Should Government Be Involved in Business?

Our governments certainly have some important roles to play in commerce, such as enforcing contracts. But should they play a more direct role, as they did recently in Miami-Dade county?

There, in one of the poorest neighborhoods in the country, developer Dennis Stackhouse promised to build a massive biopharmaceutical park, where multinational drug companies and prestigious universities would develop cutting-edge medical advances and Miami's public hospital would provide free healthcare to 150,000 poor people a year.
More than 1,500 high-paying jobs would follow, along with hundreds of millions in investments and tax revenue -- enough to make it the most dramatic economic development project ever seen in Miami-Dade. This ''is exactly the kind of job-producing investment that we have needed in Liberty City for decades,'' said U.S. Rep. Kendrick Meek, a champion of Liberty City and one of the park's most vocal supporters.
Since then, county leaders have invested millions in Stackhouse's biotech project, using public money set aside to help the poor.

I'm surprised they didn't also promise a cure for AIDS, permanent world peace, and a chicken in every pot. So was this Utopia realized in Liberty City, location of the 1980 race riots where blacks killed innocent whites?

Here is what taxpayers received in return: empty lots, dormant earthmovers and piles of dirt and gravel with no sign of the buildings, the biotech companies or the high-tech jobs promised to Liberty City.
Instead, Stackhouse diverted more than $500,000 from the park through double billings and dubious expenses while paying a bevy of political insiders to rally support for the troubled project, a seven-month Miami Herald investigation found.
Among those insiders: former congresswoman Carrie Meek, who received at least $40,000 and a free luxury car from Stackhouse to consult on the project while her son -- U.S. Rep. Kendrick Meek -- moved to secure federal dollars for the developer; and County Commissioner Dorrin Rolle, who landed thousands in campaign cash and a $10,000 donation to a nonprofit he runs.

What about all the biotech firms that were supposed to move there?

Stackhouse pitched the project to local leaders by claiming multinational companies and world-class universities would lease thousands of square feet and employ hundreds of people.
But most of the tenants touted by Stackhouse told The Miami Herald they have no plans to lease space at the park. Two of the companies said they had no knowledge of the project at all.
• In fact, the only biotech firm committed to moving into the park is a Massachusetts company called MediVector, which Stackhouse said will serve as the anchor tenant, creating 150 biotech jobs while leasing thousands of square feet to test and manufacture drugs.
But MediVector is little more than a small consulting firm run by one of Stackhouse's longtime business partners from a 300-square-foot office in Cambridge.

I always remember this when ever someone is trying to pitch an idea for a government-backed business deal. It is far better to keep taxes low and let businesses make their own decisions without government influence.