Wednesday, October 14, 2009

No Tax For Largesse!

How about this guy, Marc Emery!! (not to be confused with our Prince of Pot, Marc Emery of Vancouver).

I have always been suspicious of these types of events "bringing in millions of dollars into the local economy". As with most "delusions of government grandeur", I always get the same feeling: 'There's something fishy going on here.' What I am talking about is the vast fortune that seems to come with the hosting of the latest sporting gathering.

But the arguments always have the same ingredients:
1. The Trough Sucker: The self serving local politician(s) selling the notion to local people. This person or people always resemble a used car salesman and if you want to know what I mean go and watch around the 2:42 minute mark of the video and look at Gordon Hume. They are employed by the local government (mayors, city councillors, MLAs, etc.) so their livelihood comes from the taxpayer's pockets. However, the real damage comes from the fact that their career is entirely composed of spending other people's money. So these people, whose most meaningful employment, in terms of benefit to society, came when they pumped gasoline in high school, get to spend their days imagining ways to blow millions of dollars on make work programs. No! Scratch that, I can almost guarantee that these types of people never pumped gas in high school. They most likely spent all their time in student's societies and student government and lived off of the allowance dolled out by their parents.

2. The Flawed Investment Argument: No matter how much money is spent on the event, the overall project never seems to go revenue negative and people constantly echo the political catch phrase: "It will bring in millions to the local economy." Well, I am not disputing that the local economy gets a boost, however, the obvious thing is that if you spend millions on an event that brings in millions, then it's a wash and you might as well not bother. These events always "bring in lots of jobs" and have "intangible benefits." Intangible benefits is just another word for all of the stuff that is worth $0. It is intangible, not easily measured, for a good reason because anyone who tries can't come up with anything. And should local government, or any level for that matter, really be so fixated on temporary benefits to the local economy? After all, these "boosts" or "stimulus" dollars are temporary and go away. I would prefer it if politicians concentrated on long term problems such such as crime. I will give an example from where I live. I play soccer and we used to play in these horrifying, dilapidated old hockey arenas. So when Regina hosted the Canada Games suddenly we were the beneficiaries of a brand new indoor soccer facility. Good news right? Not so fast. The local trough suckers and the mob neglected to think any further than the initial cost of the building and didn't add up the costs to maintain the facility after the Games left. So now the local Soccer Association has resorted to begging and endless fund-raisers to raise money every year to do required maintenance (replace the turf when it is worn out). Because if the initial capital expenditure was $1M, the expenses releated to maintaining that capital will most likely be as much as 20% of the initial cost or $200k.

3. The Local Mob: These are the people who live there who can be swayed back and forth depending on the efforts and qualities of the advocates on either side of the argument. Most of the time the Mob is swayed towards the Trough Sucker because they usually devote 100% of their time trough sucking, and get paid for it. Whereas the people opposing the largess are usually volunteers who have to work at real jobs during the day and use their spare time to try to put sense into the Mob.

4. The Big Event: Most of the time these are sporting events, such as the Canada Games, Pan -Am Games (being talked alot about in Toronto right now), or more tragically politicians will beggar an entire province going after hosting the Olympics. I am sure that this has been going on for thousands of years since Publius or Tiberius or whoever raided the Roman treasury to build the Coliseum. In those days little guys like Marc Emery would just be clapped in chains and fed to the lions for their opposition. Personally, I don't get the whole male obsession with sports, but I suspect it has something to do with the sheer boredom that comes with marital life and/or life after children. But I can think of only one thing more useless than spending billions to host the Olympic Games and that is the sponsorship of the film industry. At least with a sporting events there are venues that get left behind that the locals can use. Paying thieving movie companies millions so that they shoot third-rate films locally is infinitely worse.

The point to all of this is that there is something fishy about all of these arguments. For one thing if these were true investments, then private companies would have already stepped up. Government would not be needed. Private companies are always relied upon to provide funding for these ventures, however, they never seem to go forward without the government shill ponying up most of the dough.

Yes, there is a boost to the local economy, but it is always overestimated and always temporary. So yes, the local restaurants, hotels, and bars fill up for a couple of weekends, but so what? Do these businesses hire a bunch of new employees? No, that would be incredibly stupid of them due to the temporary nature of the influx of people. Is it a good thing that we have government investment in local facilities that the people can use after the games (new sporting facilities such as pools or fields being improved), of course. But typically, the major investment comes from provincial and federal levels which actually goes against the design of our system of government. Infrastructure is supposed to be paid for and maintained by the local level of government with local tax revenues and if those revenues are not enough to pay for the investment, then it acts as a brake on unwise or unsustainable spending. Did Saskatoon people wish to pay for the new soccer facility in Regina, no of course not, but that is what happened when the provincial government funded the project. In fact, people in Toronto and Charlottetown paid into it too! Local people should decide and pay for local investment.

These things can be good for a city, province, and even a country when done the right way. But it takes prudence, care, and above all integrity and responsibility for limiting spending and keeping things on budget. All of which are almost never present in government projects. Which is why there should never be more than a minimal sponsorship by government using tax revenue. As Marc Emery states over and over in the video, no one is opposed to the events themselves - just the use of tax dollars to pay for it.

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