In some sort of synergistic relationship I haven't fully figured out, local newspapers love to cheerlead the expansion of government programs. Here is a great example, via Rick Perry. The headline in the Detroit Free Press web site reads:
State venture capital funds starting to pay off
But then we go on to read:
Michigan's two venture capital investment funds are starting to generate results, state economic officials said Monday.
Since their formation in 2006, the $95-million Venture Michigan Fund
and the $109-million Michigan 21st Century Investment Fund have
invested in six venture capital firms with either a headquarters or an office
in the state. These firms have used the money and other capital to
invest in 11 fledgling Michigan companies that have added 40 workers in
The two funds have made investment commitments of $116.3 million, or slightly more than half of their total capital.
So out of $204 million in taxpayer funds (why the state has entered the venture capital business with state funds is anybody's guess) the state has invested $116 million to create 40 jobs. Given that the notion of the government venture fund was to create state jobs, its not clear how $3 million per job is a really good return. Further, there is no mention of the government has gotten any kind of financial return from this investment, so I will presume it has not. So how can the paper possibly with a straight face say that the funds are "starting to pay off?"
Eleven companies with an average of 3 employees each somehow each got $10 million in state funds. I bet it would be fascinating to see just who these 11 companies are, and how their owners are connected into the political power structure.