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3rd Frontier’s Job Creation

December 16, 2009 at 10:11 am Matt

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.

Related posts:

  1. James Newton on The Third Frontier
  2. The Amazing Job-Creation Powers of Pork & Corporate Welfare Queens
  3. Behold! The Greatness of the Third Frontier Program!
  4. State Rep. Matt Huffman on the Third Frontier
  5. Strickland Handpicks Donors Companies for Third Frontier Grants, Republicans Like Campaign Cash Too

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