DISGUSTING

by Russ Roberts on May 17, 2011

in Politics

I live in Montgomery County. The Washington Post reports:

Fans of cheap rotisserie chicken and bulk toilet paper can rejoice. It looks as if a new Costco will be coming to Wheaton in 2012.

The Montgomery County Council defeated a proposal Monday that would have blocked the county from giving millions in funding to shopping mall giant Westfield to help secure the deal.

The vote is a significant victory for County Executive Isiah Leggett (D), who had lobbied for a plan that will give Westfield $4 million over two years. The subsidy raised eyebrows in some quarters because it comes as the county faces a $300 million budget shortfall for its next fiscal year and is cutting a variety of programs.

Leggett’s plan received reluctant approval from council members last fall, but momentum seemed to shift after two new members — Hans Riemer (D-At Large) andCraig Rice (D-Upcounty) — were elected in November.

The deal appeared to be in jeopardy last month, but the Leggett administration moved to make its case. Officials argued that pulling out of the agreement could damage the county’s reputation and undermine efforts to attract businesses.

That seemed to sway Riemer and Rice as well as Council President Valerie Ervin (D-Silver Spring).

“I don’t think [Westfield needs] the money to bring Costco to Wheaton,” Riemer said Monday. “But the integrity of the county is at stake, and I don’t think it’s my right to jeopardize the integrity of the county.”

I don’t get it. Why is $4 million of taxpayer money going to a mall so that Costco will come to Wheaton?

Crony capitalists. Corrupt politicians.

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{ 110 comments }

Don May 17, 2011 at 2:51 pm

Don,

I think you misunderstand. The $4M is just a loan. The repayment is to be made directly to the politician’s campaign accounts over the 10 years or so.

It thought you knew how such financing deals worked :^).

Matt May 17, 2011 at 3:03 pm
jjoxman May 17, 2011 at 3:07 pm

Integrity of the county? That’s good for some laughs.

Methinks1776 May 17, 2011 at 4:28 pm

Took the words right out of my mouth.

I’ll quickly get behind any effort to undermine my county’s attempts to attract businesses at taxpayers’ expense. As worthy a cause as there can be.

jjoxman May 17, 2011 at 5:10 pm

Totally OT, but you are in a perfect line of work for me to ask you: to what extent do you model or account for price inflation?

Methinks1776 May 17, 2011 at 5:32 pm

I really don’t model it at all. Ours is completely a stat arb shop. We build our models around our hedge instruments, which are extremely liquid (SPUs, 10 year bonds, LIBOR, for instance) and inflation expectations are implicit in those instruments.

My husband was an interest rate derivatives trader and his group didn’t model inflation either. The fixed income market is so liquid that none of the traders I know are willing to argue with its predictions by building their own models.

Perhaps hedgies build their own models, but hedgies think the carry trade is arbitrage :)

Joshua May 17, 2011 at 5:34 pm

You’re a chick?!

Mesa Econoguy May 17, 2011 at 7:16 pm

It can be arbitrage, if your holding carry is measured in minutes (which usually defeats the purpose of parking in a higher-return asset).

jjoxman May 17, 2011 at 7:34 pm

Interesting. I appreciate the input.

Btw, for the general fund of everyone else, the most gifted finance people I know are women.

Methinks1776 May 17, 2011 at 8:10 pm

Mesa,

Grrrr. That’s like saying if you get long Intel, but only for 4 minutes, it’s arbitrage.

The carry trade is arbitrage only if there’s no such thing as interest rate parity (and the forward markets are pretty good at maintaining interest rate parity). Otherwise, it’s a currency bet, not arbitrage.

Mesa Econoguy May 17, 2011 at 8:15 pm

I knew that would get you riled up.

Kidding. It’s basically not, though the classic definition of arbitrage, a riskless profit with zero net investment, doesn’t say anything about simultaneous transactions or duration of trade.

Methinks1776 May 17, 2011 at 8:25 pm

A pox on you, Mesa :)

Methinks1776 May 17, 2011 at 5:38 pm

You’re surprised, Joshy?

Ken May 17, 2011 at 5:48 pm

Methinks,

All people who think in stereotypes are surprised when their biases aren’t confirmed. After all, you should be barefoot and in the kitchen. There’s no way a woman could muster the arguments you do and back them up.

Regards,
Ken

Methinks1776 May 17, 2011 at 5:57 pm

Nah, I just think people don’t expect women to be this aggressive and most of the people on these blogs are men.

Dan May 18, 2011 at 12:22 am

Your not feeling your way into the liberal philosophy of enough sympathy to want to take all of the rich people’s money and give it to the oppressed poverty stricken people.

Now, if we find out that you are not white………… Armageddon for the democrat party………..don’t answer it…………. At least there is solace in knowing you are racist…… Liberal demagoguing can be begin…..

John Dewey May 18, 2011 at 9:11 am

” I just think people don’t expect women to be this aggressive”

Those of us who aggressive women have different expectations.

purplefox May 19, 2011 at 2:47 pm

Even more OT, but how would someone go about getting an internship with a financial group without spending another $30k and 1-4 years on schooling?

Mesa Econoguy May 17, 2011 at 7:18 pm

We have established precedent for that here:

http://www.goldwaterinstitute.org/article/6032

John V May 17, 2011 at 4:58 pm

Ditto.

Strange values.

Manfred May 17, 2011 at 3:09 pm

Yes, Prof. Roberts, crony capitalists and corrupt politicians. But this happens all over the country, at all levels, at the federal, state and local. Why did Wall Street need billions of bailout money (as you so brilliantly described in your paper)? Why do companies need millions and millions of “state incentives” to locate in a certain state? Why do Hollywood moguls need state incentives to make movies in states? In the state where I live, Louisiana, is full of such gimmicks; all voted by politicians, and by the way, consented by the electorate.

vidyohs May 17, 2011 at 3:22 pm

Be of good cheer my good professor, it’s only tax dollars. Work a little harder and a little longer and you’ll be to busy to think about it.

muirgeo May 17, 2011 at 3:23 pm

“I don’t get it. Why is $4 million of taxpayer money going to a mall so that Costco will come to Wheaton?”

This is nothing new but it certainly is becoming more prominant. Indeed it is disgusting to me as well.

Our FCC Commissioner Meredith Attwell Baker voted to allow the merger of giants Comcast with GE and now has accepted a million plus dollar contract to leave the FCC and work for Comcast.

This is our government but if I dare suggest we “take it back” I am accused of being a socialist or a statist or a central planner. I don’t see any logical, rational solution from the libertarian side. It’s all idealist and nice but not applicable to the real world.

The deocratic party at least has the intent of getting money out of politics…. the libertarian idea is that such rule making is an afront to liberty… well this is allwe will get then with “libertarian rules”.

Marcus May 17, 2011 at 3:28 pm

Your brilliant solution is to give more power to the political class.

The Democratic party has no intent what-so-ever to take money out of politics. None.

Dan May 18, 2011 at 12:24 am

NONE!!!!!!! THEY WANT MORE POWER!!!!!

Ken May 17, 2011 at 3:38 pm

muirgeo,

“This is our government but if I dare suggest we “take it back””

What you always suggest is that government grow more powerful, reducing the power of the average citizen, but increasing the power of the politically connected like Comcast and GE. So to “take [govnernment] back” you want to disenfranchise as many people as possible and consolidate power into as few as hand as possible?

“The deocratic party at least has the intent of getting money out of politics”

The democratic party has done no such thing. Obama is expected to raise $1,000,000,000 for his 2012 presidential bid. As Wisconsin showed, the democratic party forces teachers to pay union fees, then the union kicks back and enormous sum to democratic policies in order to force more money into the union. Then there’s Ted Turner, who dumps billions in the democratic flack machine CNN, and George Soros who dumps billions into all sorts of creepy ventures such as moveon.org. All of which every democrat looks up on with approval.

You’re simply a liar muirgeo.

Regards,
Ken

Russ Roberts May 17, 2011 at 3:38 pm

This should be unconstitutional. It should be against the rules. Don and I want rules that limit the power of government. You want to expand it. You’re on the side of the cronies.

vidyohs May 17, 2011 at 3:55 pm

http://www.youtube.com/watch?v=XX8EswfGKQw

Good little video on tax. Good message and better messenger.

John V May 17, 2011 at 5:04 pm

“You’re on the side of the cronies.”

Yes. That’s exactly what Muirgeo is. And he doesn’t even see it. It’s breathtaking.

muirgeo May 18, 2011 at 12:22 am

Do you think money is free speech? I don’t. Do you think corporations are people? I don’t. Do you think lobbying for hire is legalized bribery? I do. Do you think government officials have ANY right to privacy when doing peoples business? I don’t.
Do you think corporations should have very specific and limited charters? I do.

Again you guys propose no relevant potential solutions. The logic of your position quickly fall in on itself if you think it through to any degree.

Methinks1776 May 18, 2011 at 12:46 am

Do you think you’re a clueless idiot who should be locked up for his own safety? I do.

John V May 18, 2011 at 8:07 am

Like I said elsewhere, when the discussion of power and money come up, you totally miss the point….even though it’s written in plain English in front of you.

Your little dream of how government should work…doesn’t work. You want it both ways and you don’t even acknowledge that flaw in your thinking. You actually believe that what you just told me has any value because you somehow have convinced yourself that “corporations” and their money is something that goes unnoticed by others. You really believe that something can be done to stop people in corporations from contributing to political campaigns. You really believe that by somehow doing this that all will work better because somehow not collecting so much money from corporate donors will change how government works. It’s infantile.

Mind you, there is no way to really shut out political contributions. The whole thing is a cottage industry that is complex and wrought with more special number-lettered coded entities than I care to think about. There’s lots of money for both parties to make silly TV ads and radio spots and newspaper ads.

And the reason you think all this matters is because you want that power to exist. You want government to have a level of power that will necessarily attract attention for the more powerful and vested in the citizenry. THAT is what makes your rationale seemingly important to you. The idea, once again, that government simply be reduced so as to not have the power to meddle and control…and thus…be of much less use to the citizenry, just doesn’t penetrate that skull of yours.

crossofcrimson May 18, 2011 at 1:39 pm

“Do you think money is free speech?”

Do you think that the only rights humans possess are circumscribed by the first ten amendments to our glorious Constitution?

“Do you think corporations should have very specific and limited charters?”

“Corporations”, as groups of individuals, should have no lesser or greater rights than the individuals that voluntarily compose them. If an individual should has a “right” to transfer funds to other individuals and/or groups then corporations (or businesses/groups generally), as a collection of individuals, should have precisely the same right to transfer funds.

crossofcrimson May 18, 2011 at 1:40 pm

“have” not “has”…..sorry for typos.

JW May 18, 2011 at 10:02 pm

“Do you think money is free speech?”

Do you think free speech is only your unamplified voice in the town square?

” Do you think lobbying for hire is legalized bribery?”

Do you think it might be in that 1st Amendment thingy?

Don Boudreaux May 17, 2011 at 8:13 pm

Yep.

Dan May 18, 2011 at 12:30 am

Yes…. Limit the power of govt……. Amongst the many things to strip power from govt is a lowered flat tax on corps. With only a 2%-3% deduction for charitable givings.
Reduces many of reasons for lobbying and campaign donations. Key words are ‘many’….
GE. Flat tax, no subsidies or deductions and the ever playing on words to describe which legislated benefit is which….
Shell flat tax….. All on ‘level playing field’….. Yeah, I said the progressive mantra.

Joe Cushing May 18, 2011 at 8:34 am

I was writing the amendment in my head, just before I read this.

brotio May 17, 2011 at 3:56 pm

I don’t see any logical, rational solution from the libertarian side.

This from a ducktor of pediatrics who believes that two-year-olds are altruistic. You don’t see any solutions from the libertarian side because you’re either:
A) Too stupid to comprehend the volumes of solutions presented here in the past
or
B) Willfully ignoring the volumes of solutions presented here in the past.
My bet is that (A) is the correct answer.

This FCC Chairman was nominated by your beloved Savior of Socialism: Barack Hussein Obama (mmm… mmm… mmm) and is no different than Timothy The Tax-Cheat Geithner, Rahm Emmanuel, or any of the other above-the-law bureaucrats appointed by Your Savior.

You are mocked because you only offer platitudes (when you offer anything), and when pressed, you either duck the question or repeat the same, tired cliche, “We must take back government by giving more power to government”.

The deocratic party at least has the intent of getting money out of politics

The Democrats have no intention of getting money out of politics. If they did, they had plenty of opportunity to do so after the 2008 election. Libertarians understand that money flows to power, and that the only way to mitigate the influence of money in politics is to minimize the power of politicians.

John V May 17, 2011 at 5:06 pm

“the only way to mitigate the influence of money in politics is to minimize the power of politicians.”

And therein lies the logic that strikes muirgeo as being incomprehensible Sanskrit.

muirgeo May 18, 2011 at 12:27 am

“You are mocked because you only offer platitudes (when you offer anything), and when pressed, you either duck the question or repeat the same, tired cliche…”

Baloney… in a logic based debate comparing our two philosophies I will quickly have you backed into a corner.

In the real world my philosophy is the most successful while your’s really doesn’t exist. It is radioactive and quickly decays into something else… Your philosophy is simply a ruse to keep the cronies in power and to get the ruled to consent…. another opiate of the masses.

Seth May 18, 2011 at 1:29 am

It’s not as cut and dried as that.

Our society, like all others, has a lot of genes that came from a lot of ancestors. To say its one thing or another is way oversimplifying.

There are elements of our philosophy that are at work in our society, as there are elements of yours’.

muirgeo May 18, 2011 at 2:14 am

“There are elements of our philosophy that are at work in our society, as there are elements of yours’.”

Yes. Indeed. Modern society is a MIXED economy and much more. The evidence suggest to me when we loosen regulation too much things tend towards instability and inequity and inefficiency. The idea that the economy and society could be simplified to a libertarian format has no basis in reality. The changes I might suggest that would improve our society and our economy are relatively minimal from what we have. To go to a libertarian society would be a RADICAL departure from what the current most successful societies have been. The results of your society are an unknown. I don’t think it guarantees efficient markets or even liberty. And indeed it could be quite disastrous for millions and IMO could actually lead to serfdom.

What you guys offer is IMO corporate rule which is far more authoritarian then any social democracy.

Dan May 18, 2011 at 2:26 am

You have failed to successfully evaluate and investigate the Housing calamity. You stopped at Financial institutions embarking on the CDO’s and bundling of mortgages. You have failed to fully investigate back further as to how and when they got the ‘deregulation’…..and to what deregulation are speaking of ………….. What supposed problem was in the Housing Industry that required the Democrats and stupid Republicans at that time to intervene…… Then look at how the White House in the nineties and Congress approached the financial institutions in regards to the CRA and their accusations of racism/discrimination…… The threats by Janet Reno of the DOJ to prosecute based on STATS………STATS???? Stats that are misleading, especially as other statistical information is conveniently tossed aside.

Then you can move on to GWB who pushed Congress for the legislation to make LMI borrowing even more convenient.

You……..nor anyone else on this entire planet have a right to a mortgage or a single family or single occupancy dwelling with a ‘white picket fence’ and ‘backyard’. NO RIGHT TO A HOME!!! IT IS AN EARNED ACQUIREMENT THROUGH TRADES OF WANTS……… CASH FOR A PLOT OF LAND WITH A STRUCTURE….

Dan May 18, 2011 at 2:32 am

INEQUITY?!?!?!?!

I am not equal to you, nor are you equal to me. I have a 6 yr old computer, I built myself. I bet you do not? Inequity!!! Call Congress and the DOJ for an investigation.

Instability came from govt malfeasance by intervening in the first place….
even by your own accounts…..govt intervened by ‘deregulating’ and things went badly………I disagree with you vehemontly on the course of events……but govt created the mess, either way you look at it………

John V May 18, 2011 at 8:16 am

Muirgeo,,

Is this an example of that logic-based discussion you were speaking of?

The one where you run off on your usual diarrhea of self-contradicting platitudes and vague assertions? Ah. OK.

muirgeo May 18, 2011 at 10:03 am

Dan,

“I am not equal to you, nor are you equal to me. I have a 6 yr old computer, I built myself.”

Uhh … no you don’t. Did you invent the microprocessor? Do you have your own original OS. Did you discover polymers? Did you build the roads you drove to collect the parts you didn’t build… yourself? You didn’t build it yourself… you had lots and lots and lots of help from the government.

Marcus May 18, 2011 at 10:05 am

@muirgeo,

When ever I see a leftist pointing out that people need other people, I think of “I, Pencil”.

Seth May 18, 2011 at 10:12 am

“What you guys offer is IMO corporate rule which is far more authoritarian then any social democracy.”

By what mechanism(s) does “corporate rule” become authoritarian?

John V May 18, 2011 at 11:05 am

“By what mechanism(s) does “corporate rule” become authoritarian?”

Muirgeo will not answer this…at least honestly.

crossofcrimson May 18, 2011 at 1:46 pm

“What you guys offer is IMO corporate rule which is far more authoritarian then any social democracy.”

Says the guy who promotes centralization of power and corporate protectionism….

Dan May 18, 2011 at 11:54 pm

Muirgeo….. Your ludicrous….. Built…. Means assembled….. Didn’t have Dell or apple put my computer together …. I know , i know….. You would have govt forbid home assembly and purchasing of separate parts …..
It’s not equal.

crossofcrimson May 18, 2011 at 1:43 pm

“In the real world my philosophy is the most successful while your’s really doesn’t exist.”

I know I must have made this point to you a million times…

But, given the timeline of actual human events, such a point could have been raised perfectly against social democracies. That argument might take you pretty far in swaying people who are unable to think critically – I’ll grant you that. But it holds no place in a “logic based debate” as you so succinctly put it.

muirgeo May 18, 2011 at 3:52 pm

Yeah but like I said the logical argument for a libertarian based society falls apart when examined with any scrutiny. Your position is a bit like arguing that flying elephants could evolve… just cause they haven’t doesn’t mean they can’t. Democracy makes sense based on the nature of humans… libertarianism ….not so much… it actually requires some significant evolving of the human mind…. close to what might be required for flying elephants.

crossofcrimson May 18, 2011 at 4:23 pm

“Yeah but like I said the logical argument for a libertarian based society falls apart when examined with any scrutiny. Your position is a bit like arguing that flying elephants could evolve… just cause they haven’t doesn’t mean they can’t.”

I understand that you want to keep treating it that way, but it doesn’t reflect reality There’s a fairly vast theoretical framework (both from consequentialist and deontological perspectives) that flesh out fully imaginable and workable models. You may believe that some of the constitutive parts of that framework don’t hold up. That’s fine. But, if that’s the case, you have to actually critique what you find to be in error.

You say that:

“Your position is a bit like arguing that flying elephants could evolve… just cause they haven’t doesn’t mean they can’t.”

But I say that:

“My position is a bit like arguing that people will someday cure cancer….just cause they haven’t doesn’t mean they can’t.”

My supposition (without further argumentation) extends just as far as yours, logically. So in order to explain why your analogy applies better than mine, you’re going to have to get specific about theory. This is the point I keep stressing. You can keep rhetorically waving it away if you want. I can say that government intervention is a catastrophe and that you’re simply silly to say otherwise. I have plenty of empirics to back it up. But my arguments are better than that. I think yours are as well, if you choose to employ them properly.

“it actually requires some significant evolving of the human mind”

It really doesn’t. Interestingly enough, I think this is the most common mistake for non-libertarians – they are packing a fatal premise into the assertion….that free markets only work when people are good or perfect. And it couldn’t be further from the truth. In fact, most libertarians adopt libertarianism precisely BECAUSE they understand human vice and imperfection. On the contrary they believe that most other ideologies aren’t as equipped to appeal to that reality; that they REQUIRE (generally) trust in the benevolence of a very few. Libertarians think such pursuits are a fool’s errand. You, again, may disagree that it’s workable. But it would do your own arguments some good if you at least understood the positioning of your detractors (libertarians, in this case) a little better. There is no false presumption of perfect good in humanity – at least not on this side of the aisle.

Marcus May 18, 2011 at 4:26 pm

@crossofcrimson

Excellent post.

brotio May 18, 2011 at 4:32 pm

crossofcrimson,

Excellent rebuttals. Remember, though, that our Dear Ducktor (a pediatrician!) believes that humans are born altruistic, only to be later corrupted by eeevil capitalist, libertarian Republicans.

So, if we would just eliminate eeevil capitalist, libertarian Republicans (Actually you deserve a tidal wave of crude to sweep you and your family away and if you live or don’t you should have nothing to say about it. – Yasafi to VikingVista, on July 11, 2010) then collectivism would work perfectly.

Seth May 18, 2011 at 5:40 pm

“…a libertarian based society falls apart when examined with any scrutiny.”

I’d love to hear some of that scrutiny. Specifics please.

John V May 18, 2011 at 6:03 pm

“I’d love to hear some of that scrutiny. Specifics please.”

Me too. I won’t hold my breath.

You’ll get a hodgepodge of textbook public choice used to criticize free markets and corporatism (synonymous is muirgeo-land)……used to bolster the opposite conclusions that they give. And then you’ll get his standard “concentration of wealth makes people poor” shtick. And this latter is doubly stupid because it uses the premise of corporatism to back it up as well as some zero sum notion that fewer billionaires means the money they don’t earn/keep will make everyone else better off…not only tomorrow (borderline stupid) but for years to (galactically stupid). And if pressed, he’ll use tax rates from the post FDR era and the supposed good ol’ days of 50s and 60s to point to an example of how this notion worked in real life. Of course, you’ll hear nothing to actually explain WHY. You simple get the correlation equals causation routine. The actual facts and real-world factors surrounding business activity/climate/innovation…not to mention the total ruin that Europe and Asia lay in….will be hard to hear from him. The general circumstances that created such a prosperous cycle will all be ignored in favor of the simpleton view that dwells on high marginal tax rates explaining almost everything.

Methinks1776 May 17, 2011 at 4:30 pm

Muirdiot, I haven’t called you a statist, a socialist or a central planner.

I’ve always maintained that you are simply and idiot.

John V May 17, 2011 at 5:07 pm

*LIKE*

muirgeo May 18, 2011 at 12:31 am

John….being a crony.

Methinks1776 May 18, 2011 at 12:49 am

Imbecile. In what position of power did I install John V as a result of our cyber friendship?

I often wonder if you can really be that stupid and then you come along to provide endless evidence.

muirgeo May 18, 2011 at 2:17 am

” In what position of power did I install John V as a result of our cyber friendship?”

Butt Monkey.

John V May 18, 2011 at 7:53 am

After all the time that my responses to you in this thread have been left unanswered, you picked the one with essentially nothing to respond to and said something completely stupid.

Part for the course…

Methinks1776 May 18, 2011 at 8:56 am

John V, I can’t believe you still bother with serious replies to this stool sample.

John V May 18, 2011 at 11:03 am

Methinks,

“I can’t believe you still bother”

I had a minute to kill. ;)

John V May 17, 2011 at 5:02 pm

Wow.

You almost started making sense and then you slip back into stupidity.

Such conyism bothers you but you feel we should empower the Democratic Party and “take back the government” so the government can have even more power to continue this crap? And the libertarian idea of removing this power from the hands of politicians and rendering their job less important and more impotent in such decisions (thereby making money politics less appealing and useful) is somehow not logical.

Whatever. You. Just. Don’t. Get it. WOW.

Sam Grove May 17, 2011 at 5:43 pm

The deocratic party at least has the intent of getting money out of politics

Riiiiight.
Is the “deocratic” party selling bridges too?

Fearsome Tycoon May 17, 2011 at 6:10 pm

I don’t think you really understand. The Democratic Party doesn’t do politics at all. It does truth and justice. The Republican Party has a monopoly on politics. So when Big Labor gives millions to Democrats, that’s not money for politics, it’s money for truth and justice.

muirgeo May 17, 2011 at 3:25 pm

Four months after the Federal Communications Commission approved a hotly contested merger of Comcast and NBC Universal, one of the commissioners who voted for the deal said on Wednesday that she would soon join Comcast’s Washington lobbying office.

http://mediadecoder.blogs.nytimes.com/2011/05/11/f-c-c-commissioner-to-join-comcast/

John V May 17, 2011 at 5:18 pm

Exactly. And your point is what?

This is EXACTLY what happens in powerful government. You can’t stop this with a powerful government. You still live in that Disney Land world where the government can have all the power and discretion to do exactly what you want without being the target of power-grabbing and influence by powerful interests.

IT DOESN’T WORK THAT WAY. You want power that just sits there with attempts to control it by the more powerful and vested people in this country. You want people a world where “things work” so that people like you and Dung get elected and do “the people’s bidding” with all the power you deem necessary while the powerhouses just sit on their hands and do nothing. You want fire without smoke, rotting corpses with no stench, rain with no wetness, hot with no heat and power without corruption.

Go back to bed.

kyle8 May 17, 2011 at 6:23 pm

And yet you still like Washington to have even more control over business and individuals. What does that make you?

BTW, the Deocratic party (good Freudian slip there), Had two years of unopposed power in which they could have taken money out of politics or any number of other reforms. Instead they spent more money in two years than the previous Administration did in eight years and they failed to even pass a budget for this year.

Dan May 18, 2011 at 1:55 am

And Jeffery Immelt at the White House? Unions getting waivers from the Obamcare disaster? GM getting a waiver on profit taxation over the next 2 decades so that they can have cleaner books to pay off the billions on loans?
Cronyism, alright!!!! from the White House.

Jacob Oost May 17, 2011 at 3:55 pm

And leftists will use this kind of crap to criticize free market economics, not understanding what they’re talking about.

John V May 17, 2011 at 5:19 pm

Yes. Muirgeo does it all the time.

Joshua May 17, 2011 at 3:57 pm

Sounds like firms have taught municipalities to be a little more free market like. Now, municipalities have to compete against one another to get the business (investment), and to a potential investor, offering subsidies is little more than giving an initial one time savings on future property taxes, right?

Ken May 17, 2011 at 5:38 pm

Joshua,

“Sounds like firms have taught municipalities to be a little more free market like.”

No. Tax payers teach municipalities to be more free market oriented by moving from places like CA and NY to places like SC and TX. Why stay in, or keep taxable capital in, high tax areas? As in business, there is competition in government as well.

Regards,
Ken

erp May 17, 2011 at 4:04 pm

The same thing is being done in our little corner of Florida. It’s sold as a tax lowering device which brings jobs to the area. Of course, it does no such thing, but nobody but a bunch of old fogies notice.

Methinks1776 May 17, 2011 at 4:31 pm

Aren’t old fogies like 85% of the population in Florida?

Joseph Sunde May 17, 2011 at 4:31 pm

I love that “jeopardize the integrity of the county” bit. Hilarious.

Ian May 17, 2011 at 5:24 pm

Here in St. Louis this article recently really aggravated me:

http://www.southcountytimes.com/Articles-i-2011-03-11-173994.114137-Board-Makes-Viking-Center-Its-Own-Taxing-District.html

They made a single hotel its own “redevelopment district” so they could funnel money into the owner’s coffers.

Stone Glasgow May 18, 2011 at 12:36 am

Muirtard thinks that it is possible to set rules that won’t be changed, written and enforced by perfect, god-like men.

Methinks1776 May 18, 2011 at 12:53 am

Awe…now, he doesn’t think they’re perfect, god-like men (especially not the republicans – the democrats mostly are, though). He just thinks “we” can perfectly control them by forcing them to wear microphones while doing their bidness in the Capitol Hill urinals and meeting with their mistresses on Thursday afternoons.

Stone Glasgow May 18, 2011 at 3:38 am

And the god-men force them to wear the microphones

Mr. Econotrian May 18, 2011 at 1:47 am

Just 6 years ago, Maryland passed an (illegal) anti-Walmart law.

Now they want taxpayers to pay for a Costco store?

How quickly the corrupt politicians change their stripes to make a buck!

dan May 18, 2011 at 1:50 am

Get the hell outta here!!!!! They made it damn near impossible for Walmart but are paying for Costoc build?
What if it were Sam’s Club……owned by the same company…..Walmart? Would Sam’s Club be bludgeoned by the same legislative stalwarts?

Eric Hammer May 19, 2011 at 5:33 pm

Last I saw, Costco gave very heavily to Democratic election campaigns while Wal-Mart was slightly on the Republican side. Probably has something to do with favoring one over the other.

Also, for some reason people get in a tizzy about Wal-Mart but not Target, K-mart or Costco. Go figure.

dan May 18, 2011 at 1:52 am

By the way…………. Walter E Williams newest column is BRILLIANT!!!!!!
SO SIMPLE AND EASY, THAT EVEN MUIRGEO CAN UNDERSTAND!!! I LOVE WALTER WILLIAMS AND THOMAS SOWELL!!!
I hope that they are great astute people in person.

brotio May 18, 2011 at 3:52 am

You’re incredibly optimistic. I doubt that Yasafi understands 1+1=2.

Stone Glasgow May 18, 2011 at 3:44 am

Why doesn’t Costco or Walmart just open stores with new, unknown brand names, supplying them with the same goods at the same prices? How could any government gain public support for anti Billmart propaganda?

Gordon Richens May 18, 2011 at 8:17 am

$4 million for a Costco. How poetic.

John Dewey May 18, 2011 at 9:20 am

“Crony capitalists. Corrupt politicians.”

I very much dislike the term “crony capitalists”.

Let’s be clear about who is committing the sin.

A corporate leader by contract and by law is obligated to act on behalf of the owners of his corporation. If seeking government favors through legal means benefits the business owners, then that corporate leader has an obligation to do so.

An elected representative is tasked with acting on behalf of the elecctorate – both those who vote for him and those who do not. If such an elected official favors one business over another – or uses taxpayers’ funds to subsidize business at the expense of the electorate – then the elected official has not fulfilled his obligations and should be held accountable.

When bribery is made legal, it is not the one who bribes who sins. it is the one who accepts the bribe.

carlsoane May 18, 2011 at 1:09 pm

If it’s legal, then nobody sins. The problem lies elsewhere, probably with an electorate that is not watching its representatives closely enough.

John Dewey May 18, 2011 at 2:28 pm

I don’t know, Carl. Elected officials often write the laws which make legal their unethical and sinful behavior.

For me, “illegal” and “sinful” are not synonyms.

I agree that the electorate does not watch its representatives closely enough. Also, much of the electorate is too ignorant of economics to understand when they are being harmed by the actions of their government.

Marcus May 18, 2011 at 2:50 pm

I don’t agree with these arguments that people are too ignorant of this or that. Those are the kind of arguments we get from left-wingers in their justifications of why they need to think for us.

Rather, the problem is, as Bryan Caplan points out, the incentives of voting are irrational.

John Dewey May 18, 2011 at 3:34 pm

What you seem to be arguing is this:

1. left-wingers use ignorance of the populace to justify government intervention;

therefore

2. any suggestion that the populace is ignorant must be wrong.

Sorry, but I don’t understand your logic. Furthermore, I have seen too much evidence of economic illiteracy to believe it is not real.

The solution to poor decision-making based on economic illiteracy is not government intervention but rather increased economic literacy.

carlsoane May 18, 2011 at 5:00 pm

You’re right. They’re not synonymous. I don’t want to discount the importance of ethical and moral behavior in addition to simply legal behavior among politicians.
The issue I was focused on was the question of the check and balance for corporate favoritism. Ultimately, that resides with the electorate. And, if we, the electorate, are not well enough educated and informed to understand the implications of favoritism, we’re hosed.

John Dewey May 18, 2011 at 5:59 pm

I agree.

Dan May 18, 2011 at 11:57 pm

We are hosed as there are a couple million muirgeo’s out there.

Big John May 18, 2011 at 10:05 am

OK – Clowns to the left and Jokers to the right. Enough ranting. Everyboyd please put your big boy pants on now and stick to the topic.
Crony Capitalism is just plain wrong and cannot be defended in any manner or under any pretense.

Dan May 18, 2011 at 11:58 pm

@big john

Thanks foe being so clear and concise

John F. Opie May 18, 2011 at 10:44 am

It’s simple: someone is paying Costco (or, more exactly, providing Costco with incentives worth a set sum of money) to locate in Wheaton, rather than elsewhere. Costco knows its market value (in the sense of knowing what it is worth that a Costco is located in a particular area, rather than in an adjacent township.

Why would Wheaton do this? Simple: they want the tax revenues to run through Wheaton, not elsewhere. If they are willing to pay $4mn to do so, and there is no corruption involved (I know, I know), then that is probably the market value of having a Costco in Wheaton.

Why would a local politician want a Costco or a Walmart in their town? There’s a whole slew of possible reason: rational, irrational, legal and unlawful. Rational reasons might be wanting such a store for local residents to improve their quality of life (more bang for their ever-shrinking buck), as well as tax revenues from the operation (property, payroll, income, sales) that would be meaningfully larger than not having a Costco or Walmart. Irrational reasons might be wanting show up that uppity council member from that other township and stop him from having that revenue or simply someone having the hots for shopping at Costco and the next one is too far to drive. Legal reasons are any that don’t break the law, and unlawful ones are those of crony capitalism, with paybacks, favoritism and kickbacks expected for the quid pro quo.

Without knowing more than is mentioned above, consider this: commercial real estate is, largely, dead in the water. The $4mn isn’t just for Costco, but for an entire mall using a Costco as at least one of their anchor stores, which, given the attractiveness of Costco for many consumers, means generating significant mall traffic. Having a developer decide to open a mall in your area is, in the great scheme of things, given the current dead-as-a-dodo nature of commercial real estate, quite an achievement, and should serve to significantly enhance the reputation of the politicians involved (in other words, bragging rights and put-down lines for the local assembly (“So, Fred, what have you done for this community? I got that mall into our community where I saw you last Friday with your lovely wife and children shopping. So no, until you can top that, Fred, you can’t be on our super duper special committee…”)

I wouldn’t automagically assume crony capitalism. On the other hand, it is Maryland and there are Democrats are involved. Empirical review of these facts should suggest something…

John Dewey May 18, 2011 at 10:46 am

“Crony Capitalism is just plain wrong and cannot be defended in any manner or under any pretense.”

Sorry, but I disagree. At least, I disagree with what I think you are saying.

Elected officials who allow themselves to be bribed are wrong. Corporate leaders who act on behalf of the corporate owners – the shareholders – are not wrong. We should not expect corporate leaders to act on behalf of the taxpayer. We should not expect orporte leaders to act so as to guarantee a free market.

Slocum May 18, 2011 at 12:26 pm

The crony capitalism is obnoxious, but the reflexive sneering over “cheap rotisserie chicken and bulk toilet paper” is almost as bad. Subsidizing Costco is a bad thing, but low-priced food and household goods are great — especially for low income consumers. (And I thought all the bien pensants were supposed to *like* Costco because it pays higher wages than Sam’s Club — didn’t she get the memo?)

John Dewey May 18, 2011 at 3:39 pm

Slocum: “The crony capitalism is obnoxious”

What is obnoxious? that corporate leaders attempt to gain favors from elected officials? or that elected officials actually grant those favors?

To me, what is obnoxious is that voters allow governments to have so much power that profit-seekers even pay attention to those governments.

ben May 18, 2011 at 1:22 pm

Yes, it is disgusting, but at least it is using taxpayers money to help taxpayers get access to lower cost goods.

In New Zealand, the opposite happens. The government spends taxpayer money trying to block developments that would lower costs for consumers. New Zealand is still without its first Ikea store because last year the Environment Court decided that Ikea would be so popular that traffic around it would become snarled. Naturally, incumbent and HORRIBLY overpriced furniture retailers in New Zealand lobbied hard for and got this outcome.

But there you go: an application turned down precisely because consumers would love it so much. I’d prefer a government that spends my money at least trying to make me happy. Yes, second best, but better than the government spending my money to deprive me of access to cheaper stuff for no good reason.

brotio May 18, 2011 at 3:59 pm

You’re giving (some) government too much credit. There is no intention by government to help anyone other than government. If the citizens of Montgomery County get lower-priced goods as a result of this cronyism, then that’s just a happy accident.

Dan Sheveiko May 18, 2011 at 3:39 pm

This project includes a Costco gas station, slated to be the busiest fueling operation in the entire County, being shoehorned next to an outdoor community swimming pool and single-family residences. The project also got a waiver for Environmental Site Design and an exemption from Forest Conservation Plan, and is not required to even file a site plan or a traffic study.

Dan May 19, 2011 at 3:55 pm

Adherence to legislation or law is for the peasantry. Federal and state govt officials can simply give a waiver to any legislation or law as it seems fit……….HOUSTON WE HAVE A PROBLEM.
Now, see……
Govt is the problem……
Can’t blame the business for asking…..
When your committed partner cheats on you……
Do you blame the person with whom she/he had an affair….
Or do you blame your significant other?

Don’t blame the business………. As much, they share blame……… But, should govt be limited in size and scope as intended, there would be little or no cheating……. They would nit have the power to do so and the business or individual would not waste time and money to bother…… I don’t think this is hard to understand nor is it truly refuted…….it just does not help advocates of collectivism attain their agenda of enormous broad govt.

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