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Posts Tagged ‘Third Frontier’

Behold! The Greatness of the Third Frontier Program!

August 18th, 2010 Matt View Comments

Promised with the creation of 360 jobs, UltraCell Corp is shutting down their 14 jobs after wasting the money you were forced to invest in their business. This is what Gov. Strickland, Brian Hicks and Jo Ann Davidson worked so hard for.

UltraCell Corp.’s decision to close its Dayton fuel cell manufacturing operations in favor of consolidating in California is a disappointment but won’t stop the region’s technology development, local industry watchers said Monday, Aug. 16.

UltraCell surprised state development officials last week when it informed them of plans to shut down production in Dayton, effective Friday, Aug. 13. The California-based company fell far short of its promised employment in Dayton this year and may have to repay the state and city hundreds of thousands of dollars in economic assistance.

UltraCell’s retrenchment illustrates the risk that high-tech companies face in trying to gear up production for developing markets, officials at the Dayton Development Coalition and the Ohio Department of Development said.

“A lot of that risk has to do with the timing of market acceptance,” said Jim Leftwich, the coalition’s president and chief executive officer. “That’s a risk that every high-tech company has to deal with.” The Dayton region will push ahead with its long-term goals of developing advanced materials, aerospace research and other high-tech industries, Leftwich said.

Keith Scott, UltraCell’s chief executive, informed the state Development Department on Tuesday, Aug. 10, of the decision to consolidate operations in California. Scott didn’t return telephone calls Monday from the Dayton Daily News.

UltraCell was recruited to Dayton with much fanfare in 2006. It began operations in 2007 at a leased plant at Dayton International Airport.

Ohio is assessing how much of at least $2 million in technology-supporting Third Frontier grant money UltraCell may be asked to repay now that it has shut down in Ohio, said John Griffin, a state development official. The company also received workforce development funding.

Dayton gave UltraCell a $200,000 grant in 2007. The city will pursue the return of that money, said Shelley Dickstein, assistant city manager for strategic development.

Some of Ohio’s money supported UltraCell’s local R&D partners, the University of Dayton Research Institute and Miamisburg-based Mound Technical Solutions Inc., and the state won’t disturb that funding, Griffin said.

State Representative Ross McGregor is furious, and fired off this letter to the Dayton Daily News:

Dear Editor

I would like to express my disappointment in UltraCell Corp. for its broken promises to the Miami Valley region. The August 16th article, “UltraCell has closed its Dayton fuel plant, state officials say (Dayton Daily News, pg. A1),” cited that the city of Dayton gave UltraCell a $200,000 grant with the understanding that the corporation would create jobs and invest capital in the region. UltraCell promised 360 jobs to the area, though the plant employed only 14 workers when it closed on August 13th. Had UltraCell lived up to its agreement, the Dayton Region would have seen major advancement in its technological development. Instead, our communities have been denied jobs that Dayton paid UltraCell to provide.

In this faltering economy, the Miami Valley region cannot afford for its industries to default on their economic obligations. To develop a competitive high-tech industry, we need companies and corporations that make good on their promises, invest money in the local economy and enrich the job market. I support the efforts to hold the corporation accountable for the grant money it accepted. UltraCell should exhibit good corporate citizenship by returning the taxpayer money that it had received so that those resources can be used towards businesses that are willing to invest in our region’s economy. Still, I have confidence that the Miami Valley will continue with its technological development. We are on track to becoming a region known for a high-tech boom. Though this plant closing was clearly a blow, there is still hope for a stronger job market and a healthier economy in the greater Miami Valley.

This is what happens when money is taken out of the private economy to be redistributed in less efficient, political ways… Are advancements in battery technology a way for entrepreneurs to build wealth and create jobs? Perhaps, but private venture capitalists, who put their own money on the line, wouldn’t have given UltraCell such a enormous pile of money when they clearly had no intention of fulfilling their obligations.

Mo’ Money, Mo’ Problems

July 7th, 2010 Matt View Comments

Are you a company trying to develop a product which has no chance of getting a bank loan or securing funds from venture capitalists? How would you like to shift all the risk on the shoulders of Ohio taxpayers through a program which violates Ohio’s constitutional limitation on debt?

Well, now you’re in luck! Convicted CRIMINAL Brian Hicks, former Gov. Bob Taft’s Chief of Staff, has a FREE seminar on how to secure funding through the corporate welfare program that he helped create!:

Hicks Partners and GBQ Host FREE Third Frontier/Public Financing Seminar
Wednesday, July 14

The Ohio Third Frontier Commission recently approved a plan to invest up to $143 million to support the creation of high-tech jobs in fiscal year 2011, which begins this July. The funding plan comes on the heels of Ohio voters reauthorizing the program with an additional $700 million. These funds will be given to companies over the next four years to accelerate the development and growth of a number of industry clusters.[...]

Writing a successful Third Frontier proposal takes a strong team of professionals and significant time to prepare – all of which is well worth the effort if a company receives a typical grant of $1 million.

The professionals at Hicks Partners, GBQ’s strategic partner, helped create this economic development initiative and have helped clients secure millions of dollars of Third Frontier funding.

In this FREE seminar you’ll learn how to develop and submit a winning proposal!

Third Frontier/Public Financing Seminar

Wednesday, July 14, 2010

3:30 p.m. to 6:00 p.m.
230 West Street, Columbus 43215

(post-seminar reception included)

Click here to register!

And remember, if you are able to successfully navigate the path to funding- which includes major campaign contributions and hiring lobbyists- don’t forget that Brian Hicks needs to get his fair share too. That’s only fair, right?

John Kasich Reminds Voters of his Support for Issue 1

May 1st, 2010 Matt View Comments

From Kasich’s communication team. YUCK:

3F State Issue 1 Support

I really can’t imagine an issue which runs more counter to the “Kasich brand” than supporting corporate welfare and turning a blind eye to surpassing Ohio’s 5% constitutional limitation on debt.

Because private investors put their own money on the line, their decisions are devoid of the sort of political calculations involved with politicians passing out grants and low interest loans to highly-risky investments. Taxpayers get to do the job of venture capitalists and angel investors, except they don’t actually get to own shares!

John Kasich should take his own advice:

John Kasich opposes special interests… unless Jo Ann Davidson tells him otherwise?

If John Kasich opposes President Obama’s stimulus and wasteful Federal government spending by the Strickland administration, than it is completely hypocritical to support Issue 1, as the objectives are the same: Use Keynesian theory to boost job/economic growth through an increase in government spending and artificially cheap credit. Just because only one may result in campaign contributions to John Kasich doesn’t make one spending program better than the other.

Vote NO on Issue 1.

James Newton on The Third Frontier

April 25th, 2010 Matt Comments off

From The Dispatch today:

According to the Ohio Department of Development, more than $1 billion in Third Frontier state funds have been awarded so far, including nearly $250 million in central Ohio – second-most behind $342.9 million for the Cleveland area.

The state says that through Dec. 31, the program generated nearly 55,000 jobs at an average salary of $65,815 a year; created, attracted or funded 637 companies; and generated nearly $4.8 billion in private investment.

But of the 54,983 jobs touted through the Third Frontier, fewer than one-fifth – 9,519 – are jobs directly created or retained. The remaining are estimates of indirect jobs, calculated with an economic-modeling tool from SRI International.

James E. Newton, chief economic adviser for Commerce National Bank, questions the reliability of the modeling tool and says taxpayers deserve a more precise accounting.

“If you really believed that the state of Ohio, through this Third Frontier program, was generating a times-10 return, then every one of us ought to empty our pockets out, hand the money over to them and watch the magic happen,” he said.

YES! If investors could get that sort of return, then there would be no problem getting the financing they need!

But perhaps that return the state is talking about is the ROI for convicted criminal and lobbyist Brian Hicks or the return a politically connected firm gets from donating to the Issue 1 campaign.

And for companies which receive Third Frontier dollars, I wonder how tough the pressure is on companies to overestimate the number of jobs created. If the real answer was “0,” how pleased would the Department of Development be?

The state does not invest money… It “awards” it through grants and loans.

And regardless of how useful the Third Frontier is or isn’t, it violates Ohio’s constitutional limitation on debt.

Honest liberals know this is the type of corporate welfare that they rightfully attack the Republican Party for supporting. And conservative Republican legislators who voted for the Third Frontier are simply concerned about closing off access to campaign contributions from the business community.

So it’s left to voters to understand why the Third Frontier should be opposed. But don’t worry… if it fails, there’s plenty of time for it to be put back on the ballot, unconstitutionally tied to another infrastructure bond issue.

Please vote NO on Issue 1.

State Rep. Matt Huffman on the Third Frontier

April 21st, 2010 Matt Comments off

From the far-left Cincinnati City Beat:

One of those 14 dissenting voices in the House was state Rep. Matt Huffman (R-Lima), who says public money shouldn’t be used to pick winners and losers in the private sector.

“This is a bill against future revenues that may or may not pan out,” Huffman says. “It’s real popular with folks around the Statehouse because we get to borrow dollars that a future state legislature will have to pay back.

“This type of borrowing has caught up with the state of Ohio and is part of the reason we’re in a fiscal mess. The concept here is we’re taking money away from people and, after the government takes a slice for administrative overhead, we give the rest away for speculative ventures. We may get it back or we may not.”[...]

Although there is no organized opposition to Issue 1, the few outspoken critics are passionate that the free market should decide how Ohio’s economy develops. Also, they say, any government assistance for high-tech firms comes at the expense of other existing businesses.

“That is money that would otherwise could be put in banks and they would invest it or that would be spent buying goods and services from existing businesses,” Huffman says. “There are venture capital firms that do this. The government doesn’t need to.”

Huffman’s sentiment is inaccurate, [Candace] Klein[, Cincinnatians for Progress' co-chair,] replies.

“Issue 1 is not a tax,” she says. “It in no way ‘takes money’ from anyone or any company. The state is using a fiscally responsible method to invest in new industries. (Cincinnati businessman and Reds owner) Bob Castellini said it best on April 7 when he explained that Ohio is a manufacturing state. If we ever hope to offer our citizens jobs in other and more cutting edge industries, it takes an investment to do so. Issue 1 is simply making that investment.”

But who’s to say the investment should go to high-tech startups?

“What about all the other businesses that may not be as cool or as sexy?” Huffman asks. “The local print shop in your hometown may go out of business because they don’t have access to that kind of money.”

Although he’s not about to mount a legal challenge, Huffman believes the type of government assistance offered by the Third Frontier is unconstitutional.

“That’s the purpose of the ‘general welfare’ clause in the Constitution,” he says. “Government spending is meant to be for things that directly benefit everybody, like roads and bridges.”

Klein certainly has the talking points down… Asking Ohioans to take out a credit card to do the work of venture capitalists while unconstitutionally violating Ohio’s debt limit isn’t a tax increase. Instead it’s an “investment”… but instead instead of you receiving stocks and dividends from this investment, politically connected firms get to benefit from your risk taking.

I’m yet to find a copy of it, but take a listen to Issue 1′s radio ad. They are very TEA Party sounding, and their campaign committee sounds desperate to convince Republicans that this sort of corporate welfare is a good idea.

The Third Frontier was not supposed to be a program to be extended indefinitely, but like all bad government programs it certainly looks like it eventually will. But it has been in Ohio since 2002, and no reporter has bothered to ask what the value of the Third Frontier’s portfolio, as reporters are lazy and would rather print wildly misleading reports of how many jobs the program “created.”

If you are a conservative and haven’t done so already, please vote no on Issue 1.

TEA Partiers Don’t Buy Jon Husted’s Newfound Conservatism

April 15th, 2010 Matt View Comments

Chris Littleton of the Ohio Liberty Council, a major TEA Party organizing group, unloads on Secretary of State candidate Jon Husted in Lyndsey Teter’s article in The (Columbus) Other Paper:

[I]f Husted is counting on appealing to the state’s most conservative base, it isn’t working.

“It’s laughable,” said Ohio Liberty’s Littleton.

Even the least discerning Tea Party activists know Husted is not the flag-waving patriot that the 15-second ad conveys. And when it comes to Tea Party values, Husted has zero street cred, Littleton said.

When asked for specific aspects of Husted’s record that were troublesome, Littleton pointed to Husted’s recent support of the Third Frontier program that Tea Party conservatives consider to be “corporate welfare and gross redistribution of wealth,” said Littleton, who went on to more broadly paint Husted as an establishment candidate.

“It’s been said that all Republican values are Tea Party values, but I’d say that’s not true,” he said. “Taft, Voinovich and the Republicans who dominated the state in the last 20 years destroyed the Ohio economy.”

“Conservative activists are smart enough to realize that Husted was around for 10 of those years,” Littleton said.

Littleton hits on a key point there with the Third Frontier. It isn’t just Husted “recently” supported the Third Frontier, but instead it was Husted who helped conceive of the Third Frontier for fund raising purposes… and then after voters rejected it, he helped revived it by unconstitutionally tying it to a ballot issue for infrastructure improvements.

Without Husted, there would be no Third Frontier and we wouldn’t have a corporate welfare program which also violates Ohio’s 5% limitation on debt.

And it is this sort of stuff which leads conservatives like me to be skeptical about Husted. Even when he is vocal and correct on conservative issues- such as school choice- I get the feeling he’s far more interested in campaign donations from White Hat than from liberating students from the horrors of public schools.

Read the rest of Teter’s article here. It is especially fun to have Husted attempt to prove his conservative bona fides  by talking about his legislative cap on state spending, which was added to the end of tobacco legislation in 2006, which was the establishments way of tabling Ken Blackwell’s TEL Amendment. Not only is such a limitation easily ignored, but it doesn’t include anything expenditures outside of the General Revenue Fund. But considering Husted’s is a champion of the Third Frontier, legal limits on spending and debt don’t really matter to him anyway.

In the end, Husted will likely win his primary and conservatives should vote for him because of the apportionment board and he is politically savvy enough to issue directives which won’t be beneficial to Democrats. But that doesn’t mean we can’t laugh hysterically at his stupid Gadsden flag ads.

Ohio GOP Awkwardly Takes Ownership of Bob Taft’s Third Frontier

April 13th, 2010 Matt View Comments

Another YouTube flop from the ORP:

The rest of the ad is fine- unemployment has doubled on Gov. Ted Strickland’s watch and he is a poor manager of the state.

But don’t you think the message would be crystal clear about the differences in parties if the Ohio Republican leadership actively opposed the Third Frontier as vigorously as President Obama’s stimulus bills?

If the TEA party movement and voters upset with the growing size of government are going to decide this election, then this sort of “Hey, Bob Taft’s Ideas Were Swell!” clunky messaging is beyond silly. This video is so unmemorable that I’ve already forgotten about it.

Corporate Welfare Queens Rally Support for More Handouts

April 13th, 2010 Matt View Comments

From Jim Siegel in The Columbus Disgrace:

With about 100 supporters of state Issue 1 gathered yesterday inside TechColumbus, home to 25 high-tech startup companies, David Wilhelm offered a warning.

“I want to scare everybody in this room,” said the co-chairman of the Yes for Issue 1 campaign to renew the Ohio Third Frontier program. “We could lose.”

Despite support from more than 150 organizations, plus the backing of elected state leaders in both parties, Wilhelm said polls show that only about 20 percent of Ohioans can express an opinion about the four-year, $700 million bond issue on the May 4 ballot to extend the Third Frontier beyond 2012.

Undecided voters often vote no, he said, noting that the last Third Frontier issue in 2005 passed with just 53 percent of the vote.

“We have a problem with this campaign to the extent that there is so little controversy associated with it, it’s hard to get covered,” Wilhelm said. The Bexley resident, a past chairman of the Democratic National Committee and national manager of President Bill Clinton’s 1992 campaign, urged supporters to get active.

Controversy? Why would there be controversy, Mr. Wilhelm?

It should be just as controversial as President Obama’s stimulus bills, where America is taking a multi-trillion dollar gamble in an exercise in Keynesian economics. The theory is that massive public spending is supposed to boost private sector confidence and investment, when we are seeing that in reality the opposite is happening.

The reason why there is no controversy is that both the Ohio Democrat Party and the country club types at the Ohio Republican Party have endorsed it, just as every major Ohio newspaper. When it has support from both major parties and the dinosaur media, who cares if the Third Frontier UNCONSTITUTIONALLY raises the amount of debt Ohio can incur past the 5% limit. And if it creates any jobs, it is in the legal sector, where lawyers work with instruments like “certificates of participation”  to avoid the debt ceiling and the political nature of the Ohio Supreme Court would mean any challenge to this increase in spending would not be taken seriously.

And what really hurts is how the Issue 1 campaign is abusing the phrase “free market.”:

It isn’t a free market when the state takes money out of the economy from one place and gives that money to politically-connected firms of their choosing for projects that the “free market” has already deemed too expensive and risky. This is socialism, corporatism, and reinforces the notions that true-believing lefties have about the evils of capitalism.

In reality, there will always be venture capital to fund serious new ideas, and we don’t have to force taxpayers to take the roll of angel investors… And to make it even worse, instead of taxpayers receiving shares and dividends, our ROI consists of airy-fairy, misleading macroeconomic studies about “jobs created.” Taxpayers assume all the risk, companies enjoy all the rewards. This is not the “free market.”

There is no financial interest that has shown itself willing to fight against Issue 1, but I think that- especially in this climate- voters are intelligent enough to oppose. I would urge you to vote No on Issue 1… And for extra emphasis, if you live in the Columbus-area and are Republican, vote liberal Jo Ann Davidson out of the Republican State Central Committee.

Bill Seitz Desperately Wants to Unconstitutionally Tie the Third Frontier to Infrastructure Projects, and the TEA Party can Kill it

March 29th, 2010 Matt Comments off

From the Cincinnati Enquirer’s lengthy overview of the Third Frontier corporate welfare program:

State Sen. Bill Seitz, R-Green Township, was one of only two senators to vote against the issue, but says he still supports Third Frontier. He just wanted more highway and infrastructure funding included in the proposal – much as it was in 2005 when Third Frontier passed.

“This is too hard an argument to pass in many areas of the state on its own merits,” Seitz says.

What about the single subject rule, Bill?

And

Supporters say Third Frontier must be extended to assure private equity firms that investment now won’t be lost in a program that expires in 2012.

Organized opposition has been minimal – but it might not take much to kill the bond issue, says political analyst Gene Beaupre, a political science instructor at Xavier University.

He says the loosely organized, anti-government-spending tea party movement is gaining momentum. “All you need is someone showing up with placards decrying the spending,” Beaupre says.

Harvard University Study: Government Venture Capital Programs Tend not to Work

March 13th, 2010 Matt Comments off

David Luberoff, Executive Director of Harvard University’s Rappaport Institute for Greater Boston, talks about an interesting study that I think matters to the Third Frontier ballot issue debate:

Why are some metropolitan areas so much more entrepreneurial than others? Silicon Valley seems almost magically entrepreneurial, with a new startup on every street corner, but in declining Rust Belt cities such startups are far and few between.

In a new Policy Brief published by Harvard’s Rappaport Institute for Greater Boston, which is sponsoring a series of talks on geography and entrepreneurship, economists Edward Glaeser and William Kerr report that high levels of entrepreneurship are closely correlated with regional economic growth, which means that local policy makers who are looking for ways to rev the economic engines of their cities often are interested in policies that can generate more entrepreneurship.

Glaeser and Kerr use the presence of small firms as a proxy for entrepreneurship and find, that all else being equal, regional economic growth is highly correlated with an abundance of smaller firms. Specifically, they found that a 10 percent increase in the number of firms per worker in a metropolitan region in 1977 was associated with a nine percent increase in employment growth in that region between 1977 and 2000. Looking more closely at the connection between small independent firms and subsequent growth, they report that a 10 percent increase in average establishment size in 1992 was associated with a 7 percent decline in subsequent employment growth due to new startups. Regions with lots of small firms, in other words, tend to experience faster job growth than those with a few big ones.[...]

Even so, they note, the available evidence does suggest a few tentative policy conclusions. First, investing too much in attracting large, mature firms may not be good policy. These firms may provide an immediate headline associated with new jobs, but encouraging a profusion of small, independent firms is more likely to lead to sustained economic growth

Second, there is little reason to have much faith in the ability of local governments to play venture capitalist through public investment funds. Classic economic research found that Japan’s Ministry of International Trade and Investment, which was staffed with Japan’s best minds, generally picked losers. Why should local investment funds be able to do any better?

Interesting, but not surprising results. Private sector investors are more savvy at picking winners, since political considerations are not involved in the investment process.

While “angle investors” are nimble and savvy enough help capitalize promising new businesses, Ohio’s angelic politicians are only concerned with campaign contributions.

And the pressure not to oppose the 3rd Frontier — which would put many Republicans on the outs with various business interests – is so intense that this debate over principles and wasteful spending will only matter if politicians start paying a serious political price for redistributing your money.

But unlike the easy-to-grasp concept of the 39 MPH train, this is a harder sell to Ohio’s MSM, because the waste and inherent abuse in such a program takes actual reporting skills and an education in economics.

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Daily Beast: Ohio Ranks 50th Among Job Growth Prospects

March 5th, 2010 Matt Comments off

From The Daily Beast:

#50, Ohio

Jobs gained 2006-2009:: 8.3%
Current unemployment: 10.2%
Employment growth through 2018: 4.7%
Median individual salary: : $25,133
Hot industry: Educational services

Recent Job Listing: Corporate Counsel—Employee Benefits, Procter & Gamble. Description: Ensuring compliance with relevant laws related to benefit programs (e.g., ERISA, IRC, HIPAA and state laws), including record-keeping, reporting and disclosure requirements. Estimated Salary: N/A

Great job, Gov. Strickland. I guess the “absolutely essential” Third Frontier Campaign can always say that if it wasn’t for boatloads of corporate welfare, then Ohio would be as bad as Michigan!

Convicted Criminal Brian Hicks vs. Tom Brinkman on the Socialist 3rd Frontier

March 1st, 2010 Matt View Comments

From Karen Kasler’s show, The State of Ohio (it taped Thursday and aired on Friday):

As P.J. O’Rourke said, “When the legislature controls what is bought and sold the first thing that is bought and sold is legislators.” In Ohio, the legislature controls economic activity by having some of the most burdensome taxes in the country, so the Third Frontier gives business interests yet another incentive to “buy and sell” legislators.

I think former Rep. Tom Brinkman made the point well that the 3rd Frontier is all about enriching politically connected firms at the expense of everyone else. Gov. Strickland recently hand picked a number of donors to receive grants, and this is corporatism- or corporate socialism- at its worse.

However, I do think Sen. Bill Seitz deserves ridicule. For being a brilliant man with impressive legal training, Seitz knows very well about the constitutional requirement for single subject ballot issues. After the 1st Third Frontier failed, it wasn’t approved by voters until 2005  when it was put on the ballot again and tied to completely unrelated infrastructure investment projects. Seitz knew that to tell voters that they must vote for this bill to fix various roads and bridges, that they wouldn’t mind a little pork and waste on the side… and not to mention a couple bucks that might float into Bill’s bumperstickers & booze fund.

I will discuss these issues more in detail as the Issue 1 astroturf campaign heats up, but please consider the following:

1) The Ohio constitution has a serviceable debt limitation of 5%. But the state gets around that in the 3rd Frontier with various financial instruments such as “certificates of participation.” If the 3rd Frontier actually creates jobs, it is for lawyers to find interesting ways for the state to get around these constitutional limitations.

2) I believe the 3rd Frontier has funded immoral forms of stem cell research.

3) The original 3rd Frontier overrode the Plunder Amendment for the state and every local government entity. The new language as submitted requires an independent review of funding proposals, but it appears to not apply to local governments. Therefore, thousands of local politicians may be able to reward friends and contributors with no oversight.

4) The 3rd Frontier can supposedly tell us exactly how many jobs it created. But how can we calculate how many jobs were destroyed by funding the third frontier? And if at one company, the 3rd Frontier created no jobs, what is the political/financial pressure to lie? And who cares about jobs- What about the TOTAL VALUATION of the portfolio, compared to the amount of risk involved? Those numbers do not exist publicly, and probably don’t exist anywhere.

5) It forces you, Joe Taxpayer, to become a venture capitalist with only the hope of some airy-fairy macro-level benefit. If I invest in extremely risky companies, I want to personally own shares and possibly receive dividends, don’t you?

6) Brian Hicks is unethical, a convict, and helped create the 3rd Frontier to make himself wealthy. He brags about YOUR MONEY he helped secure for clients in endless PR emails from his lobbying firm. He shouldn’t serve on the board of trustees of OSU, should have no say in how the state invests money, and should be chased out of the state by a pack of rabid rottweilers.

7) Most conservative legislators are opposed in principle, but they don’t want to be seen as “opposed to job creation” and have no interest in cutting off access to business donors when voters really don’t understand what this issue is all about anyway. Just repeating Gov. Jim Rhodes’ slogan of “jobs! jobs! jobs!” really doesn’t help the important nuances in this debate.

8 ) With minimal investment, Ohio could also create a lot of jobs by sending government workers around the state to physically smash thousands of windows. But that’s not how true economic growth and prosperity happens.

Stay tuned for more!

Update: I forgot that in July 2008, Brian Hicks hosted a $45/ticket seminar to learn the “tricks of the trade” of how secure Third Frontier money… after Hicks Partners takes their fair chunk, of course.

I responded to his mass email about the event:

Apparently not only is the rent-seeker (not the Tom Noe house discount type of rent; the OTHER kind) a really cocky bastard, but he thinks some people work- not out of self-interest- but in order to improve an intangible abstraction like “the economy.” Thank you Brian for your altruism.

Two Liberal Republicans Head Up Socialist Third Frontier Campaign

February 12th, 2010 Matt View Comments

Matt Cox, for those of you who remember the fun that was Right Angle Blog in 2005, was gubernatorial candidate Jim Petro’s campaign manager who quit just as the polls turned south. He was a terrible thug and I’m sorry to see this guy is still around in politics. I’ll have much more to say about him as this campaign continues. And liberal, pro-abortion Jo Ann Davidson just won’t go away to a nursing home:

Two former national political leaders from Ohio have been tapped to lead the campaign to renew the state’s Third Frontier program on the May 4 ballot.

Jo Ann Davidson, a former Ohio House speaker and Republican National Committee co-chairwoman, will be teaming up with David Wilhelm of Bexley, a former chairman of the Democratic National Committee and national manager of President Bill Clinton’s 1992 campaign. The announcement was made yesterday at a meeting of the Third Frontier Commission and advisory board.

Matt Cox, who helped run Republican Jim Petro’s campaign for governor in 2006, has been selected as campaign manager. A committee of business groups and other supporters called United For Jobs and Ohio’s Future has been created.

The last time I read about Cox, he was in the Dayton Daily News singing the praises of former disgraced Ohio Lottery Director Mike Dolan. What a loser.

Sadly, I can’t imagine there would be a well-funded campaign in opposition to Issue 1, since all the campaign contributions and special interests are on the side of corporate welfare and free money.

But if my fellow conservatives and TEA party activists really want to focus on changing the political culture in Ohio, shutting down the Third Frontier and making it politically expensive for its supporters would be a great place to start.

Third Frontier Passes… Brian Hicks Does a Happy Dance

February 3rd, 2010 Matt View Comments

With the deadline being today, the legislature certainly moved quickly to put an issue on the ballot when future campaign contributions are at stake:

From William Hershey:

The House and Senate today, Feb. 3, are expected to vote to put a compromise plan for extending the Third Frontier high tech economic development program on the May 4 ballot.

A House-Senate conference committee late Tuesday agreed to a four-year, $700 million bond proposal. The Democratic-controlled House had proposed a five-year, $950 million plan while the Republican-controlled Senate had approved a four-year, $500 million plan.

From the Ohio House:

COLUMBUS — House Republican Leader William G. Batchelder (R-Medina) and Ron Amstutz (R-Wooster), who serves as the ranking minority member on the House Finance Committee, issued the following statement after the full House passed a measure to place a renewal of the Third Frontier initiative on the May ballot.

“We are pleased to see this bipartisan recommendation to extend a program for the future of Ohio’s economy and would like to thank the legislative leaders for working with us to recommend that voters extend the Third Frontier program. The amendments placed in the recommended constitutional language will keep the program on a strong footing by requiring external merit-based review when awarding project funds.”

Lawmakers remain committed to this program as originally introduced in 2002. Since that time, Ohio has seen an impressive early return on investment through generating more than $6.5 billion in economic activity and attracting a nearly 10:1 ratio of private and federal funds, thereby moving Ohio to the forefront in growing early stages of capital flow into Ohio. The measure passed the full House 83-14.

That ratio of “10:1″  is due to the fact that investors and banks feel more comfortable when government handouts/cheap loans are involved. This is forcing taxpayers into doing the job of venture capitalists. Here, taxpayers assume high risk for only supposed benefits on a macro level (unless you hire a lobbyist and start writing checks to Armond Budish and Ted Strickland?), while destroying jobs and confiscating wealth elsewhere in the economy… which is why that supposed ROI is bullhonkey.

And the conservative Republicans who opposed should be applauded: Seth Morgan, John Adams, Jeffrey McClain, Jeff Wagner, Danny Bubp, Bruce Goodwin, Dave Burke, Matt Huffman, Margaret Ruhl, David Daniels, Kris Jordan, Barbara Sears, and James Zehringer. I’m told Lynn Wachtmann was ill today, but there is no question he would have otherwise been another “no” vote.

Think I’m out of line by disagreeing with Republican leaders in the House and Senate on this one? Well, if you want to take a look at what core Republican voters think, just notice that, in addition to candidate for Auditor Seth Morgan, the 3 Rs who are running in 2 serious primaries for the State Senate- Jordan, Daniels, & Evans- all voted “no.”

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Strickland Handpicks Donors Companies for Third Frontier Grants, Republicans Like Campaign Cash Too

February 2nd, 2010 Matt Comments off

Move along folks… nothing to see here:

A panel controlled by the governor has hand-picked contenders in the latest round of bidding for a pair of high-tech Third Frontier venture funds, breaking with past practice that based awards solely on merit.

The nine-member Ohio Third Frontier Commission opted for the first time to limit eligibility for its two entrepreneurial funds in response to tough economic conditions, said executive director Norm Chagnon. Grants for those funds will go only to business entities that have a track record with the venture capital program, including several tied to generous political donors.

And while are Democrats so anxious to renew the Third Frontier, while Republicans are eager go along with a slightly less porky version? Because the free flow of grants and low-interest loans from the state = campaign cash. Cha-ching!:

A review by The Associated Press found lobbyists, executives and directors for the chosen entities and their spouses have given at least $220,000 to Ohio political campaigns in recent years. They have supported both Democratic and Republican state leaders who control the future of the program.

A joint committee of the state House and Senate is scheduled Tuesday to decide how much voters should be asked to pump into the successful initiative, one of the few bright lights on Ohio’s job creation horizon.

Gov. Ted Strickland initially proposed $1 billion. That figure was pared back to $950 million by the Ohio House and to $500 million by the Ohio Senate, and the two chambers must now compromise.

Campaign filings show that House Speaker Armond Budish collected more than $13,000 from high tech representatives as the debate raged last month.

JumpStart executives, for example, have contributed nearly $23,000 to Strickland and other Democrats. JumpStart director Ken Semelsberger, a senior Eaton Corp. vice president, has given almost $26,000 to Republicans.

Jamie Ireland, a managing director at Early Stage Partners, has given at least $23,000 to Ohio political campaigns, including $9,200 to Strickland, $8,600 to state Sen. and former House Speaker Jon Husted, $3,000 to Budish, and $2,500 to Senate President Bill Harris.

The Mercurio family affiliated with the Entrepreneurs Fund has given $78,000 mostly to Republicans, including $10,000 to Husted.

One of the firms Strickland made the exemption for was for BioEnterprise, who Brian Hicks lobbies for. Hicks, a convicted criminal, was also Gov. Taft’s Chief of Staff and helped create the Third Frontier.

Every pick-nose reporter and columnist in Ohio will repeat the lie that the Third Frontier created 41,000 jobs, while not mentioning the fact that wealth must be confiscated and jobs destroyed to pay for this less-efficient method of allocating resources.

But what is true is that the Third Frontier is a real, genuine example of bi-partisanship in Ohio. And it’s damn expensive.

3rd Frontier’s Job Creation

December 16th, 2009 Matt Comments off

From The Zanesville Times Recorder:

Ohio’s $1.4 billion Third Frontier program already has created nearly 10,000 new jobs and nearly $300 million in tax revenues since it was approved by voters in 2005, a new report by a coalition of business executives said.

All of the state dollars will be paid back with new tax revenues by 2014, with an annual return of 22 percent, according to the Ohio Business Roundtable, a Columbus-based group of state business leaders who commissioned the report to determine Third Frontier’s value.

“We … embrace state initiatives that foster innovation, leverage follow-on dollars, return cash flow, create companies and grow high-wage jobs,” the group’s report says. “The Ohio Third Frontier does all of that and more. It has proven itself and must be renewed in as robust and timely fashion as possible.”[...]

Jim Burns, president of AssureRX, says Third Frontier funding allowed his company to launch its first commercial product. He expects to hire as many as 10 new employees next year.

“The first person who stands up and says this program is worthless, I’ll go toe-to-toe with them,” Burns said. AssureRX has received nearly $2 million in state funding and another $2.8 million in private investment.

I’ll go toe-to-toe with you, Mr. Burns. Of course YOU like this sort of crony capitalism, as it is free money. But job creation numbers can’t possibly control for the amount of economic activity that was killed off due to sucking money out of the private sector and redistributing it back out to politically connected firms. You are forcing people to become venture capitalists, with the same high level of risk but with no potential for a substantial personal return.

However,  it is true government can create jobs in the private sector… For example, they could send state bureaucrats around Columbus to break all of the windows in your home. That would increase demand for glass and new windows, employ many new window installers, et cetera. And perhaps that would have more than a 22% ROI, in terms of return to the Ohio Department of Taxation! But as you can see, just because a policy create new jobs doesn’t mean it is good policy.

The renewal and proposed expansion of the Third Frontier is entirely about exchanging corporate welfare in exchange for campaign contributions. So with Republicans out of the governor’s office and in the minority in the Ohio House, it is quite disappointing to watch Republicans not take a hard line stance against this sort of abuse of your money. And Republicans who support Third Frontier but denounce Gov. Strickland’s wasteful use of stimulus money are hypocrites, as the economic arguments against both endeavors are identical.

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Thomas Suddes Glazes Over Why Democrats Want to Expand/Renew the Socialist 3rd Frontier

December 7th, 2009 Matt Comments off

Watch out for those parentheses!:

Here’s the deal with Statehouse shrieking over when to renew the Third Frontier, Ohio’s job-development program:

In 2011, Ohio will run out of Third Frontier money. Gov. Ted Strickland and House Speaker Armond Budish of Beachwood, want to ask Ohioans in May 2010 to extend the program by letting Ohio sell more Third Frontier bonds. Keep in mind, they’re Democrats, and the Third Frontier program got its start under Republican Gov. Bob Taft.

Despite that bipartisan history, some Republicans would rather hold off asking Ohioans for a second Third Frontier bond issue until after Strickland faces his probable GOP challenger, former U.S. Rep. John R. Kasich of Westerville.

Why? To keep Strickland from using a new Third Frontier campaign as feel-good publicity for his own re-election.

The campaign to renew the Third Frontier would likely be more a Cadillac than a Honda. It’s legal for corporations to donate to a ballot issue, though they can’t donate to candidates.

So a Third Frontier campaign could be lushly funded without squeezing individual Strickland donors. Without a doubt, a renewal campaign would be “free media” for Strickland. (That’s why Third Frontier renewal legislation should forbid donations by recipients of Third Frontier grants.) Democrats alone can’t propose a Third Frontier extension. That requires 60 Ohio House votes and 20 Senate votes; there are 53 Democrats in the House, 12 in the state Senate.

Forbid donations?  One would think that Suddes, a columnist who is only worth reading because he is a crusty old-fart with an impressive institutional knowledge of Ohio politics, would be so naive as to think this issue can be divorced from money through legislative magic.

In today’s world of complex campaign finance laws, such a ban would certainly still allow individuals to donate to political groups that can campaign on a candidate’s behalf and without ever disclosing who their donors are. And forbidding campaign contributions always raise serious 1st Amendment concerns.

The overall merits of the Third Frontier, fine print and “devil’s details” aside, aren’t in serious dispute. Studies by impartial researchers have turned up real evidence that the Third Frontier program has spawned a significant number of new Ohio businesses and jobs.

Batchelder, in a statement last week, said so himself. He called into question only the timing of the Third Frontier’s renewal — but not the value of it: “In the face of skyrocketing unemployment, this Republican-initiated program has fostered high-tech jobs,” he said.

So, what today’s Third Frontier argument is about at the Statehouse is political advantage. That doesn’t put any bread on Ohio’s supper tables — or help jobless Ohioans find work.

If the merits “aren’t in serious dispute,” they should be.

It is interesting how Republicans can take such a principled stand against Federal stimulus spending, then be comfortable with this sort of corporate welfare. I suppose it is different, in the sense that the 3rd Frontier was directly approved by Ohio voters. However, the legitimate arguments against both are identical.  And if Ohio Republicans don’t understand that, then they aren’t nearly as interested in tapping into voters’ anti-stimulus sentiment as they should be.

Suddes is a liberal dunderhead professor from Ohio University who is certainly pleased with his ability to shamelessly frame this issue as Ohio Republicans playing politics… as if Minority Leader Batchelder is personally taking “bread” off of “Ohio’s supper tables” and kicking cute puppies to win elections. But you don’t help jobless Ohioans find work by taking more of their money and forcing them to become venture capitalists.

Ohio Republicans should grow a spine, admit the 3rd Frontier is not a proposal which fits in with core Republican principles, expose what lobbyists are pushing the hardest, and call out Democrats for using this program as a fundraising cash cow. Not only would this be smart politics, it would be prudent governance.

cash-cow

Ohio House Democrats Moving at Lightning-Speed to Further Damage Ohio’s Bond Rating

November 30th, 2009 Matt Comments off

As an update to my post on the Ohio House Democrat’s questionable numbers the supposed benefits of the 3rd Frontier corporate welfare scheme, Minority Leader Bill Batchelder is pissed:

“It has come to our attention that for more than half a year the House Democrats have been drafting, working and reworking with their possible contributors on an arbitrary rewrite of the Third Frontier program. The framework of their legislation was not unveiled until 1 p.m. this afternoon and Republican members are being forced to deny or support this foreign measure before 9 a.m. tomorrow.

Republicans are uncertain of the details within the Democrat proposal, since we have not received it. The skeleton outline we received differs significantly from the original Third Frontier proposal, created by Gov. Taft. The original proposal was a $1.6 billion dollar investment over 10 years with an average of $160 million per year and several sources of funding including a $500 million bond issuance, tobacco settlement money, GRF and excess liquor profits. The current proposal calls for twice the bonds in half the time. For example, $1 billion over five years at an average cost of $200 million per year. This is a departure from the original balanced proposal that bears further scrutiny.

Obviously, the House Republicans need time to study and consult with bond counsel on such a crucial issue to fully expose all ramifications of this proposal as it stands today. House Republicans are committed to protecting Ohio’s bond rating. Unfortunately, at this point in time our budget appears to be unbalanced according to Governor Strickland. Earlier this year Ohio was downgraded in our state’s credit rating outlook. Ohio needs a viable, long-term Third Frontier solution in the interest of generations to come. In the face of skyrocketing unemployment this Republican initiated program has fostered hi-tech jobs.

As soon as the majority party provides us with the details of their proposal, House Republicans pledge to work across party lines just as we did with the extension of COBRA benefits in the transportation budget earlier this General Assembly.”

It would be fascinating if an Ohio journalist bothered to investigate what lobbying interests are pushing so hard for this expansion of Bob Taft’s corporate welfare program, where Ohioans are forced to do the job of venture capitalists.

But I suppose if the rating agencies continue to lower Ohio’s bond rating, Rich Cordray can just sue them.

The Amazing Job-Creation Powers of Pork & Corporate Welfare Queens

November 30th, 2009 Matt Comments off

From the inbox:

Program has created over 40K jobs and provided a 10 to 1 return for taxpayers

COLUMBUS – Citing an impressive job-creation performance and a strong return on investment for taxpayers, State Reps. Sandra Williams and Jay Goyal joined business leaders in growing high-tech industries from across the state to announce their efforts to renew and expand the Ohio Third Frontier Program.

“This bipartisan program has not only created thousands of Ohio jobs, it has developed a foundation for Ohio’s economic recovery by jumpstarting high-growth industries such as the biomedical, advanced materials and alternative energy sectors,” said Rep. Williams. “Ohio cannot afford to relent or we risk slowing the positive economic growth that this successful program has generated.”

The Ohio Third Frontier Program began in 2002 with bipartisan support and voter approval. It is a 10 year, $1.6 billion bond program that allows for targeted support of technology companies that diversify and accelerate Ohio’s knowledge-based economy.

“Ohio’s future economic prosperity depends on our ability to shift from traditional manufacturing industries to the high-growth, technology-intensive industries of tomorrow,” said Rep. Goyal. “Third Frontier not only accelerates our economic transition, it also creates good-paying jobs for Ohioans.”

40,000 jobs? really? Ohio has lost 243,200 jobs overall, unemployment is 10.5% (with the real unemployment rate being much higher). To say that grants from the 3rd Frontier, which went to everything from internships to grants for Donatos Pizza, is fuzzy math, as every dollar spent was taken from productive activities elsewhere in the economy.

With the nation souring on the wasteful Obama Stimulus spending, it is nice to see Ohio Democrats and Republicans, standing shoulder to shoulder, in the spirit of bipartisanship, to make Brian Hicks richer.

Update: The proposal to extend and expand the 3rd Frontier program will consist of sending $1 billion to start of technology companies. Congratulations fellow Ohioans- We are all venture capitalists!

Republicans, Democrats Join Together To Support Corporate Welfare

July 25th, 2009 Matt Comments off

I’m sure the sleazy-bastards at Hicks Partners are glad that Bob Taft’s corporate welfare proposal is not dead:

Strickland, meanwhile, said in response to a question at the forum that he is “fully prepared” to call the legislature back into session before an Aug. 5 deadline to put an issue on the Nov. 3 ballot to renew the Third Frontier technology program.

House Speaker Armond Budish, D-Beachwood, has said he is willing to bring the Ohio House back to put the Third Frontier issue on the ballot if an agreement can be reached. But Senate President Bill M. Harris, R-Ashland, has concerns.

Specifically, Harris said this week that although he supports the renewal, he is worried there isn’t enough time left to prepare the issue for the ballot and mount an effective campaign to pass it.

“My gut feeling at this point that it will take more than the time that we have available for this election coming up this fall,” Harris said. “We were successful and have been successful with Third Frontier (because) we’ve done it right.”

Seriously, why do Republicans put up with Bill Harris? He was the lead Senate Republican traitor on Strickland’s budget, and is too tied to special corporate interests to make a spirited defense of this socialistic program. (Even though, sadly, Taft’s program now looks like chump change and a conservative proposal compared to Federal “stimulus” spending.)

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