Monday, August 08, 2005

Good News from the Statehouse

In all the time that I have followed Indiana government, this is the first practical, bipartisan economic development effort I have ever seen. Every other effort for "economic development" has been nothing more than lip service and business-friendly tax changes, neither of which have been shown to work for the benefit of Indiana.

But in a surprisingly ingenious move, Mitch Daniels has formed a bipartisan brigade of politicians and experts who traveled to Japan and Taiwan to forge business relationships with companies interested in locating their businesses in the U.S. What does that mean? It is the opposite of outsourcing; other countries will bring their jobs here, and our citizens will have access to an enlarged job market and more competetive wages.

In short, this is the real way to create jobs because it abandons the foolish ideals of trickle-down economic welfare and looks at the realities of the labor market. Tax breaks allow businesses to increase either labor or profits. However, all business decisions are made with the end motive of maximizing profits; workers are a means to that end, just like machinery and land. [That is not cynicism, it is Business Econ 101.] That is why tax breaks are associated with higher corporate profits and no significant increase in the labor force. Trickle-down theory simply enables higher corporate profits under the guise of public welfare.

On the other hand, the efforts of the bipartisan group of hoosiers discards this failed method of creating jobs and takes a more realistic approach...if you want more jobs, you need more businesses. If you want more businesses, you have to "sell" your state to business owners, just like a real estate agent works to sell a particular piece of property to potential buyers. Successful sales of Indiana land and culture to the Japanese and Taiwanese will cause them to locate businesses in our state. This will create more competition for both workers (which will make average wage go up) and consumers (which will make prices go down). Corporate profits may take a hit, but individual Hoosiers who want nothing more than to work and provide for their families will be much better off.

I vigorously endorse this initiative and I look forward to seeing some real economic development in this state for the first time in a decade.

1 Comments:

Blogger torporific said...

I am no fan of Mitch Daniels, but I don't have the kneejerk hatred for him as I do for Bush and his brand of neo-con crusaders. Mitch has made some bad moves: stripping the union rights of state workers, not fighting for Amtrak, Joel Silverman, etc, but he surprises me every once in a while. The most glowing praise that I can give for him is that he's not as bad as I thought he'd be.

1:55 PM  

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