<>< Josh Rule : : 2008 MCPP Intern
Michigan papers today are carrying the news that Gov. Jennifer Granholm has announced a new program to spur the state’s business to growth. The program takes $300 million from the state’s employee pension fund and is placing it in the hands of a high-caliber group of Michigan businessmen. For more information, read here, here, and here.
Now, while it is laudable that Gov. Granholm wants to aid Michigan businesses, perhaps she is going about it the wrong way. In looking at this program, I have two questions to which I simply cannot bring any sense.
1- Why use pension fund money? If I were a state employee banking on a government pension, I would not want the government to be tossing bits and pieces of that pension to a market in which it could be completely lost. Yes, the government should try to use its money well and investing pension money is probably a good idea. But loaning out money to startups seems to be an awfully risky move for money that needs to be quickly available for retiring state workers. Startups are notoriously risky investments, and may not be the best choice here.
2- More importantly, haven’t we tried this type of investment before? what about programs like the Michigan Economic Growth Authority’s tax credit program? That was supposed to bring large numbers of jobs to Michigan and jumpstart our economy. What has happened to it? Simply adding more programs will not solve the problem. We need to do something fundamentally different. Simply throwing money around, particularly taxpayer money, is a poor solution. Instead, some of the officials in Lansing need to take a serious look over the tax program in Michigan and scrap it for something cleaner, simpler, and fairer.