From MyWesttexas.com's article on yesterday's Council meeting:

[Midland Development Corporation Board member Robert] Rendall came to the podium and said the company might fail if the council required it to pay back the money. "We are really encouraging them to try to make it," he said.

So the money that Trace was to pay back to the taxpayers of Midland should this venture not work out as was planned can't be paid back because...well..um...this venture hasn't worked out as was planned.

Yes, I know that in some cases that money has in fact been "clawed back" from some companies who did not make good on their employment numbers. But judging from the published council agenda regarding several ongoing MDC agreements the only clawing back of anything is being done by these rent-seeking companies trying to reduce their commitment to "create" jobs.

But the question still remains of these "claw-back" provisions: If these companies have the wherewithal to return these taxpayer funded subsidies after the projects that were funded turn out to be non-performing then why do they need the subsidy in the first place? In short, if they have the money to be "clawed-back" on the back end of a failure, why don't they use that money to self-finance up front? Answer: Because it isn't about financing, it is about free money for the favored.

And although we have asked these questions many times before, back when economic mistakes in one area can be papered over by economic growth in others, I shall ask them again in the hope that our finding ourselves in the midst of a real recession and ham-fisted Obamaian attempts at "re-forming" this country's economy will provide a bit more focus and clarity.

1. Does the Federal, State, or local government have any business provding these kinds of subsidies to privately held firms?
2. Philosophically, what is the difference between the MDC taking money from the taxpayers and giving it to Trace Engines and the Obama administration taking money from the taxpayers and giving it to General Motors?
3. Should the MDC/City Council decide not to actually enforce these contracts (or should they renegotiate them down) isn't that the exact same thing as a taxpayer bailout?
4. Can six political appointees actually ever at once:
   • Be knowledgeable enough about each specfic company's operations and product line as to ascertain the viability of it's business model, and
   • Possess adequate knowledge of the sometimes world-wide industries that these subsidy-seeking companies compete in in order to make any sort of educated guess as to their long-term viability in the marketplace?
   • At least use Google every now and again?
5. Given that the whole philosophy of development corporations is to force the flow of capital into areas that the free market has already decided against funding, how is the Midland Development Corporation's/City Council's arbitrary decisions on which companies are to be subsized and which companies are not anything but a corruption of the marketplace? Even if they get one right?
6. How soon will it be before the MDC moves from referring to "jobs created" to "jobs saved"?

The article mentions that one of the members of the City Council is an investor in one of the companies in the MDC troughdom. He will probably recuse himself from any vote on the proposed renegotiations.

Although, he could always vote against a renegotiation and to actually enforce the current agreement. Such a move would have the twin virtues of being a blow struck on behalf of true free enterprise and one that would also match up with his campaign literature.

But serial claims of fiscal conservativism and a faith in the free market notwithstanding, the "dead hand" of government intervention in the marketplace always seems to mean other people in some other governmental body somewhere else.

They spend. We invest!

(Hat tip to Ospurt for doing yeoman's work on this stuff.)