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Other States Have Tried Kasich’s Plan To Privatize Job Creation, With Unimpressive Results

I’ve already noted that Ohio gubernatorial candidate John Kasich’s (R) contention that his tax cutting proposal will lead to job growth is contradicted by Ohio history (though the plan will double his state’s budget deficit). But Kasich has a second prong to his jobs plan — transforming the Ohio Department of Development into a non-profit corporation called JobsOhio — and if other state’s experiences are any indication, it too will be a dud when it comes to creating jobs.

The idea is that JobsOhio would be run by businesspeople and would provide advice and assistance to companies looking to locate in the Buckeye State. “We are now creating an independent operation called Jobs Ohio, which is going to take private-sector people working aggressively to work with businesspeople to help them or to remove barriers, or to help them find financing,” Kasich told Real Clear Politics.

But as the Columbus Business Journal pointed out, Michigan tried a similar system, with underwhelming results:

Former Michigan Gov. John Engler, a Republican, and legislators in that state took a similar step to what Kasich is proposing in 1999, when they replaced the government’s jobs commission with the Michigan Economic Development Corp., a quasi-public agency governed by a board drawn from the private and public sectors…The Mackinac Center for Public Policy did a study in 2009 that found deals made from 1995 through 2004 by the Michigan Economic Development Corp.’s tax credit authority were expected to produce 61,043 jobs, but 17,971 were created.

“MEDC has presided over one of the most significant collapses of economic well-being in state of Michigan history,” said Michael LaFaive, a director at the Mackinac Center for Public Policy.

Florida also created a private economic development council, which the State Comptroller found “treats its top executives to bonuses and lavish travel while making grants to businesses whose officers sit on its boards.” A program review by the Florida legislature found that the council “exaggerated its role in creating jobs particularly in distressed urban and failed to provide adequate economic development services in rural areas.”

West Virginia used to operate a private development agency, but actually switched back to a state-run agency. Plus, as the Columbus Business Journal also noted, the Ohio Department of Development has other important tasks — such as administering work-force training programs — and Kasich has not explained which entity will take those over.

Much like California gubernatorial candidate Meg Whitman (R), Kasich seems to believe that cutting taxes in a vacuum and ditching regulations is the key to booming job creation. Unfortunately, reality hasn’t conformed to their rhetoric.

Whitman Invents Tale About Regulations Stifling Business To Push Her Deregulatory Ideology

One of the key parts of Republican gubernatorial candidate Meg Whitman’s plan for reviving California’s economy is eliminating and streamlining regulations. “Every small business that I have seen in California — and I’ve done 600 different events in almost all 58 counties — tell me that regulation is killing them,” she said on Fox News this week.

One of the former Ebay CEO’s favorite stories about burdensome regulations stifling business has to do with Ebay subsidiary PayPal. Here’s what Whitman told Fox News’ Neil Cavuto:

The permitting process, the competing agencies that try to regulate — we built a building in Sunnyvale for PayPal, two-and-a-half years to break ground. We had to hire three consultants to navigate the labyrinth of California regulations.

And lest we think this was a one-off story, BusinessWeek noted that Whitman “raises the issue repeatedly on the stump.” “Two and half years of trying to get permission, 25 permits, three consulting firms to navigate the labyrinth of regulations. This was for a building that was to house 3,000 white-collar workers. You would think the State of California would have been my best friend on this,” Whitman says.

There’s just one problem. None of it ever happened. CalBuzz contacted the city of Sunnyvale to see if there was any truth to the story, and City Manager Gary Luebbers responded:

We have taken considerable time trying to ferret out this assertion. In fact our research shows absolutely no record of ANY contact with PayPal. I think she may have just pulled Sunnyvale out of thin air. PayPal is in San Jose.

So the trail moves to San Jose, where the Mercury News found that the city “processed eBay’s development application in record time and that fulfilling all the city’s requirements took just 11 months.”

In fact, Whitman has had nothing but kind words for the business development infrastructure in San Jose. “Our partnership with the office of the mayor, the city council, the city staff and the office of economic development is a testament to San Jose’s status as a world class place to grow and operate a business,” she has said. “The City of San Jose has always been extremely flexible in helping to anticipate and meet our rapidly changing needs.”

So the story that Whitman relies on to push her deregulatory ideology is nothing but a fantasy. As UC Berkley economist Michael Reich has pointed out, Whitman’s claim that California is over-regulated doesn’t hold water, and the analysis that she says proves the negative effect regulations have on the Golden State’s job creation is based on discredited shlock science. Her plan to gut regulations — including eliminating overtime pay for workers — would transfer $1 billion from workers to employers.

‘America Speaking Out’ Against Tax Breaks For Outsourcing — Will The Gop Listen?

House Republicans have proudly touted their America Speaking Out website — which allows visitors to suggest and vote on various policy prescriptions — as a new and innovative way to involve the American people in the democratic process and the creation of federal policy. Rep. Phil Gingrey (R-GA) said the site is “revolutionizing the way we govern by engaging the American people and seeking your ideas for making things better.” “Americans are proud of this country. They want to see things get better and they want to be part of that turnaround. That’s what America Speaking Out is all about,” Gingrey said.

In fact, Rep. Mike Pence (R-IN) said that America Speaking Out proves “the Democrat [sic] majority isn’t listening, but House Republicans will.” Well, House Republicans might want to take a gander at what’s garnering interest on their own site, as the proposal receiving the most “interest” (and the second highest number of overall votes) in the job creation section is to “Stop the outsourcing of jobs from America to other countries that do not pay taxes into the U.S. and stop the tax breaks that are given to these companies that are outsourcing.”

Here’s a screenshot (from 5:27 p.m. yesterday):

Of course, Democrats in the current Congress have proposed time and time again to close corporate tax loopholes that encourage the offshoring of jobs, and Republicans have been opposed to all of their efforts. H.R. 1586 prevented teacher layoffs and bolstered Medicaid, while closing a variety of corporate tax loopholes: 39 Republican Senators and all but two Republican members of the House voted no.

Congress has yet to approve a tax extenders bill that renews various important business tax provisions, while closing a corporate tax loopholes that allows corporations to claim domestic tax credits on profits that they never bring back to the U.S. Republicans not only obstructed that bill, but also put forth an alternative that cut Medicaid and infrastructure funding, while leaving the tax loopholes intact.

So if America is speaking out so loud and clear, why aren’t Republicans listening?

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