It would be refreshing to be able to take a politician at his or her word. But as George Orwell wrote in his 1946 essay, “Politics and the English Language”: “Political language — and with variations this is true of all political parties, from Conservatives to Anarchists — is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind.”
That is why it is difficult to believe Gov. Martin O’Malley’s promise to support private investment in Maryland. He swore in 25 members to a revived Maryland Economic Development Commission for the sole purpose of seeing how to “support Maryland’s business community.”
According to him, he selected “some of Maryland’s greatest visionaries in science, education and business” to get the job done. But a closer look at the “visionaries” in state and federal campaign databases shows that a majority of them are big Democratic donors, sending thousands to Sens. Benjamin Cardin and Barbara Mikulski, and state candidates, including O’Malley.
And many know little about private investment, making their living by winning government contracts and grants. There is nothing wrong with winning contracts and grants, but neither generates wealth — rather, it divides existing tax dollars.
Some examples: Timothy Adams is the founder and CEO of SA-Tech Inc. His firm, which provides logistics, operation and management, and engineering services, would not exist without the federal government. SA-Tech has won $176.6 million in federal government contracts since 2000, according to fedspending.gov.
The commission chair is Dr. Elias Zerhouni, an adviser to Johns Hopkins Medicine, the top recipient of National Institutes of Health research dollars for 15 years. And then there is Edwin Hale, chairman and CEO of 1st Mariner Bancorp. The taxpayers of Baltimore City recently took a worthless $950,000 mortgage for the Senator Theatre off his hands and will likely help to build a new arena for his soccer team, the Baltimore Blast.
Alan Wilson, chairman, president and CEO of spice company McCormick & Co. Inc, looks like the only person on the commission without the potential to win big at the government trough from his post.
If O’Malley really cared about generating new business, he would have appointed a more diverse board of advisers with experience on how to start a business without government funding.
As James Surowiecki writes in “The Wisdom of Crowds,” groups that comprise a true mix of viewpoints and backgrounds make the best decisions. Those who hail from — as in this case — a largely one-sided political viewpoint, likely will ignore ideas not in vogue in their circles.
More importantly, O’Malley would not have appointed a commission. A vast amount of evidence already exists about how to attract and keep business: lower taxes. While Maryland benefits from its close proximity to Washington, it does not guarantee the state success.
As U.S. Census data show, more Marylanders are leaving the state than outsiders moving to it. Those migrating are all going to lower-tax states: Virginia, Delaware, Pennsylvania, North Carolina and Florida, to name a few.
Maryland must reverse that trend if it wants to compete for business and keep it in the state. For specifics on how to do it, the Maryland Public Policy Institute will send commission members copies of its study, “Improving Maryland’s Economic Competitiveness: Policy Reforms to Promote Economic Prosperity,” written by Donna Arduin and Wayne H. Winegarden.
State legislators and others can find it at mdpolicy.org/research/detail/improving-marylands-economic-competitiveness.
One of the report’s recommendations includes reversing the tax increases passed in 2007. As it makes clear, raising taxes to increase state revenue is unsustainable, as higher taxes drive skilled workers — and the income taxes they generate — to other states.
If commission members would like to change the title page and send it to the governor, the authors would not mind. What’s clear is that investing in bigger government has created the “structural deficit” in Maryland and will not generate new wealth.
Only policies that make Maryland competitive with other states will expand the economy. And advocating them will ultimately build trust in O’Malley, too, at a time when many residents and Americans as a whole are losing faith in government’s ability to save them.
Examiner Columnist Marta Mossburg is a senior fellow with the Maryland Public Policy Institute and lives in Baltimore.
