Media Ignores Costs In Film Coverage

Lawmakers exchange bad policy for Hollywood glitz

By Jarrett Skorup | March 11, 2013

The Michigan film subsidy program is a perfect example of how the traditional media can play into the hands of the government and elected politicians.

While virtually no economist or researcher who has looked at the program finds a net benefit for citizens, the media rolls out story after story of positive parts of the program while almost never mentioning the costs.

For example, MLive has done dozens of stories about the Disney film, "Oz: The Great and Powerful," but I am unable to find a single recent article that discusses the nuances of the program. The Detroit News and the Detroit Free Press are similar, with fawning coverage about Hollywood stars and directors who are coming to Michigan.

This is a classic case of the "seen vs. the unseen," an economic concept identified by the French economist Frederic Bastiat in 1850. He wrote, "There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen."

In other words, what is seen by Michigan citizens and helped by a willing media, are Hollywood stars coming in to the state and stories of workers who got jobs on movie sets. The unseen comes later: As a Senate Fiscal Agency report found the year "Oz" was granted its subsidies, the film program brought the state only $0.11 per dollar spent. Michigan taxpayers dished out $125 million in 2010-11 to get back $13.5 million, and as Mackinac Center for Fiscal Policy analyst James Hohman concluded, the subsidies achieved no growth in film jobs in the meantime.

The film subsidy program takes tax dollars from Michigan citizens and businesses and redistributes them to big business with the assumption that the latter spends the money better than the former.

A media obsessed with the easy story of glitz and glam will not talk to the unseen family that is struggling because state resources were used for billionaire movie makers, or see the story of the worker laid off because the state insists on spending money for an "expensive game" that creates the illusion of jobs.

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.

In Pontiac, MEA Local Raises $12K For School Supplies While Union Health Insurance Arm Sues District for $7.8 Million

Union affiliated MESSA got $7.8M judgment against Pontiac School District

By Tom Gantert | March 11, 2013

At a time when the Michigan Education Association is boasting that it has coordinated a fundraising effort to raise $12,000 for school supplies for the struggling Pontiac School District, the health insurance arm of the state's largest teachers' union has secured a legal judgment against the district for $7.8 million.

The Michigan Education Special Services Association (MESSA) is a third-party administrator of insurance benefits that was created by the MEA and serves numerous school districts in the state. It was awarded the consent judgment against the Pontiac School District by the courts, according to the Oakland Press. MESSA's trustees all have direct ties to the MEA.

While the MEA blames education funding cuts for Pontiac’s problems, the district had health insurance it couldn’t afford, which shines a light on the real issue, said Michael Van Beek, education policy director at the Mackinac Center for Public Policy.

"That the district can’t pay its health insurance bill and MESSA has to sue them to get their payment indicates the district has a different kind of problem," Van Beek said. "And it's related to spending more than they are taking in. It indicates the Pontiac school board has a problem controlling its costs, not a problem collecting revenue. … It’s been trying to afford things that it can’t afford."

Pontiac spends $16,400 per pupil.

Many schools are getting rid of the top-tier MESSA insurance and finding less expensive insurance for their teachers. For example, in July officials from Dansville Schools in Ingham County said that by dumping a top-tier MESSA program and getting a less expensive insurance plan, it was able to spend $250,000 less than it budgeted while still paying for all its teacher’s premiums and deductibles.

MESSA was founded by the MEA. According to MESSA’s latest filings with the Internal Revenue Service, all of its trustees can be directly linked to the MEA either through past service as a high-ranking MEA executive or as an MEA board member or committee member.

In 2011, MESSA paid the MEA $93,611 for “performance of services or membership or fundraising solicitations by other organizations.”

MEA Spokesman Doug Pratt, MESSA Spokesman Gary Fralick and Pontiac School District Board Members Karen Cain, Brenda Carter, Carol Turpin and Sherman Williams didn’t respond to requests for comment.