The Senate is set to take up legislation reauthorizing the Department of Commerce’s Economic Development Administration. A relic of the Great Society, the EDA was created to help economically depressed areas of the country. Today it’s just another example of an unnecessary, unconstitutional program that lingers around because politicians like to demonstrate to the public that they’re “doing something.”
Downsizing Blog
Happy National Entrepreneurs' Day?
President Obama has proclaimed today to be National Entrepreneurs’ Day. The president who has brought us regime uncertainty, more regulations, more government intrusion into the economy, more debt, and is proposing to raise taxes on productive businesses and individuals wants to celebrate entrepreneurship?
Business Subsidies in Alaska
Alaska’s Juneau Empire recently examined the state’s Manufacturing Extension Partnership and found that its claims of success aren’t backed by reality. MEPs are a nationwide network of centers that provide technical and managerial assistance to small and medium-sized firms. Federal funds from the Department of Commerce pay for one-third of the costs of MEP centers, with the balance of costs being paid by state and local governments and the private sector.
Ironing Boards and Trade Policy
Government programs don’t have to have a big budget to do big harm to the economy. For example, the Department of Commerce’s International Trade Administration “only” costs taxpayers $400 million a year, but its protectionist activities impose a substantial burden on consumers and the economy.
Obama Plans Rural "Renaissance"
National Journal reports [$] that the administration wants more rural development programs in the next farm bill. Responding to congressional criticism that the administration isn’t sufficiently attuned to rural America’s needs, USDA secretary Tom Vilsack said that subsidizing biofuel facilities and high speed Internet service are “about a renaissance of the rural community.”
EDA, NADO, & Appropriations Hearings
A couple weeks ago Orson Swindle, an assistant secretary of commerce for economic development in the Reagan Administration, was kind enough to send me news articles from his days battling policymakers over porky Economic Development Administration projects. In a 1989 Insight article, Orson gave a nice summation of one of the problems with special interest spending:
The Census: Constitutional but Very Costly
Most activities undertaken by the federal government have no constitutional basis. One exception is the Census carried every ten years to determine the allocation of seats in the House of Representatives. Alas, it appears that even this core federal function is subject to cost overruns and other waste, as a new report from the Department of Commerce’s inspector general illustrates.
EDA's Delusions of Grandeur
The U.S. Department of Commerce’s $400 million Economic Development Administration provides grants and loans to state and local governments, nonprofit groups, and businesses in regions that are supposed to be economically distressed. The EDA is a relic of the 1960s belief that the federal government can solve the problems of distressed urban centers. Its legacy is one of wasteful and politicized spending. Former EDA director, Orson Swindle, called it a “congressional cookie jar,” and the legendary anti-pork Democrat Senator William Proxmire argued that it “deserves to die.”
Census Paves the Way for Subsidies
Our bloated government does a lot of things it shouldn’t, but the decennial census is one of the handful of federal activities the Constitution approves of. The census was intended simply to determine the number of seats each state would have in the House of Representatives. Today, census data is plugged into government formulas to determine how more than $400 billion in subsidies from the federal welfare state are allocated to state and local governments.
Public Dollars for Private Profits
The federal government is running $1 trillion deficits, but that hasn’t slowed down the government’s corporate welfare gravy train. As a microcosm of the business subsidy problem, I happened to notice in an Ohio newspaper that the U.S. Department of Commerce is footing the bill for the Youngstown/Warren Regional Chamber to fund a 16-day junket to China and Taiwan.
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