Today, Serious Materials closed its Chicago plant. Another 50 workers lost their jobs.
Remember Serious Materials? I reported on the little window company that Fortune said was "booming." The company was "on a roll," according to Inc. magazine, which put Serious' CEO on its cover, with a story titled: "How to Build a Great Company."
What makes it so "great"? For one thing, it received some serious attention from the most visible people in America:
President Obama was introduced by a Serious board member at a "green energy" event. And in 2009, VP Joe Biden appeared at the opening of Serious' new Chicago plant, praising it as a great example of government stimulus in action.
Biden told the company: "You are not just churning out windows; you are making some of the most energy-efficient windows in the world. I would argue the most energy-efficient windows in the world." Other window-makers told us their windows are just as energy efficient , but the vice president didn't visit their new plants. And for some reason, the same little window company got a special green tax credit from the government.
CEO Kevin Surace thanked Biden for his "unwavering support." "Without you and the recovery act, this would not have been possible," Surace said. He also claimed that the new Chicago plant would create 600 new factory jobs.
Three years later...the factory only had 50 workers.
So much for that stimulus in action. When government picks winners and losers - besides picking its friends - it too often picks losers. Like Solyndra...and now Serious Materials.
In a press release, the company claims it "has not received any grants or loans from government agencies." But that's just playing with terms. What it got was a tax credit -- an opportunity that its competitors did not get to keep money it would have paid in taxes.
But let's not be misled. Government is as manipulative with selective tax credits as it is with cash subsidies. It would be more efficient to cut taxes across the board. There shouldn't be any favoritism.