Why Government Should Not Be In The 'Business' Business

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Today's Boston Business Journal posted a story online about Evergreen Solar.  Evergreen Solar is based in Marlborough, Massachusetts.  The company plans to cut 800 of its 925 Massachusetts jobs and close its factory at Devens, Massachusetts, by the end of March Sometimes the closing (or moving) of a factory isn't noteworthy, but in this case the closing of the factory is only part of the story.

The state directly invested into the company as part of its program to encourage green energy.  The amount of investment has been reported as high as $58 million and as low as $30 million, depending on the source.  Economic development secretary Greg Bialecki has stated that the state hopes to recover about $13 million from the company.  Bialecki claims that the $58 million figure includes future benefits which were not actually paid.  The company says that it actually only owes $3 to $4 million since it 'over-achieved' on its job creation promises.

Did I mention why the plant is closing?  They will be moving their operation to China, where manufacturing costs are lower.  One thing we need to remember is that businesses are in business to make money.  If they are not making money, there is no reason for them to be in business.  If Massachusetts wants businesses to locate here, it needs to create a business environment that allows businesses to make a profit.

Holly Robichaud points out in her Lone Republican blog at the Boston Herald:

"The Evergreen situation shows why government shouldn't be the decision-maker on the viability of businesses.  It further proves that the Democrat way does not work.  The philosophy of government knowing best is wrong. 

"For businesses to succeed in Massachusetts, we should not be handing out money, but rather creating a better business climate.  Our Governor should be looking at the cost of doing business here in the Commonwealth.  For example, we have the most generous benefits for unemployment insurance which is funded by the business community.  We are also number one in the costs for health insurance."

Thank you, Holly, for wisdom.  I wish the State House and State Legislation in Massachusetts would listen.

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This page contains a single entry by Granny G published on January 19, 2011 12:43 PM.

The Relationship Between Oil Prices And Economic Growth was the previous entry in this blog.

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