SHINE Fades (Updated May 2017)

Two years ago, I wrote about the troubles that Janesville’s publicly-subsidized SHINE project (to produce the molybdenum-99 isotope for nuclear medicine) was having in marketplace. See, SHINE Fades. Amy Goldstein also devotes a chapter to SHINE in her recent book, Janesville: An American Story. (I wrote about that chapter of her book, among others, in a post entitled Considering Janesville: An American Story (Part 10 of 14).

SHINE – the recipient of millions in public money, and already years behind schedule – now is having so much trouble in the marketplace that they can’t entice private capital without wheedling for even more public money for a small prototype facility:

JANESVILLE—SHINE Medical Technologies isn’t raising money as quickly as planned and is negotiating with the city for more financial help, company and city officials said.

Talks are underway for a city incentive package to help SHINE pay for construction of a prototype radioisotope production facility, said Gale Price, city economic development director….

“It (the prototype facility) wasn’t part of the original plan,” SHINE Vice President Katrina Pitas said. “The (prototype) building is new, and, frankly, the reason we’re breaking ground on that facility instead of the manufacturing facility is that we have raised money slower than we’d intended.”

Via SHINE seeks more financial help from city to build prototype facility @ GazetteXtra (subscription req’d).

There are billions in capital – from all corners of this country – to be invested in American start-ups. It’s years later, and SHINE still can’t entice even a tiny part of that private investment, and so returns hat-in-hand for more taxpayer funds.

This won’t end well, as one might have understood from the beginning.

What a Card! Jean Card’s Comedic Claim That Trump Will Rein in Crony Capitalism

Jean Card is a weekly blogger at U.S. News & World Report (yes, it’s still in publication), former speechwriter for the secretaries of Labor (2001-03) and Treasury (2004-06) in the Bush Administration, and owner of Jean Card Ink, where she is “a writer and communications consultant with a proven track record of translating public policy jargon and government-speak into compelling, persuasive English” with the reassuring company tagline that this is important “Because Words Matter.”

She’s also quite the comedienne, as one can easily discern from her latest post, Will Donald Trump Rein in Crony Capitalism and Let Small Business Flourish? (The subtitle’s even more amusing: “President-elect Donald Trump has crony capitalists sweating and small businesses cheering.”)

In fact, Trump’s economics involves a contradictory (and at bottom) ineffectual mix of badgering and then bribing of large corporations to do what he selfishly wants. John Tamny has it right in Carrier Corp.: Donald Trump Potentially Destroys Millions Of Jobs To ‘Save’ 800:

what’s so shameful about some of the support on the right for Trump’s alleged ‘coup’, Trump’s actions vis-à-vis Carrier sent a strong signal that the U.S. will no longer be as hospitable a locale to the very investors who create all jobs. As Trump so obnoxiously and chillingly put it, “Companies are not going to leave the U.S. anymore without consequences. Leaving the country is going to be very, very difficult.” Where is the outrage? Trump didn’t signal help on the way as much as he signaled retaliation against the companies that don’t do as he wishes….

Funnier still is Card’s contention that Trump will help business by rejecting crony capitalism.  Far from rejecting favors for his friends, he’s gone one better: he can use political power to discuss business for himself and his own family rather than mere associates and cronies.  Argentina’s president denies that Trump sought favors for a hotel project in that country, but the Guardian reports that “[Argentine] local media reports have alleged that Trump asked [President] Macri for help over a stalled construction permit for a 35-storey project called Trump Office in downtown Buenos Aires. A source told the Guardian that the information came from Macri’s staff.”

Drew Harwell describes Trump’s generally conflicted situation in a story entitled, On the day Trump said he’d clarify his business dealings, his conflicts of interest look thornier than ever:

If Trump gives his children corporate management responsibilities but still partially owns the businesses, he will have a financial stake that could influence his presidential decision-making, former White House ethics advisers said.

Business experts also wonder how Trump could promise “no new deals” for a business that has depended on routine dealmaking — both in large measure, such as signing new real estate partnerships or sealing branding agreements, as well as everyday deals, including hiring employees and refinancing debts.

Some government officials weighed in. Office of Government Ethics Director Walter Shaub, whose agency advises public officials on how to avoid conflicts, wrote in a letter Tuesday to Sen. Thomas R. Carper (D-Del.) that “a President should conduct himself ‘as if’ he were bound by” financial conflict-of-interest laws. “Transferring operational control of a company to one’s children would not constitute the establishment of a qualified blind trust, nor would it eliminate conflicts of interest,” Shaub wrote.

Card wants to position Trump as someone who badgers big companies (“Translation: the cronies are sweating”), but with his approval Indiana targeted seven million for Carrier, Boeing gave a million to Trump’s inaugural committee after being attacked on Twitter, and Trump’s telegraphed-a-day-in-advance attack on Lockheed was no surprise to hedge fund managers.

Sweating?  No, they’re cashing in and ponying up for more opportunities.

Oddest of all is Card’s contention that small businesses are hopeful about Trump. She cites a National Federation of Independent Business’ optimism index, without telling readers that (1) the survey is self-selected (it’s only from among NFIB members), (2) the NFIB membership is only a fraction (about 1.1%) of all small businesses in the U.S., (3) the NFIB was the principal plaintiff in a losing case at the U.S. Supreme Court case against the Obama Administration, and – wait for it – (4) Card doesn’t disclose in her post or her US N&WR bio that she was Vice President of Media & Communications for the NFIB from 2010-2014.

Former speech writer, former communications flack, and consultant?

Oh, no, dear readers – it’s a comedy act that Jean Card has going.

Boo! Scariest Things in Whitewater, 2015



Here’s the ninth annual FREE WHITEWATER list of the scariest things in Whitewater for 2015. The 2007, 2008, 2009, 2010, 2011, 2012, 2013, and 2014 editions are available for comparison.

The list runs in reverse order, from mildly frightening to truly scary.

10. The Coming Ferret Invasion. Alternative title: The Unprepared Will Be Doomed.  Earlier this year, I predicted that Whitewater would experience a massive invasion of ferrets.  Why?  Because I correctly guessed that New York City would not lift its ban on ferret ownership in that city.  In consequence, the aggrieved, hidden ferrets of the Big Apple are sure to decamp for ferret another location.

Whitewater, of course.

In my estimation, they were supposed to be here by mid-October, but perhaps they’re walking more slowly than I’d calculated.

In any event, there’s a way to protect ordinary, decent residents from the rodent takeover.  (It’s mistaken to say that this website does not offer solutions to problems.  It often does.  I would also
remind officials of Whitewater that the easiest way to avoid problems is not to take actions that cause problems.)

Here’s how to protect Whitewater against thousands of invading ferrets.  First, find a city official who has time on his hands.  That’s the easy part. Second, station that official miles from Whitewater, in a rural location between here and the ferrets’ path.  Third, as these small, voracious mammals approach, it will be the official’s job to associate a picture with food, happiness, etc., in the ferrets’ minds. That way, they will seek the location in the picture, and avoid residents’ homes and businesses.  The entire advancing horde will congregate only at the location depicted in the photograph.

I’ve just the place in mind:

WWMB

Problem solved.

9. Key People.  I heard a presentation recently where the presenter tried to reassure others that she would seek the input of key people.  There are no key people – at least not in a way that makes it worth using the term.  There are only key ideas.  All the rest is an attempt at flattery or an expression of insecurity.

A group of supposedly key people is no match for one ordinary man or woman with a key idea.

8. One’s Own Words.  They must be scary; one hears them so seldom.  There are a few who think that somehow they’re better off relying on poorly written and poorly read publications than speaking and writing on their own.   That’s a mistake.  Servile papers and websites will not prove enough, anymore; the readership dynamic in this city shifted irreversibly against their publications.

(Actual traffic measurements of various publications are nothing like how insiders or publishers want to portray them; realistic measurements show how far insiders’ publications have declined or stagnated, and how much others have gained.  One can be very confident about the future in this regard.)

Talented people – including many officials individually – are simply throwing away their opportunities when they rely on publications markedly inferior to their own abilities.

7. Potholes.  They must be scary, because we’re avoiding them, and spending more on big projects than we’d need for simple street repair.

6. Gaps.  The greatest republic in human history (ours) grew in liberty and prosperity though careful examination of projects and ideas.  We did not develop word-class technologies by believing ‘close is good enough’ on engineering or fiscal projects.  When, however, someone asks that American standards be applied to Whitewater’s projects, officials whine that identifying gaps is unfair, nitpicking, etc.

In what society do they think they live, for goodness’ sake?

America is great, in significant part, because she – unlike foul Third World autocracies, for example – expects high standards from her leaders and their proposals.

5. Open Government & Temporary Amnesia. Every public body has a website, on which they publish every big boast, but somehow these same officials can’t seem to remember how to post key public documents prominently.  They seem to forget, but only temporarily and selectively.

4. WEDC money.  Not just worthless – it is – but worse: a diversion of resources from far greater needs.  The many poor in this city get nothing from this money.

warg

 

3. Data.  Presenting scores in a realistic context is harder for Whitewater’s school administrators than facing a pack of savage wargs.

2. Filth, Scum, and the Flimsy Scheme to Bring Them to the City.  I’ve a series about this, in WHEN GREEN TURNS BROWN.  There’s a burn-the-village-to-save it quality to waste importation as a means of revenue.  (And yet, the sadness here is that the entire digester-energy project was unnecessary, and the obloquy it brings being wholly deserved for being unforced.)

1. The Ethical Indifference of Act Utilitarianism. Some of the large public institutions of this city show time and again that they care more about their reputations – and that means the reputations of their leaders – than the health and safety of their ordinary members.

The worst example of this has been the repeated downplaying of violent assaults against women on campus while touting accomplishments that cannot, ethically, matter as much as those injuries. These have been self-protective, morally empty, and ultimately futile attempts at diversion and subject-changing.

A climate like this has invited and will invite further tragedies; the worst of this, sadly, surely is not over.

Other officials who allow subject-changing are, themselves, culpable of a supportive wrong.  See, An Open Note to Leaders of the Municipal Government, the School District, and UW-Whitewater.  It’s right and fair that officials who aid in diversionary conversations should be called out directly & specifically when they make that attempt.

For it all, we’ll get to a better city, consigning these ways to the dustbin.

There’s the 2015 list.  We’re more than able to overcome these problems, for a stronger community.

Best wishes to all for a Happy Halloween.

On Big Banks, Big Businesses

In the video above, Sec. Clinton tells Steven Colbert that she’d let big banks fail. There’s something in her (briefly stated) position for a libertarian to admire, although other points to doubt. (I’d not urge breaking banks up, but would surely urge government to allow large banks or businesses to fail. Clinton, admittedly, is referring to banks alone.  No one, by the way, is talking about abandoning depositors’ insurance; that change is not needed to enforce market discipline in these cases.)

For Whitewater, there is also a huge irony in this: unlike so many proud, self-declared conservative officials in this town, it’s actually Sec. Clinton who here takes the position of (implicitly) favoring the market over government rescues.

Clinton’s not a conservative, of course, but the contrast shows that Whitewater’s conservative officials are almost uniformly big-government conservatives, flacking every last dime of spending they can.

A genuine, small-government conservative official in Whitewater has much in common with a needle in a haystack.

Worse, their idea of big-government is toadying to the biggest businesses in the community. Ignorant or indifferent to sound economics, and consequently disdainful of free markets, they’ve nothing but the buzzwords of so many striving, scheming new men.

Whitewater’s economic development officials will develop nothing more than bad ideas and stale rhetoric so long as they embrace economic manipulation on behalf of their favored establishments.

stbernardThese town squires are so lost that the leading Democratic candidate for president, the member of a party that enthuses over economic intervention, still shows a better grasp business intervention than they do.

That’s a whole new order of being lost, an extreme condition in which even the smartest St. Bernard, with the most developed senses, would be of no help.

Business v. Free Markets

Over at Cato, David Boaz writes about The Divide between Pro-Market and Pro-Business. (I’ve also linked to Boaz’s post at my libertarian website, Daily Adams.)

Boaz observes that, too often, business (especially big business) is an opponent of free markets:

In 2014 big business opposed several of the most free-market members of Congress, and even a Ron Paul-aligned Georgia legislator who opposed taxpayer funding for the Atlanta Braves.

The U.S. chamber jumped into a Republican primary in Grand Rapids, Mich., to try to take down Rep. Justin Amash, probably the most pro-free-enterprise and most libertarian member of Congress. Free-market groups, including the Club for Growth, Freedomworks and Americans for Prosperity, strongly backed Mr. Amash.

And now the chamber plans to spend up to $100 million on the 2016 campaign. Roll Call, a Capitol Hill newspaper, reports, “Some of business’ top targets in 2016 will be right-wing, tea party candidates, the types that have bucked the corporate agenda in Congress by supporting government shutdowns, opposing an immigration overhaul and attempting to close the Export-Import Bank.” Politico adds a highway bill to big business’ list of grievances against fiscal conservatives.

This clash between pro-market and pro-business is an old one. Adam Smith wrote “The Wealth of Nations” to denounce mercantilism, the crony capitalism of his day. Milton Friedman said at a 1998 conference: “There’s a common misconception that people who are in favor of a free market are also in favor of everything that big business does. Nothing could be further from the truth.”

Locally, which side would one choose, in a contest between (a) Smith, Hayek, & Friedman on one side, and (b) on the other side the economic manipulations of the WEDC,  UW-Whitewater chancellor, Whitewater city manager, Community Development Authority, and (with some of the same ‘development’ gurus) the Greater Whitewater Committee business lobby?

Honest to goodness, that’s no choice at all.

When one contends in support of free markets, doing the best one can to understand, apply, and defend the arguments of Smith, Hayek, Friedman, et al., one embraces a tradition incomparably superior to the crude, deceptive, and ineffectual manipulation of the economy to the benefit of a few, favored businesses.

One can be confident about this not because there’s anything special about oneself (in my case there certainly isn’t), but because the tradition of which one is a proponent is vastly better than the views of those on the other side.

A strong tradition uplifts its advocates; a weak tradition diminishes its adherents.  Personality doesn’t matter more than sound principle; sound principle creates the world in which personality, of whatever type, may be freely expressed and enjoyed.

 

 

Fog Lifts

Whitewater started the day with fog, but there has never been a place, anywhere or ever, in which the fog did not lift.

There’s reason for confidence that even befogged places see, in the course of events, clear skies.

I’d guess, though, that most policymakers in town (such as they are) don’t believe that policy follows underlying social forces or structural limits the way, for example, weather develops in accordance with natural forces (that people can explain and predict).

Just the opposite is probably true, actually: to listen to economic development officials at the Community Development Authority or in the city administration is to hear something closer to stream-of-consciousness fiction than social science, let alone meteorology.

In this sort of befogged environment, it makes sense that self-styled public relations men, incurious and servile reporters, avaricious big-business interests, mendacious officials, academics who distort data, administrators who discard individuals and individuals’ injuries for the sake of their own undeserved reputations, etc., would play an outsized role.

These few of overweening ambition and underwhelming results have one thing, at least, in common: they think that accomplishment – and even truth – is found simply in the declaring, in the insisting, of it.

The people of this beautiful city are far more capable, far more clear-sighted, than the town’s political leaders and economic policymakers.

Good policy, like meteorology, is more than hoping the day will be sunny; it requires understanding what makes a day cloudy or bright.

WEDC Spends More, Produces Less

It should come as no surprise that the Wisconsin Economic Development Corporation’s millions in taxpayer handouts to well-fed executives and political cronies are producing less with each successive spending spree:

The state’s flagship job-creation agency handed out nearly $90 million more in economic development awards last year than the previous year, yet those awards are expected to create or retain almost 6,000 fewer jobs and result in $400 million less in capital investment.

Most of the additional award funding resulted from a historic rehabilitation tax credit that Gov. Scott Walker and the Legislature expanded in 2013. The agency gave out $2.9 million in 2013-14, but that jumped to $78.1 million last year.

Even without the historic credits, total economic development awards increased $13.5 million, while promised job creation and capital investment dropped….

See, AGENCY HANDED OUT $90 MILLION MORE LAST YEAR: WEDC awards increase as job creation numbers fall @ State Journal.

At the same time, Wisconsin lags America in job creation:

Wisconsin ranked 30th overall in the nation in private-sector job creation during the 12 months ending in March, according to data released Thursday.

Wisconsin reported a 1.72% increase in private-sector jobs for that period, compared with the previous 12 months, according to employment numbers released by the U.S. Bureau of Labor Statistics. The state added 39,624 jobs.

The state’s performance compares with a 2.4% increase for the nation — continuing Wisconsin’s historic lag in job creation.

We’re spending more, but producing less for it, and still underperforming the national average.

Three other key points:

1. As with tens of millions in state credits for Kohl’s, some of the jobs created needn’t last long to be counted. Supposed job-creation claims are often sketchy and temporary.

2. There’s now a flood of statewide reporting about WEDC’s failures. That wave of inquiries & reporting isn’t close to being done.

3. Even after results of those inquiries are published, there’s a significant issue of how local development agencies or city governments are spending public money, what they’re reporting as ‘job creation,’ and how loans are either unpaid or converted into grants so that they needn’t be repaid. Several cities or agencies in Wisconsin have embraced WEDC more firmly than others. Whitewater’s Community Development Authority and city government are among them.

Most of these communities have proceeded with little more than economic-justification-by-press-release. Actual evidence of job creation is either absent or flimsy. In Whitewater, the CDA truly looks more like a third-tier public-relations effort than an actual community development agency. In this regard, Whitewater is probably at the forefront of the WEDC wave: headlines, happy insiders, and exaggerated claims.

Months of statewide examinations into WEDC will inexorably lead to examinations of local agencies that have embraced the WEDC model most warmly.

The Weakness of Sugar Cubes

When conditions are dry, sugar cubes are fairly sturdy. When placed in coffee, they don’t last long.

Cronyism is like this – it does well in the dry jar of municipal officials, insiders, press-toads, big-business lobbyists, and their lightheaded cheerleaders. In the bracing coffee of careful analysis, sound economics, and impartial observation it dissolves quickly enough.

What’s happened to the WEDC statewide – it’s a disgrace that no insiders’ flickering hopes can overcome – should be a warning for local cronyism in Whitewater.  It’s true that some men have devoted their political careers to these kinds of projects. No matter: their work has been profligate and selfish, their hopes for a positive legacy are hopes in vain. Whitewater’s tiny versions of statewide failures have no political future except the ashcan.

It’s unlikely that men devoted to these projects will change their tune; they’re more likely to play the same off-key score with even greater intensity. Associating with their own kind, they can’t or won’t imagine alternatives to their way.

(Even as recently as three years ago, their ideas must have seemed, to them, winning ones.  That was never true, of course.  They should have read more of history, and less of their own grandiose press releases.)

Still, nothing of their efforts will be sufficient.

The future will write the history of the present; that history will be favorable to many, but dismissive or contemptuous of these projects.

There are years yet ahead, but the outcome for cronyism in Whitewater is no better than a sugar cube’s chances in a mug of Kona.

The New Crony Capitalist

Gov. Scott Walker on Thursday appointed banking executive and frequent GOP donor Mark Hogan to lead the state’s troubled job-creation agency [WEDC]…..

M&I Bank faced its own problems several years ago with bad loans and a crashing stock price and ended up being absorbed by BMO Harris of Canada in 2011.

M&I loan losses during the real estate bust — concentrated heavily in Arizona and Florida — totaled $4.8 billion across its portfolio from Dec. 31, 2007, through December 2010, according to a Milwaukee Journal Sentinel review.

Hogan has given $24,125 to Walker’s campaigns for governor since 2009, state records show.

He gave another $10,000 this year to the super PAC backing Walker’s presidential run. His son, Patrick, has worked for Walker’s office and campaign.

Walker spokeswoman Laurel Patrick said the contributions and Hogan’s son’s work for the campaign played no role in Hogan’s appointment.

Via Scott Walker appoints banking executive to lead state jobs agency @ JSOnline.

Cross-posted at Daily Wisconsin.

WEDC Leader Quits: “It is time for me to return to my previous retired status”

Having presided over the national embarrassment that is the Wisconsin Economic Development Corporation, WEDC leader Reed Hall now heads for the exit:  

The state’s top economic development agency, stung by a series of scathing audits, media reports about questionable loans and accusations of mismanagement, is once again seeking new leadership.

After three years steering Gov. Scott Walker’s flagship job-creation agency through troubled waters, Reed Hall announced Tuesday he is retiring as Wisconsin Economic Development Corp. CEO on Sept. 25.

In a statement, Hall thanked Walker, the WEDC board, other cabinet secretaries and agency staff in saying “it is time for me to return to my previous retired status.”

Via WEDC CEO Reed Hall to leave troubled agency on Sept. 25 @ Wisconsin State Journal. 

The best timing for Hall would have been to remain retired in the first place, but better late than never to depart.  

The former Department of Commerce was a mess; the WEDC has been even worse.  

Locally, there were a few development gurus in at the Community Development Authority who thought that WEDC support would prove both valuable and a public-relations boon to Whitewater.

Here we are, these years later, and all their proud claims are proved false: the WEDC has been – so very predictably – a state-funded failure. 

When the WEDC, itself, will be shut down I cannot say, and in the meantime it’s sure to do more damage.  
The local gentlemen who believed in it, against sound understanding, have espoused a sham economics.  

Almost any sensible person, of Right or Left, would have crafted something better than this.

Someday, some of them will.  

Previously:  FW posts about WEDC negligence and waste.

The State’s WEDC and Whitewater’s Facsimiles

Ongoing revelations about the Wisconsin Economic Development Corporation are a double concern: they’re stories of statewide malfeasance, and those revelations beg the question of how local officials in Whitewater are managing their own pools of public money.

First, the latest stories (it’s a steady stream) of state-level error, waste, and negligence:

Madison— Failing to run adequate checks, Wisconsin’s flagship jobs agency gave two awards worth more than $1.2 million to a financially troubled De Pere businessman who had not disclosed his problems to the state, a Milwaukee Journal Sentinel review has found.

Despite those omissions in 2011 and 2012, Gov. Scott Walker’s administration kept working with Ron Van Den Heuvel and his clean energy company, Green Box, into 2014, state records show.

There is no record of the Wisconsin Economic Development Corp. notifying the city of De Pere about the company’s money troubles even though Green Box was working with the city in an unsuccessful attempt to get tax-exempt bonds — in part to repay the state’s soured loan.

It’s the second case disclosed in recent weeks in which WEDC failed to catch omissions by businesses about their troubled finances and then continued to work with them….

Via Jobs agencies loaned $1.2 million to businessman with troubled finances.

Yet make no mistake – even after being thrust into the spotlight WEDC is pressing on in issuing unmonitored awards. Just this past Monday [7.20.15] – four days ago – Walker took a break from his campaign to drop in on the agency’s quarterly board meeting. While that $500,000 loan [for William Minahan] was on the public agenda and one board member openly wondered why there hadn’t been “a giant red flag to cease and desist all activities,” the agency’s staff quietly presented a different proposal: to cut the number of tax credits [that] the agency audits from a required 100% (which it has never managed to comply with), to just 25%.

Via Brian Murphy @ Talking Points Memo

Second, inevitable concerns arise about local distributions after a stream of state-level reports: should a reasonable man or woman believe without careful inquiry & verification that state officials have managed these kinds of public funds poorly but that local officials (the CDA, Tech Park Board, etc.) have performed better? 

Put another way: Does anyone think that state officials are less competent and diligent than their local counterparts?

I don’t know.

At the very least, Whitewater – her city government, her Community Development Authority, all with pools of taxpayer money to dole to so-called startups, etc. – the officials responsible owe as much of an accounting of actual performance as any state official. 

In a well-ordered community, these local distributions would be periodically and independently audited. 

Libertarians (and others of different views) know well that any number of special interests – business, labor, political – will seek to ensconce themselves into government positions, directing government work to their own selfish ends. 

One would prefer a community requiring no political concerns.  A serene place like that would perhaps be a world only of cat videos and puzzles; we do not live in such a place. 

Grants and loans of public money to white-collar firms, an addiction to tax incremental financing, sketchy claims of job creation, expensive buildings at public expense, public men who present themselves as development gurus, the selling of public property to business interests too cheaply – this gutter economics infects the CDA and other public agencies in Whitewater. 

In a city with so many who are poor, these distributions to white-collar professionals have been utterly ineffectual for the many, and useful only to a few (for their immediate gain or in scrapbook headlines).

In any event, no one owes these few their claims on faith alone; they’ve wasted too much already in this city. 

Perhaps it is enough – Dieu aidant – that some are naturally inclined to review, first from curiosity and thereafter in root-and-branch scrutiny. 

WEDC Backed Use of Public Funds to Pay Off Luxury Cars

There is more than one person in this town who has insisted, more than once, that the Wisconsin Economic Development Corporation has been good for Wisconsin, and good for Whitewater. 

It’s been, instead, a failure and a disgrace.

At a time when many communities did not have enough money for vital needs, WEDC was trying to find money for a firm to pay off its Maserati lease. 

All the talk from a few local men and women describing WEDC as a positive force has been evidence of poor judgment and contempt for sound reasoning.   All the plaques and certificates that a few local men and women have received from WEDC are, themselves, pitiful badges of poor judgment and contempt for sound reasoning.  

Consider the latest on the Wisconsin Economic Development Corporation:

Madison — Officials at Wisconsin’s top jobs agency sought federal tax incentives for a failing Milwaukee business for a year after being told that the owner was seeking the money to pay off business debts such as the leases on luxury cars.

Officials at the Wisconsin Economic Development Corp. worked to get that federal help for Building Committee Inc. even though a $500,000 loan it had given to the company had gone sour within months and the owner of the firm had provided false information to the state.

Top officials in Gov. Scott Walker’s administration pushed to get Building Committee the initial loan and worked to get more for the company. But the jobs agency had to pass on giving the company more funding from state taxpayers after finding numerous problems with the firm and being told that owner Bill Minahan was promising some of this second proposed loan to pay a leasing debt on cars such as a 2010 Maserati and a 2011 Nissan 370Z luxury sports car.

Information about state officials’ long-running attempts to find help for the troubled company are coming to light just as the Republican governor prepares to announce his bid for the presidency next month. Walker said he didn’t think his jobs agency had cut any corners.

WEDC officials’ alarm didn’t stop them from persuading three counties to allocate $4.5 million for Building Committee from a federal program meant to spur energy conservation, according to hundreds of pages of emails and other documents recently released under the state’s open records law. Those federal incentives were never used because, even with the subsidies in hand, Building Committee was unable to get the financial backing it needed to proceed with its project.

WEDC officials never told those counties about the concerns that had made them email each other with statements like “Yikes!” and “I can’t believe we are actually going to do this” about earlier proposed help for Building Committee….

See, WEDC backed firm after learning state money was for luxury car debts @ JSOnline

$124,000,000 Without Underwriters’ Review 

In its first 15 months, a jobs agency created by Wisconsin Gov. Scott Walker gave businesses 26 awards worth $124.3 million in all without a formal review of the deals by underwriters.

The Wisconsin Economic Development Corp. is reporting to its board on the awards made between July 2011 and June 2013 after reports that the agency in September 2011 gave an unvetted, unsecured $500,000 loan from taxpayers to Building Committee Inc., a now-defunct company whose owner had been taken to court a year earlier for not paying taxes.

The records also confirmed for the first time that the prominent lobbyists for Building Committee included Gary George, a former Democratic state senator who was convicted in 2004 of one felony count of conspiring to defraud the government….

Via Jobs agency gave loans, credits to firms without financial review @ JSOnline.

Cross-posted @ Daily Wisconsin.

Another Six-Figure WEDC Loan to an Unworthy Applicant

Across the state, revelation after revelation shows that the Wisconsin Economic Development Corporation has been a mistake, a wasteful political endeavor contrary to sound economics. Locally, support for the WEDC, from Whitewater’s Community Development Authority, Chancellor Richard Telfer, City Manager Cameron Clapper, etc., shows not only that they’re ignorant of sound economics, but so politically inept that they’d pick the WEDC as the vehicle through which they’d assert their self-professed sophistication.

Initial public-relations efforts on behalf of the WEDC (whether flashy from the state or dull from local officials) now look like nothing so much as a coat of paint on a brothel.

Months after Gov. Scott Walker’s flagship job-creation agency was formed in 2011, it gave a forgivable $686,000 taxpayer loan to a Sheboygan company planning to build a combination helicopter and corporate jet — even though the company had no experience in aircraft manufacturing and underwriters hadn’t reviewed the company’s finances in years.

But Morgan Aircraft hasn’t created the 340 jobs it promised by the end of 2015, did not make the promised $105 million investment and is not expected to repay the loan….

See, $700,000 WEDC loan to aviation company unpaid @ State Journal.

Conservatives Against WEDC

Only a generation ago (not long, really), most conservatives would have rejected something like the Wisconsin Economic Development Corporation’s ineffectual, wasteful attempts to manipulate the economy for the benefit of a few insiders’ friends.

Today, communities across our state are beset with any number of unctuous men hawking a kind of big-government conservatism, with false promise after false promise about community development or job-creation. It’s junk economics, to be sure, but for every oily salesman there’s an obliging, oily toad among the press happy to flack these shams.

Fortunately, there many who see though this, including conservatives who have not descended into hucksterism. (I’m a libertarian, not a conservative, yet I well know that there are varieties of conservatives, and conservatives who have not abandoned the truth of economic uplift through markets free of state interference.)

Consider the men and women of Wisconsin’s MacIver Institute as a positive example:

According to an article in the May issue of State Legislatures Magazine, states offer billions of dollars in subsidies with little to show for it.

“Today, every state offers at least some sort of tax incentive for businesses,” according to the article by Jackson Brainerd, a research analyst for the National Council of State Legislatures. “Yet, despite lawmakers’ enthusiasm for corporation-specific incentives, many economists, experts and other observers, from the left to the right, doubt they are an efficient use of public money.”

Groups including the conservative Madison-based MacIver Institute question whether states should even be in the business of subsidizing business.

“We believe government does not have a role in this arena,” said Brett Healy, executive director of MacIver, which promotes a free-market approach. “Any time the government gets involved in this type of corporate welfare, picking winners and losers, all sorts of problems crop up.

“If we take a step back and be honest with ourselves, this is not a critical or core mission of state government,” Healy said.

Well-said.

Via What should Wisconsin do to boost business? @ State Journal.

 

SHINE Fades

Over at the Gazette, there’s a story that, ever so tentatively, lets readers know that the public-money-sucking SHINE project (to produce the molybdenum-99 isotope for nuclear medicine) isn’t faring so well in the marketplace.

SHINE is, after all, the centerpiece of big-government conservatism in Rock County, having received millions in public money to fund a tech venture for about a hundred highly-compensated workers as a supposed replacement for thousands of Janesville jobs lost during the Great Recession.   (See, subscription req’d, SHINE regulatory process going smoothly; funding not so.)

The paper offers a lemonade-from-lemons headline if ever there were one: a smooth regulatory process should be a given (as millions in taxpayer dollars have been sunk into SHINE), a mere prelude to the truly important work of convincing private investors to sink almost another hundred-million into the project.

Thinking that private capital investment is secondary, after the regulatory process, is risibly short-sighted.  This project will feast or starve in private markets.

SHINE is starving:

Katrina Pitas, SHINE spokeswoman and business development coordinator, said the company has pushed back its plant opening timetable to mid- to late 2018.

Pitas said the delay is because SHINE has not landed major private funding sources for the Janesville facility. She said private investors and venture capitalists have showed a trend of initial interest but then have cooled toward the project.

Having been pushed back again & again, they’ve now set a timetable of “mid-to-late 2018.”

Meanwhile, a competitor is moving forward faster, with a different process that won’t require uranium:

NorthStar, a Beloit-based radioisotope producer that says it could begin handling and shipping Mo-99 this summer, and in 2017 or 2018 could begin producing in Beloit without using uranium [as SHINE’s process will require].

Private markets aren’t secondary, except among an ignorant class of self-promoters who think that they’ve discovered a new way of business.

No, they’ve not: this is the old way of the well-fed, grabbing what they can from common residents, and hoping others won’t notice, or won’t object.

12 Points on the WEDC’s $500,000 Loan for Campaign Contributor’s Failing (and Lying) Company

Seemingly, all Wisconsin is discussing a $500,000 Wisconsin Economic Development Corporation loan to a failing company of a Walker political contributor. 

Here’s a summary of what’s known so far.

1.  The loan was to Building Committee Inc. (BCI), a business owned by William Minahan, a Walker political contributor (and Minahan made contributions to other campaigns, of both major parties).  It was meant to allow BCI to renovate bank or credit union buildings for “energy efficiency.”

2.  The 2011 loan to BCI created no jobs. 

3.  It’s uncertain where the money went.

4.  It’s not been repaid, and the state is suing BCI.

5.  Then-Secretary of Administration Mike Huebsch wanted the WEDC to extend a forgivable loan over eight times as large ($4,300,000).

6.  The WEDC lent BCI the half-million, aware that even that large-but-reduced amount was “fairly risky.”

7.  No other state or federal programs were willing to lend BCI anything.

8.  The original underwriting documents (different from a loan application) for the BCI loan cannot be found. 

9.  State officials never conducted a loan review.

10. BCI failed to disclose lawsuits pending against it, although a loan application required that they be disclosed. 

11.  BCI listed business partners on the energy efficiency project who received no funds and did almost no work. 

See, Top Scott Walker aides pushed for questionable $500,000 WEDC loan @ State Journal.

12. Some of Minahan’s employees contend he asked them to submit political contributions to candidates (in other states) that he designated, and that Minahan promised to reimburse them.

See, Company obtained loan from WEDC, unsuccessful elsewhere @ State Journal.

Below is a selection from FREE WHITEWATER on the WEDC.  There’s also a category link useful for following updates: WEDC.

WEDC Slowly Crumbles

image
WEDC ‘CEO’ Reed Hall Looks Downcast. 
You Would, Too, If You’d Disgraced All Wisconsin Yet Again. 
AP Photo.

On a Friday afternoon, there’s breaking news across Wisconsin. Having rejected free markets in capital, labor, and goods for cronyism and ineffectual manipulation of the economy, the Wisconsin Economic Development Corporation now slowly crumbles:

Scott Walker calls for elimination of state economic development loans

In the wake of another scathing audit of his flagship job-creation agency, Gov. Scott Walker called on lawmakers Friday to eliminate all loans the agency provides to encourage business development.

He also called for scrapping a proposed $55 million revolving loan fund for the agency included in his budget and using the money for education and worker training programs….

Should one be surprised?  Years of sham economics, lies about progress and development, and of job creation have met their match in audit after audit after audit.  So many of these millions went to the undeserving, bloated friends of insiders. 

To each and every person in this city who touted the work of the WEDC, one can confidently say this: you recklessly abandoned America’s deep tradition of reason and knowledge, and her advanced economic understanding, for hucksterism, for nothing but a low ideology common in banana republics and other degraded places.

If an ape screeched, hooted, and howled along Main Street, on that occasion Whitewater would have heard wiser and more melodious remarks than anything this city’s officials have ever said in defense of the WEDC.

There is much more work to be done, about this agency and in opposition to its unctuous defenders, but today is a good day for reason, learning, and fairness.

Reed Hall’s Inauspicious Choices

Reed Hall, who ‘boldly,’ ‘innovatively’ uses the private title of CEO for an organization that runs on public money, has written two defenses to his agency’s latest audit fiasco.  The first of those appears as a few platitudinous paragraphs online (‘WEDC takes bold, innovative approach to economic development,’ subscription req’d,  and the second as a reply to the Legislative Audit Bureau’s one-hundred-sixteen-page audit from this month.)

Consider how Hall touts his agency’s accomplishments, with the same “expected to create or retain” language that Republicans criticized ceaselessly (and rightly) in Pres. Obama’s stimulus package.  Imprecision and ambiguity were once a problem the GOP criticized.  Now, a sketchy phrase is at the center of how Hall describes the WEDC’s work.

Hall wants you to think that there’s been improvement in his agency’s performance, of course, but he deceptively hides the reason for better WEDC loan delinquency rates. 

Hall does this by mentioning a May 2013 audit and the May 2015 audit, while simultaneously omitting information from a September 2014 audit that undermines his claims of a legitimately lower delinquency rate.

First, what Hall hopes you’ll take at face value:

As a result of our efforts, our loan delinquency rate dropped from 2.7 percent in 2013 to 0.2 percent in 2014. The uncollectable loan balance declined from $5.5 million in 2013 to $1.3 million in 2014, and the percentage of performance reports that are late fell from 55 percent to 5.4 percent in two years.

Then, the truth he omits, as revealed in a September 2014 audit:

Of the $7.7 million decrease in troubled loans held by WEDC, the biggest chunk — $3.2 million — came from loans that were written off by WEDC because they were 90 days past due.

For the state to proceed with the collection process, those loans had to be transferred from WEDC to the Department of Administration. So by itself that change is just a bureaucratic shuffle, not a gain for taxpayers.

The audit didn’t examine what had happened to the loans after they went to the administration department.

The next biggest chunk of past due loans, worth $2.1 million, had their contracts rewritten by WEDC to delay repayment by the borrowers and $1.3 million in loans were forgiven by WEDC in whole or in part.

Hall gets better figures by concealing that the WEDC has shuffled loans to another agency and has simply written many other loans off.  

I’ll say there are two possibilities: Reed runs a multi-million-dollar, taxpayer-funded agency, yet is unable to count to three (skipping the second of three audits), or he knows that there have been three, but deceptively hopes you’ll remember only two.  

Dunce or deceiver? 

Hard to see how that’s an auspicious choice for Mr. Hall, no matter how bold and innovative he claims the WEDC to have been.

Another WEDC Audit Failure

Appearing below, you’ll see a full, 116-page audit of the Wisconsin Economic Development Corporation.  It shows the WEDC’s gross negligence; it’s the second to show the WEDC’s many failures (including deficiencies persisting from audit to audit).  (For a link to the prior audit, see WEDC Claims Success by Writing Off Bad Loans.)

For each and every official in Whitewater who has praised the WEDC as though it offered manna from Heaven, what will you to say about this organization now? 

For each and every local reporter who has carried water for the WEDC, ignoring ceaseless failures for the sake of lying headlines, how many more lies of omission will you commit?  That’s a silly question, I know: you’ll keep lying until the publications for which you write go under (and go under they will). 

For each and every WEDC ‘business citizen’ award recipient, with a shiny plaque or trophy, what will you do with your taxpayer-funded coaster or doorstop now?

I once heard that the WEDC’s work was all ‘chemistry,’ making it seem so natural (and so cleverly expressed, too).  Then and now, it’s been only alchemy.

Below, the recent audit information.

Tomorrow Friday, 5.15, I’ll answer the latest defense from the WEDC’s so-called CEO, Reed Hall.

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