Patrick’s economic development plan is flawed
Gov. Deval Patrick’s new economic development plan is well intended and for the most part worthy. Released last month by the state’s Economic Development Planning Council, “Choosing to Compete in the 21st Century” is welcome evidence that the governor understands that Massachusetts can only address the state’s persistent unemployment and generate revenues for public services by making the Bay State an attractive place to grow businesses.
Elements of the plan are realistic and wise steps toward that goal. For example, the plan calls for government to execute on its core functions, such as upgrading infrastructure. It calls for government to remove barriers to hiring by cutting the tangle of regulation, streamline permitting, and make the corporate tax structure predictable and competitive. These pledges are important; the hard work is to get them done.
The plan, unfortunately, also suggests that the administration has not yet learned from mistakes of the very recent past. The new plan continues to call for government to manipulate the private economy with increased funding for favored industries and/or companies. The continued emphasis on picking winners and losers is a cause for worry, that the state is not creating policy on the basis of evidence–and it should especially worry taxpayers, who will foot the bill.
The administration’s most glaring market manipulation debacle is now famous, or infamous. A 2008 package of $58 million in state resources, including grants and loans, to Evergreen Solar, designed to help lift the state’s economy through the growth of a supposedly soon-to-boom renewable energy industry, went up in smoke when the company closed its taxpayer-supported, $430 million Fort Devens facility last March. It then filed for bankruptcy in August. The promise of 350 new jobs turned into a loss of 800 jobs.
The reason for the collapse was that Evergreen could not compete with China in the production of solar panels. That should not have been a surprise.
Four years earlier, at meetings of the MassDevelopment’s Board of Directors, questions about Evergreen’s financial strength were brushed aside, as were any concerns about rival Chinese solar manufacturers, even though that nation’s solar energy boom had been widely reported by the New York Times and Reuters.
Government documents that our investigation team analyzed demonstrate that there was little due diligence by the state to evaluate the financial health of Evergreen, and that at least one of the funders, the Massachusetts Technology Collaborative, has not been able to produce any evidence that decision-makers had experience with the solar industry.
Also seen in Herald News, The Boston Herald and World News.