Here is an interesting thought experiment.
You are a consumer who likes a particular product that is offered by a variety of different suppliers. Let’s call that product specialty food.
Presumably, a group of likeminded consumers live in your relatively small, affluent midwestern town (we will call it CollegeTown) but you can not find the exact products you want.
A retailer of specialty food products is interested in opening a store in CollegeTown. The specialty food retailer wonders “is the local market big enough and wealthy enough to support the enterprise?”.
There is only one way to find out. The retailer risks their wealth and moves forward. Finding the right location, making improvements to the property and the general operation is expensive, but it is risk they are willing to take.
This scenario is generally referred to as a free market. Entrepreneurs take risks with their wealth, or the wealth of those who are willing to assume the same risk with the prospects of a financial return.
The entrepreneur and financial backers “have skin in the game”.
But what if the retailer could reduce their risk and let someone else take it for them? That would make the chances of success better. Instead of relying on the sale of their product to generate the revenue necessary, what if the retailer has revenue given to them?
Where can a business find someone to give them money without expecting to be paid back? A bank would want a loan re-paid. Shareholders will want dividends paid. Where does a business go to get “something for nothing” in return?
Politicians forcibly take citizens wealth, give it to a business as an “incentive” and then congratulate themselves for their actions. The specialty food retailer has reduced the amount of “skin” they have in the game. The politicians have none, but the taxpayers do, thanks to the gave away. Would our elected officials make the same commitment if it was their personal money at risk?
Who benefits? The business has reduce the cost of doing business; more profit potential. The politicians? They are liable for nothing; there are no financial repercussions for the giving away taxpayer money. Taxpayers are forced into an enterprise they may have no interest in.
The fallacy, or folly, of “economic development” is compounded by the arrogance. As West Lafayette Mayor John Dennis put it, “we wanted the right kind of business there”. Who is the “we” he is referring to? You? Me? Us? Obviously not. He is referring to himself and the other elected and non elected officials who decided against other options and signed off on this one.
How does he know what “we” want? Is there some sort of empirical evidence demonstrating that “we” want a specialty food retailer? Obviously there is none. How well did it work for The Fresh Market? Your neighbors talking about wanting a Trader Joe’s hardly qualifies as empirical evidence. Your neighbors spending their money is a much different yardstick.
The only definitive statement to made is that Fresh Thyme was interested in the local market. It’s their risk, let them take it; without taxpayer money.