Am I the only one to notice that our governor is spending tax money to both buy and get rid of jobs in Tennessee? If the governor has made a serious error in getting rid of government jobs, what makes people think that there is no probability whatsoever that a serious error has also been made in buying the Volkswagen jobs?

The logical place to suspect a flaw in the economic development calculations is in the area of job multipliers. It is very likely that Alabama and Michigan fell out of the bidding because their experience with estimating economic impacts are not lining up with the historical economic statistics in the years after they paid out economic development incentives. These data normally lag about two years behind the current date so nearly anything can be promised and you have at least two years to make up the excuses.

Job multipliers vary from estimator to estimator because they depend upon knowing exact data on the fraction of in-state versus out-of-state suppliers around the auto assembly plant. Any state must recover its incentive investment from spending within its own jurisdiction. The Commerce Department publishes averages but those are averages. Job multipliers have also been used to estimate the impact of businesses closing. This begs the question of how many jobs will be lost after the state gets rid of 2200 state employees. Don't those government jobs multiply too? If you get rid of 2200 jobs for $60 million and buy 2000 for $500 million, it seems like you just spent $560 million and only lost 200 jobs.

It is my opinion that there is a fatal flaw in the calculations on the VW deal. Some estimates of auto industry job multipliers are as high as eight. Some are as low as two. In either case, the total labor hours spent building anything has an upper limit based on the final sale price of the item. With the Japanese building a car every 18 hours and the Americans building a car from 20 to 24 hours, the trend for multipliers over time is down, not up.