As I mentioned in a Tweet, I've been behind in my reading. I read more periodicals than should be legal, but there you have it. Among those periodicals is The New Yorker. I was reading an October 21st article about President Obama's economic advisor Dr. Lawrence Summers, when the piece suddenly veered toward Michigan and right into downtown Ann Arbor. The piece described a visit Summers made to Michigan and a meeting with Governor Granholm and her top economic advisor, Ned Staebler. Yep, that Ned Staebler, the one who is currently having holiday parties, cocktail parties, birthday parties, baby naming parties, bar mitvah parties and First Communion parties where attendees come together to deposit their cash and check-filled envelopes in party boy Ned Staebler's wishing well. If Staebler happens to be shopping at Hiller's when you're in the store, move quickly to the nearest exit, as your shopping excursion could turn into a "party," and you will be expected to pay $200 to be in the same building with the 53rd District House representative wanna-be.
A2Politico, always one to pick up on the current trends, is having a party soon. Sometime after I figure out how to deposit your checks. I digress.
In The New Yorker piece, the author watches as Staebler describes to Dr. Summers an economic development loan program Michigan had just created to help old-line firms make the transition to new-economy industries, like solar-panel production and microchips, and the meeting turned into a plea to the Obama Administration to adopt the program as a federal plan.
"Ned Staebler, one of Granholm’s top economic advisers, explained excitedly that the new assistance program for struggling companies had already approved its first loan even though he hadn’t advertised the program....."
Pay close attention to the last part of that sentence: "even though he hadn’t advertised the program....." because Lawrence Summers was listening.
The New Yorker author writes, [Summers], turned to Ned Staebler. Granholm seemed to hold her breath as Summers prepared to deliver his verdict on the new loan program. 'You said you hadn’t really marketed your program at all, and you’ve been able to get a number of people who have been able to take advantage of it without marketing,' Summers told Staebler. 'One reaction was ‘Isn’t that terrific? There’s this demand without marketing it.’ But, he added, another way to look at it was that Staebler had started a program of loans in which only 'the people who are well connected and fortunate enough to know about them are able to take advantage of them.' Summers said that the Michigan program reminded him of a term used to criticize Asian countries during the financial crisis of the nineties: 'crony capitalism.'”
I smiled broadly when I read that. Who ever thought little old A2Politico would ever have anything in common with one of the 21st century's brainiest economists? Turns out we can both recognize crony capitalism when we see it. I've been writing about the Den of Crony Capitalism gubernatorial candidate Rick Snyder birthed here in Ann Arbor: Ann Arbor SPARK. Snyder has been criss-crossing the state telling folks that he wants to bring the SPARK model of economic development to Lansing. Maybe he can spread the Bubonic Plague while he's at it. Turns out Rick Snyder isn't the only crony capitalist with an Ann Arbor SPARK connection who wants to spread the crony capitalism model far and wide.
Republican Washtenaw County Commissioner Mark Ouimet, a member of the Executive Committee of Ann Arbor SPARK, and a wanna-be for Representative Pam Byrnes's 52nd District House seat, was recently quoted in the Manchester paper as saying that, "Here in Washtenaw County, our local chambers of commerce and the Ann Arbor SPARK do an amazing job of bringing together job providers, policy makers and local interest groups to insure that all are working together to promote our region and the opportunities that exist for business here. I've been honored to hold leadership positions at the chambers and SPARK and can attest to the important need for strong partnership from our legislators in Lansing. I intend to foster that partnership."
I read that and a cold grue ran through me. Typhoid Mark.
So what do you think I read today? Rick Snyder issued a press release that was a big old bitch slap of the Michigan Economic Development Corporation (MEDC), where Ned Staebler works as a VP, and gives away billions of our tax dollars as "incentives" for a living. Snyder is quoted in the press release as alleging that, "The MEDC has been mismanaged by the current administration....The use of tax incentives should include performance objectives, reportable results, and be transparent to citizens. The state currently gives out $6.3 billion more in tax credits, deductions and incentives than it takes in yearly in tax revenue – more than $30 billion a year in handouts that are supposed to be stimulating our economy. There is little transparency or accountability in what return the state is getting on those investments."
Before you fist bump Snyder for finally realizing that tax incentives need to be coupled with absolute transparency and iron clad accountability, remember that he instituted none of these nifty reforms while the CEO of Ann Arbor SPARK, the Washtenaw County economic development entity created in 2005 by the MEDC with Snyder as President. In fact, representatives from Ann Arbor SPARK said just a few days ago that they are not in the business of verifying the results of the economic development money they distribute. A SPARK official claimed to track the actual number of jobs created by the companies funded with our tax dollars would require hiring another employee, and Ann Arbor SPARK had no interest in doing that. The state of Michigan, the SPARK official said, was responsible for tracking those results. Turns out the "state" isn't doing a very good job of tracking much of anything where the billions of tax credits given out are concerned.
Snyder, the Born Again Economic Tough Love Candidate, says in his press release, "Economic development incentives should be used sparingly and measured against the actual number of targeted jobs created to make the data more reliable and less subjective. The results should be posted online for everyone to see."
I'd love to say something cheery like, "You GO, Girl!"
However, there's a political kicker. Snyder tells Michigan voters he's the man to get the MEDC whipped into shape because, "...Rick has led the MEDC and Michigan toward a healthy business climate before; he can do it again. He’s done it on a local level with Ann Arbor SPARK. Because he’s not a career politician, he has no special interests to pay back. He has one goal: creating jobs and reinventing the state of Michigan."
No special interests to pay back? What about all his SPARK cronies? The cronies he helped as CEO of SPARK are as numerous as the stars in the sky. When we see Snyder's campaign finance disclosure forms, I suspect we'll see that many of those cronies returned his favors. Sndyer claims he can make the MEDC more transparent because he made Ann Arbor SPARK more transparent. He claims he can measure the real number of jobs created through MEDC incentives because he set up a system to do that at Ann Arbor SPARK.
Snyder's December 17th press release proves that he has either lost touch with reality, has no memory of what went on when he was President of Ann Arbor SPARK, or is as duplicitous a politician as I've seen in a good long while.
One of President Obama's top economist advisors, Lawrence Summers, described the Governor of Michigan's top economic advisor's, Ned Staebler, and the MEDC's "unadvertised" loan program that funnels loans to their friends, as "crony capitalism." For gubernatorial candidate Rick Snyder to bitch slap the MEDC's administration for neglecting to track results, and for not instituting mechanisms to improve transparency is little more than a political girl fight complete with hair-pulling and lots of trash-talk.
Just a year ago, when Snyder was a small-town crony capitalist in Ann Arbor, he and his SPARK crew were nailed by auditors for over billing, conflicts of interest and accounting irregularities. Snyder signed off on annual reports that claim the creation of thousands of jobs when just a few hundred actual jobs had been created between 2006-2008. Snyder's legacy of secrecy, exaggerated claims of job creation (SPARK's 2008 990 tax form claims SPARK created over 2,000 jobs) is carried on by current SPARK staff.
Rick Snyder still sits on the Executive Committee of Ann Arbor SPARK.
That the MEDC needs some serious whipping into shape to eliminate cronyism and the boondoggle's waste of billions of tax dollars is a given. Rick Snyder may want us to believe he's the man for the job. He has proven, without a doubt, he's not up to the task because he couldn't do it on the local level.