Let’s say Lansing had $35 million to use for something to improve Detroit…and they let you decide how to spend it! What would you do?
Maybe you’d hire more firefighters or subsidize a construction/renovation project. Maybe you’d create a program to help community groups buy neighborhood vacant lots and turn them into gardens and parks. A public fund to invest in local start-ups? New streetlights? Tax credits for residents of a city with oppressively high local tax burden? The possibilities are endless.
Here’s what I’m guessing, regardless of your political persuasions, you wouldn’t do: Give that $35 million to a major Hollywood studio so they would spend $131 million shooting a movie in Detroit. However, that’s exactly what our state government has done.
The Batman-Superman movie starring Ben Affleck is expected to hire 406 Michigan workers, use local vendors, and spend $5 million at local hotels when it films here. That sounds nice and all, but is this corporate welfare the highest and best use of the state’s finite public dollars?
The quick-and-dirty math tells us the state is essentially spending $86,206.90 to create each of those 406 jobs. Unlike a job created at an auto plant or bank or advertising agency, these gigs won’t still exist 18 months from now.
And, yeah, increased hotel business and vendors and multiplier effect. We’ve heard that racket before. None of it changes the fact that taxpayers are subsidizing more than a quarter of the cost of a temporary operation, with profits heading back to California. Incentive supporters will likely counter that, well, the state has $50 million in film subsidies budgeted, so why not make Detroit into the new Gotham?
Here’s why: There’s no reason the state has to budget any money to bolster Hollywood’s fiscal health. These people charge $8 for a quarter’s worth of popcorn. They’ll get by without our money. Discretionary public funds can be spent anyway our elected officials see fit. The question remains: Is this the highest and best use of this particular chunk of taxpayer dollars?
The only way you can answer that question in the affirmative is by first arguing there exists literally no possibly better economic development activity for the state to subsidize in Detroit. And even if we get there, we should also ask if our basic public services are fully funded.
This may come as a shock to some people, especially those in elected office, but the purpose of government is not to create jobs. It’s to provide a very narrow menu of services that cannot be adequately provided by the private sector—roads, public transportation, universal education, public safety, the social safety net, etc.
While administering those public services isn’t, you know, as sexy as attending movie premiers or sending press releases about jobs, it is kind of the whole point for government in the first place. It’s something that we don’t currently do all that well in Michigan and Detroit. We remain too busy focusing on the false promise of job creation.
In so much as public services demand labor, government can “create jobs” by hiring teachers and police officers and garbage men. However, this entire economic development bureaucracy designed to “create jobs” distracts government from it’s primary mission—teach Johnny to read and fix that Goddamned pothole.
True, some economic development efforts are less objectionable than others—the Book-Cadillac is nice, no question—but the cold fact remains that the only thing that “creates jobs” is an economic demand for labor. No one can manufacture that demand with tax credits.
Technocrats may be able to shift the demand's geographic location, but in the long run this process only creates a race to the bottom. We're pitting states and cities against each other for increasingly diminished returns at the margin. It also creates a down-is-up world where taxpayers pay Ben Affleck’s salary in a city that can’t afford pensions for cops.
That’s dumber than green-lighting Gigli.
