The Outstater

May 25, 2022

GOV. ERIC HOLCOMB reached a career pinnacle this week in being asked to speak at the World Economic Forum in Davos, Switzerland. It marked him as among the brightest of the bright, the most powerful of the powerful, one of the men and women who make the world go around.

OK, let’s grant him that. Such recognition seems important to him. Back here on the ground in Indiana, though, we have some questions — mundane, perhaps, but sincere.

Holcomb represents the refinement of an Indiana economic development strategy crafted by his mentors, Mitch Daniels and Mike Pence. “In Indiana, we’re finding more ways to partner globally to ensure the economy of the future is prosperous, equitable and sustainable,” he told the Davos haut monde.

Equitable? Sustainable? Aren’t those political words, not economic words? And indeed that is what Indiana’s economic-development policies are based upon. The last three Republican governors have shuffled various federal and state economic grants and dealt them out to politically favored regions of the state.

They call it job growth. We call it press-release economics. That is the term coined for us in a 2010 article for The Indiana Policy Review by Tad DeHaven, former deputy director of the Indiana Office of Management and Budget.

If anyone had been listening, DeHaven blew the whistle early on what was to become the establishment’s game, institutionalized as the Indiana Economic Development Corporation (IEDC). He noted that there is no independent audit of whether the tax money to the IEDC actually creates any jobs — or any jobs that would not have been created anyway. Let DeHaven explain:

“Because a governor will get credit for creating jobs, businesses know they can extract taxpayer money from the state for these subsidies. After a company reaches an agreement with the IEDC, the administration issues a press release. For the high-profile deals, it arranges a choreographed ribbon-cutting ceremony at the company’s facilities. The company helps fulfill its end of the bargain by telling the press that the administration’s support sealed the deal. Witnessing this charade from inside the administration led me to coin the phrase, ‘press-release economics.’”

When an Indianapolis television reporter tried to visit some of the companies celebrated in IEDC press releases, he found empty fields, vacant lots and deserted factories. “As many as 40 percent of statewide jobs listed as so-called economic successes have not happened — and most of them never will,” he reported.

The editor of the Marion newspaper told us he had been to three IEDC ribbon-cutting ceremonies . . . at the same manufacturing plant.

Examples are cropping up throughout the country. One of the most edifying is from Kansas City, which sits on the divide of two states competing in the press release economics olympics. A company need only threaten to move across town to set off a bidding war between the Kansas and Missouri versions of Holcomb’s economic development corporation.

“If subsidies worked,” a local there quipped, “then Kansas City would look like Dubai on the Missouri River.” In fact, according to Kansas City’s Hall Foundation, the two states have lost a combined $335 million in tax revenues to accomplish nothing more than shift the city’s commuting patterns.

How does that make sense?

We have more questions for Gov. Holcomb. Why is it assuring for him to announce after each of his dozen international trips that all expenses were paid by private donations to the Indiana Economic Development Foundation? Are we to believe that one or more of those donating couldn’t make it known to the governor that they paid for his trip? If so, wouldn’t that be a thinly disguised bribe?

Somebody should ask the World Economic Forum to look into that. — tcl


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