The MEDC’s Pure Michigan Puffery: Part II
Reforms could make agency more credible
The Michigan Economic Development Corp., Michigan’s economic development agency, has come under criticism for its lack of transparency, which most recently was exhibited in a claim that its Pure Michigan advertising campaign had a return on investment of 587 percent in one year.
If the MEDC (and Travel Michigan) ever want their claims of effectiveness to be taken seriously then they must overhaul the agency’s culture into one of authentic transparency and intellectual forthrightness. Whether they want to do that or not, the lawmakers that citizens send to Lansing should require it (or else shut the agency down).
What would the work of a reshaped MEDC look like?
First, an independent and credible agency like the Legislature’s auditor general — not the MEDC itself — should be responsible for selecting any consultants paid to perform return-on-investment or economic impact studies. Officials at the MEDC currently have too much incentive to game studies in their favor in the hope of justifying their operations. (For more, see “Meet the New MEDC, Same as the Old MEDC.”)
Second, every such study must be transparent and fully disclose its methodology, assumptions and data in a way that would make it possible for outside scholars to replicate its work. As my colleague, economist Michael Hicks, has pointed out, this is all the more important for works that influence public spending.
Third, all such investigations should be purchased through a competitive bidding process open to all qualified vendors. This is especially important given the strong incentives for those on the MEDC’s payroll to justify their paychecks with exaggerated “jobs created” and “return on investment” claims.
The MEDC has demonstrated that it cannot be trusted to evaluate itself. The agency has a history of commissioning dubious studies justifying its programs, such as a 2009 film subsidy study and one in 2002 promoting big spending on government broadband deployment projects.
This dynamic of self-serving research is not unique to Michigan. In a 2006 research paper published by the Journal of Travel Research, “Economic Impact Studies: Instruments for Political Shenanigans?” Professor John L. Crompton said, “Most economic impact studies are commissioned to legitimize a political position rather than to search for economic truth. Often the result is mischievous procedures that produce large numbers that study sponsors seek to support a predetermined position.”
Fourth, and where possible, the Legislature may wish to mandate that all economic impact studies bought by the state contain an “opportunity cost” component. What is the tradeoff? Instead of just looking at the impact of spending $33 million on a jobs program, what if that money were used instead for personal income tax cuts? The results would be more revealing than impact studies currently bought by Michigan’s state government, however well-intentioned their champions may be.
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.
Was President Eisenhower Prescient on Global Warming Alarmists?
Add 'scientific-technological elite' to Ike’s 'military-industrial complex' warning
Former U.S. President Dwight D. Eisenhower passed away in 1969, long before claims of man-made global warming came into vogue. Yet in his farewell address, his most enduring speech, Eisenhower warned of what he called a “scientific-technological elite” that might, through unwarranted influence, achieve a position of unassailable ascendancy within the U.S. government.
In that 1961 speech, he said:
“Today, the solitary inventor, tinkering in his shop, has been overshadowed by task forces of scientists in laboratories and testing fields. In the same fashion, the free university, historically the fountainhead of free ideas and scientific discovery, has experienced a revolution in the conduct of research. Partly because of the huge costs involved, a government contract becomes virtually a substitute for intellectual curiosity. For every old blackboard there are now hundreds of new electronic computers.”
“The prospect of domination of the nation's scholars by Federal employment, project allocations, and the power of money is ever present — and is gravely to be regarded. Yet, in holding scientific research and discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific-technological elite.”
When Eisenhower penned this speech, his focus and concern was that the nation could be misled and public policy manipulated in the name of national defense by what he called “the military-industrial complex.” However, a closer look at what he was actually describing reveals a broader context.
Eisenhower was alerting the public to the danger that dogma could someday permeate and dominate their government. He envisioned the source for promoting this transcendent dogma as a scientific-technological elite, whose viewpoints and policy recommendations would become blindly accepted.
The clear implication behind Eisenhower’s words is that whether the motivation is sincerely held beliefs, cynical self-serving opportunism or both working in combination, the resulting impact of such pervasive and unchallenged dogma is bound to lead to the suppression of necessary debate. What he couldn’t possibly have foreseen was that within 50 years this dynamic could play out in the name of something called man-made global warming.
As we watch so many government officials and politicians passively submit to climate-crisis dogma, too fearful to challenge it, Eisenhower’s description of a scientific-technological elite wielding unwarranted influence over public policy seems clairvoyant. The degree to which policymakers uncritically follow the advice of this elite, as though its declarations were undeniable and its motives unimpeachable, shows that our 34th president profoundly understood the true nature of government.
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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