Categories
porkbarrel politics subsidy too much government

Up-to-Date in Kansas City?

Eight-hundred million bucks. 

That’s the investment that “Meta” — the umbrella outfit that owns Facebook, Instagram and WhatsApp — has agreed to invest in a patch of land in Kansas City’s Northland. The plan is to build a data center at an 882-acred development site. 

“Political leaders who gathered at Union Station heralded the news as a major development for Kansas City and the state.” This private investment “would far surpass the scale of recent projects in the region . . . said Missouri Gov. Mike Parson,” The Kansas City Star relates.

But there’s more.

“Meta spokeswoman Melanie Roe said the company could invest as much as $40 billion at the site in land acquisition, construction, and development of a larger data center.” This is to be a “long term partnership.”

Make that a Big Business/Big Government partnership. The biggest ever, perhaps.

The Kansas City Council had unanimously approved a development plan for the site last April, with data centers there enabled to access to more than $8 billion in local tax incentives. “Incentive watchdog group Good Jobs First says such an incentive award would be the largest ever in American history,” The Kansas City Star explains.

Take it as a word of caution. This is not laissez faire capitalism. This is not “the free market.” It is favoritism. It unites big business and big government.

And even as an investment in future taxes — which is the ostensible justification for the subsidies — the data complex is slated to employ about a hundred workers.

Politicians don’t make the best investors. But they do make easy marks for big corporations.

This is Common Sense. I’m Paul Jacob.


PDF for printing

Recent popular posts

Categories
Common Sense free trade & free markets general freedom ideological culture meme porkbarrel politics too much government

Wisdom for Labor Day

“…a wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government…”

–Thomas Jefferson, 1801

 


Full quote is here

 

Categories
Accountability general freedom ideological culture porkbarrel politics responsibility too much government

Ask the Next Question

Republicans are very reliable. When given our system’s “Mandate of Heaven” — majorities in both houses of Congress and the Presidency — they can be relied upon to do one thing: add debt by piling up huge deficits.

It happened under George W. Bush, and it is happening under Donald J. Trump: “The Trump administration expects annual budget deficits to rise nearly $100 billion more than previously forecast in each of the next three years,” the Wall Street Journal tells us, “pushing the federal deficit above $1 trillion starting next year.”

Republicans should ask themselves why. And while they ask themselves that, everyone else should ask the next question: why do politicians who say they want one thing so often deliver its opposite?

This is not a mere “right-wing” phenomenon. Leftists say they want “democratic socialism,” but, as Irving Kristol noted, at some point not far down their road to Utopia, “democratic socialists” must choose between democracy and socialism.* By promising everybody everything, too quickly everybody gets shanghaied into service to produce that “everything,” finding themselves conscripts in socialism’s army.

The equation of socialism with regimentation and general un-freedom has been clear for over a century, explained carefully by sociologists, economists and even politicians.* And yet, increasingly, today’s Democrats are embracing a philosophy with proven anti-democratic features.

Could some deep principle be at play?

Probably. It is built into the very nature of state governance, of politics itself. It may be why republics metamorphose into empires, conservatives go radical and liberals become serviles.

Which is why effective democracy requires limited government. To minimize that boomerang effect.

We might start by limiting spending.

This is Common Sense. I’m Paul Jacob.

 


* Herbert Spencer’s writings on socialism include The Man versus the State (1884) and Industrial Institutions (1896, Principles of Sociology, Vol. III, Part VIII); German politician Eugene Richter’s satire Pictures of the Socialist Future (1896) is well worth reading; and economist Yves Guyot preceded Ludwig von Mises’ classic Die Gemeinwirtschaft (1922, translated as Socialism: An Economic and Sociological Analysis, 1950) with several books, including The Tyranny of Socialism (1893) and Socialistic Fallacies (1910).

PDF for printing

 

Categories
Accountability local leaders moral hazard porkbarrel politics responsibility tax policy too much government

Panic in the Prairie State

When your state has the lowest credit rating in the union, the highest population decline rate, and spends nearly a quarter of its annual budget on an out-of-control government-employee pension system, what do you do?

Raise taxes, of course!

That’s the advice of experts in Illinois, anyway.

You can see why they panic: The unfunded portion of Illinois’s public employee pension system amounts to $11,000 per person in the state. Something extraordinary must be done.

Yet, as Pat Hughes at the Illinois Opportunity Project insists, taxpayers need relief — not a statewide 1 percent property tax increase.

Besides, it is not as if tax hikes could solve the problem. “It was just last year that politicians raised the state income tax by 32 percent in a desperate attempt to balance the budget,” Hughes explains. “Despite over $5 billion in new taxes, the state was back in deficit spending in less than a year.”

Hughes mentions a number of tax limitation measures in the works. More power to them.

But what’s needed even more? Spending limitation measures.

No government can be trusted to offer anything but defined-contribution pensions — and no government, at any level, should ever manage a pension system. Politicians can’t help themselves. They just cannot resist the temptation to buy off the government-worker constituency by promising more in the future than financially feasible (or just plain old politically possible) to pay for now.

Other people’s money is theirs to spend. And a future financial bind? Some other politician’s problem.

This is Common Sense. I’m Paul Jacob.

 


N.B. Congratulations to the Illinois Policy Institute for its Liberty Center, which won its case against forced unionization, Janus v. American Federation, on June 27. Commentary about this Supreme Court case appeared on this site in early May, “Post Blindfold.”

 

PDF for printing

 

Categories
Accountability crime and punishment folly general freedom government transparency local leaders moral hazard nannyism porkbarrel politics privacy property rights responsibility tax policy too much government

Progress, DC-Style

Is the black, Democratic mayor of Washington, D.C., actually a “racist”? What about the city council, which is 46 percent African-American, 85 percent Democrat, and 100 percent liberal/progressive?

That’s what a lawsuit argues — the DC ‘powers that be’ are racist in their development and housing policies. Filed on behalf of several African-American DC residents, it alleges that Mayor Muriel Bowser and the council have been striving mightily, as the Washington Post reported, “to ‘lighten’ African American neighborhoods and break up long-established communities.”

“Every city planning agency,” states the complaint, “... conspired to make D.C. very welcoming for preferred residents and sought to displace residents inimical to the creative economy.”

Nothing that a billion dollars couldn’t make right, of course — for which the plaintiffs ask.

But is gentrification a crime?

As American University professor Derek Hyra told the Post, “Developers want to maximize their return. This is not a conspiracy. This is capitalism.”

But no, this certainly isn’t laissez faire “capitalism.” It could be described as dirigisme — or “state capitalism” or “crony capitalism” or just a bad old-fashioned mercantilism, revised to work at the city level, where governments partner up with particular groups to extract as much wealth for the insiders as they can. Professor Hyra acknowledges that Bowser and the council were “providing subsidies” to bring in richer citizens and push out poorer ones.

Most importantly, we discover yet again that the power politicians claim they need to help the poor, is used to help the rich.

Way to go, “progressives.”

This is Common Sense. I’m Paul Jacob.

 


Note: The mayor is a Democrat and the 13-member council is composed of eleven (11) Democrats and two (2) independents. There are no Republicans.

PDF for printing

 

Categories
Accountability crime and punishment folly free trade & free markets insider corruption media and media people moral hazard national politics & policies porkbarrel politics property rights responsibility too much government

Déjà vu All Over Again

One of the stand-bys of the post-2008 mortgage finance bust, at least from left-of-center policy mavens, has been to ask: why has no banker gone to prison? They played a game of fraud and got rich. What a protected class — Cronyism! Plutocracy! Capitalism!

The why is much easier to understand if you read up on Round Two of the aughts’ boom-bust scenario, as in Prashant Gopal’s coverage in Bloomberg, “Getting Rich on Government-Backed Mortgages.” Gopal spotlights a non-bank mortgage broker, Angelo Christian, who is making a killing selling houses to people with horrible credit, just as happened before 2008.

“Christian can do this kind of deal because he is, in effect, making the loan on behalf of the federal government through its most important affordable housing program,” Gopal writes. “It’s a sweet deal: He gets his nearly risk-free commission. [His client] puts no money down. If things go south, the government ultimately bears the risk.”

So, should he go to jail?

Not really. He’s merely doing Congress’s bidding.

Gopal notes that it is not banks that dominate this round. They are under too much scrutiny. But non-banking loan intermediaries like Mr. Christian are swarming like flies on a cow’s behind.

There’s a problem in Gopal’s account though. “No one is saying the system is close to another collapse.”

Well, plenty of people are saying that.

The Cassandras are just not being heeded.

Of course, they don’t know when the bust will happen.

They just know it will.

This is Common Sense. I’m Paul Jacob.

 


PDF for printing

Photo by Images Money on Flickr.