Thursday, August 28, 2008

Rendell administration in 'denial of basic facts'

The letter to the editor below was originally published in The Mercury. The writer, Nathan Benefield, is responding to an op-ed from Gov. Ed Rendell criticizing the Allegheny Institute for Public Policy in Pittsburgh for daring to say that Rendell's idea of economic development -- passing out large cardboard checks to corporations -- does not result in the promised job growth.

Benefield, who works for the Commonwealth Foundation for Public Policy Alternatives in Harrisburg, comes to the defense of the Allegheny Institute:
Gov. Rendell is in 'denial'

In an opinion column on Aug. 21, "Pennsylvania economy doing well," Gov. Ed Rendell claims that Pennsylvania's economy is thriving, thanks to his "investments" in the economy.

Of course, Gov. Rendell isn't "investing" his money, but taxing the entire population to offer corporate welfare handouts to politically selected companies. Like splashing water from the shallow end of the pool to the deep end, this redistribution of wealth doesn't make the pool any larger.

The taxes needed to pay for these economic development schemes destroy more jobs than the grants "create." Indeed, an audit of one economic development program found that recipients did not add the number of jobs they promised and some companies went out of business after receiving taxpayer grants. In short, these "investments" represent failed economic policy.

Since Gov. Rendell took office, Pennsylvania has lagged behind the rest of the nation in job growth, ranking 40th out of 50 states. Forbes magazine recently said Pennsylvania had the 10th worst state business climate, which is consistent with state rankings from the Small Business and Entrepreneurship Council, the Beacon Hill Institute, CEO Magazine, and others. Data from both the US Census and United Van Lines indicate that far more residents are leaving Pennsylvania for other states than the number migrating to Pennsylvania.

None of these indicators point to a strong economy or an attractive business climate. The Rendell administration's denial of basic facts makes it impossible to debate which policies are better suited for economic growth.

Director of Policy Research
Commonwealth Foundation

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