Greece ill-temperedly rattles a tin cup—desperate for another handout from the European Union but feeling far more anger than gratitude toward its would-be benefactors.

Italy shares Greece’s pain—and its deeply ingrained sense of resentment and entitlement. Italy may follow Greece in bellying up to the EU’s bailout line.

Whatever happened to “the glory that was Greece and the grandeur that was Rome”?

In his famous funeral oration, delivered in 431 BC, the Greek leader Pericles sought to capture what it was that characterized Athens at the peak of its glory. In his words, the Athens of that time did not need a Homer to sing its praises, or even imperishable monuments, such as the Parthenon, completed only a few years earlier: “What you leave behind is not what is engraved in stone monuments, but what is woven into the lives of others to be eternally remembered.”

So how did the Greeks of this golden age manage to make such great and enduring contributions to Western civilization? Believe it or not (and progressives will find this especially hard to fathom), it was individual freedom, self-reliance, and an absence of class envy—combined with a powerful sense of Greek (and especially Athenian) exceptionalism.

Pericles began his speech with several observations about the nature of democracy in the city-state of Athens. As recounted by his contemporary, the historian Thucydides, Pericles said:

We are called a democracy, for the administration is in the hands of the many and not the few. Our laws afford equal justice to all in their private differences.

The freedom that we enjoy in government extends to ordinary life. Far from exercising a jealous surveillance over each other, we do not feel called upon to be angry with our neighbor for doing what he likes.

We regard wealth as something to be properly used, rather than as something to boast about. As for poverty, no one need be ashamed to admit it, but the real shame is in not taking practical measures to escape from it.

The great statesman, general, and patron of the arts went on to say how the freedom and openness of their city did not weaken but served only to redouble the valor, resourcefulness, and generosity of the citizenry:

Trusting in the native spirit of our citizens, we throw open our city to the world, and never exclude foreigners from any opportunity of learning and observing, although the eyes of an enemy may occasionally profit from our liberality.

To sum up, I say that Athens is the school of Hellas, and that the individual Athenian in his own person seems to have the power of adapting himself to most varied forms of action with the utmost versatility and grace.

It would take a Margaret Thatcher if not a Pericles to make a case for real reform—and there is no such champion of individual freedom and self-reliance anywhere to be seen.

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In ancient Athens, the birthplace of democracy and human freedom, the richest citizens often paid for roads, bridges, theaters, and gymnasiums. They picked up the bill for athletic games and other public amusements. In times of peril, they built war ships and donated them to the city.

This voluntary giving of both time and money maximized freedom, reduced the need for government, and reinforced a powerful sense of Athenian exceptionalism. In his famous funeral oration in 431 BC, Pericles spoke of how the freedom and openness of their city did not weaken but only served to redouble the valor, resourcefulness, and generosity of the citizenry, enabling Athens to exceed all its neighbors in dedication to the common good, both in war and peace.

Charles W. Adams, author of the classic book For Good and Evil: The Impact of Taxes on the Course of Civilization, called this system of giving “the Greeks’ brilliant alternative” to government ownership and control. He described it as “private enterprise for public good.”

In our own time, sports-minded cities across the United States have stood this ancient ideal on its head. In trying to attract or to hold onto sports franchises, most U.S. cities have followed the model of public assistance for private gain, or what is also known as crony capitalism.

Political leaders in our cities and states have been all too willing to grovel at the feet of the wealthy owners of professional sports teams, saying, in effect: If you pick our stadium over competing venues, we will do everything in our power to use the public purse to swell your bottom line and multiply the value of your franchise.

Consider the astounding concessions that the city of Saint Louis made to get the then Los Angeles Rams to move to Saint Louis in 1995—and how the city has now landed in a situation in which it will have to agree to another roughly $400 million in taxpayer assistance to have any hope of holding onto the team.

Neil deMause, co-author of Field of Schemes: How the Great Stadium Swindle Turns Public Money into Private Profit, calls the original deal that the city of Saint Louis struck with the Rams “the worst lease ever”—meaning the most one-sided in enriching the team’s owners at the expense of taxpayers . . . while doing far more to please deep-pocketed corporate clients than to control ticket prices or provide better seating for ordinary fans.

The Rams paid no part of the $480 million in construction costs in building the Edward Jones Dome, and they have paid almost nothing in rent (just $250,000 a year). They received all luxury box and concession revenues, took 75 percent of advertising and name rights, and pocketed a $46 million relocation fee.

Still more, political and civic leaders signed on to a deal that gave the team the right to opt out of a 30-year lease after 20 years—if the stadium no longer ranked in the “top tier” of NFL stadiums. As a result, the Rams may move as soon as 2016, but Saint Louis City and County and the state of Missouri are still on the hook for $120 million in remaining bond payments falling due between 2016 and 2021.

According to Forbes, the St. Louis Rams football team is now worth about $930 million. Experts say that the value of the franchise will jump to between $2.5 billion and $3.5 billion if the team moves to Los Angeles. Any such increase in value would more than offset the cost of building a new stadium in Los Angeles. Rams owner Stan Kroenke—a billionaire developer and the husband of Ann Walton Kroenke, daughter of Wal-Mart co-founder Bud Walton—has acquired a prime site in the city’s Inglewood neighborhood.

The city of Saint Louis and the state of Missouri are considering a brand-new publicly owned riverfront stadium, with still more luxury suites, high-priced club seats, scoreboard, and other amenities, aimed at meeting the most exacting NFL specs. It would cost close to a billion dollars, with local and state taxpayers picking up about 40 percent of the bill through publicly financed debt, state tax credits, and other means that would deplete local and state treasuries and leave less money for police, roads, schools, and other public needs.

However, there seems to be little public or political support for the project. A recent poll commissioned by the Missouri Alliance for Freedom shows that 70 percent of Missouri voters are opposed to public funding for the stadium.

In waving good-bye to the Rams, many Saint Louisans (this writer included) are therefore inclined to say “thanks for the memories.” We had “the greatest show on turf” for three years—with the 1999 Super Bowl champion, a playoff contender in 2000, and losing only in the final seconds of another thrilling Super Bowl in 2001.

Thirteen out of 32 NFL teams have never won the ultimate prize, and four have never made a Super Bowl appearance.

But as for public funding of a new stadium built mainly for the benefit of a billionaire owner and wealthy patrons, enough is enough.

Andrew B. Wilson is resident fellow and senior writer at the Show-Me Institute.

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The cost of the city’s plan has actually gotten worse since the Journal published this video in 2012. Just a few months ago, the Kansas City Council actually voted to refinance the district’s debt to help pay for pensions, extending the term of the repayment period and adding tens of millions of dollars to the district’s cost.

The refinancing calls for adding seven years to the Power & Light entertainment district’s debt payments, from 2033 to 2040. It lowers the payments from 2015 through 2019 and frees up cash to help pay for pension reform, especially in the 2014-15 budget. But it bumps up the debt payments between 2020 and 2040, a net increase in overall debt of $36 million.

Who’s going to pay for all of these costs? Kansas Citians, of course, most likely through higher taxes, lower services, or a combination of the two. Businesses that have to compete with the newly subsidized competitors will also be paying for it not only in tax dollars but in customers, too, as their clientele are diverted to new taxpayer-funded developments. If these massive projects were going to work, they should be able to make it on their own, and as the Spectator observed:

The forbidding economics of these projects should be evident from the start, since their need for subsidies shows that they have inadequate market demand. Yet they continue to open, representing the fallout that occurs when officials speculate with public money.

That chronic speculatory impulse of Missouri’s public officials must stop. If our local and state governments can afford to massively cut taxes for some, they can afford to cut taxes for all. That’s the direction in which tax policy in this state must continue to move.

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Beyer contends that public subsidies to developments such as Ballpark Village mean that there wasn’t enough demand in the first place in order to justify investing in them. I agree. I also believe that using subsidies to finance these projects will be of limited economic benefit because they will just shift spending from other local establishments. A waitress who works at one area restaurant told me that her co-workers in Kiener Plaza are expecting a permanent 10 percent reduction in revenue now that Ballpark Village has opened. This example is only anecdotal, but it falls in line with what economists find when they examine public subsidies for similar types of developments, such as sports stadiums. They find that a lot of the economic benefit these developments bring to cities comes at the expense of spending elsewhere in the economy. Little to no actual wealth is created.

The government should not be picking which development gets public money and which does not. Instead, it should be focused on providing public goods such as basic infrastructure and public safety. Ballpark Village looks like it is going to be a great success, as most people thought it would be. Forcing taxpayers to subsidize the development, however, is not justified and is improper.

The post Does Ballpark Village Really Need Subsidies? appeared first on Show-Me Institute.

It makes your head spin! Two months ago, Gov. Jay Nixon vetoed a bill that would have provided some tax relief for all Missourians. Today he is calling for a gigantic tax cut — amounting to an estimated $150 million a year or $1.5 billion over the course of a decade — for one company.

The governor is hoping that would be enough to entice the Boeing Company to locate its 777X commercial airplane assembly plant in north St. Louis County.

In vetoing House Bill 253 earlier this year, Nixon went around the state arguing that cutting state income taxes for individuals and corporations would harm education and mental health. Where is the same concern today in offering a lavish gift to a single, deep-pocketed company?

If Boeing is short of the cash needed to build the new airliner, you wouldn’t know it from its generosity in compensating its top executives. In 2012 Boeing CEO Jim McNerney received $21.1 million in compensation — or 469 times the median family income in Missouri. J. Michael Luttig, the top lawyer at Boeing and a former federal judge, had $9.6 million in compensation in 2012 — or 214 times the median family income in Missouri. No doubt the Boeing general counsel is highly skilled in minimizing taxes (Boeing reportedly paid no federal taxes from 2008 to 2010) and maximizing tax rebates and other forms of corporate welfare.

How much should a state (and Missouri is just one of about a dozen states waving fistfuls of cash in trying to get Boeing’s attention) be willing to pay a company like Boeing to open a plant and create jobs?

Nixon is urging Missouri lawmakers to adopt a special tax package that would pay Boeing up to $75,000 per job per year — based on annual subsidies of $150 million spread over a minimum requirement of 2,000 jobs. No doubt that will strike some observers as money well spent — given much higher subsidy costs in other areas, such as solar energy, where federal subsidies have exceeded $350,000 per job.

Nevertheless, there are good reasons for being strongly opposed to the Boeing package.

First, it is crony capitalism and a misuse of taxpayers’ money. It makes the same mistake that many cities and town have made in cutting deals for Walmart and other big-name retailers that are not available to smaller retailers in the same community. It unfairly and unwisely diverts scarce resources to businesses with the biggest and most powerful lobbying organizations.

Second, tax credits are not free money. Our state government is supposedly straining to meet its current commitments. Every dollar that is given away in tax credits is a dollar that the state government must replace with cuts in current programs, or — more likely — increased taxation.

And third, there is a better way to promote business and job growth. Instead of chasing after Boeing and other corporate behemoths with more hand-outs, Missouri lawmakers should do something truly innovative: They should lower taxes across the board for all Missourians. That way, growth can occur organically, and in ways that politicians and lawmakers cannot even begin to anticipate.

Andrew B. Wilson wrote this article in his position as a resident fellow and senior writer at the Show-Me Institute, a free-market think tank based in St. Louis.

The St. Louis Business Journal carried a version of this op-ed in the December 13, 2013, edition.

The post Missouri Should Say No to Boeing Subsidy appeared first on Show-Me Institute.

Show-Me tech guru Josh Smith recorded the event.

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Video streaming by Ustream

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Crowne Plaza Hotel – Crystal Ballroom
7750 Carondelet Avenue
St. Louis, MO 63105

Parking is free. A cash bar will follow. Everyone is welcome to attend.

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The recurring theme in President Barack Obama’s State of the Union address was “winning the future.” It’s a good theme — focusing attention on the need for U.S. workers and businesses to face the challenge of competing in world markets. We are no longer living in a world — as the president pointed out — where “your competition” in seeking a job is “pretty much limited to your neighbors.” Unfortunately, the president stood his “winning the future” theme on its head through a misplaced belief in the ability of government to do a better job of picking winners and losers than the free-enterprise system is able to do on its own.

Obama cited high-speed rail as one of the primary would-be winners, saying (emphasis added): “Within 25 years, our goal is to give 80 percent of all Americans access to high-speed rail. This could allow you to go places in half the time it takes to travel by car. For some trips, it will be faster than flying.”

Show-Me Institute scholars have conducted detailed cost-benefit studies of high-speed rail and found that it would be an egregious waste of money. It is not just that 200-mph bullet trains and the infrastructure needed to support them are extraordinarily expensive. There is also the fact that it may not be practical to run even 110-mph passenger trains on the same tracks as freight trains.

Other would-be winners identified by Obama included:

• Construction: “Over the last two years, we’ve begun rebuilding for the 21st century, a project that has meant thousands of good jobs for the hard-hit construction industry. And tonight I’m proposing that we redouble those efforts.”
• Wireless technology: “Within the next five years, we’ll make it possible for businesses to deploy the next generation of high-speed wireless coverage for 98 percent of all Americans.”
• Clean energy (emphasis added): “Now, clean energy breakthroughs will only translate into clean energy jobs if businesses know there will be a market for what they’re selling. So tonight, I challenge you to join me in setting a new goal: By 2035, 80 percent of America’s electricity will come from clean energy sources.”

Let us leave aside the staggering pick-a-number-out-of-the-sky presumption of that last statement, which suggests that in two-plus decades our nation will reduce coal from more than 50 percent of total electricity generation to no more than 20 percent. It seems that the president is prepared to use a two-edged sword to make that happen: First, hitting up taxpayers in order to lavish billions of dollars in subsidies on wind, solar, and other producers of politically favored forms of alternate energy. Second, forcing utilities to buy at inflated prices from the same subsidized producers, which — by federal fiat — would be guaranteed the lion’s share of the power industry’s demand for energy. That, in turn, would force the utilities to jack up their rates on homeowners and businesses.

There is an overwhelming body of scholarly evidence, to which the Show-Me Institute has contributed, supporting the conclusion that whenever government intervenes in the marketplace in order to try to pick winners and losers, they almost always wind up picking losers and compounding failure. If, as the president suggests, there is a bright future for high-speed rail, high-speed wireless, or wind and solar energy, there is no reason to suppose that private companies would not support such enterprises, lured by the prospect of future growth and earnings.

Finally, Obama talks of giving Americans access to high-speed rail and other projects built at taxpayers’ expense. In doing so, he neglects to consider the deadening effect upon the economy as a whole that has come from ramping up public expenditures. Now or in the future, that can only mean higher taxes on individuals and businesses.

During the past two years, the federal government spending has increased from slightly more than 20 percent of GDP to nearly 25 percent. That is 4 percent of GDP that almost certainly would have been put to better use in the private sector. It is one reason that may be cited for the painfully slow pace of the economic recovery.

On Nov. 2, voters in Missouri and most other states indicated a strong desire for smaller and less intrusive government. Our president does not yet seem to have gotten the message.

Andrew Wilson is a senior editor and writer for the Show-Me Institute, an independent think tank promoting free-market solutions for Missouri public policy. He contributes frequently to the American Spectator, the Weekly Standard, and other national publications. This commentary also appeared in the American Spectator.

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