improved stop & shelters, added bike lanes, etc. those sorts of projects are relatively cheap investments and while no single one is a silver bullet they add up. On a bigger scale - Caltrain's electrification was a big win. Both kinds of projects are easier than building whole new tracks or digging new tunnels. Extend and improve the existing systems. Most cities have something to start from.
I mean building infrastructure is literally done by private groups the government hires not the government itself. Infantalizing the government as unable to do anything is the biggest myth of the 20th century. When the government did build the roads for the interstate high system they were much cheaper. They cut through any possible regulations and just built them. If government is slow its because we have regulated government to be slow because people would get tremendous power and than plow over large African American communities with roads and rail roads. Its very well documented the speed and brutality that government can move with.
All this to say the government can be fast and efficient mostly because we have an almost infinite number of examples in the US of it doing it.
> The reason you never hear that is because waste and fraud are very low in reality. That’s why this made the news. It’s uncommon.
Fraud might be relatively rare, but we hear about waste constantly and it isn't newsworthy because a high level of waste is expected from a government operation. If it wasn't then there would be good results by putting things under government control, rather than the more realistic outcome of a politically controlled market oscillating erratically between gluts and shortages depending on who won a popularity contest this year.
To be newsworthy political waste generally has to be competitive with wartime levels of destruction. Things like a 2 billion dollars going down the tubes with basically nothing to show for it. Which is similar to the cost/benefit to the US of a day of wild flailing in Iran, US assaults typically run at around a billion dollars per day. If it is less damaging than that then there isn't much point bringing it up because there are bigger fish to fry.
Definitely and we should have affordable universal healthcare and subsidized state university tuition. Everything else should be cut as much as possible. I don't see any programs that are working well.
> That's because the US also defends the free world.
The US invasions of Afghanistan, Iraq, Libya and Iraq have sure helped defend the free world. How many trillions went into those combined? Fantastic return per $ of "free world defense".
Consider all the US bases in Europe, there to defend Europe against Russia. And the bases in the Pacific and Japan. Greenland, too!
When I lived in Germany in the 70s, we were driving on the Autobahn one day, and I saw a jet hedgehopping at full blast over the countryside. I asked my dad what was going on, and why didn't the Germans complain about it. (Hedgehopping is how you avoid radar detection.)
He replied that the Germans didn't particularly like it, but they understood the reason for it. We were in Wiesbaden because my dad worked on the US base and their job was to ensure that there wasn't going to be nuclear combat toe to toe with the Russkies.
Later on, we lived near Luke AFB in Arizona, where Luftwaffe pilots were trained. I'd ride my bike out to the flight line and watch those glorious F-104s blast off with their afterburners lit up.
> open competitive programs based on project quality
This will never, ever happen. There will always be bonus points available, even if they're awarded to "conservative"-leaning feel-good attributes like veteran-owned sponsor businesses.
These investments are likely to always fail at their declared purpose. Better to put the money towards free childcare and maybe trying to convince parents to read to their kids.
> There will always be bonus points available, even if they're awarded to "conservative"-leaning feel-good attributes like veteran-owned sponsor businesses.
It's straight corruption, no matter of big or small business. It should have been randomized blind selection of business who have existed for more than a year, and the granted money pays for new employees' taxes. Blind selection takes out the path to corruption (not who you know to get the fund). Randomized to be fair. Government is bad at picking winners or losers anyway. Business more than a year to screen out frauds. Granted money for new employees' taxes to encourage hiring new employees. Paying the taxes only so that the money can be spread out to more people.
> everyone involved should lose re election and get investigated by the financial crimes unit
The flawed assumption here is assuming elections are an exception to every other democratic process riddled with corruption and are operated fair and square, in general.
They're always handed out as political favors or lotteries at best. How is a lottery sustainable or scalable? These solutions do not work. It's at best virtue signaling and at worst corruption (as OP says).
>There doesn’t seem to be any lesson-learning happening...
Which would indicate that creating jobs was not the actual reason for the grants. Given how trivially easy it would be fix the problem (simply make the grant contingent on the creation of jobs, otherwise it converts to a loan), the real purpose is probably a matter of generating headlines and raking in campaign contributions (with occasional full-on kickbacks probably happening as well). All of which it apparently does well enough that politicians continue to do it.
Pretty easy to check on. And I'm not sure how the company would profit from giving away money to thousands of people who didn't work. And even if for some reason they did, we've seen that it actually stimulates the economy, which is the whole point.
Correct, reporting this is doing nothing to stop it. People don't directly see the impact of it on their paychecks or budgets so they forget about it the hour after they read about it. The next politician can do it without fear of reprisal
I am a lifelong resident of Michigan and sadly the state keeps doubling down on what isn't working. Politicians like to think they're smart enough to pick winners and they're horrible at it.
When Governor Jennifer Granholm was governor a guy approached the state needed investment for a factory in Flint. It would create thousands of jobs. They were delighted because that is something that never happens in Flint. They not only gave him the money but he posed him holding a $9.1 million dollar check with the governor. The picture of the two of them together was in all state media. You know when something sounds too good to be true you might want to do a little checking? When people in Flint saw the picture they informed the state that this guy was a well known conman who had just got out of jail and was living in a trailer. Luckily they were able to recover the money.
Another Gov. Granholm story was the time an old line Boston VC firm approached the state for investment. So the state pulled funds out of the employees retirement plan to invest in the next round. The idea was that this would give the state more venture investment. But again no one did any due diligence whatsoever. This firm was not obligated to open an office in the state but only come a couple of times a year looking for investments. They were under no obligation to make any investments in the state and in fact did not. Due diligence would have revealed that the firm offered a very low return on their last several funds. So in the end the employees retirement funds grew more slowly and the state got no venture investments. That venture firm wasn't able to raise another fund and closed.
> Hohman examined eight major projects—"those that offered $100 million in payments and received significant media attention"—totaling $2.7 billion in promised incentives
> All told, the governor said that her major subsidy projects would create 20,595 jobs in Michigan
Even using these numbers that works out to $135k/job, which is bonkers!
Not really, if the job lasts 30 years it will absolutely offset itself with local economic activity. These people will pay taxes, buy homes, visit doctors and much more.
People will truly justify anything. My god. We can't even hold governments accountable for waste because people will bend over backwards to justify any amount of spending.
No they won’t the money will go to the local branch of Kroger Walmart McDonalds and Home Depot who will pay their shareholders and all the money will leave
It's both. A mix of incentives (that were not paid out) and land reclamation (which did cost money):
> Ford, meanwhile, lowered its job creation estimate from 2,500 to 1,700, though so far it has created zero, and received no state money, as the building is still under construction. The state did, however, spend another $780 million on site preparation.
Most of the claims in the article are slightly obfuscated as to which actually involved any real net cash flow. Even the bottom line:
> Of the $2.7 billion offered, $1.8 billion has been spent—transferred either to companies or to local economic development agencies.
Doesn't make it clear what the local economic development agencies actually did with it - whether the projects were otherwise necessary, etc. Some of the spending was likely defensible even if the originally intended project fell through. Lots of it probably wasn't defensible. Michigan (and every other state) gives a lot of money to 'developers' in ways that don't look great if you bother to look into it at all.
Michigan's state budget probably totaled ~$700 billion over the past 8 years. So this accounts for up to 0.2% of the budget.
I wonder if there would be merit to requiring that government investment must come with shares in the company at market rate. Because short of that it feels like a misappropriation of funds.
This is not the first time this type of thing happened almost looks like a laundering scam. Companies that do this should face real and very expensive consequences. But we know that will never happen.
The tfa says that almost all of this went to big public automakers. Enraging. I initially thought that this was going to some small biz thing that at least would slosh the money around through the owners. But nope - corp welfare!
The government just gave money to every executive in the company, and your argument is that because the company stock is also held by pension funds, they were supporting pension funds? Makes little sense.
Just giving the money straight to the pension funds would be much more efficient. This method enriches a bunch of non-contributors along the way.
Why do you say it was given to executives in the company? The shareholders (which in the case of e.g. Ford, appear to be only 0.3% executives of the company) are the owners of the company. An extra dollar of income to the company does not become accessible to the executives as personal income without being allocated as such by the shareholders.
If you're claiming otherwise, it would be fascinating to see the evidence.
Michigan has relatively business-unfriendly laws and regulations.
Apparently their tax system is quite favorable to businesses, but taxes are only one (small) part of the equation. The taxes matter more once a company is making a lot of money.
In short, tax incentives and random per company “investments” (bribes?) are not enough to offset certain laws and regulations Michigan has.
I am not saying those laws and regulations are bad. I am just saying that targeted tax incentives and investment for specific companies are the wrong way to solve the problem.
China’s provincial investment in industry is very different. They use loans and take equity in the businesses so they have a direct interest in the companies succeeding.
Grants and tax incentives for non-novel or R&D heavy industry is a terrible investment. Especially since it’s just a competition between states that escalates every year with how lucrative they can make the offering and how little they demand in return.
It is not completely like that...In China, "government experts" is absolutely a negative term. On the Chinese internet we often called then "砖家", which is a homophonic pun about their low level.
Policy stability may be an advantage, but it does not mean the long-term planning is really long-term planning:
Real estate; birth rate; gender antagonism; wealth gap;
extremely involuted education, where even primary school students have to get home at least after 6pm, and then spend another three hours doing test papers, combined with purely formal university education and very low employment rates after graduation;
a working environment where even a five-day, eight-hour workweek is really rare in private companies, where unions are only a placeholder, and individuals are very powerless against companies...
We saw what happened in Japan and South Korea, and we walked into the same path in an even more extreme way.
On the Chinese internet, Japan and South Korea are often called the "super test servers", while China is the "official server": the same problems are further intensified.
You do see this working in many places. Singapore is probably the best example with an explicit scholar programme and competitive pay in much of the upper rungs of the government. This comes with its own problem culturally but does result in very well thought through programs and infra that actually helps people.
Even in the top echelon of the Indian government (Indian Administrative Services), a similar culture exists and has interestingly been strengthend as the power has fragmented across political parties. I personally know several of my top B School/Engineering college mates who joined and any of them would do very well in top management in private industry. You can see the result in the rapidity with which India is pulling people out of poverty and modernizing. Certainly alower than China, but pretty amazing seei living outside for a decade now - many urban services are already far superior in quality to what you get in Europe, US or even Singapore. The challenge in India is the bulk of the bureaucracy below them isn't held to the same standard.In India it's still a prestige thing only in the top echelon - the lower echlons are more motivated by job security, pensions and avenues for corruption.
The difference in Singapore is the government pays well enough to attract and retain higher quality talent deeper.
The money spent on site and land clearing results in a big empty field? Yes, yes it did, that’s what those words mean. If we’re going to bribe companies to do a thing, we should at least accept when they did do it.
Two things
1) we dont know if the state might have lost more jobs if these incentives weren't provided
2) the deeper issue is that the auto makers compete with state backed companies in other regions
I'm not saying we need to copy state backed but the climate is desperate
Democrats are structurally incompetent. I've never seen them use tax dollars in a fiscally responsible way. I was always a registered democrat, but their complete incompetence and lack of efficiency has really turned me away from them. I don't trust them to spend money effectively or wisely. In California we are taxed extensively but then spend hundreds of billions on trains that don't exist, homeless programs that clearly do nothing but make the problem worse, our roads are in shambles, and quality of life crimes are all but completely ignored. Every state where democrats are in majority seems to be poorly managed.
California has the 10th largest economy in the world. There's a reason people like you would never actually live in a conservative state like Mississippi.
Claiming the state “spent” money when it’s something like a tax incentive is completely disingenuous bullshit. This article does this in spades to come up with this huge billion dollar figure.
“We won’t collect additional property taxes on this new thing you’re building for 10 years” is not the same thing as spending money. If a business doesn’t start there instead you don’t get any money at all. So in both scenarios you get no tax revenue but without the business you hurt your own economy.
It’s not taxpayer money being sent away. It’s tax collection policy and if we claim tax exemptions are spending money, then the government is also spending billions on non-profits and low income households.
selectively giving away free money to big business is straight corruption. there is no other way to put it. everyone involved should lose re election and get investigated by the financial crimes unit.
but i dont think "leave it up to the market" is a better idea. investments like this just need to be transparent, open to everyone and set up strict punishment for stealing the money with prison for executives.
if they wanted to actually create jobs they would support small companies and set up open competitive programs based on project quality. or start a state investment bank giving super low interest loans so factories can expand without cutting profitable divisions like in china.
One idea I like is directly funding apprenticeship. It pays for job training and classroom instruction on a per-individual basis. The jobs are in long-term career sectors like advanced manufacturing, shipbuilding, aviation, healthcare, and technology.
Here's one example: https://www.dol.gov/newsroom/releases/osec/osec20250923
In Georgia, the employer is reimbursed $2,500 when an apprentice starts and up to $10,000 when they finish. They can also get up to 75% of the apprentice's hourly wage covered during their initial on-the-job training.
You mean what companies used to do before we decided to import cheap labor instead?
> One idea I like is directly funding apprenticeship. It pays for job training and classroom instruction on a per-individual basis. The jobs are in long-term career sectors like advanced manufacturing, shipbuilding, aviation, healthcare, and technology.
This is basically what grad school does too. I'm into funding education further any day of the week. For higher education, I'd only add a string attached like "must practice trade in state that funded you if job is available for x years or must pay back funding pro rated".
It will just be abused like the money for in-home daycares and elder care is.
I'd rather they just lower our taxes and quit squandering our money on these programs that never work. I never once hear democrats looking to lower taxes or remove wasteful spending, it's practically encouraged. They defend SNAP recipients buying soda and candy even while admitting there's a correlation between SNAP recipients and having diabetes and being overweight. They do the wrong thing and know it and expect us to ignore that and keep funding these programs.
The reason you never hear that is because waste and fraud are very low in reality. That’s why this made the news. It’s uncommon.
We should be using the government to help people and when we do, it often does a good job.
Examples: Roads, libraries, fire departments, schools, safety regulations…
Our public transportation infrastructure literally cost 10x per mile than France or Hong Kong. That's not waste to you? For what California has spent/is spending on high-speed rail from nowhere to nowhere, China blanketed their country?
Notice you also left out police. How's our spending working there?
California high speed rail has been a mess. Which is likely in part because politics dictating routes has raised the costs and timelines substantially. On a smaller scale SF was building a new subway in 2013 that had been on the drawing board for years. I remember thinking maybe I'd ride it to work one day. Opened in 2023 or 2024, after I had moved offices twice and then went to work from home. It's not a terrible line but because it had to go to the center of our Chinatown instead of 2 blocks over, it took quite a bit longer and became the deepest subway line in the city. Several other bits of stupidity too in that project but a big piece of the delayed timeline was that tunneling in SF is hard.
Plenty of other transit projects exist that have made real differences. Personally I'm a fan of the simple improvements: revised bus routes with dedicated bus lanes and improved stop & shelters, added bike lanes, etc. those sorts of projects are relatively cheap investments and while no single one is a silver bullet they add up. On a bigger scale - Caltrain's electrification was a big win. Both kinds of projects are easier than building whole new tracks or digging new tunnels. Extend and improve the existing systems. Most cities have something to start from.
Note Atherton's delays cost Caltrain electrification 3 years and $400m IIRC
https://peninsulaforeveryone.org/blog/atherton-spent-145k-to...
I’d note that China does not need democratic approval for any of its projects and thus is substantially more efficient.
And what lesson should be drawn from that?
I mean building infrastructure is literally done by private groups the government hires not the government itself. Infantalizing the government as unable to do anything is the biggest myth of the 20th century. When the government did build the roads for the interstate high system they were much cheaper. They cut through any possible regulations and just built them. If government is slow its because we have regulated government to be slow because people would get tremendous power and than plow over large African American communities with roads and rail roads. Its very well documented the speed and brutality that government can move with.
All this to say the government can be fast and efficient mostly because we have an almost infinite number of examples in the US of it doing it.
> The reason you never hear that is because waste and fraud are very low in reality. That’s why this made the news. It’s uncommon.
Fraud might be relatively rare, but we hear about waste constantly and it isn't newsworthy because a high level of waste is expected from a government operation. If it wasn't then there would be good results by putting things under government control, rather than the more realistic outcome of a politically controlled market oscillating erratically between gluts and shortages depending on who won a popularity contest this year.
To be newsworthy political waste generally has to be competitive with wartime levels of destruction. Things like a 2 billion dollars going down the tubes with basically nothing to show for it. Which is similar to the cost/benefit to the US of a day of wild flailing in Iran, US assaults typically run at around a billion dollars per day. If it is less damaging than that then there isn't much point bringing it up because there are bigger fish to fry.
And another, our recidivism rates are much higher than comparable countries. Is that how we do a "good job" helping people?
> I'd rather they just lower our taxes and quit squandering our money on these programs that never work.
Would you support cutting military spending? It's a lot higher than other countries.
Definitely and we should have affordable universal healthcare and subsidized state university tuition. Everything else should be cut as much as possible. I don't see any programs that are working well.
> It's a lot higher than other countries.
That's because the US also defends the free world.
Besides, not spending enough on the military can get very, very expensive.
> That's because the US also defends the free world.
The US invasions of Afghanistan, Iraq, Libya and Iraq have sure helped defend the free world. How many trillions went into those combined? Fantastic return per $ of "free world defense".
Consider all the US bases in Europe, there to defend Europe against Russia. And the bases in the Pacific and Japan. Greenland, too!
When I lived in Germany in the 70s, we were driving on the Autobahn one day, and I saw a jet hedgehopping at full blast over the countryside. I asked my dad what was going on, and why didn't the Germans complain about it. (Hedgehopping is how you avoid radar detection.)
He replied that the Germans didn't particularly like it, but they understood the reason for it. We were in Wiesbaden because my dad worked on the US base and their job was to ensure that there wasn't going to be nuclear combat toe to toe with the Russkies.
Later on, we lived near Luke AFB in Arizona, where Luftwaffe pilots were trained. I'd ride my bike out to the flight line and watch those glorious F-104s blast off with their afterburners lit up.
Don’t forget Ukraine!
> open competitive programs based on project quality
This will never, ever happen. There will always be bonus points available, even if they're awarded to "conservative"-leaning feel-good attributes like veteran-owned sponsor businesses.
These investments are likely to always fail at their declared purpose. Better to put the money towards free childcare and maybe trying to convince parents to read to their kids.
> There will always be bonus points available, even if they're awarded to "conservative"-leaning feel-good attributes like veteran-owned sponsor businesses.
Why are you singling out "conservative" causes?
The government should limit innovation and direct resources to proven ROI spending such as free daycare, nutrition, and public infrastructure
It's straight corruption, no matter of big or small business. It should have been randomized blind selection of business who have existed for more than a year, and the granted money pays for new employees' taxes. Blind selection takes out the path to corruption (not who you know to get the fund). Randomized to be fair. Government is bad at picking winners or losers anyway. Business more than a year to screen out frauds. Granted money for new employees' taxes to encourage hiring new employees. Paying the taxes only so that the money can be spread out to more people.
> everyone involved should lose re election and get investigated by the financial crimes unit
The flawed assumption here is assuming elections are an exception to every other democratic process riddled with corruption and are operated fair and square, in general.
> selectively giving away free money to big business is straight corruption
Liberals in canada call that 'making housing affordable', https://www.cbc.ca/news/canada/british-columbia/prime-minist...
It feels that in Canada business is impossible unless it's directly funded by the government.
Or —- hear me out —- create laws and tax policies compatible with growth, and apply them equally to everyone.
They're always handed out as political favors or lotteries at best. How is a lottery sustainable or scalable? These solutions do not work. It's at best virtue signaling and at worst corruption (as OP says).
> A new report suggests the state of Michigan is the latest to learn that lesson the hard way.
There doesn’t seem to be any lesson-learning happening, since governments keep trying this despite the outcome always being the same.
>There doesn’t seem to be any lesson-learning happening...
Which would indicate that creating jobs was not the actual reason for the grants. Given how trivially easy it would be fix the problem (simply make the grant contingent on the creation of jobs, otherwise it converts to a loan), the real purpose is probably a matter of generating headlines and raking in campaign contributions (with occasional full-on kickbacks probably happening as well). All of which it apparently does well enough that politicians continue to do it.
Implementing your loan-contingency wouldn't prevent generating headlines, so that would only leave contributions and kickbacks.
If the program actually does create jobs, it doesn't much matter whether or not the politician benefits, because it still serves the public interest.
> Given how trivially easy it would be fix the problem (simply make the grant contingent on the creation of jobs, otherwise it converts to a loan
Sounds like a good way to create lots of fake jobs and scammy businesses.
Pretty easy to check on. And I'm not sure how the company would profit from giving away money to thousands of people who didn't work. And even if for some reason they did, we've seen that it actually stimulates the economy, which is the whole point.
Correct, reporting this is doing nothing to stop it. People don't directly see the impact of it on their paychecks or budgets so they forget about it the hour after they read about it. The next politician can do it without fear of reprisal
pointing out a stop sign does nothing to stop cars either, but it's a pretty important step if you want any cars to stop.
it’s almost as if they are just lying about the purpose and doing it for some other purpose that it is perfectly effective for
Self-enrichment on the part of government employees?! I am SHOCKED BEYOND ALL BELIEF.
/s
It's a distinct signal of pure ignorance that you conflate the highest levels of publicly elected executive leadership with "government employees".
We need more judges and prosecutors that are hungry to catch corruption and are willing to go after white collar crime.
We need people of the "can't afford a house, making 50K a year in a rural state" class in politics.
That would shake things up.
They will mysteriously suddenly be able to afford houses (plural) without making much more than 50K a year.
I am a lifelong resident of Michigan and sadly the state keeps doubling down on what isn't working. Politicians like to think they're smart enough to pick winners and they're horrible at it.
When Governor Jennifer Granholm was governor a guy approached the state needed investment for a factory in Flint. It would create thousands of jobs. They were delighted because that is something that never happens in Flint. They not only gave him the money but he posed him holding a $9.1 million dollar check with the governor. The picture of the two of them together was in all state media. You know when something sounds too good to be true you might want to do a little checking? When people in Flint saw the picture they informed the state that this guy was a well known conman who had just got out of jail and was living in a trailer. Luckily they were able to recover the money.
https://www.mackinac.org/12345
Another Gov. Granholm story was the time an old line Boston VC firm approached the state for investment. So the state pulled funds out of the employees retirement plan to invest in the next round. The idea was that this would give the state more venture investment. But again no one did any due diligence whatsoever. This firm was not obligated to open an office in the state but only come a couple of times a year looking for investments. They were under no obligation to make any investments in the state and in fact did not. Due diligence would have revealed that the firm offered a very low return on their last several funds. So in the end the employees retirement funds grew more slowly and the state got no venture investments. That venture firm wasn't able to raise another fund and closed.
Originally on reason.com: https://reason.com/2026/06/26/michigan-spent-1-8-billion-and...
With a link to the report: https://www.mackinac.org/archives/2026/s2026-08.pdf
The two largest projects are still under construction, so it might be too early to make any conclusions.
> Hohman examined eight major projects—"those that offered $100 million in payments and received significant media attention"—totaling $2.7 billion in promised incentives
> All told, the governor said that her major subsidy projects would create 20,595 jobs in Michigan
Even using these numbers that works out to $135k/job, which is bonkers!
Not really, if the job lasts 30 years it will absolutely offset itself with local economic activity. These people will pay taxes, buy homes, visit doctors and much more.
People will truly justify anything. My god. We can't even hold governments accountable for waste because people will bend over backwards to justify any amount of spending.
No they won’t the money will go to the local branch of Kroger Walmart McDonalds and Home Depot who will pay their shareholders and all the money will leave
Pretty sure those places have employees, suppliers, and vendors.
This is $currentyear. Jobs are 10 years tops
This looks like Michigan transferred actual cash. Not tax abatements on new projects.
It's both. A mix of incentives (that were not paid out) and land reclamation (which did cost money):
> Ford, meanwhile, lowered its job creation estimate from 2,500 to 1,700, though so far it has created zero, and received no state money, as the building is still under construction. The state did, however, spend another $780 million on site preparation.
Most of the claims in the article are slightly obfuscated as to which actually involved any real net cash flow. Even the bottom line:
> Of the $2.7 billion offered, $1.8 billion has been spent—transferred either to companies or to local economic development agencies.
Doesn't make it clear what the local economic development agencies actually did with it - whether the projects were otherwise necessary, etc. Some of the spending was likely defensible even if the originally intended project fell through. Lots of it probably wasn't defensible. Michigan (and every other state) gives a lot of money to 'developers' in ways that don't look great if you bother to look into it at all.
Michigan's state budget probably totaled ~$700 billion over the past 8 years. So this accounts for up to 0.2% of the budget.
I wonder if there would be merit to requiring that government investment must come with shares in the company at market rate. Because short of that it feels like a misappropriation of funds.
Did the 602 each hire someone to do their job for 12k a month until 2037 because sharing is caring?
That works out to 2.5 million per job.
This is not the first time this type of thing happened almost looks like a laundering scam. Companies that do this should face real and very expensive consequences. But we know that will never happen.
The tfa says that almost all of this went to big public automakers. Enraging. I initially thought that this was going to some small biz thing that at least would slosh the money around through the owners. But nope - corp welfare!
Doesn’t this basically mean the money was sloshed around to 401k and pension funds?
That statement trivializes the whole situation.
Short answer: no.
The government just gave money to every executive in the company, and your argument is that because the company stock is also held by pension funds, they were supporting pension funds? Makes little sense.
Just giving the money straight to the pension funds would be much more efficient. This method enriches a bunch of non-contributors along the way.
Why do you say it was given to executives in the company? The shareholders (which in the case of e.g. Ford, appear to be only 0.3% executives of the company) are the owners of the company. An extra dollar of income to the company does not become accessible to the executives as personal income without being allocated as such by the shareholders.
If you're claiming otherwise, it would be fascinating to see the evidence.
The first Trump term tariffs on washing machines was studied, it resulted in jobs that cost ~820k each in higher prices to the consumer.
The important takeaway is not only did the consumer pay more, but corporate profits rose.
https://bfi.uchicago.edu/wp-content/uploads/BFI_WP_201961-1....
Michigan has relatively business-unfriendly laws and regulations.
Apparently their tax system is quite favorable to businesses, but taxes are only one (small) part of the equation. The taxes matter more once a company is making a lot of money.
In short, tax incentives and random per company “investments” (bribes?) are not enough to offset certain laws and regulations Michigan has.
I am not saying those laws and regulations are bad. I am just saying that targeted tax incentives and investment for specific companies are the wrong way to solve the problem.
“Click to continue reading”
No thanks
It works in China as there absolute experts Work in government , whereas in Europe government employees are typically not competitive in free market
China’s provincial investment in industry is very different. They use loans and take equity in the businesses so they have a direct interest in the companies succeeding.
Grants and tax incentives for non-novel or R&D heavy industry is a terrible investment. Especially since it’s just a competition between states that escalates every year with how lucrative they can make the offering and how little they demand in return.
It is not completely like that...In China, "government experts" is absolutely a negative term. On the Chinese internet we often called then "砖家", which is a homophonic pun about their low level.
Policy stability may be an advantage, but it does not mean the long-term planning is really long-term planning: Real estate; birth rate; gender antagonism; wealth gap; extremely involuted education, where even primary school students have to get home at least after 6pm, and then spend another three hours doing test papers, combined with purely formal university education and very low employment rates after graduation; a working environment where even a five-day, eight-hour workweek is really rare in private companies, where unions are only a placeholder, and individuals are very powerless against companies...
We saw what happened in Japan and South Korea, and we walked into the same path in an even more extreme way.
On the Chinese internet, Japan and South Korea are often called the "super test servers", while China is the "official server": the same problems are further intensified.
You do see this working in many places. Singapore is probably the best example with an explicit scholar programme and competitive pay in much of the upper rungs of the government. This comes with its own problem culturally but does result in very well thought through programs and infra that actually helps people.
Even in the top echelon of the Indian government (Indian Administrative Services), a similar culture exists and has interestingly been strengthend as the power has fragmented across political parties. I personally know several of my top B School/Engineering college mates who joined and any of them would do very well in top management in private industry. You can see the result in the rapidity with which India is pulling people out of poverty and modernizing. Certainly alower than China, but pretty amazing seei living outside for a decade now - many urban services are already far superior in quality to what you get in Europe, US or even Singapore. The challenge in India is the bulk of the bureaucracy below them isn't held to the same standard.In India it's still a prestige thing only in the top echelon - the lower echlons are more motivated by job security, pensions and avenues for corruption.
The difference in Singapore is the government pays well enough to attract and retain higher quality talent deeper.
did they, like, not lose a million jobs tho?
The money spent on site and land clearing results in a big empty field? Yes, yes it did, that’s what those words mean. If we’re going to bribe companies to do a thing, we should at least accept when they did do it.
People don't appreciate how many palms you have to grease to (legally) get a big empty field.
Two things 1) we dont know if the state might have lost more jobs if these incentives weren't provided 2) the deeper issue is that the auto makers compete with state backed companies in other regions
I'm not saying we need to copy state backed but the climate is desperate
What the hell is that image of Whitner.
That's just her new face.
Democrats are structurally incompetent. I've never seen them use tax dollars in a fiscally responsible way. I was always a registered democrat, but their complete incompetence and lack of efficiency has really turned me away from them. I don't trust them to spend money effectively or wisely. In California we are taxed extensively but then spend hundreds of billions on trains that don't exist, homeless programs that clearly do nothing but make the problem worse, our roads are in shambles, and quality of life crimes are all but completely ignored. Every state where democrats are in majority seems to be poorly managed.
California has the 10th largest economy in the world. There's a reason people like you would never actually live in a conservative state like Mississippi.
4th largest as of 2025 - are you adjusting for CoL?
https://www.gov.ca.gov/2025/04/23/california-is-now-the-4th-...
Claiming the state “spent” money when it’s something like a tax incentive is completely disingenuous bullshit. This article does this in spades to come up with this huge billion dollar figure.
“We won’t collect additional property taxes on this new thing you’re building for 10 years” is not the same thing as spending money. If a business doesn’t start there instead you don’t get any money at all. So in both scenarios you get no tax revenue but without the business you hurt your own economy.
It’s not taxpayer money being sent away. It’s tax collection policy and if we claim tax exemptions are spending money, then the government is also spending billions on non-profits and low income households.