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Corporate Welfare

All articles with the "Corporate Welfare" tag.

Published: Tue, 16 Jan 2018 00:00:00 -0500

Last Build Date: Tue, 16 Jan 2018 04:41:44 -0500


Brickbat: Have You Ever Been in a Turkish Prison?

Tue, 02 Jan 2018 04:00:00 -0500

(image) Turkish prosecutors have indicted NBA player Enes Kanter of insulting President Recep Tayyip Erodgan. They plan to try Kanter in absentia. Kanter could be sentenced to up to four years in prison if found guilty.

The Senate's Rejection of Export-Import Bank Critic Shows How Entrenched Crony Capitalism Is in Washington

Wed, 20 Dec 2017 11:15:00 -0500

The Senate Banking Committee voted 10–13 yesterday to reject former New Jersey Rep. Scott Garrett to head the Export-Import Bank, an institution that has become synonymous with corporate welfare. Two Republicans on the committee—Sens. Mike Rounds (R–S.D.) and Tim Scott (R–S.C.)—broke ranks to vote against Garrett, who had called for the bank's elimination while he was in Congress and who had promised to reform the institution if tapped to lead it. Scott cited Garrett's "long history opposing the Ex-Im Bank" in explaining his vote. Scott's state contains a plant for the aviation giant Boeing, whose customers get some 40 percent of the Export-Import Bank's financing. The institution is sometimes called "Boeing's bank." In opposing Garrett's nomination, Scott and Rounds made common cause with their Democratic colleagues. Sen. Maria Cantwell (D–Wash.)—whose home state also contains major Boeing operations—said in a statement that she "applauds" the banking committee's rejection of Garret. "If we want to create jobs across America, we need a fully functioning Export-Import Bank approving these deals from manufacturers that are ready to close sales and hire workers." Sen. Sherrod Brown (D–Ohio), the ranking Democrat on the banking committee, called Garret's nomination "inappropriate," adding that "the National Association of Manufacturers, Chamber of Commerce, Aerospace Industries Association and the Ohio Manufacturing Association all oppose his nomination." The Bank works by giving low-interest loans—backed by the full faith and credit of the U.S. taxpayer—to foreign customers of American exporters. It also issues guarantees to private banks making loans to foreign purchasers of American products, promising to cover these banks' losses should these foreign debtors fail to make good on their obligations. Because of these direct taxpayer subsidies for corporate sales, critics have long derided the bank as one of the worst examples of crony capitalism. The Competitive Enterprise Institute's Daniel Press calls it "one of the capital's greatest boondoggles." Veronique de Rugy of the Mercatus Center—a Reason columnist—has frequently suggested that the bank should be scrapped. On this point, Garrett was once in agreement. While in Congress, he voted repeatedly to eliminate the Export-Import Bank. He has described it bluntly as an institution that "embodies the corruption of the free market system." If Garret had been approved—and if he kept that reformist spirit—he could have used his perch to expose bad deals and improper conduct. Since 2015, operations of the Export-Import bank have been largely stalled, as empty board seats have left it without the quorum it needs to approve larger deals. The silver lining to Garrett's rejection is that the Bank will continue to be hobbled in conducting many of its ordinary operations. Regardless, the Senate's refusal to confirm him demonstrates how entrenched, and indeed how bipartisan, corporatist interests in federal government are. For all his faults, President Donald Trump has appointed a number of reformist, free-market-minded officials to staff his administration, including Neomi Rao at the Office of Information and Regulatory Affairs and Scott Gottlieb at the Food and Drug Administration. But Garret proved a bridge too far. Big business, progressive Democrats, and conservative Republicans closed ranks to prevent him from getting his hands on Boeing's bank.[...]

The Nanny State vs. The Nanny Goat

Tue, 12 Dec 2017 16:45:00 -0500

The nationwide craze for goat yoga, recently banned in the nation's capital, has improbably reared its horned head in the state capital of Connecticut, smack dab in the batting cages of the beleaguered, taxpayer-funded baseball stadium of the Hartford Yard Goats. For a $40 fee, a non-Berra yogi will guide you through asanas and flows near home plate, while as many as fifteen goats graze the unfriendly confines of Dunkin' Donuts Park. src="" allowfullscreen="allowfullscreen" width="560" height="340" frameborder="0"> While economists differ as to whether society has achieved peak goat, they're in agreement that taxpayer-subsidized stadiums are poor investments. Since Dunkin' Donuts Park was first proposed in 2014, Hartford city hall has fleeced its citizens for ever-increasing sums—from the original $46 million price tag to the current $71 million and a projected $120 million after pending litigation. A grand vision of new neighborhood development surrounding the park has been marred by missed construction deadlines that delayed the park's opening by a year. The city responded by firing the project's developers, leading to a web of lawsuits, counterclaims and an FBI investigation into the woolly state of the stadium's finances. All this in Hartford, a city that operates under the constant threat of bankruptcy. But all hope is not lost. Hartford Mayor Luke Bronin (D), who was never a fan of building the stadium, negotiated successfully to get the park construction back on track. Ever a man of the sheeple, Bronin is committed to turning things around financially. "No matter what you thought about the stadium deal," the mayor bleated during a state of the city address earlier this year, "now is the time to rally together, to embrace this stadium and team that are now ours, and to make it a success." For all the tortured history of Dunkin' Donuts Park, there's good reason to share in Mayor Bronin's optimism. By my calculations, at the current ticket price, it will take only 1.4 million goat yoga enthusaists to pay off the stadium in full. And with the first goat yoga class already sold out, the stadium is only 1,399,980 ticket sales away from achieving financial stability. src="" allowfullscreen="allowfullscreen" width="560" height="340" frameborder="0"> By shear coincidence, the unlikely confluence of two goat-related stories also brings together two unrelated Reason videos. I had the pleasure of producing two videos about the separation of goat and state: Another Troubled City, Another Troubled Stadium (about the building of Dunkin' Donuts Park) and Goat Yoga Gets Baaaaa-nned (about the banning of goat yoga). Let me state for the record, I believe this makes me the premier journalist in the world covering the libertarian goat beat.[...]

The Winners in the AT&T-Time Warner Merger Will Be Consumers

Mon, 04 Dec 2017 12:30:00 -0500

On October 22, AT&T and Time Warner announced they had reached an agreement to merge the two companies. The deal, valued at about $85 billion, would create a vertically integrated company that produces content (movies, TV shows) and provides access to content (through cable, fiber-optic, DSL and wireless Internet connections). But on November 20, the Department of Justice brought suit against AT&T and Time Warner, seeking to block the merger on the grounds that it would inhibit competition, harming consumers. AT&T and Time Warner formally responded to the suit last Monday, refuting these claims and arguing the merged company would be investing in innovations that would expand consumer choice. The DOJ's case is based on a fundamental misunderstanding of the dynamics of the market for both access and content. If it were to succeed it would likely impede competition, resulting in less innovation and choice for consumers. Consumers are shifting away from the kinds of access and content bundles that so concern the DOJ. And they are doing so because such bundles poorly match their preferences. AT&T recognizes the trend of falling subscription rates for its traditional TV bundles. That's why it wants to expand into content. It could have done that by licensing legacy content from others, arranging syndication deals for new content, and building its own studio, as Netflix and Amazon have done. It chose instead to merge with Time Warner. At the heart of the DOJ's complaint is an assumption that the merged entity would use its market power to raise the price of content currently owned by Time Warner, or threaten to withhold programming, including hit shows such as Game of Thrones and NCAA March Madness. Time Warner could already make such threats, but the DOJ claims it would have greater incentive because it could benefit from some subscribers switching over to AT&T's networks (DirecTV, U-verse and DirecTV Now). A merged AT&T-Time Warner could, in principle, refuse to supply content to some distributors in order to drive consumers to purchase its own access and content bundles, but it would not be in the merged company's financial interest to do so. As Geoff Manne notes in the WSJ: "More than half of Time Warner's revenue, $6 billion last year, comes from fees that distributors pay to carry its content. Because fewer than 15% of home-video subscriptions are on networks owned by AT&T … the bulk of that revenue comes from other providers. In other words: Calculated using expected revenue, AT&T is paying $36 billion for the portion of Time Warner's business that comes from AT&T's competitors. The theory seems to be that the merged company would simply forgo this revenue in a speculative hope that withholding Time Warner content from distributors would induce masses of viewers to switch to AT&T—and maybe, one day, put competitors out of business. That this strategy would actually work is unfathomable. "Game of Thrones" is good, but it isn't that good." When Comcast merged with NBCUniversal in 2013, the DOJ employed a "consent decree" (a legally binding agreement between the DOJ and the merged entity) to mitigate concerns regarding the potential for the merged entity to use its market power to charge more. AT&T and Time Warner have now made a similar commitment, as they told the DOJ: "contingent only upon the closing of this merger, Turner has formally and irrevocably offered its distributors licensing terms that, for seven years after closing, (I) entitle the distributor to invoke "baseball-style" arbitration if it is unable to reach a satisfactory distribution agreement for Turner Networks and (ii) forbid Turner from "going dark" on any Turner distributor during the arbitration process." This "eliminates even the theoretical risk that lies at the heart of the Government's case – the risk that, post-close, Turner would be more inclined to threaten to "go dark" on a distributor," according to the companies. The DOJ complaint focuses on hypothetical [...]

Today at SCOTUS: Does the Federal Ban on Sports Gambling Violate the 10th Amendment?

Mon, 04 Dec 2017 07:45:00 -0500

(image) The Professional and Amateur Sports Protection Act of 1992 made it illegal for "a governmental entity to sponsor, operate, advertise, promote, license, or authorize by law or compact" sports betting. In oral arguments today in the case of Christie v. National Collegiate Athletic Association, the U.S. Supreme Court will consider whether that federal law runs afoul of the 10th Amendment and its underlying principles of constitutional federalism.

On one side of Christie v. N.C.A.A. stands the state of New Jersey, whose voters amended the state constitution in 2012 in order to legalize sports gambling. Garden State lawmakers responded by partially lifting the existing state ban on the practice at casinos and racetracks.

On the other side of the case stands the National Collegiate Athletic Association, the National Basketball Association, the National Football League, the National Hockey League, and the Office of the Commissioner of Baseball, all of which seek to prevent the state's legalization efforts.

The sports leagues argue that New Jersey is illegally flaunting the Professional and Amateur Sports Protection Act and should be stopped. New Jersey argues that that federal law is overreaching and unconstitutional.

The outcome of the case is likely to turn on the Supreme Court's application of two precedents from the 1990s. In New York v. United States (1992), the Court held that "while Congress has substantial powers to govern the Nation directly, including in areas of intimate concern to the States, the Constitution has never been understood to confer upon Congress the ability to require the States to govern according to Congress' instructions."

Five years later, in Printz v. United States (1997), the Court continued in this vein. "The Federal Government may neither issue directives requiring the States to address particular problems, nor command the States' officers, or those of their political subdivisions, to administer or enforce a federal regulatory program." In short, "federal commandeering of state governments" goes against the Constitution.

The legal question at the heart of Christie v. N.C.A.A. is whether the Professional and Amateur Sports Protection Act, or PASPA, violates the anti-commandeering doctrine set forth in New York and Printz.

New Jersey argues that PASPA does violate the doctrine and should therefore be declared unconstitutional. "Under our Constitution," the state argues, "if Congress wishes for sports wagering to be illegal, it must make the activity unlawful itself. It cannot compel States to do so."

The sports leagues take the opposite view. "Congress' power to regulate gambling on a nationwide basis," the leagues maintain, "is as settled as its power to prohibit states from undertaking or authorizing conduct that conflicts with federal policy, and nothing in [New Jersey's] arguments calls either commonly exercised power into question."

Which side will prevail in this dispute, federalism or federal power? We'll get our first indications during today's oral arguments.

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Will SCOTUS Bet on Federalism?

Fri, 01 Dec 2017 12:00:00 -0500

New Jersey is on a constitutional collision course with the federal government—and with some of the biggest names in professional and college sports. At issue is whether Congress violates the 10th Amendment by forbidding the Garden State from partially repealing its statewide ban on sports betting.

Christie v. National Collegiate Athletic Association, which comes before the U.S. Supreme Court this term, has the makings to be one of the biggest federalism cases in years.

In 2012, New Jersey voters amended the state constitution to legalize sports betting at racetracks and casinos statewide. Lawmakers responded by partially lifting an existing ban on the practice.

But then the National Collegiate Athletic Association, the National Basketball Association, the National Football League, the National Hockey League, and the Office of the Commissioner of Baseball filed suit to thwart the effort. They argue the state has contravened the federal Professional and Amateur Sports Protection Act (PASPA), which made it illegal for "a governmental entity to sponsor, operate, advertise, promote, license, or authorize by law or compact" sports betting.

That federal law did contain exemptions for states such as Nevada, where sports gambling was already legal, and for Atlantic City, New Jersey. But the overall purpose was to prevent states from legalizing sports betting. The Garden State is now fighting to get the feds off its back. "Never before has federal law been enforced to command a State to give effect to a state law that the State has chosen to repeal," New Jersey told the Supreme Court in its petition for certiorari.

The sports leagues, which oppose legalized betting on the grounds that it will lead to bribery and corruption among athletes and officials, insist that the federal government has every right to control the states in this manner. PASPA is "an unremarkable exercise of Congress' settled power to regulate commerce in sports gambling," they claim. The Trump administration takes an equally broad view of federal power.

A nationwide ban on sports betting would probably be upheld by the Supreme Court under existing precedent, which recognizes broad congressional power to regulate economic activity. But that is not the sort of regulation being challenged here. In this case, Congress has effectively dictated the terms of a state law in order to further its own regulatory goals. The Court has repeatedly said federal commandeering of the states is not permitted under the Constitution.

Soon we'll learn which the justices will put first—federalism or federal power. Place your bets now.

Coming Soon to SCOTUS: Federal Sports Betting Ban vs. the 10th Amendment

Thu, 30 Nov 2017 10:45:00 -0500

The U.S. Supreme Court will hear oral arguments on Monday in a 10th Amendment case that pits the state of New Jersey against both the federal government and the biggest names in professional and amateur sports. It will be a constitutional clash between federalism and federal power.

The case is Christie v. National Collegiate Athletic Association. In a new video produced by the Federalist Society, I explain the legal issues at stake in this high-profile dispute. Does the federal government have the lawful power to prevent New Jersey from partially legalizing sports betting in its casinos and racetracks? Or does the 10th Amendment shield the state from the federal government's reach? Click below to watch.

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Los Angeles Mulls Multi-Million-Dollar Hotel Subsidy

Wed, 29 Nov 2017 13:45:00 -0500

The City of Los Angeles is mulling a $67.4 million handout to the New York–based developer Lightstone to build a 1,000-room hotel complex in the city's downtown. According to an economic analysis commissioned by the city, Lightstone's project faces a $67.4 million "feasibility gap" were the project to try solely on private capital. Rather than take this as a sign that the project is well, infeasible, the city has decided to make up the difference. Under the terms of a rough agreement approved by the city council's Economic Development Committee, L.A. would pay Lightstone the money over a 25-year period once construction is completed. In return for this support, Lightstone promises the hotels will achieve and maintain an impressive 3-star rating from AAA and will provide a "Community Benefits Package" that includes hiring locals, paying a living wage, and offering room block agreements for conventions and the 2028 Olympics. City officials claim the subsidy is needed because there aren't enough hotel options near L.A.'s publicly owned convention center. "The biggest complaint we get from people who want to bring conventions to Los Angeles are the number of hotels within walking distance of the convention center and the variety of price points for rooms," Doane Liu, executive director of the city's Department of Convention and Tourism Development, told the Los Angeles Times. The city claims that the hotel will actually make money for taxpayers. In 25 years of operation, the complex's three hotels are supposed to generate $494 million in nominal tax revenue, or $160 million in today's dollars. But such promises always accompany big public payouts to hotel developers—and almost always fail to come to fruition. For an example, look to Phoenix, Arizona. In 2005, the Downtown Phoenix Hotel Corporation—an arm of the Phoenix city government—borrowed $350 million to construct a 1,000-room Sheraton Hotel in the city's downtown. As with the prospective Lightstone deal in Los Angeles, the Sheraton project was supposed to breathe life into Phoenix's convention center by providing much needed hotel rooms to the downtown area. Instead, both convention attendees and hotel occupancy rates plummeted when the Sheraton opened in 2009, and the hotel required $47 million in further subsidies to stay afloat. This year Phoenix agreed to sell the hotel for a $200 million loss. The City of Los Angeles is protected from a loss on that scale because it will not directly own the Lightstone project and because it isn't offering as big a subsidy for its construction. But that does not make it a wise use of taxpayers' funds. The fact that private investors are not willing to fully fund the project as currently conceived implies that there are higher-value uses out there for that scarce capital, uses that could yield more benefits to Los Angeles residents than greater foot traffic to the city's convention center. The same can be said for the public money Los Angeles is willing to invest, which could go to much more valuable uses than building more $225-a-night hotel rooms. The full Los Angeles City Council is set to vote on the financial aid package this Friday.[...]

Brickbat: Get This Straight

Thu, 09 Nov 2017 04:00:00 -0500

(image) Camille LeNoir had a job offer from then-New Mexico State University womens basketball head coach Mark Trakh, her former coach at the University of Southern California, to work for him as an assistant. But two days before she was to leave for New Mexico, Trakh called and said he'd seen a video online in which LeNoir said she was no longer gay. In fact, she said she is now a Christian and believes homosexuality is wrong. Trakh rescinded the job offer.

Amazon's Second HQ Attracts 238 Bids From Cities Eager to 'Give Away the Farm'

Mon, 23 Oct 2017 16:45:00 -0400

Amazon announced today that 238 North American cities have submitted applications to be the lucky location that will get to shower the online retail behemoth with billions of dollars' worth of incentives. The cities are trying to land the $5 billion investment and estimated 50,000 jobs that would come with hosting Amazon's second headquarters. As Reason's Christian Britschgi has noted, New Jersey Gov. Chris Christie (no stranger to humiliating himself in the game of politics) offered $7 billion in tax incentives to Amazon if the company set up shop in the Garden State. Local officials in Georgia have offered to let the company incorporate its own city. Tuscon even sent Amazon's CEO a 21-foot cactus, because why the hell not? Amazon isn't releasing the names of the cities behind the 238 bids, but the company says they came from "54 states, provinces, districts and territories around North America." According to a map published by the company, the U.S. bids have come from 43 states and Washington, D.C. So congrats to the cities of Arkansas, Hawaii, Montana, North Dakota, South Dakota, Vermont, and Wyoming—the only places to resist the urge to prostrate themselves before the gods of economic development. Sure, Amazon is great. It's a powerhouse of a company that has given anyone with an internet connection and a mailing address access to products they never knew they wanted but suddenly can't live without. It has laid waste to awful, soul-destroying indoor shopping malls, and it plans to deliver your stuff faster than ever in the near future. Hooray for Amazon. But Amazon knows it is great. It knows, too, that the leaders of most American cities would sell their children for the chance to land 50,000 new jobs and all the tax revenue that comes with them. That's the kind of deal that pays for every government program they've ever wanted. That's the kind of deal that could be a springboard to higher office. Amazon can pretty much ask for the moon, and officials will line up with baskets full of other people's money and promise to throw a lasso around it. The sheer number of the bids is staggering, not so much because of how many places want Amazon's second headquarters but because a good percentage of the bidding cities surely have no chance whatsoever of winning. Amazon has been very clear about what it wants from a winning bid. It wants a metro area with more than a million people, with the actual site located within 30 miles of the population center and within 45 minutes of an international airport. It wants enough space to eventually build up to 8 million square feet of office space. There are only so many places in America that fit that description—and even if you assume that every suburb within every major metropolitan area on the continent submitted a bid, it's still hard to fathom that there would be 238 of them. Gary, Indiana (population: 47,000) reportedly put together a bid. Sure, it's technically in the Chicago metro area, but come on. Upstate New York is lovely to visit in the autumn, but Syracuse (population: 143,000) is not a prime contender for Amazon's new HQ, no matter how hard local officials try to convince themselves that it is. Gary and Syracuse—and other small or midsized cities that have experienced a drop in population and a surge in poverty—need something more than a pie-in-the-sky bid for a massive infusion of new jobs. There's no doubt that a major company like Amazon would revitalize a place like that, but there's nothing about Amazon's request (which also asks for "a stable and business-friendly environment" and "a community where our employees will enjoy living") that suggests their applications will get even a cursory glance. That officials in places like that think it's worth their time and their city's resources to even bid for Amazon tells y[...]

Former NFL Players Say League Should Allow Players to Use Marijuana to Treat Pain, Injuries

Sun, 22 Oct 2017 12:30:00 -0400

Medical marijuana has been legalized in 29 states, but it remains illegal for professional football players to use as a treatment for injuries and chronic pain. That doesn't mean players in the National Football League aren't using the drug. Quite the opposite. Eben Britton, who retired in 2014 after seven years in the NFL and who has admitted to playing games while high on marijuana and painkillers, estimates that more than half of the players in NFL locker rooms are using marijuana recreationally, or to treat injuries and control pain. During a discussion hosted by, a marijuana culture website, Britton talked about his experience using marijuana versus using opioids and other pain-killers. "I would take these pills and I would feel insane," Britton says. The opioids made him feel "more depressed, more helpless, more pissed off." Britton's assessment of widespread marijuana use in the NFL is supported by other players' experience. In a survey conducted earlier this year by, an online medical marijuana marketplace, 68 percent of the current and former players polled said they had used marijuana (either for recreational or medical purposes) during their career, while 87 percent said they would use it if the league allowed it (and 89 percent said they believed it would be an effective treatment for pain and other ailments). That tracks pretty closely with how the rest of the country feels about medical marijuana. A Quinnipiac University Poll conducted in February found support for medical marijuana at 93 percent nationwide, with large majorities cutting across all demographics. According to Gallup's latest polling, support for legalizing recreational marijuana is at 60 percent, the highest percentage recorded in the polling firm's 47 years of tracking that question. As Steve Chapman wrote earlier today here at Reason, legal marijuana is becoming the norm. The NFL has never allowed players to use marijuana for any reason—though league officials and the head of the NFL's players' union have begun discussing the possibility of allowing players to use the drug for medical purposes. But there is a well-documented history of teams handing out pharmaceutical pain-killers by the handful. Several former players are suing the NFL, alleging that official team doctors ignored federal laws for prescription drugs and disregarding medical guidance by handing out piles of opioids and other painkillers before, during, and after games. "I've seen plenty of guys leave the game addicted to pain pills. I've never seen anyone leave the game addicted to marijuana," says Marvin Washington, who played 11 seasons in the league and participated in the discussion. src="" allowfullscreen="allowfullscreen" width="560" height="315" frameborder="0"> The NFL's position on marijuana could soon change. Jerry Jones, the Dallas Cowboys' owner and possibly the most powerful billionaire in the NFL's inner circle of powerful billionaires, has floated the idea of loosening the NFL's ban on marijuana. And Allen Sills, the league's new chief medical officer, is interested in researching how marijuana could be used to help players manage their pain. "Certainly the research about marijuana and really more particularly cannabinoid compounds as they may relate to the treatment of both acute and chronic pain, that is an area of research that we need a lot more information on and we need to further develop," Sills, a Vanderbilt University neurosurgeon, said in an interview with The Washington Post. Despite overwhelming public support, and evidence the NFL's ban is no preventative, NFL Commissioner Roger Goodell has remained unmoved. Goodell suspended Buffalo Bills offensive tackle Seantrel Henderson last year for using medical ma[...]

Atlanta Scrambles to Get Out of Expensive Deal It Forgot It Made

Tue, 17 Oct 2017 09:40:00 -0400

Which is worse: committing to sell off public land at millions below its market value, or not remembering you'd made that commitment in the first place? That's the question the Atlanta Housing Authority (AHA) is no doubt asking itself as it tries desperately to get out of a deal it made to sell $138 million of land to a property development company for the recession-era price of $17 million. The company, Integral, claims it was promised the $120 million discount by former AHA chief Renee Glover in a 2011 agreement. AHA's current president, Catherine Buell, says she knew nothing about the 2011 deal until Integral tried to make good on it in late 2016, and that the terms are wholly inappropriate. "The Atlanta Housing Authority is not a land bank for private developers to purchase land at rock bottom prices," says Buell. Her agency is now suing to stop the deal, calling it "unconscionable," "secret," and a violation of federal and state regulations. It's gross mismanagement at best, pure corruption at worst. And sadly, it isn't the only time a housing program has been caught in such a scandal. Money meant to house low-income people has been directed toward politically connected developers, wasted on never-completed projects, and even spent demolishing the homes of poor people. This particular episode has its roots in "revitalization agreements" made between AHA and Integral at the turn of the century, whereby Integral promised to convert several of Atlanta's low-income public housing projects into mixed-income developments. For its trouble, Integral was awarded some $114 million in AHA loans, funded through Department of Housing and Urban Development's HOPE VI program. In 2011, then-president Glover amended these revitalization agreements to give Integral the option of buying some of the vacant land surrounding the mixed-income communities it had developed at severely depressed land valuations. According to the lawsuit, Glover made this multi-million-dollar commitment without the consent of either the AHA board of directors or HUD, both of whose sign-off was required. AHA Communications Director Cecilia Taylor tells Reason that no meeting minutes or records show any vote being taken by the authority's board of directors on the 2011 deal, and two board members have said they have no memory of it. There is also no record of any review or approval from HUD, which is responsible for funding and supervising revitalization agreements. In March the Atlanta Constitution-Journal requested records of whatever approval HUD gave for Glover's 2011 deal. None were provided to the newspaper. Taylor tells Reason that HUD has yet to provide AHA with any such records either. This would not be the first time HUD has failed in its oversight of HOPE VI funds. A 2007 GAO report found that the department had no standard means of enforcing the terms of grant agreements it made, and that it often failed even to monitor the progress of those grants. Despite the lack of documentation, Glover has insisted the deal she brokered with Integral went through all the proper channels. So has Egbert Perry, co-founder of Integral. (Both Perry and Glover serve on Fannie Mae's board of directors.) Perry claims not just that the deal was reached within the bounds of the law, but that the massive subsidy his company gets from it is a fair reward for the value his tax-funded investment has brought to AHA land. "They don't realize what's there is because of what we did," Perry told the Atlanta Constitution-Journal back in March, "not what the authority did. What we did." That's a pretty rich claim coming from a man whose investment was underwritten by federally funded AHA loans, and who still owes some $29 million in interest on those loans. AHA describes the likelihood [...]

Nashville's Future MLS Team Has Two Billionaire Owners; Mayor Wants Taxpayers to Help Fund Stadium Anyway

Sat, 07 Oct 2017 10:05:00 -0400

When the Nashville Metro Council extended tax breaks to the Nashville Predators, a financially struggling pro hockey team, a councilwoman named Megan Barry was skeptical that the deal was in the public's best interest. "Is Nashville a better place with the Predators?" she said on the council floor before voting against the proposal. "Probably. But I'm not voting on that question. I'm voting on whether further public subsidies for this particular for-profit enterprise represents good public policy. And I'm going to vote no." But that was in 2008. Now that Barry is the mayor of Nashville, she's become the lead cheerleader for subsidizing a new Major League Soccer stadium. "This is a tremendous benefit to our city and the community of Nashville," Barry told members the city council during a presentation on the proposal last week. "I think we are absolutely ready for this. Nashville is a soccer city." Barry's proposal for a $225 million soccer-only stadium—which the Metro Council could vote on as soon as October 17, according to the Nashville Business Journal—would require the city to borrow $200 million. The team's owners would front $25 million. The city would be on the hook for $13 million in annual debt payments over the next 30 years; the team's owners would be obliged to pay $9 million annually, with new taxes on tickets and concessions at the stadium projected to make up the other $4 million each year. If things don't go as planned—if, say, the team (or Major League Soccer as a whole) doesn't stick around for 30 years, or if ticket sales and concessions don't cover the expected debt payments—taxpayers could end up with a much bigger tab for the stadium. And they might not get a say in the matter. The proposal is moving through city council at breakneck speed, in part to meet deadlines for the league's planned expansion in 2020. Nashville is reportedly one of the league's top choices for expansion. An update: while my sources are "confident" Nashville will earn spot, MLS not making final decision until December. Nothing official today. — Jeff Rueter (@jeffrueter) October 2, 2017 Mark Cunningham of the Beacon Center, a free market think tank in Nashville, says the city shouldn't spend public money on a stadium unless voters approve it, like they did in a 1996 referendum that authorized $144 million to build a new stadium for the National Football League's Tennessee Titans. "The taxpayers should decide. It's their money," says Cunningham. "We don't think public dollars should be spent on a private stadium like this, especially one that has millionaires and billionaires benefiting from it." Beyond Barry's about-face on sports subsidies, two other elements of the stadium deal are worth exploring. First, why can't the new soccer team share the Titans' Nissan Stadium? That would seem to make a lot of sense, since taxpayers already put up a bunch of money to build it and it's conveniently located close to downtown. The Titans generally play only eight home games a year. (A maximum of 12 home dates is possible if you count two preseason games and the potential for two home playoff games.) That leaves plenty of dates open for soccer games. Logistically, fitting a soccer field into a football stadium is easy—in fact, Nissan Stadium has regularly hosted the U.S. men's and women's national soccer teams for games, including World Cup qualifying matches. Teams from the English Premier League, widely regarded as the top soccer league in the world, have played there. It's also one of the stadiums proposed as a site for the 2026 World Cup. If Nissan Stadium is good enough for world-class soccer teams, surely it's good enough for Major League Soccer. Except it's not, for the simple reason that Major Le[...]

Will Trump's NFL Spat Spur More Conservative Opposition to Terrible Stadium Subsidies?

Sun, 01 Oct 2017 11:50:00 -0400

If there is a silver lining to President Donald Trump's foolish attempt at bullying National Football League players and team owners via Twitter, it is this: Republicans and conservatives suddenly seem ever so slightly more interested in ending the stream of taxpayer subsidies for billion-dollar football stadiums. The shift was apparent during a segment of Monday's Fox and Friends, in which Fox Business Network anchor Stuart Varney offered his thoughts on the president's weekend war of words with the NFL over the question of whether players should stand or kneel (or remain off the field entirely) during the playing of the national anthem at the start of games. Trump's tweets on the matter inflated a handful of players kneeling during the anthem to protest police violence against African Americans into a league-wide show of solidarity against the president. Varney is against players taking a knee and he somewhat sloppily connected the protests to the fact that almost all NFL stadiums have been heavily subsidized by taxpayers. "Taxpayer subsidies go towards the building of stadiums," Varney said. "There have been 20 new NFL stadiums [built] since 1997. All of them have received a degree of taxpayer subsidies." A few seconds later, Varney's answer veered into incoherence. He said the NFL should not "bite the hand that helps to feed you," in reference to those same subsidies, and he suggested the league should not "insult taxpayers—whose symbol is the flag, and who you are disrespecting by your actions." Watch the whole clip here. Varney: NFL stadiums have collected over $1B in federal subsidies. My message to the NFL is "don't bite the hand that feeds you." — FOX & friends (@foxandfriends) September 25, 2017 Varney is very wrong about what should be considered an insult to taxpayers, of course. The idea that billionaire owners of professional football teams that rake in hundreds of millions of dollars of revenue every year need assistance from taxpayers is what's insulting. And it's even more insulting when team owners and government officials team up to shovel a bunch of debunked nonsense about "economic development" in front of taxpayers, as if that justifies those subsidies. Varney obviously needs to work on his argument, but cut him the smallest bit of slack for raising the issue of stadium subsidies on a platform like Fox and Friends, where Trump fans are already upset about what they perceive are the NFL's slights against the president. It's fair to assume most viewers don't know the details of stadium deals—an assumption host Steve Doocey made when he asked, "what do you mean by a subsidy?"—and maybe some will seek out additional information. Rep. Matt Gaetz, R-Fla., joined the subsidy outrage when he spoke on the House floor this week to denounce the NFL's response to Trump's tweets. "The public pays 70 percent of the cost of NFL stadiums," Gaetz said. "In America, if you want to play sports you're free to do so. If you want to protest, you're free to do so, but you should do so on your own time and on your own dime." Louisiana state Rep. Kenny Havard, R-East Baton Rouge, has called for putting an end to the estimated $165 million in tax breaks that flow annually to the New Orleans Saints, The Washington Post reports. Libertarians have long been opposed to stadium subsidies. But until recently there was little mainstream criticism from either the right or the left. That's starting to change. On the left, populist, progressive movements have become a larger part of the Democratic coalition, particularly in cities. That helps to explain why city councils in places like St. Louis, San Diego, and Oakland have stood up to pro football te[...]

By All Means, Let's Take Politics Out of Sports—Starting With the National Anthem

Sun, 01 Oct 2017 08:18:00 -0400

Defenders of Donald Trump's condemnation of NFL players who "take a knee" during the national hymn—sorry, anthem—beg a few questions. They assume the truth of matters that are or should be in dispute. So, not so fast, Trump defenders. You have work to do. The first question begged is whether kneeling or sitting during the "Star Bangled Banner" is an act of disrespect to "the country," the flag, the song, or the military. It's not enough to assume it is. Trump and his defenders have to demonstrate this, which would be difficult since we're talking about a state of mind. Any behavior can be consistent with many states of mind. Maybe one player or another intends disrespect, but disrespect doesn't seem to be the message most players wish to send. In fact, some have been quoted saying they mean no disrespect. Rather, they say, their actions are meant to express their belief that the ideals supposedly symbolized by the flag are being dishonored, for example, by police mistreatment of black people. Who's to say the kneelers are lying? That could end the discussion, but I think a much larger question is begged by Trump and his defenders. People sympathetic to Trump's tweets—for example, former generals and CIA directors Michael Hayden and David Petraeus—lament the kneeling because, they say, football of all things should not be "politicized." Their mistake is in thinking that the players initiated the politicization. They did not. Football, like other professional sports and public spectacles, first politicized their events by displaying the flag, playing the national anthem, and lauding the military. To assume those things are not political is to beg a whole lot of questions. The flag necessarily is a political symbol, and so is a song that sacralizes it. The country, which the flag is said to symbolize, is a political entity. The term the country is rarely meant to indicate merely the middle North American civil society that exists south of Canada and north of Mexico. That term is inextricably tied up with the government of the United States of America. Most people couldn't imagine the country without the government. Trump and his defenders certainly cannot. Indeed, they think it holds society together, for example, by securing its borders. While some people certainly believe the flag symbolizes freedom, one is justified in seeing it as a symbol of something rather different—of war, empire, and oppression at home and abroad. Empire-building began at the very start with the attempted extermination or expulsion of the Indians. The government supported the buying and selling of human beings. Yes, that was long ago, and some amends have been made. But that flag was carried (I'll avoid a tediously long list) to the Philippines, Japan, Germany, Korea, Vietnam, Afghanistan, Iraq, Syria, Libya, and all the other places where the U.S. government and its armed forces waged and still are waging war (conventional, chemical, nuclear, etc.), imposed or supported tyrants, and killed and tortured innocents. That flag is emblazoned on warplanes and naval destroyers, not to mention the uniforms of men and women who, on the orders of hack politicians worried about their political futures, ignorantly barge into other people's countries with the intent to kill. And we shouldn't overlook domestic oppression, like the war on drug users, merchants, and manufacturers, which has been an effective cover for the persecution of blacks and Latinos. Police wear the flag too. So the flag is inherently political and controversial. Thus, reacting to it by kneeling or sitting or turning one's back can hardly be deemed an initiation of politicization. It's just an inevitable [...]