Job Creation: The Latest Taxpayer-Funded Scandal
Republican governors are actually creating jobs, and sometimes big-paying jobs. However, these are not jobs for you or your neighbors, but for their friends — also known as campaign donors — a new report shows.
These newly created jobs do not manufacture products. They don’t even provide a service. Well, technically they do — serving up your tax dollars to politically connected businesses while erecting barriers to make sure the public knows as little as possible.
And just what are the new jobs being created by governors like Jan Brewer in Arizona, John Kasich in Ohio, Terry Branstad in Iowa and Scott Walker in Wisconsin?
Why, they are on the staffs of public-private partnerships, or PPPs, whose purpose is to give your tax dollars away to corporations.
If you think people who own companies should invest their own dough, and if they do it right are entitled to their riches, you must be living in another era. These days hotels, big-box retail stores, medical offices and the occasional factory are built using your tax dollars for all or a good chunk of the cost, a story detailed in my book, Free Lunch.
This latest development in the rapid growth of corporate socialism is in a report being issued today by Good Jobs First, a tiny nonprofit research group in Washington, D.C.
For years this small group, operating on a budget of about a million bucks a year, has mined the public record to find golden nuggets of fact documenting the upward redistribution of wealth and income that is at the heart of America’s economic woes. It is a story seldom mentioned in the news.
The new report is titled, fittingly, “Creating Scandals Instead of Jobs: The Failures of Privatized State Economic Development Agencies.”
“State efforts to promote economic development,” the report begins, “have traditionally been carried out by public agencies such as commerce departments, which both market the state to potential corporate investors and administer the subsidies that are frequently used to lure companies. In late 2010, however, several newly elected governors called for a different approach. Claiming that their state agencies were no longer effective, the governors-elect called for the creation of “public-private partnerships” (PPPs) to take over the functions.”
These jobs giving away your tax dollars must require tremendous skill, based on what they pay.
Consider Don Cardon, hired by Arizona governor Jan Brewer in 2011 to run the Arizona Commerce Authority with at least $25 million of taxpayer and private funds to give away. Cardon’s salary was $300,000, triple what the finger-wagging governor makes.
He also got a $50,000 signing bonus, a grand a month car allowance, and the prospect of a $75,000 performance bonus if he was really good at giving away money to companies. That was more than enough to put him well into the top half of one percent of all workers that year. But Cardon quit and thus had to give back part of his signing bonus.
Good news for Cardon, though, that the private side of the public-private partnership approved a $60,000 bonus. Cardon then took a job raising money for — who else — the Arizona Commerce Authority through a private partner, called Team ACA, that does not disclose its donors.
Kasich, the Ohio governor who postures as a wise steward of public funds, gave away almost a half-billion dollars in his first year as governor, setting a new record for the state by a wide margin.
Kasich also came up with a curious plan to finance his JobsOhio program. He wanted to use state proceeds from liquor stores to finance a $1.4 billion bond issue, a lowball figure, given that the profits over the life of the bonds are likely to be more than four times that much.
Under Kasich, birthday card-maker American Greetings, sausage maker Bob Evans, and Diebold — maker of automated teller machines that dispense cash and voting machines that can produce dubious results — threatened to leave Ohio unless they were given $200 million. Good Jobs First calls such threats “jobs blackmail.”
Steve Davis, CEO of Bob Evans, served on JobsOhio’s board, but his commitment to new jobs or even retaining existing ones seems less than his quest for subsidies down on the farm. Since Kasich took office, Bob Evans has closed two Ohio food factories and moved the work to Texas, which under Governor Rick Perry has become the champion of corporate socialism as well as cross-state job stealing.
As for transparency, Kasich proposed that JobsOhio be exempted from the Buckeye State’s open meetings and public records laws.
But Kasich says he is demanding performance for gifts of taxpayer money. Kasich said in a speech that $900,000 had been taken back from companies that did not create jobs. But in line with his opaque ideas about transparency, not one buck has actually been returned, Politifact Ohio reported. All the Kasich administration did was send notices of intent to recover monies.
And how has job creation for ordinary folk worked out under Kasich? According to the Bureau of Labor Statistics, Ohio has about 20,000 fewer jobs than when Kasich was sworn in.
Then there’s Terry Branstad who since 1983 has been the on-again, off-again governor of Iowa.
In the 2010 election he promised to create 200,000 jobs by 2016, which seemed a lot of hooey worthy of the Music Man’s instrument-selling schemes.
Branstad said he would name a CEO with “real-world economic development success” to run the Iowa Partnership for Economic Progress.
Tens of millions of dollars later, the Bureau of Labor Statistics reports that Iowa had fewer than 1.6 million jobs in August, up just 11,000 from when Branstad took office in January 2011. That’s just 5.5 percent of the way toward the goal of 200,000 more jobs — but Branstad has 26 months left to add 189,000 new jobs.
Branstad’s administration, to be fair, says the state has really added 56,000 non-farm jobs, a figure I found in the Des Moines Register, a paper that in its storied past would have checked such claims against the official record. But like a lot of news organizations, Iowa’s leading paper has cut so many newsroom jobs that, apparently, no one has time to check what politicians say against the official record.
If you want to see the troubling facts and inconvenient truths about how the redistribution of income and wealth in America is up, not down as is so often claimed, read the new Good Jobs First report. And take it not with a grain of salt, but a dose of aspirin.
Photo: Gage Skidmore via Flickr