It’s not where the gov is, it’s the business climate

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The timing was lousy. Gov. Deval Patrick was on his big “trade mission” to Israel and England when the giant sucking sound came from Marlborough – Fidelity announced it was essentially shuttering its operation there, moving 1,100 jobs to Merrimack, N.H. and Rhode Island.

It tended to take the wind out of the governor’s announcement that this 10-day junket might bring all of 50 jobs to Massachusetts.

Patrick didn’t help his cause much, declaring from London that he was “deeply frustrated” that the company had blindsided him, and later demanding that they “tell me to my face” that the decision is final. What does he expect – that CEOs are going to check with him first, or ask his permission before they make major strategic decisions? Do legislators or the governor check with Fidelity honchos before they raise taxes or hike the premiums on unemployment insurance?

Legislators don’t help themselves much either, suddenly complaining about “sweetheart” tax breaks for the company, and vowing to hold hearings on whether they might “claw back” some of the money the state had “given” to the company.

It is important, before a debate or a hearing even starts, to get the terms right. State government has not “given” Fidelity anything. It has just been taking less. Government does not create money. It takes it, and redistributes it.

And if this was a sweetheart deal, the state was a willing partner to it. The deal goes back to 1996, and Fidelity complied with its commitments.  The feigned Statehouse outrage is nothing more than grandstanding. Reps and senators know they are not going to change the terms of a legal contract after the fact.

But all of this is a diversion anyway. The timing may have been bad, but the problem is not that the governor was out of the country. The problem is that Massachusetts is a relatively hostile place to do business, compared with some of its neighbors. Elected officials spend too much of their time finding new ways to wring the neck of the golden goose, and then wonder why there aren’t so many golden eggs around to be tapped for taxes.

Legislators are half right – they should not be making sweetheart deals with favored companies. When government gets into picking winners and losers, it rarely works out well. Can we all say “Evergreen Solar”?

They should be focused instead on making Massachusetts a good place to do business for everybody, not just biotech and alternative energy, for all the reasons Jim Stergios cites in his post below. The way it is now, they are inviting business owners in general – not just Fidelity – to look longingly over the borders.

Fidelity management isn’t transferring jobs out of state because it wants to stick it to Massachusetts. They’re doing it because Massachusetts has been sticking it to them.