News reports state the movie makers of "Iron Man 3" left Michigan for North Carolina because Michigan wouldn’t meet demands for up to $30 million in incentives for the production company.
While Senate Majority Leader Randy Richardville, R-Monroe, implied Gov. Rick Snyder’s administration made a mistake in losing Iron Man 3, the Mackinac Center for Public Policy’s James Hohman says politicians should have much higher priorities for state tax dollars.
For instance, Hohman, assistant director of fiscal policy, estimated that 4,892 families that were kicked off welfare this year could get assistance again with $30 million.
Also, it would take all the tax receipts of nearly 2,000 small businesses to pay for that $30 million subsidy, Hohman estimated.
Sen. Richardville said negotiations for film tax incentives were ongoing to bring a Steven Spielberg movie to Michigan. Spielberg’s net worth is estimated to be $3 billion.
“Legislators have serious prioritization problems if they would rather give $30 million to Steven Spielberg than to improve Michigan's business climate or bolster its human service programs,” Hohman said.
Sen. Richardville told AM-1270 host and WWJ political analyst Charlie Langton that Gov. Snyder’s administration does not want an encore of what happened with "Ironman 3," which went to another state.
“We will have learned from the Iron Man lesson,” Richardville said. “That’s one thing about this administration — you can’t be perfect with everything you do. … The governor would be the first to admit that he made mistakes. … They learned from that and now are out negotiating on a Steven Spielberg movie, and I can’t really get into a whole lot of detail now. You could be hearing something very, very exciting over the next couple of weeks.”
Sen. Richardville didn’t respond to an email seeking comment.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.
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Pot, Meet Kettle
As reported in the Wall Street Journal, a group of American companies that make solar panels has called on the federal government to raise tariffs on their Chinese rivals for “dumping their products on the U.S. market.”
The complaints come in the wake of multiple bankruptcies of government-backed solar companies in the United States, most notably the “green jobs” darling Solyndra. According to the article, American solar panel makers are “struggling with the oversupply from China and other Asian countries.”
The irony is rich: According to the Energy Information Administration, solar gets about 100 times the subsidy received by oil and natural gas per unit of production. Yet executives of these highly subsidized U.S. solar plants are complaining about the alleged subsidies the Chinese government is reportedly giving its own solar companies.
One reason the political allocation of capital usually fails is because the politicians directing the investments generally burden the programs with conflicting goals. In this case, renewable energy subsidies are sold as both a “jobs program” and as a means to “save the earth.”
As I wrote previously, if the ultimate goal is the latter, “[Shouldn’t we] welcome lower-cost Chinese versions of these products, which presumably would bring about our economy’s transition from ‘evil’ fossil fuels even more rapidly?”
If the goal is to create jobs, then government should end “renewable energy” subsidies and mandates altogether, because they kill jobs by raising the cost of energy, a key input to manufacturing and every other sector of our economy. The tiny number of “green energy” jobs is dwarfed by the huge employment losses caused by those higher costs, making our overall economy less competitive.
There’s a simple solution to the American solar companies’ complaint about Chinese subsidies: A bilateral agreement in which both governments agree to end all their “renewable energy” handouts. One suspects this is not what our solar favor-seekers have in mind, however.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.