As has been written in this space before, elected officials and bureaucrats simply aren’t well suited to taking business gambles with taxpayer money. Even putting aside questions of competence (such as: Why would somebody who can reliably and profitably invest millions of dollars not be working for him or herself?), the incentives are wrong. If a government agent makes a bad investment decision, he or she keeps working without losing a penny of income, and moreover, it’s very easy to spin the amount of success.
Along these lines, GoLocalProv reports:
The $1 million to build out Johnson & Johnson’s space at 1 Ship Street in the Jewelry District proved to be wasteful as the company used the space for less than two years.
As the Wexford Innovation Center was being developed it was agreed between Commerce RI and Johnson & Johnson that the company would move from the newly built on Ship Street to Wexford.
Johnson and Johnson was scheduled to take a full floor in Wexford — 25,000 square feet for their 75 employees and for potential future expansion.
But now Johnson & Johnson has slashed their space needs and only leased 40 percent of what they planned — just 10,000 square feet in Wexford.
With the cut back by Johnson & Johnson and Brown University moving just 85 existing jobs, the only new permanent jobs in the $88 million building are Cambridge Innovation Center employees — just 12 new hires in the Wexford complex.
In other words, the state invested tens of millions of dollars to keep labor unions busy building and to give some existing organizations an opportunity to move their offices within Rhode Island. (At least one of those organizations is a tax exempt nonprofit, to boot.) We’ll never know what opportunities our state has missed by not taking the simpler approach of freeing residents from our heavy tax burden and restrictive regulatory regime.
Given the (at best) debatable fruits of the government-centric economic development model, however, there is no principled reason not to give something else a try. Of course, having no principled reason doesn’t mean insiders don’t have self-interested reasons.