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Scanning the headlines from South Korea

It was hard to miss the headlines last week as news of Gov. Haley Barbour’s meeting with Kia auto executives began breaking in the Mississippi media after an initial report in a South Korean newspaper hit the Web.

Once again, the world grew slightly smaller thanks to the interconnectivity of our increasingly wired world. From The Korea Times (online at http://times.hankooki.com/) to the sites and sections of The Sun-Herald, the Northeast Mississippi Daily Journal and The Clarion-Ledger, to name just a few of the Mississippi newspapers reporting the development.

According to a story from Times staff reporter Na Jeong-ju, the Magnolia State “is emerging as a key contender for the site” after a meeting between the governor and Hyundai-Kia Automotive Group chairman Chung Mong-koo.

“Chung received a request from Barbour to build an automobile plant in the U.S.,” a Hyundai official said. “Some U.S. states have vied to draw the plant, and Mississippi is one of the attractive sites.”

And if Mississippi is chosen for such a plant, that would be great news for the state — as well as vindication for Barbour’s Asian tour, criticized by some but supported by most of the Mississippi economic development community. MBJ contributing writer Lynn Lofton covers that issue for us in a page one story this week.

The possibility of landing a Kia plant is another exciting chapter in one of the most fascinating business stories of the day as Mississippi and other states compete for projects along the so-called Southern Automotive Corridor.

Considering the other side

Luring any large manufacturer and the accompanying jobs to a state these days takes lucrative incentive packages.

In a column released several days before the Kia story began circulating, Ole Miss prof William Shughart pulled no punches when he wrote: It is not the government’s function to create jobs.

A simple, straightforward statement to get the piece going. He continued: Mississippi politicians nevertheless continue to squander hundreds of millions of taxpayers’ dollars in bidding wars to attract new businesses to the state or to keep existing ones from leaving.

And the gist? Shughart is concise and clear that “it’s all a sham.”

He points to a new book from Greg LeRoy that has received coverage from a variety of sources. National Public Radio’s “Morning Edition” had a review of the work within the past few days, and many of you may have heard it on the drive to the office.

LeRoy has assembled a range of research for “The Great American Jobs Scam: Corporate Tax Dodging and the Myth of Job Creation,” and has concluded that public money for economic development programs are by and large wasteful and do not result in any great benefit to the communities offering these “sweetheart” deals.

Similar points, especially as state-funded economic development became more important to everyone as the Cattle-gate controversy unfolded, have been made on the pages of the Mississippi Business Journal by academics and others. Their analysis is difficult to dismiss.

Playing the game

Changes to the rules of the economic development game are unlikely anytime soon. For the time being, and this sentiment is echoed frequently, if your neighbors are doing it, you have to do it.

From a public policy standpoint, it might not seem to make much sense, but from this side of the keyboard, it sure does make for some compelling coverage.

Contact MBJ editor Jim Laird at jlaird@msbusiness.com.


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