Quotulatiousness

April 21, 2015

Lee Kuan Yew and Singapore’s amazing economic success

Filed under: Asia,Economics,Government — Tags: , , , — Nicholas @ 04:00

Earlier this month, Alvaro Vargas Llosa examined the economic success of Singapore under the authoritarian rule of Lee Kuan Yew:

Lee Kuan Yew, Singapore’s legendary statesman, who died last month at the age of 91, posed a challenge to those of us who believe in political and economic freedom (and all other freedoms). His combination of authoritarianism and economic freedom, of social engineering and self-reliance, worked. The result was a society that is more prosperous than most others, but free only in some respects.

For years, the best examples one could come up with to show that the marriage of economic and political liberty could work were the liberal democracies of the developed world, whose achievements originated in centuries past and different circumstances.

Lee Kuan Yew’s credentials became strong as many countries that also gained independence in the 1950s or 1960s opted for a mix of nativism and collectivism that kept them poor while tiny Singapore, with no natural resources, emerged as an economic powerhouse. While Mao, Ho Chi Minh, and Castro — not to cite Mobutu, Idi Amin Dada, and others — destroyed the chances of a decent life for many generations, Lee Kuan Yew created the conditions for a 124-fold increase in Singapore’s per capita income in half a century.

[…]

Singapore’s case is exceptional, which makes it a tough challenge for those of us who think freedom is best served by not carving it up. My belief is that Singapore has been able to preserve its curious mix because of the absence of prosperous liberal democracies around it. But its model is based on globalization, and it’s therefore porous to good ideas.

In a world in which more countries, including Asian ones, end up successfully embracing democracy under the rule of law as well as free trade, it will be impossible for the city-state to avoid the comparison and the contagion. It is one thing to preserve an authoritarian model because your neighbors espouse a less successful one, and quite another to perpetuate it in the face of equally or even more successful societies that espouse a freer model.

April 15, 2015

QotD: The secret weapon of the bureaucracy

Filed under: Bureaucracy,Government,Quotations — Tags: , , — Nicholas @ 01:00

… boredom is the deadly secret weapon of the bien-pensant technocrats of the EU and the UN. “They wear outsiders down with the tedium of their arguments and the smallness of their fine print, so that by the time anyone else notices what they’re up to the damage has been done and it’s too late to do anything about it.”

James Delingpole, “Green Global Governance: How Environmentalists Have Taken Over the World”, Breitbart.com, 2014-06-25.

April 11, 2015

America’s biggest welfare queen

Filed under: Business,Government,USA — Tags: , , — Nicholas @ 03:00

It’s not nice to call someone a welfare queen, but this is a case where it’s hard to find a more accurate way of putting it:

America’s biggest welfare queen is someone you’ve probably never heard of. She’s Hispanic. She’s been living off other people’s hard-earned tax money for years. And she’s gotten rich doing it.

Her name is Iberdrola. She’s a Spanish energy company that has invested in U.S. power facilities. And according to the advocacy group Good Jobs First, she’s raked in more than $2 billion from Uncle Sam in just the past few years.

Good Jobs First maintains a subsidy tracker where you can look up which companies are getting rich from public funds. It recently issued a report on “Uncle Sam’s Favorite Corporations — the companies that have gained the most from federal grants, special tax preferences, loans, and loan guarantees.

The biggest beneficiaries (“by an order of magnitude”) are Bank of America, Citigroup, and other major financial institutions that were bailed out during the 2008 financial crisis. The Federal Reserve, the Troubled Asset Relief Program, and so on threw trillions of dollars at U.S. and foreign banks in a desperate effort to stabilize the financial system. It worked. In many cases (though not all), the institutions repaid the money. In some cases the federal government actually earned a profit.

But hundreds of other companies have raked in billions of dollars in direct grants. Along with Iberdrola, NextEra Energy, NRG Energy, Southern Company, Summit Power, and SCS Energy all have reaped more than $1 billion in federal largess, often receiving payments through programs meant to boost renewable energy. At the same time, many coal companies have taken huge sums from Washington through grants and coal production tax credits. So, as with farm programs—some of which subsidize farmers to farm more and some of which pay farmers to not farm at all—Washington thwarts its own objectives by subsidizing both renewable fuel sources and the fossil fuels they’re supposed to replace.

QotD: Tyranny and the Anglosphere

Filed under: Britain,Cancon,Government,Quotations,USA — Tags: , — Nicholas @ 01:00

I’m 41 years old, which doesn’t feel that old to me (most days), but history is short. With the exception of those trapped behind the Iron Curtain, the world as I have known it has been remarkably free and prosperous, and it is getting more free and more prosperous. But it is also a fact that, within my lifetime, there have been dictatorships in Spain, Portugal, Greece, Poland, India, Brazil, Argentina, Chile, South Korea, and half of Germany — and lots of other places, too, to be sure, but you sort of expect them in Cameroon and Russia. If I were only a few years older, I could add France to that list. (You know how you can tell that Charles de Gaulle was a pretty good dictator? He’s almost never described as a “dictator.”) There have been three attempted coups d’état in Spain during my life. Take the span of my father’s life and you’ll find dictatorships and coups and generalissimos rampant in practically every country, even the nice ones, like Norway.

That democratic self-governance is a historical anomaly is easy to forget for those of us in the Anglosphere — we haven’t really endured a dictator since Oliver Cromwell. The United States came close, first under Woodrow Wilson and then during the very long presidency of Franklin Roosevelt. Both men were surrounded by advisers who admired various aspects of authoritarian models then fashionable in Europe. Rexford Tugwell, a key figure in Roosevelt’s so-called brain trust, was particularly keen on the Italian fascist model, which he described as “the cleanest, most efficiently operating piece of social machinery I’ve ever seen.” And the means by which that social hygiene was maintained? “It makes me envious,” he said. That envy will always be with us, which is one of the reasons why progressives work so diligently to undermine the separation of powers, aggrandize the machinery of the state, and stifle criticism of the state. We’ll always have our Hendrik Hertzbergs — but who could say the words “Canadian dictatorship” without laughing a little? As Tom Wolfe put it, “The dark night of fascism is always descending in the United States and yet lands only in Europe.”

Kevin D. Williamson, “The Eternal Dictator: The ruthless exercise of power by strongmen and generalissimos is the natural state of human affairs”, National Review, 2014-06-27.

April 10, 2015

“Scotland in the 21st century is a hotbed of the new authoritarianism”

Filed under: Britain,Government,Religion,Soccer — Tags: , , , — Nicholas @ 02:00

Brendan O’Neill on the odd disconnect between American views of Scotland (roughly summed up by kilts, whisky, and Braveheart) and the reality:

… far from being a land of freedom-yearning Bravehearts, Scotland in the 21st century is a hotbed of the new authoritarianism. It’s the most nannying of Europe’s nanny states. It’s a country that imprisons people for singing songs, instructs people to stop smoking in their own homes, and which dreams of making salad-eating compulsory. Seriously. Scotland the Brave has become Scotland the Brave New World.

If you had to guess which country in the world recently sent a young man to jail for the crime of singing an offensive song, I’m guessing most of you would plumb for Putin’s Russia or maybe Saudi Arabia. Nope, it’s Scotland.

Last month, a 24-year-old fan of Rangers, the largely Protestant soccer team, was banged up for four months for singing “The Billy Boys,” an old anti-Catholic ditty that Rangers fans have been singing for years, mainly to annoy fans of Celtic, the largely Catholic soccer team. He was belting it out as he walked along a street to a game. He was arrested, found guilty of songcrimes—something even Orwell failed to foresee—and sent down.

It’s all thanks to the Offensive Behaviour at Football Act, which, yes, is as scary as it sounds. Introduced in 2012 by the Scottish National Party, the largest party in Scotland the Brave New World and author of most of its new nanny-state laws, the Act sums up everything that is rotten in the head of this sceptred isle. Taking a wild, wide-ranging scattergun approach, it outlaws at soccer matches “behaviour of any kind,” including, “in particular, things said or otherwise communicated,” that is “motivated (wholly or partly) by hatred” or which is “threatening” or which a “reasonable person would be likely to consider offensive.”

Got that? At soccer games in Scotland it is now illegal to do or say anything — and “in particular” to say it — that is hateful or threatening or just offensive. Now, I don’t know how many readers have been to a soccer game in Britain, but offensiveness, riling the opposing side, is the gushing lifeblood of the game. Especially in Scotland. Banning at soccer matches hateful or offensive comments, chants, songs, banners, or badges — all are covered by the Offensive Behaviour Act — is like banning cheerleaders from American football. Sure, our cheerleaders are gruffer, drunker, fatter, and more foul-mouthed than yours, but they play a similarly key role in getting the crowds going.

The Offensive Behaviour Act has led to Celtic fans being arrested in dawn raids for the crime of singing pro-I.R.A. songs — which they do to irritate Rangers fans — and Rangers fans being hauled to court for chanting less-than-pleasant things about Catholics.

Even blessing yourself at a soccer game in Scotland could lead to arrest. Catholic fans have been warned that if they “bless themselves aggressively” at games, it could be “construed as something that is offensive,” presumably to non-Catholic fans, and the police might pick them up. You don’t have to look to some Middle Eastern tinpot tyranny if you want to see the state punishing public expressions of Christian faith — it’s happening in Scotland.

QotD: Zoning hurts the poor

Filed under: Economics,Government,Quotations,USA — Tags: , , , — Nicholas @ 01:00

One kind of regulation that was actually intended to harm the poor, and especially poor minorities, was zoning. The ostensible reason for zoning was to address unhealthy conditions in cities by functionally separating land uses, which is called “exclusionary zoning.” But prior to passage of the Civil Rights Act of 1968, some municipalities had race-based exclusionary land-use regulations. Early in the 20th century, several California cities masked their racist intent by specifically excluding laundry businesses, predominantly Chinese owned, from certain areas of the cities.

Today, of course, explicitly race-based, exclusionary zoning policies are illegal. But some zoning regulations nevertheless price certain demographics out of particular neighborhoods by forbidding multifamily dwellings, which are more affordable to low- or middle-income individuals. When the government artificially separates land uses and forbids building certain kinds of residences in entire districts, it restricts the supply of housing and increases the cost of the land, and the price of housing reflects those restrictions.

Moreover, when cities implement zoning rules that make it difficult to secure permits to build new housing, land that is already developed becomes more valuable because you no longer need a permit. The demand for such developed land is therefore artificially higher, and that again raises its price.

Sandy Ikeda, “Shut Out: How Land-Use Regulations Hurt the Poor”, The Freeman, 2015-02-05.

April 9, 2015

Politicians love to build infrastructure – they’re not as eager to maintain it

Filed under: Bureaucracy,Government,Media,Politics — Tags: , — Nicholas @ 05:00

Politicians love big infrastructure projects, from gala announcement — featuring plenty of face time in the media for the politicos themselves — to ground-breaking, also featuring lots of media along with hard hats and “first shovel” action through to grand opening, usually featuring lots of media along with ribbon cutting and some sort of first action involving the newly built bridge/dam/tunnel/streetcar/etc. For some inscrutable reason, politicians are much less eager to get involved in making sure that the glitzy new infrastructure of a few years back gets appropriate and timely maintenance (and the permanent bureaucracy in charge of the now-built infrastructure have rather different long-term goals):

I think the cause lies in a couple areas related to government incentives

  1. Legislatures never want to appropriate for capital maintenance. If the legislature somehow has, say, $100 million money it can spend on infrastructure, their incentives are to use it to build new things rather than to keep the old things in repair (e.g. to extend a rail line rather than to keep the old one fixed).
  2. If you want to understand a government agency’s behavior, the best rule of thumb is to assume that they are working to maximize the headcount and the payroll budget of their agency. I know that sounds cynical, but if you do not understand an agency’s position or priorities, try applying this test: What would the agency be doing or supporting if it were trying to maximize its payroll. You will find this explains a lot

To understand #2, you have to understand that the pay and benefits — and perhaps most important of all — the prestige of an agency’s leaders is set by its headcount and budgets. Also, there are many lobbying forces that are always trying to pressure an agency, but no group is more ever-present, more ubiquitous, and more vocal than its own staff. Also, since cutting staff is politically always the hardest thing for legislators to do, shifting more of the agency’s budget to staff costs helps protect the agency against legislative budget cuts. Non-headcount expenses are raw meat for budget cutters, and the first thing to get swept. By the way, this is not unique to public agencies — the same occurs in corporations. But corporations, unlike government agencies, face the discipline of markets that places a check on this tendency.

This means that agencies are loath to pay for the outside resources (contractors and materials) that are needed for capital maintenance projects out of their regular budgets. When given the choice of repairing a bathroom at the cost of keeping a staff person, agencies will always want to choose in favor of keeping the staff. They assume capital maintenance can always be done later via special appropriation, but of course we saw earlier that legislators are equally unlikely to prioritize capital maintenance vs. other alternatives.

The other related problem faced is that this focus on internal staff tends to drive up pay and benefits of the agency workers. This drives up the cost of fundamental day to day tasks (like cleaning bathrooms and mowing) and again helps to starve out longer-horizon maintenance functions.

April 8, 2015

This is probably why so many people think businesses should pay more tax

Filed under: Business,Economics,Government — Tags: , , — Nicholas @ 04:00

At Forbes, Tim Worstall reports on a staggering misconception among Americans about what corporate profits amount to:

A wonderful little find by Mark Perry. Something that helps to explain quite why so many completely ridiculous economic ideas and public policies manage to gain traction. The problem is that the average person just doesn’t understand the economy at all. No, I don’t mean economics, or the abstruse arguments about whether we should use monetary or fiscal policy. But just the basic raw numbers of what’s actually going on out there. As Perry goes on to point out this, well, let’s not beat about the bush here, let’s call it what it is, this ignorance of the universe they’re inhabiting by the average person out there is what keeps the economic demagogues in business.

Here’s what Perry found:

    When a random sample of American adults were asked the question “Just a rough guess, what percent profit on each dollar of sales do you think the average company makes after taxes?” for the Reason-Rupe poll in May 2013, the average response was 36%! That response was very close to historical results from the polling organization ORC’s polls for a slightly different, but related question: What percent profit on each dollar of sales do you think the average manufacturer makes after taxes? Responses to that question in 9 different polls between 1971 and 1987 ranged from 28% to 37% and averaged 31.6%.

That’s simply a ridiculous belief. Plain howling at the Moon crazy. The capital share of the economy isn’t that high and the capital share is made up of a great deal more than just profits (depreciation, rent, interest and so on as well as profits). There’s just no way that this is anywhere near true. As Perry goes on to point out:

    According to this Yahoo!Finance database for 212 different industries, the average profit margin for the most recent quarter was 7.5% and the median profit margin was 6.5%.

April 7, 2015

Senator Moynihan

Filed under: Government,Politics,USA — Tags: , , , , , — Nicholas @ 05:00

In City Journal, Fred Siegel looks at some recent books about the late Democratic Senator Daniel Patrick Monihan:

Daniel Patrick Moynihan, the four-term senator from New York who died in 2003, was that rare soul who was both a political and intellectual giant. Stephen Hess, who worked in the early Nixon White House as an aide to Moynihan, was the rare individual friendly with both Moynihan and Richard Nixon. The Professor and the President is a short but revealing memoir-cum-narrative of Moynihan’s service in the executive branch.

What brought Nixon and Moynihan together was a tectonic shift of the political plates. Nixon won the presidency in 1968 thanks to the backlash against the riots that had ripped through America’s cities. What made Moynihan a Democrat of extraordinary insight, willing to serve a Republican president, were his reactions to those riots — and to the excesses and wrong turns of American liberalism.

Today, 50 years after its issuance, some liberals “bravely” acknowledge that 1965’s so-called Moynihan Report, in which the future senator warned about the dire future consequences of the collapse of the black family, was a fire bell in the night. But at the time, and for decades to come, Moynihan was branded as a racist by civil rights leaders, black activists, and run-of-the-mill liberals. “One began to sense,” Moynihan wrote, that “a price was to be paid even for such a mild dissent from conventional liberalism.”

His capacity for irony notwithstanding, Moynihan came close to a nervous breakdown and “emerged changed” from the experience. He came to feel “that American liberalism had created its own version of a politique du pire (i.e., the worse the better) … in which evidence had been displaced by ideology.” His fear that the empirically oriented liberalism of his youth was under assault from racial and cultural nihilists intensified after the 1967 riots that burned through Cleveland, Newark, and Detroit, where 43 died. “The summer of 1967,” Moynihan wrote at the time, “came in the aftermath of one of the most extraordinary periods of liberal legislation, liberal electoral victories and the liberal dominance of the media … that we have ever experienced. The period was, moreover, accompanied by the greatest economic expansion in human history. And to top it all, some of the worst violence occurred in Detroit, a city with one of the most liberal and successful administrations in the nation; a city in which the social and economic position of the Negro was generally agreed to be far and away the best in the nation.”

Regulating the US railroads

Filed under: Business,Government,History,Railways,USA — Tags: , , — Nicholas @ 02:00

At Slate Star Codex, Scott Alexander recently reviewed David Friedman’s latest revision to his 1973 book, The Machinery of Freedom (sometimes called The Machinery of Friedman by libertarian wags). Scott wasn’t totally sold on Friedman’s proposals, but he posted several highlights from the book, including this discussion of how the US government was persuaded to regulate the railroad industry and then the airlines:

One of the most effective arguments against unregulated laissez faire has been that it invariably leads to monopoly. As George Orwell put it, “The trouble with competitions is that somebody wins them.” It is thus argued that government must intervene to prevent the formation of monopolies or, once formed, to control them. This is the usual justification for antitrust laws and such regulatory agencies as the Interstate Commerce Commission and the Civil Aeronautics Board.

The best historical refutation of this thesis is in two books by socialist historian Gabriel Kolko: The Triumph of Conservatism and Railroads and Regulation. He argues that at the end of the last century businessmen believed the future was with bigness, with conglomerates and cartels, but were wrong. The organizations they formed to control markets and reduce costs were almost invariably failures, returning lower profits than their smaller competitors, unable to fix prices, and controlling a steadily shrinking share of the market.

The regulatory commissions supposedly were formed to restrain monopolistic businessmen. Actually, Kolko argues, they were formed at the request of unsuccessful monopolists to prevent the competition which had frustrated their efforts.

[…]

It was in 1884 that railroad men in large numbers realized the advantages to them of federal control; it took 34 years to get the government to set their rates for them. The airline industry was born in a period more friendly to regulation. In 1938 the Civil Aeronautics Board (CAB), initially called the Civil Aeronautics Administration, was formed. It was given the power to regulate airline fares, to allocate routes among airlines, and to control the entry of new firms into the airline business. From that day until the deregulation of the industry in the late 1970s, no new trunk line — no major, scheduled, interstate passenger carrier — was started.

The CAB had one limitation: it could only regulate interstate airlines. There was one major intrastate route in the country — between San Francisco and Los Angeles. Pacific Southwest Airlines, which operated on that route, had no interstate operations and was therefore not subject to CAB rate fixing. Prior to deregulation, the fare between San Francisco and Los Angeles on PSA was about half that of any comparable interstate trip anywhere in the country. That gives us a good measure of the effect of the CAB on prices; it maintained them at about twice their competitive level.

In this complicated world it is rare that a political argument can be proved with evidence readily accessible to everyone, but until deregulation the airline industry provided one such case. If you did not believe that the effect of government regulation of transportation was to drive prices up, you could call any reliable travel agent and ask whether all interstate airline fares were the same, how PSA’s fare between San Francisco and Los Angeles compared with the fare charged by the major airlines, and how that fare compared with the fare on other major intercity routes of comparable length. If you do not believe that the ICC and the CAB are on the side of the industries they regulate, figure out why they set minimum as well as maximum fares.

April 1, 2015

Colby Cosh on Albertan “Norwailing”

Filed under: Cancon,Economics,Government,Media — Tags: , , — Nicholas @ 05:00

It’s been decades since my one trip to Alberta, so I’m far from current on what Albertans talk about when the national press aren’t paying attention, therefore it’s not much of a surprise to find that the term “Norwailing” is new to me:

The University of Alberta resource economist (and Maclean’s contributor) Andrew Leach calls it “Norwailing.” It has been a suffocatingly hot trend in print and electronic media for a while now. “Norwailing” describes a type of envious glance cast by columnists and editors at the sovereign wealth fund that Norway has built through the near-total sequestering of its oil revenues. The fund’s estimated value, as I write, is $6.94 trillion Norwegian kroner, the equivalent of $1.1 trillion Canadian. The fund is said to own about one per cent of the world’s financial equity.

Every year, the fund contributes a fraction of its value to the Norwegian public treasury. That fraction is set so that it equals the long-term expected return on investment from the fund. In short, Norway tries not to touch the principal. The idea is that the income from selling a non-renewable resource should be set aside as a permanent endowment.

There is a great deal of Norwailing inside and outside Alberta, a sheikhdom that briefly adopted a policy of setting aside oil royalties in the 1970s but abandoned it without accruing much value. The Norwailing inside Alberta is a form of self-abasement undertaken mostly, as far as one can tell, for social-signalling purposes. When oil prices drop and disorder strikes the Alberta economy, as it has this fiscal year, Albertans make a pious show of regret over “wasting” the good times.

[…]

What we Albertans are really regretting when we Norwail is that prior generations did not create a welfare program for us, at their expense. (The universities, hospitals and lines of business created with the oil money were supposed to be that, but they do not seem to count.) We stand in the same relationship to the selfish past that future generations do to us; we wish the saving had begun before we were born. That would have been convenient, assuming the money was not invested unwisely, squandered for political ends or just stolen.

Some of us are saintly enough to say that the saving should begin now. Future generations, you see, are better and more deserving than we. Future generations are always invoked in Norwailing. One cannot Norwail properly without summoning the image of a marching file of adorable hypothetical future-babies extending to infinity.

Let ’em shift for themselves. Judging from recent centuries, they are likely to be richer, healthier and more knowledgeable than us. They’ll be taller and have higher IQs. They’ll be raised better, cherished more closely, exposed to less violence, as you probably were in contrast to your own parents. They will be equipped with ever more sophisticated automata and yet will be more productive. And, yes, the planet may be warmer, but not, on any sane estimate, too warm to be incompatible with life or civilization.

March 31, 2015

QotD: The constitutional issue for Canadians

Filed under: Cancon,Government,Quotations — Tags: — Nicholas @ 01:00

In a normal country, like say Botswana or Mongolia, modernizing a constitution is just one of those things that politicians get around to doing once in a generation or so. It’s no big deal. But then again in these countries, not run by crazy people, updating your basic legal instrument isn’t seen as a threat to national unity. Imagine sitting down with an American or Frenchman and saying, with a straight face, that if they were to attempt to amend their constitutions it would provoke a national unity crisis. They’d think you were nuts or the country in question was some third rate third world banana republic.

Our constitution complex is one of those weird quirks of the national psyche. A nation of accountants who, on the weekends, like to play Russian roulette just to take the edge off. We are a boring country, boring as a matter of principle really, but we decided that when it comes to arcane legal questions we’re willing to blow the whole place up. Just because.

Richard Anderson, “Please God No. Anything But This”, The Gods of the Copybook Headings, 2015-03-23.

March 28, 2015

Singapore

Filed under: Asia,Government,Liberty — Tags: , , , , — Nicholas @ 02:00

Back in 2009, the government of Singapore used some of Bryan Caplan’s writing to defend their policies against accusations of authoritarianism. In return, Caplan pointed out some aspects of Singapore’s government he finds appalling:

1. Conscription. Though they laughed at me in Singapore, this is clearly state slavery — and there are plenty of less draconian means to defend the city-state from conquest. (Like… paying soldiers market wages). Only a democratic fundamentalist would imagine that the right to vote is more important than the right to say “No” to a job offer.

2. The death penalty for drug trafficking. Jailing people for capitalist acts between consenting adults is bad enough. Murdering people for selling intoxicants to willing buyers is sheer barbarism.

3. State ownership. While Singapore’s state-owned companies act surprisingly like capitalist firms, why settle for second-best? And if you needed further empirical evidence that state ownership undermines personal freedom even if it is “run like a business,” take a look at the Straits Times or Singaporean television.

4. Defamation law. Letting people sue people who badmouth them is bad enough. But Singapore takes defamation law to its logical, absurd conclusion: You can’t even badmouth government officials unless you can prove that your charges are true. The problem with these laws isn’t that they’re undemocratic — after all, Singapore still allows criticism of policies. The problem is that they violate human freedom. People should be allowed to say what they like about whoever they like, whether or not they can prove it, and whether or not they’re right.

5. Censorship. The Internet has made Singaporean censorship largely obsolete, but it’s still an outrage that you need the government’s approval to stage a public performance.

Bottom line: Singapore’s critics have plenty of genuine grievances to denounce. (And under Singaporean law, it’s legal to do so — just don’t get personal!) So why do the critics keep complaining about “lack of democracy” when the real story is that most Singaporeans persistently prefer the PAP to the opposition?

March 25, 2015

Reason.tv – Sports Stadiums Are Bad Public Investments. So Why Are Cities Still Paying for Them?

Published on 17 Mar 2015

“Anybody that drives around Southern California can tell you the infrastructure is falling apart,” says Joel Kotkin, a fellow of urban studies at Chapman University and author of the book The New Class Conflict. “And then we’re going to give money so a bunch of corporate executives can watch a football game eight times a year? It’s absurd.”

When the Inglewood City Council voted unanimously to approve a $1.8 billion stadium plan on February 24th, hundreds of football fans in attendance cheered for the prospect of a team finally returning to the Los Angeles area.

On it’s face, the deal for the city of Inglewood is unprecedented — Rams owner Stan Kroenke has agreed to finance construction of the stadium entirely with private funds. The deal makes the stadium one of the most expensive facilities ever built and is an oddity in the sports world, where most stadiums require millions in public dollars to be constructed.

And while the city still waits to hear if it will indeed inherit an NFL team, the progress on the new privately-funded Inglewood stadium has set off a bidding war between other cities that are offering up millions in public subsidies to keep (or attract) pro-sports franchises to their area.

St. Louis has proposed a billion dollar waterfront stadium financed with $400 million in tax money to keep the Rams in Missouri. And the San Diego Chargers and Oakland Raiders have unveiled a plan to turn a former landfill in Carson, California, into a $1.7 billion stadium to keep the Rams from encroaching on their turf. While full details of the plan have yet to be released, it’s been reported that the financing would be similar to the San Francisco 49er’s deal in Santa Clara, which saw the team receive $621 million in construction loans paid for with public money.

Even the fiscally conservative Scott Walker is not immune to the stadium spending craze. The Wisconsin governor wants to allocate $220 million in public bonds to keep the Milwaukee Bucks basketball franchise in the area. Walker has dubbed the financing scheme as the “Pay Their Way” plan, but professional sports teams rarely pay their fair share when it comes to stadiums and instead use public money to generate private revenue.

Pacific Standard magazine has reported that in the last 20 years, the U.S. has opened 101 new sports facilities and stadium finance experts say that almost all of them have received public funding totaling billions of dollars. Politicians generally rationalize this expense by stating that stadiums will generate economic revenue and job opportunities for the city, but Kotkin says those promises are rarely realized.

“I think this is sort of a fanciful approach towards economic development instead of building really good jobs. And except for the construction, the jobs created by stadia are generally low wage occasional work.”

“The important thing that we’ve forgotten is ‘What is the purpose of a government?'” asks Kotkin. “Cities instead of fixing their schools, fixing their roads or fixing their sewers or fixing their water are putting money into ephemera like stadia. And in the end, what’s more important?”

March 19, 2015

Thirty years on, what was the impact of the Miners’ strike in Britain?

Filed under: Britain,Economics,Government,History,Politics — Tags: , , — Nicholas @ 05:00

Frank Furedi points out six ways that Britain’s political scene has changed as a result of the year-long miners’ strike:

To defeat the National Union of Miners, UK prime minister Margaret Thatcher and her Conservative government had to use almost every available resource, including the mass mobilisation of the police. The Miners’ Strike became the defining event of British politics in the 1980s. And in retrospect, it’s clear that it was the last class-focused dispute of its kind.

Over the past three decades, the political climate, culture and institutions that served as the background for the Miners’ Strike have fundamentally altered. Here are six things that changed enormously in the wake of that industrial conflict.

1) The defeat of the Miners’ Strike signalled the end of the era of militant trade unions

[…]

2) The demise of the British labour movement was paralleled by the decline of the left

The Labour Party has survived the post-1985 tumult, yes, but only by reinventing itself as the party of the middle-class, public-sector professional. Thanks to the vagaries of the electoral system, Labour can still have MPs in many of its traditional working-class seats. The decline of labourism also coincided with the implosion of the Stalinist communist movement and the collapse of the Soviet Union.

[…]

3) Paradoxically, the demise of the left has not benefited the right

Thatcherism, which was very much the dominant force during the Miners’ Strike, has lost its authority. Today’s so-called Conservatives regard Thatcher as an embarrassment and self-consciously distance themselves from her legacy. So defensive is the right today that it continually protests that it is no longer a ‘toxic brand’.

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