When it comes to a statewide economic development strategy, Gov. Dannel P. Malloy often acts more like Mayor Dan Malloy, showering a handful of businesses with subsidies and tax breaks paid for by their unsubsidized competitors and the rest of the taxpaying public. Aside from this disparity and the empirical evidence that suggests the ineffectiveness of such efforts, it turns out there is one more problem with picking winners and losers: sometimes the winners you pick turn out to be losers.
According to the police report, Mr. Vaccaro is alleged to have groped the breasts of a female guest at an Oscars Party and engaged in an altercation with a security guard, whom Vaacaro is said to have called a “black motherf****r”. Mr. Vaccaro, who came away from the confrontation with a “tiny scratch on the heel of his palm and a small smear of blood around the same,” alleged that the guard had “assaulted” him.
His company, TicketNetwork, was to receive a $4.5 million loan through Malloy’s First Five program to create between 200 and 600 jobs over the next ten years as reported by CTNewsJunkie.
In the wake of the incident, TicketNetwork announced that it would be withdrawing from program.Though its CEO was accused of breach of peace, interfering with a police officer, and a hate crime, the company statement highlighted a different reason for its action: “Due to the personal incident involving our CEO Don Vaccaro, we feel that it is necessary to respectfully withdraw from the FirstFive program in an earnest attempt at preserving our future relationship with the state.” (emphasis added)
It is nothing short of remarkable that they expect the state to crawl back into bed with them at some point in the future.
The whole episode highlights the foolishness of subsidizing corporations in the vain hope that it will create jobs.The government plays a key role in the economy through its tax policy, regulatory posture, education efforts, and the numerous other ways that it shaped the economic landscape of a town, state, or nation. But when the referee takes the ball and starts throwing passes, something has gone horribly awry.
Gov. Malloy has been right in his efforts to extricate state government from its entanglements in alcohol sales. Under his proposal, many anti-market practices would be repealed or substantively modified (though he watered down his position somewhat this week). His administration should adopt a similar tact when it comes to trying to pick economic winners and losers, too.
Heath W. Fahle is the Policy Director of the Yankee Institute for Public Policy and a former Executive Director of the Connecticut Republican Party. Contact Heath about this article by visiting www.heathwfahle.com