Harvard Professor: Mass. Targeted Industry Subsidies Unfair

January 28, 2011 -

The Boston Herald offers an editorial on state representative Vincent Pedone's proposal to offer tax breaks to the game industry in Massachusetts. The author, Edward L. Glaeser (professor of economics at Harvard University and author of the forthcoming book "The Triumph of the City"), compares it to the disastrous results of Evergreen Solar and ponders aloud if this is all "throwing good money after bad?"

Two weeks ago, a major tax break recipient in the state, Evergreen Solar, announced that it was closing its Devens, Mass. factory. Why are people so ticked off by this news in the state? Because the company took advantage of $58 million in state aid. Evergreen Solar was launched in 1994 as a joint venture of alumni of Mobil's Solar Division and an MIT scientist who pioneered String Ribbon solar cells. As the company matured and prospered the state took notice. In 2007, Massachusetts gave the company $58 million in grants, tax breaks, and other incentives to open a plant in Devens. The company obliged, taking the money and opening the plant. Fast forward to 2001: the company announces that it is leaving the state and moving its manufacturing operation to China. While the state is doing its best to get some of those funds back, the loss of jobs in the region and the investment have given the state a real black eye. In short, the deal seems foolish in hindsight.

Glaeser says that Pedone's proposals for the video game industry seem eerily familiar. While the details are still forthcoming the main part of the deal would be through a transferable tax credit that pays for around a quarter of a video-gaming company's labor costs. The company taking advantage of the bill would get even more credits if the video games are developed in a "disadvantaged community" or if the games prominently feature the "Massachusetts state marketing logo." The logo on the box program sounds exactly like what Georgia does for video game and film companies that promote the state prominently in some way on or in their products.

While the author admits that the video game industry is more likely to succeed because it "plays to the Commonwealth's creative strengths," he also says that that fact "doesn't make it more worthy of subsidy." He also cast doubt on whether the commonwealth's parents "want their children's video gaming supported by state subsidies."

Another point he makes is that the video game tax credit "is paid after, not before, workers get hired, and that reduces the difficult problem of enforcing claw-back provisions."

One of the most ludicrous comments he makes is that some firms that are not in the video game industry might be encouraged "to masquerade as video gamers, even if their main business is something else" to get these tax credits. What?

We will let Glaeser have the last word here - an opinion that many businesses in the state would agree with:

"Targeted subsidies, for Evergreen or video gaming, are neither fair nor likely to engender wide-spread economic growth. The best economic development strategy is to improve fundamentals: fewer regulations, lower tax rates for everyone, good services, and especially good schools."

Source: Boston Herald


Comments

Re: Harvard Professor: Mass. Targeted Industry Subsidies ...

 "Targeted subsidies, for Evergreen or video gaming, are neither fair nor likely to engender wide-spread economic growth. The best economic development strategy is to improve fundamentals: fewer regulations, lower tax rates for everyone, good services, and especially good schools."

Holy smokes, that's about the most clearly sane thing I have heard anyone say about tax subsidies in a long time.

Re: Harvard Professor: Mass. Targeted Industry Subsidies ...

That is true, however he seems to have disregarded the fact (of which I am sure he is aware) that these measures are intended to keep the state competitive with other areas in the US and Canada which offer similar subsidies.

Also, his "doubt on whether the commonwealth's parents "want their children's video gaming supported by state subsidies."" is a moot point that he and many others have tried to apply to the issue. This is not about encouraging the production of video games, it is about maintaining a share in a wealthy industry. Children (and adults) will still be playing video games regardless, but the proceeds would not be going towards jobs in the state if developers move to a location with better trading conditions.

 
Forgot your password?
Username :
Password :

Poll

Which group is more ethically challenged?:

Shout box

You're not permitted to post shouts.
Andrew EisenYes, and that doesn't say rape scenes are bad and people shouldn't write them.07/01/2015 - 3:18pm
Goth_SkunkI don't think I am. Once again, here is the quote from the article, verbatim: "In short, anyone can write a rape scene—but should they? Chances are, the answer is no."07/01/2015 - 3:16pm
Andrew EisenYou're misinterpreting the argument it's putting forward.07/01/2015 - 3:13pm
Goth_SkunkThere's no point in reading the article further. Unless it's a poorly written article, it will focus on trying to justify the argument it put forward. As I believe there is no justification, there is no reason for me to continue reading.07/01/2015 - 3:05pm
Andrew EisenEspecially if you refuse to listen to what they have to say. As an example, had you read the article (and you're under no obligation to do so, mind), you'd learn that she isn't saying a scene is bad simply because it depicts or describes rape.07/01/2015 - 3:02pm
Goth_SkunkI never said their position was less valid than mine. I'm just saying they will never convince me away from my stance, so there's no point in trying.07/01/2015 - 2:57pm
Matthew Wilsonhttp://blog.twitch.tv/2015/06/html5-chat-is-live/ now only if we could get videos as html 5 instead of crappy flash.07/01/2015 - 2:55pm
james_fudgeSee what i'm saying?07/01/2015 - 2:48pm
james_fudgeI also am not a PoC and don't understand how a word with hundreds of years of history behind it affects them.07/01/2015 - 2:48pm
james_fudgeWe should also stop pretending that we understand someone else's perspective. I am not a woman nor a rape survivor and I have no idea how this stuff affects them.07/01/2015 - 2:48pm
james_fudgeThe trick is - can people talk about these things without losing their cool?07/01/2015 - 2:46pm
james_fudgetheir position is just as valid as yours07/01/2015 - 2:46pm
Goth_SkunkAs far as I'm concerned, there is no justification for such a stance.07/01/2015 - 2:45pm
Goth_SkunkThe theme of the writer's article is "People shouldn't write rape scenes in their creative works, even though they can." I disagree with the premise on its face, and don't care how one tries to justify it.07/01/2015 - 2:44pm
Goth_Skunk@eZeek: Last I checked, rape was supposed to be offensive. I don't see how it could be anything else. But to call a scene 'bad' just for having implicit or explicit rape in it is ridiculous.07/01/2015 - 2:42pm
TechnogeekThe constant conflation of "you shouldn't do this" as a personal guideline and "you shouldn't do this" as something with the force of law is really getting tiresome. Lawful Neutral was garbage in D&D, and it's garbage in real life.07/01/2015 - 12:24pm
PHX Corphttp://kotaku.com/sources-warner-bros-knew-that-arkham-knight-pc-was-a-1714915219 Sources: Warner Bros. Knew That Arkham Knight PC Was A Mess For Months07/01/2015 - 11:49am
Andrew EisenIf you do, I hope you can provide some examples of people (again, other than random no-name numbnuts on Twitter) who are genuinely trying to dictate what should and should not be allowed so far as themes, topics, language, plot devices, etc. go.07/01/2015 - 9:43am
MattsworknameI'd go into why I think it's a bigger problem then most realize, but nows not the time really. I'll catch up with everyone later07/01/2015 - 9:42am
Andrew EisenThat's the thing though, rarely is anyone (again, other than random numbnuts on Twitter) attempting to dictate what can and cannot be said or done.07/01/2015 - 9:39am
 

Be Heard - Contact Your Politician