Economic development incentives: they’re okay if Republicans do it, right?

In today’s Journal, former RGF Board member Kenneth Brown takes me to task (I’m the “local libertarian”) for advocating low, flat, and fair taxes and regulations instead of targeted incentives. Brown particularly questions whether Richardson’s tax cuts had a positive economic impact as I’ve written in the past.

Brown then admits that “well-designed” incentives “assume the conclusion” and seems to argue that because Mayor Berry and Gov. Martinez are Republicans and “thrifty” that they won’t make the same mistakes as Richardson did.

Interestingly enough, there is this excellent story by Larry Barker of KRQE. Simply put, the Martinez Administration was going “all-out” to attract a film project to New Mexico and got caught misusing one of the state planes. It was illegal and I think the Administration realizes the mistake.

This is, of course, one of the problems with “targeted” incentives and attempting to leverage state assets on behalf of private businesses. Brown fails to see it and tacitly assumes that “thrifty people” will ultimately make the right decision. The plane report by Barker illustrates how targeted incentives can backfire even if the negative economic impact was (thankfully) minimal.

Hopefully Martinez and Berry ignore the siren song of targeted incentives and focus instead like a laser on the push for sound economic policies across the board that have proven their worth nationwide.

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