When I read this in our local paper, alarm bells immediately went off:
A friendship cemented while working together on the state’s economic development efforts has led to a new partnership linking Roy Vallee, the former Avnet Inc. chairman and chief executive officer, with private developer Don Cardon.
Great, two folks who have focused on bringing crony corporatist benefits to selected local businesses and business relocations are going into business together. I don't know these guys, I am sure they are fine folks, but my first thought was a business that leveraged their connections with government to create private profits.
Reading further, this seems like a good guess:
The two metro Phoenix business leaders say they will collaborate on large commercial developments, including those with a special public-interest focus and those with special complexities....
Cardon spent three years at the Arizona Commerce Authority, a public-private partnership, and the predecessor Arizona Commerce Department. Aside from that, he perhaps is best-known as a driving force behind CityScape, the three-block, $1.2 billion mixed-use development in downtown Phoenix. He cites as a strength his ability to bring private and public interests together on a project.
Yep, I definitely think I am on to something:
The firm will strive to encourage a “collective vision” and “make sure projects are worthy of investment and will be successful,” Cardon said. “Everything we do will involve public value, enriching the quality of life.”
You know the type of project -- the ones where the city / state / Feds justify investing millions of taxpayer money into private projects because "they create jobs" (like those at Solyndra). In fact, the two partners are already polishing up this mantra, which I am sure we will hear over and over:
Deals typically will exceed $100 million and will create hundreds of jobs, both in the development stage and when complete, he said. The company , however, will maintain a fairly lean staff.
“We’re not a big employer, but we’ll be a job creator,” he said.
I want to make a couple of quick points:
- Investments whose primary return is "jobs" are not investments, because jobs are a cost, not an income stream. Investing public money to create jobs means that one is investing money now so that it incurs costs later.
- All successful capitalist enterprises that make a profit by definition create "public value" and "enrich the quality of life." Otherwise no one would buy their product or service and they would fail. In fact, only publicly-funded projects can evade this sort of accountability. When it is said that these projects deliver "public value," what is meant is that they deliver benefits that a few self-selected people have defined as somehow interesting to the public, but which it turns out the public (when given a choice) is unwilling to pay for. Which is how we get the local town of Glendale continuing to subsidize an ice hockey team for $25 million or so a year.