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Corporate Welfare

All articles with the "Corporate Welfare" tag.

Published: Tue, 26 Sep 2017 00:00:00 -0400

Last Build Date: Tue, 26 Sep 2017 04:03:30 -0400


Judge Napolitano on Whether the Trump/NFL Feud Is a First Amendment and/or Free Speech Issue

Mon, 25 Sep 2017 18:20:00 -0400

(image) Berkeley's Milo-tastic Free Speech Week might have been a dud on arrival, but that's not going to stop the most libertarian cable news show on television probing both the culture and legality of free speech all damn week. Fox Business Network's Kennedy, the eponymous daily starring Reason's dear old pal, launches its own Free Speech Week tonight with a super-strong effort featuring:

* Judge Andrew Napolitano, expertly picking apart free-speech arguments about the Trump-NFL-anthem kerfuffle that you hadn't even begun thinking about.

* Beloved Reason campus-free-speech correspondent Robby Soave, who describes what he saw at that Berkeley nothingburger, and what that might mean for the college speaking wars.

* A Party Panel of me, Kat Timpf, and Conservatarian Manifesto author Charles C.W. Cooke, discussing Trump's NFL commentary, and also his administration's revised travel ban.

Other Reason guests on Kennedy this week will include Peter Suderman and Katherine Mangu-Ward, so stay tuned all week at 8 p.m. ET! Oh, and read our recent magazine interview with the hostess herself.

Stop Subsidizing Football

Thu, 07 Sep 2017 12:29:00 -0400

In the sprawling suburbs west of Houston, the newest coliseum to America's favorite sport hosted its first game last week. Legacy Stadium seats more than 12,000 people in two decks of bleachers that wrap around the side of a gridiron. An HD video board for replays of the action cost $2 million by itself. The final price tag for the whole project was more than $70 million. The most surprising thing of all, perhaps, is that it's not a professional stadium. It's not a college stadium either. It's the most expensive high school football field in the nation, and it was paid for—every last dime—by the taxpayers of the Katy Independent School District, who approved the stadium as part of a bond package in 2014. Football is big business in America—from youth and high school levels all the way up to the pros in the National Football League—but the sport benefits from taxpayer subsidies at every level. State and local governments have spent billions of dollars in recent years to build stadiums for pro teams with billionaire owners, and untold millions on stadiums for high school and college teams too. Not all subsidies are so obvious, though, and the feeder system for the NFL relies on a system of high school and college programs that are built largely on the backs of taxpayers. Taxpayers should not have to support recreational activities of any kind—whether the participants are 17-years-old or earning $17 million a year (an amount some top quarterbacks and wide receivers can command in the NFL)—but they certainly should not be supporting a recreational pursuit that is proven to put young men at risk of serious health problems. There is no longer much doubt that football does that. Just a month before the new Legacy Stadium opened, the most damning evidence linking football to brain damage was published by a researcher at Boston University. Dr. Ann McKee, a neuropathologist, and a team of researchers at Boston University examined the brains of 111 former NFL players, and found 110 of them had signs of chronic traumatic encephalopathy, or C.T.E., a degenerative brain disease thought to be caused by repetitive head trauma. It can affect "behavior, mood, and cognitive symptoms" and can cause dementia, according to the researchers. Now that we know more about the health consequences of playing football, there's an urgent need to reassess the role that governments play in propping up a sport that, even though it remains wildly popular, is undoubtedly causing real harm to many of the young men who play it. School districts should stop subsiding brain damage in the name of athletics. -- The new NFL season will begin Thursday night at Gillette Stadium in Foxboro, Massachusetts, when the defending Super Bowl champion New England Patriots host the Kansas City Chiefs. The season is scheduled to end on the first Sunday in February 2018 at U.S. Bank Stadium in Minneapolis, the newly built home of the Minnesota Vikings, with the playing of Super Bowl 52. The two locales are a study in contrasts for how Americans subsidize football. Gillette Stadium opened in 2002 and cost about $412 million. The $325 million stadium was built entirely with private money, financed by Patriot's owner Robert Kraft, while the state of Massachusetts kicked in about $72 million for pay for infrastructure upgrades necessary for the construction and operation of the Patriots' home. In Minneapolis, local and state taxpayers got soaked for more than $500 million of the $1.1 billion price tag on the Vikings new home, which opened last season. Voters didn't get a referendum on whether they wanted to help team owner Zygi Wilf (estimated net worth: $5.3 billion) pay for the stadium, and the local officials who did vote on the new plan got special access to luxury box seats for all events hosted there. Gregg Easterbook, author of The King of Sports: Football's Impact on America and a longtime critic of taxpayer subsidies for the sport, says taxpayers have covered more than 70 percent of the total cost of NFL stadiums built in the past t[...]

Stop Subsidizing Sports!

Fri, 25 Aug 2017 15:01:00 -0400

Let's talk about "sports"—that thing where we gather around to watch a muscular stranger put a regulation-size ball in a specific location.

Why are taxpayers forced to pony up cash for athletic ventures that don't benefit them? Franchise owners routinely extort massive stadium subsidies through threats of relocation and fake promises of economic revitalization. Universities jack up student rates to subsidize athletic programs that should be self-sustaining. And the Olympics is economically devastating to every municipality foolish enough to get suckered by one of the oldest scams around.

Mostly Weekly host Andrew Heaton explores the sports phenomenon and why we should quit throwing other people's money at it.

Watch past episodes.

Script by Sarah Siskind with writing assistant from Andrew Heaton and David Fried.
Edited by Austin Bragg and Siskind.
Produced by Meredith and Austin Bragg.
Theme Song: Frozen by Surfer Blood.

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ESPN's Robert Lee Decision Should Be Wake-Up Call About the Perpetual Outrage Machines

Wed, 23 Aug 2017 13:40:00 -0400

(image) ESPN has pulled announcer Robert Lee from doing the play-by-play at the University of Virginia's football home opener in Charlottesville this weekend. The channel says it made this decision while "the tragic events in Charlottesville were unfolding, simply because of the coincidence of his name."

"In that moment it felt right to all parties," ESPN said in a statement. "It's a shame that this is even a topic of conversation and we regret that who calls play by play for a football game has become an issue." The outlet claims that the decision was mutual, and a network executive later commented that Lee could be "subjected to memes and jokes and who knows what else." The executive insists there were no "politically correct efforts" or race issues. "Just trying to be supportive of a young guy who felt it best to avoid the potential zoo," the executive wrote.

This ought to be a turning point in the debate over "PC culture." It raises the important question of how much it is the perception of potential outrage rather than the outrage itself that drives these disputes. Would there really have been enough anger over Lee announcing the UVa game to make removing him the more "politically correct" option?

Sure, there may have been some harmless jokes about his name, but so what? The ESPN executive said he was worried about memes, but ESPN loves memes and understands how trafficking in them can increase exposure and name recognition.

Someone, somewhere, might actually get mad about Lee's name. (Someone, somewhere, is always getting mad about everything.) But now people are mad that Lee isn't doing the play-by-play. (For a news organization to assume such a juicy piece of news wouldn't have leaked is naïve, to say the least.) The left-wing perpetual outrage machine has sparked a resurgence in the right-wing outrage machine, which is now running through the "ESPN pulled an Asian Robert Lee from Charlottesville" cycle.

Here's a better approach: Don't make decisions like this based on the memes people might pass around on Facebook. The outrage machines are noisy, but that doesn't mean they're big. A wise media outlet will never assume that the loudest voices are the most popular ones.

Five Cities That Got F*cked by Hosting the Olympics

Mon, 21 Aug 2017 12:30:00 -0400

Every four years with the Olympics, municipalities compete to host the winter and summer games and virtually always plunge their cities and sometimes even their home countries into massive debt and insolvency. Why? Because host cities inevitably spend double or more over initial estimates, fewer people show up than expected, and the International Olympic Committee, or IOC, takes bigger and bigger cuts of TV and other revenue streams. Sports economist Andrew Zimbalist says that a typical Summer Olympics generates up to $6 billion in revenue, at least half of which goes to the IOC. Winter Games generate even less money despite often being more expensive to host than Summer Games. Cities routinely claim that whatever money they spend on new facilities will stimulate the local economy for decades to come. With the recent announcement that Paris will host the 2024 Summer Games and Los Angeles will host the 2028 Summer Games, here are five cities that got fucked by hosting the Olympics. Athens, Greece, 2004. Athens is the birthplace of the ancient games that inspired today's modern municipal money pits. Its 2004, Games cost $16 billion, or 10 times the original estimate. By 2010, more than half the venues built for the event were underused, completely empty, or literally falling apart. Sochi, Russia, 2014. At $50 billion, the Sochi Winter Games cost more than all previous Winter Olympics combined, paid for by a dwindling supply of Russian petro dollars and gold bullion. Boris Nemtsov documented that $21 billion went to "embezzlement and kickbacks" for businessmen friends of Vladimir Putin. Nemtsov was later assassinated. Rio de Janiero, Brazil, 2016. Plagued by low ticket sales partly due to the outbreak of the Zika virus, the Rio games ended up costing $20 billion rather than the $13 billion backers claimed. The Olympics were hosted on the heels of the 2014 World Cup, which also cost a ton of loot, and the showplace Maracana stadium, which got a $500 million makeover, was "largely abandoned" soon after the games and had thousands of seats ripped out by vandals. Beijing, China, 2008. The Beijing Games cost $42 billion, a record at the time, even though Amnesty International charged that the Chinese government used forced labor to build many of the venues. The IOC didn't mind the stratospheric costs or crackdowns on dissent, though: It awarded Beijing the 2022 Winter Games. Montreal, Canada, 1976. The mayor of Montreal declared that the Olympics "can no more have a deficit than a man can have a baby." Unfortunately, it took Montreal 30 years to pay off its debt just for the main stadium built for the 1976 Summer Games. If there's good news here, it's that cities seem to be wising up: Paris and Los Angeles were the only two cities to bid on the 2024 Olympic Games and IOC was so anxious that there wouldn't be enough applications for 2028, that it pre-emptively awarded it to LA. But just like with professional sports teams that extort tax dollars and subsidies for stadiums that never pay back their inflated costs, it's likely the Olympics will keep finding new suckers for one of the oldest scams in sports. Produced by Todd Krainin. Written and narrated by Nick Gillespie, and based on an article by Ed Krayewski. Camera by Jim Epstein. Subscribe to our YouTube channel. Like us on Facebook. Follow us on Twitter. Subscribe to our podcast at iTunes.[...]

Why Handwashing Is Key to Ballpark Food Safety

Sat, 19 Aug 2017 08:00:00 -0400

In an interesting before-you-reach-for-that-hot-dog style report released last week, Sports Illustrated compared and ranked the food-safety climate at every Major League Baseball park in the United States. Seattle's Safeco Field came in first, while Tampa Bay's Tropicana Field brought up the rear. My favorite (and hometown) ballpark, Boston's Fenway, ranked second. Among its conclusions, the report found "almost a third of the league's stadiums had over 100 total violations, including both Los Angeles clubs. One Chicago stadium failed its routine inspection for the second summer in a row. Eighteen ballparks had critical violations in at least a quarter of their concession stands." Some of the violations reported are objectively gross: "Camden Yards had evidence of rodent infestation at eight different food entities and Yankee Stadium had 14 stands overrun with filth flies." The SI report updates the first such study, published by ESPN in 2009. Food safety at sporting events has long intrigued me. The first time I ever really thought about food safety is intimately tied to sports. The year was 1980. I was seven years old. As I watched an episode of Quincy, M.E.—titled "Deadly Arena"—I saw the title character engage in what IMDB characterizes as "a race against time to find the source of" a botulism outbreak at a sports stadium "before the field becomes littered with bodies." Some of the best stadium food I've eaten in the years since has been the Ichiroll (an Ichiro Suzuki-themed sushi roll) and the grasshoppers at Safeco. The worst food I've ever eaten at a sporting event—football, rather than baseball—was a crab and cheese pretzel at FedEx Field in Maryland. But the relative tastiness of a stadium's food doesn't have much if anything to do with the safety of that food. "The real risk, it seems to me at the ballpark, is the handling of food," said UCLA Prof. Michael Roberts—with whom I serve on the board of the Academy of Food Law & Policy—in comments to SI. "That's where you've got handlers cooking the food, handing it out, managing refrigeration and heating. … So it seems that the most important players in this would be local level, the county inspectors, the folks that are there to ensure quality and safety measures are being followed." Others SI spoke with echoed Roberts. And I will, too. He's exactly right. Data back him up. Nearly six out of every ten cases of foodborne illness in this country are caused by norovirus, which is transmitted most often from person to person due to poor handwashing after using a restroom. According to a 2016 article published in the Journal of Food Protection, every state requires workers to wash their hands after using a restroom. Requiring foodservice employees to wash their hands after using a restroom is—in a bubble—smart lawmaking. But other rules may offset the handwashing rule. For example, fire-safety laws requiring that bathroom doors open inward, rather than outward, means in most cases that a person must touch a door handle before they leave a restroom. So a foodservice worker may do everything they're supposed to—washing their hands before leaving a restroom—but their best efforts may be foiled by having to share a bathroom-door handle (and the associated germs) with people who don't wash their hands. The FDA's model food code recognizes the potential for re-contamination after washing one's hands. "TO avoid recontaminating their hands ... FOOD EMPLOYEES may use disposable paper towels or similar clean barriers when touching surfaces such as manually operated faucet handles on a HANDWASHING SINK or the handle of a restroom door," it states. But many foodservice establishments are swapping out environmentally unsound disposable paper towels for efficient, modern air dryers. As more and more restaurants move to fancy Dyson-style air driers, fewer and fewer restaurants even have paper towels in their restrooms, making it[...]

If MLS Is a Ponzi Scheme, Taxpayers Will Get Left Holding The Bag

Sun, 13 Aug 2017 15:01:00 -0400

Cincinnati, Ohio, has a modestly successful minor league soccer team, FC Cincinnati, which shares a stadium with the University of Cincinnati football team. Within the next two years, though, the club hopes to join Major League Soccer, the top tier professional league in the United States. To get there, FC Cincinnati will have to beat out 11 other cities that have applied for the MLS expansion in 2020. Winning the bidding process will likely require taxpayers to agree to fund a new soccer-only stadium for FC Cincinnati. The price tag: about $200 million, at least half of it coming from public sources, the Cincinnati Business Courier reports. But before Cincinnati—or Charlotte, Detroit, Nashville, Phoenix, or any of the other cities bidding to join MLS—agrees to put-up public financing for a new stadium, officials there might want to take a good, hard look at the financial health of the league they are attempting to join. Because, right now, MLS resembles something a little like a Ponzi scheme. The league is losing money every year, Commissioner Don Garber acknowledges, even though he's declined to provide specifics. Meanwhile, weirdly, the value of individual franchises is climbing fast. The most recent Forbes' analysis of MLS teams found that the average franchise is now worth $185 million, a 400 percent increase over the average value of a team in 2008. "That business model and this financial trajectory suggests that MLS's sea of red ink is either a loss leader or a Ponzi scheme," Neil deMause, author of the book Field of Schemes, writes at Deadspin this week, "and it's not always easy to tell the difference between the two until it's too late. Several sports economists, though, aren't optimistic." DeMause suggests a big part of the explanation might be MLS' rapid expansion. From its formation in 1996 through 2004, MLS had somewhere between eight and 12 teams scattered around the country. By 2010 membership had jumped to 16, and four more teams were added by 2015. With the addition of Atlanta United and Minnesota United (soccer desperately needs a wider selection of team names) this year, there are now 22 franchises in MLS. The league reportedly has plans to expand to 26 teams by 2020—that's where Cincinnati, Charlotte, and the other bidders come in. Each new team pays an "expansion fee" of $150 million to the league, to be split among the other owners. And each new team is supposed to bring its own soccer-specific stadium with it, meaning taxpayers are generally part of the transaction, whether they want to be or not. Since MLS continues to struggle with TV ratings—which drive advertising, which allow other major professional sports leagues to make big money today—and with attracting high-level footballing talent, the long-term viability of the league is questionable, deMause writes. "If you can't make money either of the old-fashioned or sustainable ways, you might as well recruit a new batch of suckers to boost your bottom line in the short run," says deMause. "It also helps to explain MLS's otherwise puzzling insistence on making a brand-new, soccer-only stadium a primary condition for anointing new franchises." Even compared to other American professional sports leagues, Major League Soccer operates with a stunning degree of socialism. While other leagues use salary caps or luxury taxes to impose parity, and all leagues use some form of revenue-sharing to balance smaller and bigger market teams, they at least allow the franchises to negotiate salaries directly with players and try to offer the most money to a prospective free agent. In MLS, players sign contracts with the league and are then allocated to each of the different franchises. No surprise, then, that the best players end up in New York and Los Angeles, or in places like Seattle and Toronto where soccer is weirdly super-popular. All the teams are supposedly equal before MLS. Some tea[...]

What the Left Should Like about Public Choice

Sun, 30 Jul 2017 13:58:00 -0400

Although the public choice school of political economy has been demonized in a new work of putatively progressive fiction masquerading as intellectual history, good-faith leftists (if they don't already regard themselves as libertarians) may be surprised by how their cause could benefit from the insights of James Buchanan et al. (For reviews of the book I'm referring to, see among others this, this, and this. To keep up with the daily sightings of misquotations, fabrications, and smears, read Don Boudreaux at Cafe Hayek.) Full disclosure: despite its many valuable insights, I find less to like in public choice theory, at least its most common variant, than many (nonlibertarian) leftists would. For one thing, I (like Murray Rothbard) don't share the view that the state is just another way (along with the market) in which we assert our personal preferences and obtain goods and services. (Public choice versus private choice.) The state is a predator and an exploiter, not a cooperative venture for the production of "public goods." I don't see how a hypothetical social contract or constitutional convention changes that. And I'm underwhelmed by the constitutional contractarian argument that, while the state indeed coerces, we in effect have consented to be subject to the state's threats of violence. On the other hand, I like the methodological and moral egalitarian individualism at the base of public choice—and so should all leftists of good faith. Everyone has the right to be free of aggression; no one is naturally endowed with authority over others. But I am uneasy about the fact that that the consequent unanimity principle in practice becomes something far less than literal unanimity. For me it's not enough that the decrees of legislatures are passed under constitutional rules everyone perhaps would agree to were they gathered at a convention. As Rothbard pointed out, such hypothetical unanimity can easily become a device to legitimize almost anything the government does. I realize that concern about the production of important "public goods," such as security and dispute resolution, underlies much of this, but perhaps this concern betrays an underappreciation for the power of entrepreneurship, technology, and cooperation through nonstate channels. For a long time some heavy thinkers thought lighthouses couldn't be produced on the market. As for the market production of security, a voluminous interdisciplinary literature has become available to show how feasible that would be. (Start here. By the way, it's wrong to think that a stateless society would lack a constitution.) Elements on the left should also be delighted by public choice scholars' development of the theory of privilege-seeking (or "rent-seeking"). It's an old observation, really: when the state's personnel have favors to dispense, people in the private sector will invest resources to obtain them. Such favors are by nature impositions on third parties. They may take the form of cash subsidies, taxes and regulations that hamper or quash competition and raise incomes in a nonmarket manner, and other devices. But the principle is the same: private- and government-sector individuals collude to use the state's coercive power to obtain what they could not obtain through voluntary exchange for mutual benefit. It's a theory of exploitation the good-faith left should embrace. By the same token, the state's personnel, seeing opportunities to sell favors, are just as likely to initiate the privilege-seeking process. In this sense, public choice scholars are right when they see the political arena as a series of exchanges. The big difference with the marketplace, however, is that in the political arena the largest group of people is forced to participate. The bottom line on privilege-seeking, which should interest the left, is this: the people with the greatest access to power will [...]

Trump’s 'Made In America Week' Inadvertently Highlights Corporate Welfare

Thu, 20 Jul 2017 11:05:00 -0400

Even as a centerpiece of his policy agenda—the repeal and replace of Obamacare—was going down in flames in the Senate, President Donald Trump appeared to be having fun. He donned a white Stetson hat. He climbed into the cab of a bright red fire truck parked on the White House lawn. He swung a golf club and admired a baseball bat. It was a made-for-TV moment—"Made In America Week," the White House's celebration of domestic manufacturing—but it wasn't all for show. Trump was promising to implement policies, like a new tax on foreign-made goods and a restructuring of the North American Free Trade Agreement, that will help some companies based in America even as they hurt other businesses and consumers. Trump, surrounded by props large and small, promised he was fighting for a "level playing field" for American-made products. "But," he said, "if the playing field were slanted a little bit towards us, I'd accept that also." As it turns out, some of the businesses invited to the White House this week already have the playing field slanted—in some cases quite dramatically—in their direction. A Reason review of the 50 businesses invited to Trump's "Made in America" event reveals that 21 of them have received some form of government grant, subsidy, loan guarantee, or other economic incentive since 1997, according to records aggregated by Good Jobs First, a union-funded nonprofit that opposes corporate welfare. Running the names of the 50 businesses through the "subsidy tracker" database maintained by Good Jobs First revealed more than 870 records of individual handouts totaling more than $598 million in spending at the local, state, and federal level. Those subsides take several forms. More than 300 of them are direct grants, totaling more than $325 million in pure subsidies that shift tax dollars from government coffers to businesses' bottom lines. Another 144 are loans, in which the federal or state government take on the role of banks and dole out investment cash with taxpayers as the ultimate backstop on defaulted payments. Most of the rest are various kinds of tax breaks, a hidden form of subsidy that doesn't show up on government budgets but rewards certain businesses at the expense of everyone else—and serves as a subtle acknowledgement that taxes are too high. "There are virtually no credits in federal or state tax law that are sensible tax policy," says Chris Edwards, director of tax policy for the libertarian Cato Institute. "The fact that states 'need' special breaks to those taxes is an admission by the politicians that the general tax rates are too high and are scaring away businesses. But then the solution is cutting overall rates, not just cutting for a narrow group of favored businesses." While 21 of the 50 invitees have benefitted from government assistance in one form or another, most have only dipped into public coffers a few times. The Montana-based Simms Fishing Products, for example, has collected more than $400,000 from federal and state subsidy programs since 2011. Ames Tru Temper, a Pennsylvania-based maker of wheelbarrows and other small-scale farming equipment, collected more than $3.3 million in grants and tax breaks since 2003. But the White House also invited some of the biggest players in the corporate welfare game. Take Caterpillar, the Illinois-based manufacturer of earth movers and other heavy trucks. Over the past 20 years the Department of Commerce, Department of Defense, Department of Energy, and various other federal and state agencies have given Caterpillar 200 grants valued at more than $155 million in direct taxpayer assistance. All this to a company that generated $38 billion in revenue last year. A majority of those grants have funded Caterpillar's research and development of new technologies. Caterpillar also received more than $17 million in government gran[...]

Matt Welch Interviews Sen. Mike Lee, Kmele Foster, James Kirchick and More from 9-12 AM ET

Mon, 10 Jul 2017 08:32:00 -0400

This morning I am sitting in the guest-host chair for Stand UP! with Pete Dominick on Sirius XM Insight (channel 121) from 9-12 am ET. The guests are scheduled to include:

* James Kirchick, author of The End of Europe: Dictators, Demagogues, and the Coming Dark Age, who will talk about President Donald Trump's trip to Europe last week.

* Nina Khrushcheva, author of The Lost Khrushchev: A Journey Into the Gulag of the Russian Mind. She will talk about Vladimir Putin and the continuum of Russian political leadership.

* Sen Mike Lee (R-Utah), author of Written Out of History: The Forgotten Founders Who Fought Big Government, who will talk about that book and also the prospects for Obamacare reform.

* Denny Dressman, author of Heard but not Seen: Richard Nixon, Frank Robinson and The All-Star Game's Most Debated Play. We will discuss Pete Rose knocking the shit out of Ray Fosse in 1970.

* Kmele Foster, impresario of FreeThink Media and The Fifth Column podcast (speaking of which, here's last week's, including a memorable lil' 4th of July rant from Kmele). We'll talk about, I dunno, race, media…maybe a little Austin Petersen.

Please call the show at any time, but especially in the Kmele hour: 1-877-974-7487.

Brickbat: It's Just Not Cricket

Tue, 27 Jun 2017 04:00:00 -0400

(image) Indian officials have charged 15 men with sedition and criminal conspiracy for celebrating Pakistan's win over Indian in a game of cricket.

Detroit Council Dunks on Taxpayers, Will Use School Funds for Basketball Arena

Sun, 25 Jun 2017 13:15:00 -0400

Taxpayer-funded bonds sold to raise revenue for parks and schools in cash-strapped Detroit will instead be used to lure its professional basketball team back into the city. The Detroit Pistons have played out in the suburbs (first in Pontiac, now in Auburn Hills) since 1977, but will relocate to a new downtown arena thanks to $34 million in incentives approved by the Detroit City Council. Taxpayers are already on the hook for more than $300 million of the $900 million construction cost for new Little Caesars Arena, built to host the Detroit Red Wings of the National Hockey League. The additional spending will make the arena suitable for basketball and help pay for new practice facility and front office for the Pistons. Michigan Radio reported this week that "some Detroiters are unhappy with the deal because the bonds are taxpayer funded with money originally intended for schools and parks." As well they should be. In a city still recovering from bankruptcy, local officials might have found better ways to use $34 million. It's a fair question whether government should be spending money on parks and schools, but it's certainly a more core function than throwing cash at billionaire team owners. Tom Gores, who owns the Pistons, is worth an estimated $3.3 billion. But it gets worse. As the Detroit Free Press reported earlier this month, local activists filed a lawsuit to block the stadium spending. The city asked the judge to dismiss the case, making several laughable claims about why it was essential to spend money on the stadium project, instead of using the money to help fund the city's public schools (which are $500 million in debt, by the way). Stopping the project, the city's attorneys argued, would be "devastating" to Detroit's "remarkable comeback story." "Post-bankruptcy, the city cannot expect lenders to extend unsecured credit at reasonable rates, so its debt has been limited to secured transactions, tied to specific revenue streams," the attorneys write. "The default on any of that debt would significantly affect the ability of the city to attract investors. The city is currently engaged in a bond offering to raise funds to rebuild neighborhoods. A default on DDA's debt would certainly increase the costs and could possibly derail the plan completely." As Deadspin noted this week, this is disingenuous nonsense. The city's attorneys are essentially arguing that not giving millions of dollars to the Pistons' billionaire owner would jeopardize Detroit's entire economic recovery. A federal judge dismissed the lawsuit. The next time you see a headline about how woefully underfunded Detroit's schools are or hear about appeals for additional state and federal funding, think about how its city leaders prioritize a finite amount of tax revenue. Detroit's rickety fiscal situation is the result of decades of poor choices, from which it appears the current leadership has learned nothing.[...]

Congress Could Make It Harder for Local Pols to Blow Your Money on Stadiums

Thu, 15 Jun 2017 09:34:00 -0400

When New York City agreed to build a new stadium for the most valuable baseball team in the country, the Yankees, they partially paid for the project by issuing more than $1.6 billion in municipal bonds. That means Red Sox fans in Boston ended up indirectly helping to build their rivals' new home. A bipartisan bill introduced this week in Congress proposes to close the federal tax loophole that made that possible. The bill, sponsored by Sens. Cory Booker (D–N.J.) and James Lankford (R–Okla.), would not be the end of government-subsidized stadiums, but it would stop local officials from shoveling part of the cost onto the backs of taxpayers well outside their own jurisdictions. The $1.6 billion in municipal bonds issued for the construction of the new Yankee Stadium is a record. But New York isn't the only city to take advantage of a loophole that ropes taxpayers from all across America into subsidizing stadiums. According to a recent analysis by the Brookings Institution, a centrist think tank, since 2000, 45 major professional sports stadium projects have been financed in part by more than $13 billion in municipal bonds. Those bonds are meant to be used to pay for roads, sewer systems, schools, and other municipal infrastructure needs. They are exempt from federal taxes as a way of encouraging investors to buy them at lower interest rates, saving cities money. Those $13 billion in untaxed bonds for stadium projects have reduced federal tax revenue by $3.2 billion since 2000, according to the Brookings' estimate. "It's an unseen subsidy," Victor Matheson, a sports economist at the College of the Holy Cross, told Reason on Wednesday. "It's a tax break that we never get to vote on, and it's one that don't even think about and don't see." The bill introduced by Booker and Lankford would end the federal tax exemption for municipal bonds issued for stadium projects. Bonds issued to pay for infrastructure and other public projects would still be sheltered from taxation. "It's not fair to finance these expensive projects on the backs of taxpayers, especially when wealthy teams end up reaping most of the benefits," said Booker in a statement. He pointed to the fact that decades of economic research shows little or no correlation between stadium projects and overall economic growth. On that point, Booker is correct. The last three decades have been a sprawling cross-country experiment in the grand promises of economic growth spurred by building stadiums. The reality is you can build it, but the promised payoff rarely comes. The Yankees got $492 million through the backdoor subsidy created by the federal tax exemption for municipal bonds, the Brookings study says. The New York Mets scored the second largest subsidy from taxpayers, $214 million for the construction of Citi Field, which opened in 2009 at a cost $815 million, more than $600 million of that funded by the public. "Using billions of federal taxpayer dollars for the subsidization of private stadiums when we have real infrastructure needs in our country is not a good way to prioritize a limited amount of funds," said Lankford. "Everyone likes free federal money to build their expensive stadiums, but with $20 trillion in federal debt, this is waste that needs to be eliminated." President Barack Obama proposed eliminating tax exemptions for municipal bonds attached to stadium projects as part of his 2015 budget plan, but Congress didn't bite. There are plenty of reasons to be skeptical that Booker's and Lankford's proposal will get through the legislative process—sports teams and wealthy bond-buyers are likely to lobby against it—but bipartisan support is a step in the right direction. Even if the bill does pass, though, it won't be the end of [...]

Turkey Seeks Arrest of NBA Player, Says He Belongs to a 'Terrorist Organization'

Fri, 02 Jun 2017 10:00:00 -0400

A Turkish court has reportedly issued an arrest warrant for Oklahoma Thunder center Enes Kanter, charging him with "being a member of a terrorist organization." The 25-year-old Kanter, a Turkish national who has been living in the United States since 2009, has been an outspoken critic of the increasingly authoritarian Turkish government. He is also a supporter of Fethullah Gulen, a former imam and former ally of Turkish President Recep Erdogan. Gulen, who has lived in the U.S. since 1999, is the spiritual leader of a movement known as Hizmet (Turkish for "service"). According to the Rubin Center for Research in International Affairs, he was estimated to have "between 200,000 supporters and 4 million people influenced by his ideas" in the late 1990s. Erdogan regularly accuses him of being the mastermind behind last year's attempted coup. "Only exiled people are going to be willing to go on record" about Kanter, a source familiar with the situation on the ground in Turkey tells Reason. "The whole set of accusations and demands has become toxic. It's partly because it's a no-go topic in Turkey but also because the [Gulen movement] is flawed and disliked by a lot of ordinary people in Turkey." After the failed coup, Erdogan initiated a massive purge of academics, bureaucrats, members of the judiciary, and members of the media, claiming with little to no evidence that thousands of people were colluding with what the Turkish government now calls the "Gulen Terrorist Organization." Kanter's family in Turkey has publicly disowned him, with his father apologizing to Erdogan "and the Turkish people" for "having such a son." That didn't keep Kanter's dad from losing his job at a university in Istanbul.* Turkey's slide into authoritarianism accelerated after a constitutional referendum earlier this year that vastly expanded Erdogan's powers. Since then, and particularly because Germany and the Netherlands prohibited pro-Erdogan election rallies in their countries, "Erdogan has shown little concern with how the West (particularly the U.S. and the EU) view his actions, and arguably has been behaving in such a manner as to create a wedge between the Turkish people and the West," says Michael Wuthrich, a specialist on the region who directs the Global & International Studies program at Kansas University. "What is particularly surprising about Kanter's case," Wuthrich adds, "is that they are targeting a well-known international figure who hasn't lived in Turkey for any length of time for years"—and "whose connection with the foiled coup plot would be extremely dubious to all but the most ardent Erdogan supporter." For Wuthrich, that means Erdogan "no longer feels shame from a harsh reaction from the West; in fact, he is stoking it to present to his political base a Western bloc that is part of a grand conspiracy to thwart Turkey's rise to greatness." Gulen, meanwhile, serves as "an Orwellian foil of sorts," though "there is very little substance that would link him to the attempted coup," Wuthrich says. Gulen has structured his supporters' network "in such a way that he almost never conveys direct orders. Even if he wished that Erdogan was removed from power, it is unlikely that he expressed this in any sort of explicitly incriminating ways or would have sullied himself with planning and preparation for such a thing." It's not even clear that the Turkish government sincerely wants extradite Gulen. Because he has been "conveniently operating as a scapegoat for every problem that Erdogan finds himself in for the last several years," Wuthrich explains, Gulen may be more valuable abroad. Turkey's chances of securing an extradition of Kanter are low, according to Wuthrich: "There is almost no[...]

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(image) The Turkish government has canceled the passport of NBA player Enes Kanter and issued a warrant for his arrest for his support of Islamic preacher Fethullah Gulen. The government says Gulen played a role in a failed coup against President Tayyip Erdogan last year.