Friday, September 26, 2008

New Arenas and $700 Billion Economic Bailout


I am officially against the bailout. It hasn't set right with me for a while. I would rather let the economy take its natural course. As my opposition crystallized for me, I realized that the principle is the same as why I am against tax payer funded building of arenas, or anything non-infrastructure for that matter. You see, when a team wants a new arena, what do they do. They say they will move if they don't get it. The city then panics and says that a total economic collapse will happen if it isn't built. They say that businesses will sprout up, jobs will be created, tourism will flourish, and the blind will see if it is built. The plan gets presented before the public, and in a panic of the economic doom and the promise of an economic boom, the public takes the bait and pass it.

Congress must have learned a lesson from their city council friends (or maybe it is Obama's experience as a city organizer that has made a difference) because they are trying the same tactic with this economic bailout package. There will be economic doom if it doesn't get passed and think of how much the economy will bounce back. What neither the arena plan or bailout plan fail to mention is that if either were so good, why didn't the private sector already do it. It didn't happen because the free market couldn't support the arena and because these businesses are meant to fail.

The other side of this coin is how wrong the principle is when it is examined at the micro level. If government financed construction of buildings works, why isn't every business built by the government. If I want to open a bakery, while the city may offer a tax break, they will not build my building. I say I will open it in another city, or think of the jobs, or think of all the other businesses that will sprout up. It isn't done because it really isn't constitutionally provided for, nor is it how the market works. Similarly, if my bakery is bankrupt, the city will not take over its operations. I say think of the jobs that will be lost and all the businesses that depend on my bread. The city is likely to send you the property tax bill and say good luck. If it doesn't and shouldn't work on the micro level, it shouldn't at the macro level. You just have to ask yourself what is the motivation.

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