Exposing the Eco-Devo Game
AT LAST, an actually issue of critical economic importance in the governor’s race. Mike Braun has called attention to his GOP primary opponent’s role in creating a statewide eco-devo network that runs on favors and political connections.
“Eric Doden has been using donations from people who received taxpayer-funded benefits while he was running the Indiana Economic Development Corporation and Greater Fort Wayne to fund his campaign to hide from his liberal record, his support for Communist China and his past shady business dealings while (serving) in taxpayer-funded roles,” Braun’s campaign said according to the Indiana Capital Chronicle.
“Shady” sounds about right, even discounting the political embroidery. Coupled with a statewide campaign for office, it looks like a delayed pay-to-play scheme.
Doden as Mike Pence’s Secretary of Commerce perfected what we call “press-release economics.” That is a manipulation of tax-based grants, credits and bonds to entice corporate relocation to Indiana or even just across town. This in turn provides an opportunity for local politicians to cut ribbons and to send self-congratulatory news releases.
There have been several problems with that. The first is that the corporations, foreign or American, get paid up front so there is little investment in the community or loyalty to its workforce. Second, there is no way to determine whether the company would have decided to locate here regardless of government incentives or whether it is holding up its end of the bargain. Third and most troubling, it encourages a shadow network of crony capitalists who become the primary political movers in every region of the state.
The Chronicle says that Braun created a website that called Doden “crooked.”
Strong words for a usually tepid Indiana GOP gubernatorial primary. A “smear,” was all that Doden’s team would say. That was smart because it doesn’t want anyone looking into the arcane world of either the IEDC or of Greater Fort Wayne.
A couple of weeks ago, Jason Arp, a Fort Wayne Councilman and former investment banker, charged in open council that Greater Fort Wayne had mismanaged its bonding responsibilities, losing as much as $50 million on a garage deal that was part of a quasi-public economic development project.
Maybe $50 million isn’t a big number anymore because there was no response from the council or from Greater Fort Wayne. There was no murmur from the legislative delegation. The governor didn’t call. No media coverage.
“There are other people in this room who can do the math; it’s not hard,” Arp said in exasperation. He referred the council to video testimony of the developer saying that if the larger project ever yields tax income it won’t be until 2055. “That’s a pretty delayed return on investment,” Arp concluded. “Certain people are getting a lot of money.”
Now comes Fox 59CBS4 in Indianapolis with a story detailing sweetheart deals amounting to over $53 million between the IEDC and its individual board members. To the degree that the IEDC has responded, it asks us to just move along, there’s nothing to see here. The board members didn’t physically vote on the specific gifts.
That might fly with your buddies at the country club board but in the world of economics you would be called a “rent seeker,” an awkward designation that means something close to an inside trader.
However this shakes out, Braun deserves credit for raising a complex issue that doesn’t fit nicely into a campaign soundbite. It is nonetheless an issue that voters need to understand and resolve. — tcl