How a good job-creation idea can go bad for Georgians
You’ve heard of good ideas and bad ideas. Today, meet the bad “good idea.”
Earlier this month, I previewed a job-creation program that Lt. Gov. Casey Cagle and other state leaders are expected to champion next year. The state would use some to-be-determined revenue stream to partner with private investors and pump money into Georgia start-up companies in certain strategic industries.
It’s a variation on an idea I’ve advocated before, on the premise that Georgia creates many promising young businesses — only to watch them move to places like Boston or Silicon Valley, because that’s where the capital they so desperately need is located.
Most of the details of this specific plan are still being worked out, or at least Cagle didn’t share them with me when I interviewed him. On the surface, it might sound like a good idea.
Less than a week later, however, AJC readers learned why it could be one of those bad “good ideas.” That’s when my colleague, Aaron Gould Sheinin, reported that lobbyists representing a for-profit cancer hospital paid $5,000 for Cagle to attend a charity golf weekend last month at The Cloister resort on St. Simons Island.
Now, I have nothing against golf, resorts, cancer hospitals or profits. Nor against lobbyists, per se. But I have a real problem with elected officials who accept golfing trips at resorts on the dime of anyone promoting any interest, regardless of industry or profitability.
So should all taxpayers, especially if said elected officials are thinking of investing public money in a way that might benefit such interests. That’s how a “good idea” turns bad.
Lobbyist-funded junkets are only the public — shamelessly public, you might say — manifestation of the web of special interests that stand to outweigh the public’s interest when taxpayer dollars are involved.
It’s one thing for the state to seek out and choose, very transparently, a VC fund that invests in a wide variety of start-ups and put some money in that fund — asking in return only that the fund open an office in Georgia, potentially leading it to recognize and invest in our homegrown companies. That’s particularly true if the investment is made with money, such as money from a pension fund, that the state is going to invest in equities anyway.
It’s an entirely different matter to launch a new state investment vehicle, make a bunch of rules about which sectors or even companies are eligible for investment, and ask private investors to participate. Who thinks that’s wise, what with Solyndra, the latest federal failure at picking winners and losers, still in the news?
Just for a moment, remove specific personalities such as Cagle or Speaker David Ralston, and the particulars of Cagle’s trip to the coast and Ralston’s journey to Germany this time last year to examine that country’s rail system. Who among us doesn’t see the potential for future politicians, any number of years hence, to treat such a state-led investment program as a slush fund to reward cronies and supporters?
The problem is even more glaring when you consider that today’s politicians in Georgia, before such a temptation even exists, reject even a modest cap on gifts from lobbyists.
Attracting much-needed capital to Georgia and our fledgling businesses is a very good idea. It can be done responsibly. But doing it in a way that invites conflicts of interest would make it a very bad one. Tread carefully here.
– By Kyle Wingfield
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100 comments Add your comment
BULLSEYE
November 28th, 2011
3:50 pm
Little Barry sees with his all knowing singular Brown Eye.
detritusUSA
November 28th, 2011
4:17 pm
Sounds like “central planning” to me. Wonder how many communists are in state government, 57?
Hillbilly D
November 28th, 2011
4:23 pm
The State of GA has handed out tax break after tax break to businesses and yet unemployment is still pushing 10%. I’m no economic expert but it sounds like they need to read up on diminishing returns.
I Report (-: You Whine )-: Thee Magnificent!!! mmm, mmmm, mmmmm! Just sayin...
November 28th, 2011
4:27 pm
Wall Street executives are bracing for the possibility that Rep. Maxine Waters (D-Calif.) will take over as the senior Democrat on the House Financial Services Committee after Rep. Barney Frank (D-Mass.) retires.
I knew the dummycrats wanted to destroy the US economy but I didn’t think they wanted to burn it slam to the ground too.
Egads, have mercy on us, would ya?
very xmas
November 28th, 2011
4:29 pm
That’s right, Bullseye, and I think it’s a shame that Kyle’s mom didn’t raise him to be a nicer brown eyed girl!
sailfish
November 28th, 2011
4:34 pm
wingfield
You are being disingenuous, when I said off the books, yes the costs would always be accounted for in the total debt. Bush did not add that cost to the deficit, obama did. So one president kept it “off the books” so to speak, and the next president put that cost “on the books” by adding it to the deficit. Hidden cost versus added cost, that’s it pure and simple…
Kyle Wingfield
November 28th, 2011
4:42 pm
sailfish: You’re the one who, to back up your point, linked to an article about the debt ceiling. And I’ve already explained why you’re wrong about Obama “adding it to the deficit.”
I Report (-: You Whine )-: Thee Magnificent!!! mmm, mmmm, mmmmm! Just sayin...
November 28th, 2011
4:56 pm
The Urinal’s “Conservative” guest columnist opionates-
Meanwhile, many Republicans flock to Herman Cain or Newt Gingrich because they are more interested in a leader who can take on the mainstream media than in one who can plausibly govern. Grover Norquist’s tax pledge isn’t really about public policy; it’s a chastity belt Republican politicians wear to show that they haven’t been defiled by the Washington culture. -David Brooks
Itching to hang Romney around our necks. Or better yet, obozo.
Newt has no crease to oogle, man.
fishfry
November 28th, 2011
6:09 pm
Gentle with them Kyle, remember they are liberals.
Lil' Barry Bailout (Revised Downward)
November 28th, 2011
7:15 pm
According to the Treasury department, our President Bush added $4.9 trillion to the national debt in eight years.
In less than three years, Obozo had added $4.6 trillion. By the election next year, Obozo’s debt will have skyrocketed well beyond that figure.
I can see the campaign commercial already.
Obozo: Loser.
I Report (-: You Whine )-: Thee Magnificent!!! mmm, mmmm, mmmmm! Just sayin...
November 28th, 2011
7:20 pm
“President Obama seems to travel to battleground states more so than any other president before him. Am I’m wondering if you could respond to this. It looks like the president is campaigning on the taxpayer dime more than any other president has done,” Tapper said at today’s White House briefing.
Jake, what else do you expect from a goony socialist stooge like obozo?
sailfish
November 28th, 2011
8:53 pm
lbb
Keep yourself company in your tiny fantasy world, the truth about deficits speaks louder than your fiction-
http://voices.washingtonpost.com/postpartisan/2010/09/obama_deficits_and_the_ditch.html
Lil' Barry Bailout (Revised Downward)
November 28th, 2011
9:42 pm
You’re entitled to your opinion. You are not entitled to your own facts.
Are you accusing the Obozo treasury department of lying?
In addition to exploding the national debt like no other before him, your Idiot-in-Chief inherited a recovery and turned it into an economic wreck with record numbers of folks living in poverty.
Welcome to Obozoville.
sailfish
November 28th, 2011
10:00 pm
**inherited a recovery**
What planet do you live on?
Dusty
November 28th, 2011
10:01 pm
sailfish,
Seems like you have a bit of trouble recognizing the truth. You keep denying it.
Obama does keep adding to the deficit. He wants to pass out more and more money that we do not have.
How is it possible that you can ignore that like it is not happening? Will you keep blaming Bush when the next president is in office?
I waste my time. I keep looking for one liberal who will not approve of every move Obama makes. I haven’t found one. Maybe there isn’t one free thinking liberal left.
sailfish
November 28th, 2011
10:05 pm
disty
It’s not that I approve of everything obama has done, no he certainly has made some mistakes. The problem is that you can’t blame the whole heaping mess on him that started six years ago. The real estate crash is the gift that keeps on taking from this economy, he did not preside over that, yet that is the main reason almost everybody you know is treading water or broke, except of course for those who made out like bandits.
Dusty
November 28th, 2011
10:14 pm
MAXINE WATERS!!!
Maxine Waters head of any committee in Congress????
I mean Pelosi looks like a saint compared to Maxine Waters. It’s that bad!
Something’s got to be done about Congress!! Can we invent another one? A new battery or something? This one does not run.
Dusty
November 28th, 2011
10:32 pm
Sailfish,
Right! Obama is not responsible for some things. Obiously he is not responsible for any of the promises he made either. Or his failed attempts at improving the economy by promising stimulus money we don’t have. Now he wants to spend more on another “stimulus”. There are other failing ventures. He takes no responsibility for any of it. Tries to pass the blame to others.
For that trait alone makes him seem spineless and vacillating. I do not think he is dishonest but over eager to be in the White House for which he has shown no leadership. He can rally a crowd with a nice speech but actions speak louder than words. The facade is all there is.
I want a president who can lead and inspire. We need one so badly.
sailfish
November 28th, 2011
10:36 pm
“I want a president who can lead and inspire. We need one so badly.”
Unfortunately, we haven’t had one of those since reagan. The republican candidates are pretty weak, the only one that makes any sense is huntsman and nobody seems to be listening to him. Obama is the default candidate – “the devil you know is better than the devil you don’t know.”
Same ol' Song and Dance
November 29th, 2011
12:53 am
Cagle being bought by lobbyists? The Occupy movement wants corporate money out politics. But since Fox News says Occupy is bad, and Cagle is a Republican, Georgia voters don’t mind their governor is paid for…
Lil' Barry Bailout (Revised Downward)
November 29th, 2011
8:07 am
Cagle isn’t the governor.
If we can’t trust you to get the basic facts right, what CAN we trust you on?
Don't Tread
November 29th, 2011
8:11 am
“The Occupy movement wants corporate money out politics”
Along with the implementation of Communism in this country and the destruction of capitalism and individual rights, beginning with the right of individuals to own property. (Because, you know, they have “too much” and “they don’t give their fair share”.)
markie mark
November 29th, 2011
8:52 am
Kyle, FYI – The Cloister is on Sea Island, which is reached thru St Simons (former St Simons resident)
I Love Life Cereal
November 29th, 2011
9:00 am
test
Edward
November 29th, 2011
9:44 am
“inherited a recovery”???? This forum is inhabited by the most delusional bunch of liars outside of a GOP debate. You people are seriously sick.
Lil' Barry Bailout (Revised Downward)
November 29th, 2011
9:51 am
Don’t fear facts, Edward. The recession ended in June 2009 thanks to our President Bush’s actions to clean up the Democrat housing mess caused by Fan, Fred, and CRA requiring banks to lend to parasites, liars, and losers.
ragnar danneskjold
November 29th, 2011
10:13 am
I read only Arnold’s 5:33 AM comment, and realized I could add nothing of substance. Well said.
The Anti-Wooten
November 29th, 2011
10:14 am
Nothing to worry about hear Mr. Wingnutfield, the gubner has gutted ethics and oversight pertaining to politician’s behavior here in Georgia. The MUST mean that everything is just fine.
SQUIRREL!!!
UGA1999
November 29th, 2011
10:17 am
It is hard to create jobs on a local level when the federal government is doing its best to destroy jobs.
Road Scholar
November 29th, 2011
10:44 am
Mary Elizabeth : Excellent post. Your writing skills and thoughts are appreciated.
LBB: You wanted Frank gone! And now you are concerned about Waters? Be careful what you ask for!!!! You may get it! Before you lambasted Frank, you should have looked at the outcome.
Kyle, back on subject, For 25 years state employees (GDOT) were not to recieve any gifts. Now I’m not one who thinks/knows that there were some who violated this edict, esp at Christmas when Contractors showed up with truckloads of turkeys and hams. But those who abused it were dealt with; most times the public never knew of the discipline; “dirty linen” was not aired in a time of manners. Over the last 15 years, a gift less than $25 dollars was ok, but had to be reported and documented, esp if it was over $25 dollars. So why are state employees being treated differently from legislators, who are state employees? And the Legislators deal in dollar amounts and more issues than state employees. Because they are elected and report to the public, do they have speacial rules or genes which will keep them abusing the gift taking? Also, most legislators are very well off; do they really need gifts or meals?
Road Scholar
November 29th, 2011
10:46 am
Oh and Kyle, aren’t you concerned about the take over of agencies, boards, commissions, etc. by ex legislators?
Dennis
November 29th, 2011
11:12 am
Mr. Wingfield, Thank you for this column.
According to the Atlanta Business Chronicle, November 18, 2011, “Georgia could begin investing nearly $200 million in the next generation of high-growth companies.
“The General Assembly is expected to take up a proposal this winter creating a venture capital fund aimed at providing an infusion of much-needed capital to attract jobs, investment and tax revenues to the state.
“A panel of lawmakers and technology industry insiders recommended the proposed Georgia Venture Capital Program Nov. 8 to generate venture capital activity in a state that lags national leaders California and Massachusetts and struggles to compete with regional leaders Virginia and North Carolina.”
You might ask yourself, Mr. Wingfield, just where the governor plans to get $200 million dollars?
According to an article by Tom Crawford writing for the Georgia Review, “Governor Nathan Deal recently told the Georgia Research Alliance he supports ending the ban on alternative investments [made by state pension systems].”
This means that the governor intends to get funds from the Georgia Teacher Retirement System as one of those sources to raise $200 million dollars to be used for risky investments – most of which risky investments have failed all over this nation.
If a startup business of one sort or another is such a good idea, let the lending institutions make such loans. And if the lending institutions will not take the risk, why should the pension funds of teacher and state employees be risked instead?
The money in the Teacher Retirement System does not belong to the state. It does not belong to the state legislature. It does not belong to the governor.
It belongs to the employes, both active and retired, who put it there and whose investments are being well managed by the Teacher Retirement System as they presently are. These investments are providing all the retirement benefits promised, and those conservatively invested funds are not in need of “risky investments.”
What is not being told by those advocating such risky investments are just how many of these investments have failed. And they are failing all over the nation.
According to Dan Primack writing in CNN Money, February 16, 2011, “The median net return to VC fund investors has not been positive for any vintage year since 1998.”
If state employes pension funds are going to be used for risky investments and those investments fail, is it the intent of the governor to raise taxes on the citizens of Georgia in order to pay the promised retirement benefits to retired state teachers?
Or will the governor and the legislators just walk away and say “It’s not my problem?”
Those are questions the tax paying citizens of Georgia and their local legislators ought to think about before allowing the governor to dip into funds that are not his.
Truth Squad
November 29th, 2011
12:19 pm
It is funny how Georgia use to be able to develop,attract, and hold on to new businesses which included a number of technology companies. Since the Republicans have taken over, the state has suffered. We need to stop kidding ourselves and realize that more and more companies do not wish to stay here, much less come here, because of a lack of confidence in those running the state.
Georgia is a terrific state and Atlanta a world-class city despite the animus aim toward it by those who live further out from it’s borders. I believe that we will see more job growth once the voters decide it is never a good idea to place in charge those who claim not to believe that government can help solve problems and govern accordingly.
Cutting taxes for the wealthy and well-connected while laying off first responders and teachers and sticking it to the poor and sickly is not a path to follow if one wishes to remain in office. This is true at the state and federal level. Asking people under 55 to pay for “entitlement” programs that are far more generous than they will receive when eligible all while continuing to cut taxes for that 1% is a losing message for Republicans at the national level.
If we want to get the state’s economy back on track, we have to get back to investing in first-class schools, first-class infrastructure, and electing politicians who share a vision of a state striving to become greater. Georgia is a purple state, not a red one. We use to have politicians in both parties that were sensible and did right by Atlanta and the entire state. It is time to get back to electing politicians who put state before party. Then we will see more new businesses maintain in the state. There are plenty of people here who have experience nurturing those businesses.
very xmas
November 29th, 2011
12:43 pm
I don’t think any reader needs to know any more about KW than his assessment of the cost of the Iraq War. He’s delusional. He’s drunk on the koolaid, and he’s now a blogzilla leading a bunch of GOPeeTards into the abyss of hate and lies and stink.
Hillbilly D
November 29th, 2011
1:25 pm
So why are state employees being treated differently from legislators, who are state employees?
Because when you make the rules and voters don’t hold you accountable, you can pretty well do as you please. Be nice if that changed but it’s been that way all my life and will probably be that way long after I’ve cashed in my chips.
I do think that since the Legislators take meals from whomever, we should cut out the meal allowance that they get during the session. If they aren’t smart enough to get somebody to buy their breakfast, dinner and supper, too damn bad.
dcb
November 29th, 2011
2:36 pm
Sorry for being the odd man out here, but until it can be shown that the money a lobbyist spent entertaining and/or otherwise providing politicians with details of their business resulted in the awarding of a project where direct financial benefit to the politician resulted, than I don’t see the problem. How else would our government officials learn of such details if the very people involved in supplying the product or project don’t give it to them? Certainly the politician or our professional government staff do not have all the expertise nor time to do the same in-depth research. I can’t believe that any politician is stupid enough to sell their soles in public for a lousy $5k golf tournament, or $200 dinner. Give the poor politicos a break. If corruption and kick-backs can be proven, then so be it. And no doubt some of our politicians do stupid things. Look at Nancy Pelosi and what she costs the taxpayer for her flights back and forth to California. Or how about the salary Michelle Obama earned for a part-time job while her husband was Senator from Illinois – a job that was phased out as unnecessary after they moved to Washington. But to convict a politician in the news media as is done on a daily basis these days is pure insanity. No wonder the confidence factor in our Congress is so low.
Sean
November 29th, 2011
2:39 pm
You southern people are so dumb. Most of you can’t even have decent and sensible blogs that have to do with the issue at hand. It’s no wonder that companies don’t want to come to your state(idiots).
Kyle Wingfield
November 29th, 2011
2:44 pm
dcb: I agree with some of what you said. However, there is no reason that said expertise and in-depth research can’t be conveyed during a meeting in the elected official’s office at the Capitol, rather than over a golfing weekend.
contrarian
November 29th, 2011
2:59 pm
Solyndra! Solyndra! Solyndra!
Geez, even when the subject is the possible corruption of the (overwhelmingly Republican) political leadership in Georgia , you still try to blame it all on the Democrat in the White House.
At least you’re consistent.
Kyle Wingfield
November 29th, 2011
3:09 pm
very xmas @ 12:43: I assume you’re talking about my comments to sailfish yesterday. So what, exactly, did I get wrong?
Kyle Wingfield
November 29th, 2011
3:15 pm
contrarian @ 2:59: You’re living up to your name, because otherwise I don’t see how citing Solyndra as an example not to be followed = blaming “it” (whatever “it” is in this case) on Obama.
Dusty
November 29th, 2011
3:17 pm
I think our state legistators are looking at Washington spending taxpayer money and think they can too. They see the president going to the most expensive places in an expensively run airplane with a large group of family, friends and security for vacations in any part of the world. . It is quite evident that no thought is given to expense, even as our country sinks lower into debt.
So he is the president! Should he not set an example? He should and he is and it is an expensive example using taxpayer money. Bush & Reagan had country ranch houses. FDR had a Warm Springs bungalow. Kennedy went to the family compound on Cape Cod. They did not act like kings but citizens.
OUr state legislators want a piece of the pie, Seems the GDOT workers do too. Seems strange that all these people were elected to work for us, not turn into partakers of tax funds and “free” gifts. . So it goes.
Ethics are as old fashioned now as high top button shoes. They have evolved into “everybody’s doing it” and therefore permissable. Let’s turn that around. “Nobody is going to do it and you can’t either.” We must demand it.
Dusty
November 29th, 2011
3:32 pm
Sean,
Dumb Southerners huh? Where did you acquire your fine education, impeccable manners and ephemerable savoir faire? Lower Bronx?
I am sure there is no need for you to waste your valuable time here. We’ll manage somehow.
Bill
November 29th, 2011
3:44 pm
1) Venture Capital is no place for pension funds.
2) Lets pass a really draconian immigration law that will keep any self respecting company from moving here.
Bill
November 29th, 2011
3:46 pm
Dusty,
Thanks for pointing out that many of our previous presidents had vacation homes, and Obama does not.
Bill
November 29th, 2011
4:07 pm
Barry Bailout;
“You are entitled to your own opinion, but not your own facts.” I learned that from you.
“In addition to exploding the national debt like no other before him, your Idiot-in-Chief inherited a recovery and turned it into an economic wreck with record numbers of folks living in poverty.”
The national debt to gdp ratio is approaching 100%. It is projected to level off after next year, partly due to the new healthcare law. When Obama took office, it was at 90%. When Bush took office, it was about 60%. It has grown under Obama, but clearly not exploded. At the end of WWII, the ratio was 120%. What did we cut?? nada. Instead, we invested in the Marshall plan, rebuilding Japan, the GI bill for education and housing, the interstate highway program and the space program. The debt to gdp ratio dropped every year until 1982. (In the 1980s, our costs for interest were higher than they are now. It has increased every year since, except for a couple of years under Clinton.
Mike Green
November 29th, 2011
6:50 pm
Kyle, it is hard for me to take you serious when you say that sailfish has the most inaccurate statement of the day when you let Lil’ Barry hoot and howl all over your board saying inaccurate statements and calling people libtards and the president “obozo” and “loser”.
But I guess that is is okay because he is a “conservative”.
I Report (-: You Whine )-: Thee Magnificent!!! mmm, mmmm, mmmmm! Just sayin...
December 1st, 2011
7:28 am
I don’t think you’ll have to worry about tort reform after obozo wipes out the entire US economy.
Even better, will be able to shoot the attorney?
I Report (-: You Whine )-: Thee Magnificent!!! mmm, mmmm, mmmmm! Just sayin...
December 1st, 2011
7:29 am
test
And if he botches the operation, how many potatoes will he owe you?
I Report (-: You Whine )-: Thee Magnificent!!! mmm, mmmm, mmmmm! Just sayin...
December 1st, 2011
7:30 am
test
your foot because of frostbite, how many potatoes will you owe him?