[PEN-L:8761] Re: Re: Re: RE: Re: the NFL and urban development

["Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>]

Is this an example of the New Left merging with the Old Right?
The Minn Fed study was classic conservative free market oriented, argued from the
perspective that a.) public subsidies distort business decisions and resource
allocation in economic terms, b) government are not good in identifying business
opportunities and c) subsidies has high opportunity cost on competing public
welfare needs.

These arguments from the Minn Fed are not honest. Here are the counter arguments:
a) Business decisions are never made in a vacuum of government policy anyway, so
distortion is sytemic already. The very existence of the Fed and the need for a
monetary policy illustrate that point.
b) As inefficient as government is, it is the only institution to openly assume
macroeconomics policy responsibility on behalf of the whole public. So the solution
is less governmment but a more responsive government controlled by the people.
c) The assumption that refusing certain subsidies will free funds for other more
deserving subsidies is not true, because the American system of public finance has
segregated pockets for each type of subsidies.

Much opposition to subsidies for the NFL on this thread has been concentrated on
the two points:
a) such subsidies produce little economic benefit and
b) whatever benefit they produce goes to the wrong parties.
c) the money should be spent on other more deserving needs.

Item a) is highly controversial.
Item b) is true, but the solution is to socialized the benefit more equitably as
the original BRC article demanded.
ITem c) is a non issue, because the subsidy funds are not just sitting in a surplus
account for competitive claim. Such subsidies are generally supported by
specifically voted taxes that otherwise would not be available.  Most stadium
subsidies come from new hotel ocupancy and restaurant sales taxes.  In other word,
they are new additional economic activities, not horizontal transfers.

The Left should learn that opposition based on a futile spoiler strategy is not
productive on micro issues, even if such strategy may be useful on macro levels.
It seems to me that a strategy to elevate the disfranchised class into true player
status on urban sport franchises would be more useful than a spoiler opposition
which in any event ususaly fails.
But I can see that I am in the minority on this issue and not because I am on the
political right.

As for the Northwest Airline situation, the importance of the airline to the state
and the regional economy  is undeniable.  If Northwest did not have public support,
and was forced into bankruptcy and become absorbed by another airline, the region
will no doubt be not as well served in this deregulated climate.  If fact, Carter's
deregulation moves were an extremely right-wing policy in the name of populist
intentions.  Deregulation favors the powerful over the weak.  It is not a policy
that leftist should support.
The Right recognizes that the people will eventually gain control of government,
that is why the Right wants government out of the economy.  There is nothing wrong
with subsidies to generate economic growth. The target for the Left is a better
deal for the poor from such growth, not growth itself.
The left is very confused these days and often myopic.

Henry C.K. Liu

Doug Henwood wrote:

> Michael Perelman wrote:
>
> >LeRoy has gathered wonderful statistics about the subsidy per job
> >that has been
> >given by state and local gov'ts.  Even the Fed. Reserve Bank of Minn. has come
> >out against such subidies in general
>
> There's a section of their website devoted to the topic -
> <http://woodrow.mpls.frb.fed.us/sylloge/econwar/index.html>. I think
> the Bank got interested when a libertarian staffer got irritated by
> the huge and pointless state subsidy of Northwest Airlines in the
> early 1990s.
>
> Doug