Stephanie Simon of the Wall Street Journal writes an insightful article about the innane race among states to woo companies with tax breaks and speical incentives — even while many of the states are reeling from declining revenues and making significant budget cuts.
Does all the courting work? Simon says it's hard to say. Interestingly, Brent Lane of the Center for Competitive Economics at UNC which studies the issue in North Carolina, offers WSJ his own candid assessment of corporate incentives and politicians:
…"the political imperative is to be seen to be doing something, even if it's not effective in the long term. I have a lot of sympathy for these politicians. They're desperate to do something"
Translation: All that glitters isn't gold. Corporate incentives may look good to companies and politicians, but they usually fail to produce lasting benefits. Do we ever learn? (See: Dell, Global TransPark, Skybus).