back
88 comments
selectively giving away free money to big business is straight corruption. there is no other way to put it. everyone involved should lose re election and get investigated by the financial crimes unit.

but i dont think "leave it up to the market" is a better idea. investments like this just need to be transparent, open to everyone and set up strict punishment for stealing the money with prison for executives.

if they wanted to actually create jobs they would support small companies and set up open competitive programs based on project quality. or start a state investment bank giving super low interest loans so factories can expand without cutting profitable divisions like in china.

One idea I like is directly funding apprenticeship. It pays for job training and classroom instruction on a per-individual basis. The jobs are in long-term career sectors like advanced manufacturing, shipbuilding, aviation, healthcare, and technology.

Here's one example: https://www.dol.gov/newsroom/releases/osec/osec20250923

In Georgia, the employer is reimbursed $2,500 when an apprentice starts and up to $10,000 when they finish. They can also get up to 75% of the apprentice's hourly wage covered during their initial on-the-job training.

You mean what companies used to do before we decided to import cheap labor instead?
> One idea I like is directly funding apprenticeship. It pays for job training and classroom instruction on a per-individual basis. The jobs are in long-term career sectors like advanced manufacturing, shipbuilding, aviation, healthcare, and technology.

This is basically what grad school does too. I'm into funding education further any day of the week. For higher education, I'd only add a string attached like "must practice trade in state that funded you if job is available for x years or must pay back funding pro rated".

> open competitive programs based on project quality

This will never, ever happen. There will always be bonus points available, even if they're awarded to "conservative"-leaning feel-good attributes like veteran-owned sponsor businesses.

These investments are likely to always fail at their declared purpose. Better to put the money towards free childcare and maybe trying to convince parents to read to their kids.

> There will always be bonus points available, even if they're awarded to "conservative"-leaning feel-good attributes like veteran-owned sponsor businesses.

Why are you singling out "conservative" causes?

It's straight corruption, no matter of big or small business. It should have been randomized blind selection of business who have existed for more than a year, and the granted money pays for new employees' taxes. Blind selection takes out the path to corruption (not who you know to get the fund). Randomized to be fair. Government is bad at picking winners or losers anyway. Business more than a year to screen out frauds. Granted money for new employees' taxes to encourage hiring new employees. Paying the taxes only so that the money can be spread out to more people.
Or —- hear me out —- create laws and tax policies compatible with growth, and apply them equally to everyone.
> everyone involved should lose re election and get investigated by the financial crimes unit

The flawed assumption here is assuming elections are an exception to every other democratic process riddled with corruption and are operated fair and square, in general.

> selectively giving away free money to big business is straight corruption

Liberals in canada call that 'making housing affordable', https://www.cbc.ca/news/canada/british-columbia/prime-minist...

It feels that in Canada business is impossible unless it's directly funded by the government.

They're always handed out as political favors or lotteries at best. How is a lottery sustainable or scalable? These solutions do not work. It's at best virtue signaling and at worst corruption (as OP says).
I am a lifelong resident of Michigan and sadly the state keeps doubling down on what isn't working. Politicians like to think they're smart enough to pick winners and they're horrible at it.

When Governor Jennifer Granholm was governor a guy approached the state needed investment for a factory in Flint. It would create thousands of jobs. They were delighted because that is something that never happens in Flint. They not only gave him the money but he posed him holding a $9.1 million dollar check with the governor. The picture of the two of them together was in all state media. You know when something sounds too good to be true you might want to do a little checking? When people in Flint saw the picture they informed the state that this guy was a well known conman who had just got out of jail and was living in a trailer. Luckily they were able to recover the money.

https://www.mackinac.org/12345

Another Gov. Granholm story was the time an old line Boston VC firm approached the state for investment. So the state pulled funds out of the employees retirement plan to invest in the next round. The idea was that this would give the state more venture investment. But again no one did any due diligence whatsoever. This firm was not obligated to open an office in the state but only come a couple of times a year looking for investments. They were under no obligation to make any investments in the state and in fact did not. Due diligence would have revealed that the firm offered a very low return on their last several funds. So in the end the employees retirement funds grew more slowly and the state got no venture investments. That venture firm wasn't able to raise another fund and closed.

> A new report suggests the state of Michigan is the latest to learn that lesson the hard way.

There doesn’t seem to be any lesson-learning happening, since governments keep trying this despite the outcome always being the same.

>There doesn’t seem to be any lesson-learning happening...

Which would indicate that creating jobs was not the actual reason for the grants. Given how trivially easy it would be fix the problem (simply make the grant contingent on the creation of jobs, otherwise it converts to a loan), the real purpose is probably a matter of generating headlines and raking in campaign contributions (with occasional full-on kickbacks probably happening as well). All of which it apparently does well enough that politicians continue to do it.

Correct, reporting this is doing nothing to stop it. People don't directly see the impact of it on their paychecks or budgets so they forget about it the hour after they read about it. The next politician can do it without fear of reprisal
it’s almost as if they are just lying about the purpose and doing it for some other purpose that it is perfectly effective for
Originally on reason.com: https://reason.com/2026/06/26/michigan-spent-1-8-billion-and...
With a link to the report: https://www.mackinac.org/archives/2026/s2026-08.pdf

The two largest projects are still under construction, so it might be too early to make any conclusions.

> Hohman examined eight major projects—"those that offered $100 million in payments and received significant media attention"—totaling $2.7 billion in promised incentives

> All told, the governor said that her major subsidy projects would create 20,595 jobs in Michigan

Even using these numbers that works out to $135k/job, which is bonkers!

Not really, if the job lasts 30 years it will absolutely offset itself with local economic activity. These people will pay taxes, buy homes, visit doctors and much more.
That works out to 2.5 million per job.

This is not the first time this type of thing happened almost looks like a laundering scam. Companies that do this should face real and very expensive consequences. But we know that will never happen.

The first Trump term tariffs on washing machines was studied, it resulted in jobs that cost ~820k each in higher prices to the consumer.

The important takeaway is not only did the consumer pay more, but corporate profits rose.

https://bfi.uchicago.edu/wp-content/uploads/BFI_WP_201961-1....

The tfa says that almost all of this went to big public automakers. Enraging. I initially thought that this was going to some small biz thing that at least would slosh the money around through the owners. But nope - corp welfare!
This looks like Michigan transferred actual cash. Not tax abatements on new projects.
It's both. A mix of incentives (that were not paid out) and land reclamation (which did cost money):

> Ford, meanwhile, lowered its job creation estimate from 2,500 to 1,700, though so far it has created zero, and received no state money, as the building is still under construction. The state did, however, spend another $780 million on site preparation.

Most of the claims in the article are slightly obfuscated as to which actually involved any real net cash flow. Even the bottom line:

> Of the $2.7 billion offered, $1.8 billion has been spent—transferred either to companies or to local economic development agencies.

Doesn't make it clear what the local economic development agencies actually did with it - whether the projects were otherwise necessary, etc. Some of the spending was likely defensible even if the originally intended project fell through. Lots of it probably wasn't defensible. Michigan (and every other state) gives a lot of money to 'developers' in ways that don't look great if you bother to look into it at all.

Michigan's state budget probably totaled ~$700 billion over the past 8 years. So this accounts for up to 0.2% of the budget.

I think what's shown in The Sopranos is close to the truth. Schemes like HUD or feed the poor etc are a front to some money laundering scheme. And it's widespread.
I wonder if there would be merit to requiring that government investment must come with shares in the company at market rate. Because short of that it feels like a misappropriation of funds.
Even if they hit the stated goal job creation numbers, it would be over $150,000 in subsidies for a single job. Is that really worth it?
If the job pays well and is relatively stable it could be very worth it.

The thing about jobs like this are that they invite more opportunities. These manufacturing workers will want hairdressers, grocery stores, restaurants, teachers, doctors, etc.

Entire towns in the past used to get made on the backs of a few thousand manufacturering jobs.

Did the 602 each hire someone to do their job for 12k a month until 2037 because sharing is caring?
Michigan has relatively business-unfriendly laws and regulations.

Apparently their tax system is quite favorable to businesses, but taxes are only one (small) part of the equation. The taxes matter more once a company is making a lot of money.

In short, tax incentives and random per company “investments” (bribes?) are not enough to offset certain laws and regulations Michigan has.

I am not saying those laws and regulations are bad. I am just saying that targeted tax incentives and investment for specific companies are the wrong way to solve the problem.

Don't worry. It'll trickle down.
did they, like, not lose a million jobs tho?
The money spent on site and land clearing results in a big empty field? Yes, yes it did, that’s what those words mean. If we’re going to bribe companies to do a thing, we should at least accept when they did do it.
People don't appreciate how many palms you have to grease to (legally) get a big empty field.
What the hell is that image of Whitner.
That's just her new face.
Now tell me that UBI is not possible
Claiming the state “spent” money when it’s something like a tax incentive is completely disingenuous bullshit. This article does this in spades to come up with this huge billion dollar figure.

“We won’t collect additional property taxes on this new thing you’re building for 10 years” is not the same thing as spending money. If a business doesn’t start there instead you don’t get any money at all. So in both scenarios you get no tax revenue but without the business you hurt your own economy.

It’s not taxpayer money being sent away. It’s tax collection policy and if we claim tax exemptions are spending money, then the government is also spending billions on non-profits and low income households.

It works in China as there absolute experts Work in government , whereas in Europe government employees are typically not competitive in free market
China’s provincial investment in industry is very different. They use loans and take equity in the businesses so they have a direct interest in the companies succeeding.

Grants and tax incentives for non-novel or R&D heavy industry is a terrible investment. Especially since it’s just a competition between states that escalates every year with how lucrative they can make the offering and how little they demand in return.

It is not completely like that...In China, "government experts" is absolutely a negative term. On the Chinese internet we often called then "砖家", which is a homophonic pun about their low level.

Policy stability may be an advantage, but it does not mean the long-term planning is really long-term planning: Real estate; birth rate; gender antagonism; wealth gap; extremely involuted education, where even primary school students have to get home at least after 6pm, and then spend another three hours doing test papers, combined with purely formal university education and very low employment rates after graduation; a working environment where even a five-day, eight-hour workweek is really rare in private companies, where unions are only a placeholder, and individuals are very powerless against companies...

We saw what happened in Japan and South Korea, and we walked into the same path in an even more extreme way.

On the Chinese internet, Japan and South Korea are often called the "super test servers", while China is the "official server": the same problems are further intensified.

You do see this working in many places. Singapore is probably the best example with an explicit scholar programme and competitive pay in much of the upper rungs of the government. This comes with its own problem culturally but does result in very well thought through programs and infra that actually helps people.

Even in the top echelon of the Indian government (Indian Administrative Services), a similar culture exists and has interestingly been strengthend as the power has fragmented across political parties. I personally know several of my top B School/Engineering college mates who joined and any of them would do very well in top management in private industry. You can see the result in the rapidity with which India is pulling people out of poverty and modernizing. Certainly alower than China, but pretty amazing seei living outside for a decade now - many urban services are already far superior in quality to what you get in Europe, US or even Singapore. The challenge in India is the bulk of the bureaucracy below them isn't held to the same standard.In India it's still a prestige thing only in the top echelon - the lower echlons are more motivated by job security, pensions and avenues for corruption.

The difference in Singapore is the government pays well enough to attract and retain higher quality talent deeper.

Two things 1) we dont know if the state might have lost more jobs if these incentives weren't provided 2) the deeper issue is that the auto makers compete with state backed companies in other regions

I'm not saying we need to copy state backed but the climate is desperate