Corporate Welfare Queens – Shocking “Development Program” Failure Rate in North Carolina

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Corporate Welfare Queens – Shocking “Development Program” Failure Rate in North Carolina
Posted on February 20, 2015 by Yves Smith

Yves here. Bear in mind that development programs are a form of socialism for the capital-owning classes. Quite often they reward companies for thing they were going to do regardless.


By Kenneth Thomas. Originally published at Middle Class Political Economist

@sandymaxey points me to a new report from the North Carolina Justice Center that is making my head spin. Picking Losers shows that the state’s flagship development program, the Job Development Investment Grant (JDIG), has seen 62 of its 102 projects fail in the period from its inception in 2002 until 2013. That is, 60% of the projects failed to meet either their job, investment, or wage goals, and had to have their awards canceled.

60%! This isn’t baseball, where a .400 batting average is outstanding, a feat that hasn’t been accomplished since Ted Williams in 1941. Let me tell you about a different failure rate: Investment Quebec takes equity stakes in a number of tech start-ups and other new companies. When I interviewed the director in Montreal in 2007, their failure rate was only 20%, a figure he considered needed to be reduced. In North Carolina, we are talking about a failure rate three times as high, despite giving the awards to firms that should not be nearly so risky.

One such firm was Dell Computers. In 2004, the company conducted a bidding war for a new computer manufacturing plant between Virginia and North Carolina. But North Carolina’s analysis of the project was so out of whack that in nominal dollars it offered almost $300 million ($174 million present value) compared to Virginia’s offer of $37 million. The plant shut down completely in 2010. ............(more)

The complete piece is at: http://www.nakedcapitalism.com/2015/02/corporate-welfare-queens-shocking-development-program-failure-rate-north-carolina.html

[Scuba]

1. Squat Wanker is pulling the same scam in Wisconsin ...

http://www.democraticunderground.com/108412127

http://www.democraticunderground.com/10847593