Topic: Government and Politics

Obama Should Learn from King Canute

Legendary tale of King Canute:

“King Canute (995-1035) ruler of England, Denmark and Norway, was surrounded by sycophants. One day, he ordered his courtiers to take him to the sea shore, where he challenged them, saying, ‘Do you believe that I can halt the sea?’ None disputed the fact, so Canute commanded the sea to cease its upwards march. But soon Canute’s feet were covered in water, showing that even he was unable to hold back the tide.”

Legendary tale of candidate Obama:

“I am absolutely certain that generations from now, we will be able to look back and tell our children that this was the moment when… the rise of the oceans began to slow and our planet began to heal.”

Chutzpah

Today’s Washington Times has a long interview with former House Majority Whip Tom DeLay in which he talks about the problems facing the Republican Party and his efforts to help rebuild it. As I have written, there is no doubt that the GOP is facing many problems today, many of them due to the big-government conservatism brought about in part by…Tom DeLay.

This is after all, the same Tom DeLay who:

  • Presided over an unprecedented spending binge by Congressional Republicans. In fact, DeLay was a cheerleader for using earmarks to buy votes for Republican candidates in competitive districts;
  • Twisted arms and threatened dissenters in order to pass the Medicare prescription drug benefit, the first new entitlement program in 40 years;
  • Helped sidetrack Social Security reform;
  • Helped start the “K Street Project,” a cynical exercise in vote buying that led to much of the corruption that plagued Republicans in recent years;
  • Once said that “there is simply no fat left to cut in the federal budget.”

If Republicans and/or conservatives really want to recapture their small government credentials, the might start by ignoring Tom DeLay.

No Need for a General Election; Obama Already Has Mandate

An article [$] today in CongressDaily AM outlines the plans of trade-skeptic congressional Democrats wishing to formalize that “time-out” on trade we’ve heard so much about during the Democratic primary campaign.

A bill introduced yesterday (H.R 6180 and its companion S.3083) would slow down the process of approving new trade agreements by requiring the GAO to review existing agreements and judge them not, as logic would seem to dictate, according to the standard of increasing trade, but against the domestic policy standards contained in the bill:

The bill would require GAO to review existing trade deals by June 10, 2010, and an analysis of how the deals stack up against labor, environmental and safety standards enumerated in the bill.

If gaps are found by GAO, the president would be required to submit renegotiation plans for current trade pacts before negotiating new ones and congressional consideration of pending trade pacts. Committees of jurisdiction would then review the renegotiation plans.

According to congressional Democrats, Senator Obama’s win in the Democratic primary is justification enough for introducing a bill that mirrors his plans. Those plans include, yes, loading up trade agreements with possibly deal-killing standards and, at least judging by Senator Obama’s voting record so far, very little new trade liberalization (details here).

If that sounds like a bad idea, it is music to the ears of some members of Congress. Here’s a quote from Rep. Michael Michaud (D, ME):

“I feel very comfortable with Sen. Obama’s position on trade; he understands the devastation that trade has caused to the American people and how flawed these trade deals are.”

We at Cato’s Center for Trade Policy Studies would refute that. Strenuously.

Gravy Train for European Politicians

In the dark days of the Soviet Union, the political elite (known as the nomenklatura) enjoyed immense privileges, including uncluttered roadway access on special ”Chaika lanes.” There’s now a new version of Chaika lanes, only this time the nomenklatura are members of the European Parliament. According to the UK-based Times, they are getting a special train to ferry them between Brussels and Strasbourg. Needless to say, the taxpayers who finance this elitist boondoggle will not be allowed to ride the train:

After years of being accused of riding the Brussels gravy train, members of the European parliament are about to step aboard a real one. A Eurocrats-only express service will be launched next month to ferry MEPs and officials in luxury at 186mph between one European parliament in Brussels and the other in Strasbourg. The buffet car will, of course, be fully stocked. The Strasbourg Express will leave Brussels for the first time at 9.57am on Monday, July 7. Each return journey will cost the taxpayer about £158,000, but the fare-paying public will be banned. MEPs will pay £170 for a return ticket, but will then be reimbursed. “The public will not be able to buy tickets or use this train,” said Thalys, the high-speed train operator that will run the service. …Every month, when the European parliament moves to Strasbourg, the “train of shame” will leave Brussels on a Monday, returning the following Thursday, with up to 377 MEPs and officials travelling each way in three spacious carriages. It is widely seen in Brussels as a gimmick to boost the French, whose insistence on maintaining the second parliament in Strasbourg makes such journeys necessary in the first place.

Whose Side Are You On?

In an article about the wave of conservative reform under Louisiana governor Bobby Jindal, the New York Times writes:

Meanwhile the House is considering an income tax cut that would cost the state $300 million. 

Another way to say that would be:

Meanwhile the House is considering an income tax cut that would save the taxpayers $300 million.

It all depends on whether you identify with the taxpayers or the tax consumers.

Surprise! Stadium Predictions Flawed

The Washington Examiner reports:

Attendance at Nationals Park has fallen more than a quarter short of a consultant’s projections for the stadium’s inaugural year, cutting into the revenue needed to pay the ballpark bonds and spurring a D.C. Council member to demand the city’s money back.

The District’s ability to pay down the debt on the publicly financed ballpark depends in part on the number of people who show up to the games, David Catania, independent at-large, wrote in a letter Tuesday to Chief Financial Officer Natwar Gandhi. 

A study was commissioned in 2005 by Gandhi’s office. Written by Los Angeles-based Economics Research Associates, the report predicted attendance at the 41,000-seat ballpark would average 39,130 in year one, dropping to 32,737 in year four.

But paid attendance through 28 games has averaged only 29,141, Catania said, 26 percent lower than the consultant’s estimates. The Nationals are drawing the 15th-best crowd in baseball, according to ESPN, with a team that is in last place in the National League East and a 22-31 record as of Wednesday.

“It appears now,” Catania wrote, “that ERA may have seriously overestimated ticket sales, which represents a major portion of stadium-related revenues.”

Gandhi says it doesn’t matter, the bonds can be paid off with attendance as low as 10,000 per game. Which raises the question: if it’s that easy to pay for the stadium, why didn’t the multi-millionaire team owners agree to pay for it themselves?

Of course, these economic projections for subsidized stadiums are always vastly overstated. As Dennis Coates and Brad Humphreys wrote in a 2004 Cato study criticizing the proposed stadium subsidy, “The wonder is that anyone finds such figures credible.”

Several Cato studies over the years have looked at the absurd economic claims of stadium advocates. In “Sports Pork: The Costly Relationship between Major League Sports and Government,” Raymond Keating finds:

The lone beneficiaries of sports subsidies are team owners and players. The existence of what economists call the “substitution effect” (in terms of the stadium game, leisure dollars will be spent one way or another whether a stadium exists or not), the dubiousness of the Keynesian multiplier, the offsetting impact of a negative multiplier, the inefficiency of government, and the negatives of higher taxes all argue against government sports subsidies. Indeed, the results of studies on changes in the economy resulting from the presence of stadiums, arenas, and sports teams show no positive economic impact from professional sports — or a possible negative effect.

In Regulation magazine, (.pdf) Coates and Humphreys found that the economic literature on stadium subsidies comes to consistent conclusions:

The evidence suggests that attracting a professional sports franchise to a city and building that franchise a new stadium or arena will have no effect on the growth rate of real per capita income and may reduce the level of real per capita income in that city.

And in “Caught Stealing: Debunking the Economic Case for D.C. Baseball,” Coates and Humphreys looked specifically at the economics of the new baseball stadium in Washington, D.C., and found similar results:

Our conclusion, and that of nearly all academic economists studying this issue, is that professional sports generally have little, if any, positive effect on a city’s economy. The net economic impact of professional sports in Washington, D.C., and the 36 other cities that hosted professional sports teams over nearly 30 years, was a reduction in real per capita income over the entire metropolitan area.

And yet millionaire owners and mayors with Edifice Complexes keep commissioning these studies, and council members and editorial boards keep falling for them.