Saturday, August 01, 2015

Scott Walker destroyed his state: Wisconsin’s economic cautionary tale

Taxing the poor to subsidize massive corporations is calamitous in the long term. Who would've guessed?

David Sirota, Salon.com

The continuum of American politics is not a straight line — it is more like a circle. Travel farther out on the right and left, and ultimately the sides bend to a common position on an issue like taxpayer subsidies for big business. To many progressives, such expenditures are giveaways to the already wealthy. To many conservatives, they are a free-market-distorting waste of taxpayer resources. Both sides also often criticize the subsidies as an instrument of cronyism and corruption.

In recent years, taxpayer subsidies for corporations have become a huge expense: The New York Times estimates that states and cities now spend more than $80 billion a year on such so-called “incentives.” For the most part, this gravy train has not faced much pressure to slow down.

But now, as the 2016 presidential campaign intensifies, both the left and the right will have a prime opportunity to spotlight its critiques. That is because one of the most prominent Republican presidential candidates — Wisconsin Gov. Scott Walker — has made such subsidies a central part of his public policy agenda. Those subsidies have produced both high-profile scandals and lackluster economic results.

In 2011, Walker created the Wisconsin Economic Development Corporation to give businesses taxpayer loans and grants. Within a few years, state auditors published reports spotlighting “concerns with WEDC’s administration and oversight of its economic development programs and its financial management.” Specifically, auditors said “WEDC did not require grant and loan recipients to submit information showing that contractually required jobs were actually created or retained” and also noted that money was handed out “in ways that did not consistently comply” with state law.

(More here.)

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