August 28, 2010

Ron Johnson challenges professor of economics*

"They're out to destroy me."Ron Johnson

Item: "A Republican senatorial candidate said the government should stop distributing the funds and return the money to the treasury."

Him first.
"The $75,000 rail spur happened before I was even on the scene, and industrial revenue bonds are not government subsidies," Johnson told the group of about 50 people who gathered in the lower level of Four Star Family Restaurant.
No informed person said the bond itself was a subsidy. The subsidy inheres from obtaining the favorable interest rate:
"Tax-free bonds allow a borrower to borrow at a lower rate," said Andrew Reschovsky,** a professor of applied economics at the University of Wisconsin-Madison. "That's a subsidy from normal borrowing."
And there's no way that rail spur was built within two months of its being "secured." But that isn't the point. The point is that Johnson was for a mixed economy before he was against it. Johnson is preaching Randian dog-eat-dog ("creative destruction") capitalism yet his own business prospered through government largesse.

It's no surprise Johnson is having a hard time admitting it.
"Certainly, the negativity is not on my part," he said, noting he only counters what he called misleading reports from Democrats and news media. "They're out to destroy me."
Oh stop it. All they're doing is actually listening to what Ron Johnson has been saying and then comparing it with the observable reality.

Those results are often strongly discordant.

* I was kind of hoping he'd get in touch with Martin Sharp.

** "[Prof. Reschovsky's] research focuses on tax policy and intergovernmental fiscal relations."

I think he would know what constitutes a subsidy in this context.

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