McHenry’s Steve Stanek shared two email attempts to persuade the Northwest Herald to provide balanced coverage on McHenry County College’s attempt to put a baseball stadium in Crystal Lake.
In the first, sent on November 21st, Stanek finds an issue paper written by MCC consultant Economics Research Associates. At the last board meeting, ERA tried to expand its role from 3rd party reviewer to baseball stadium promoter. The email is to Group Editor Chris Krug.
This is from the March 19, 2006 Boston Globe article on the foolishness of sports facilities subsidies to which I sent you a link last week:
ACCORDING TO [Vanderbilt University economist John] Siegfried, there’s a remarkable agreement on these points. In economics, he says, ”with most empirical issues there’s lots of debate. Does the minimum wage cause unemployment? There’s lots of debate about that issue. Here there’s no debate.” Even the consulting firm ERA put out an issue paper, back in 1995, cautioning against ”over- blown claims of the economic value of major league sports teams” and concluding that, ”Compared with more traditional public investments of scarce economic development dollars. . .sports facilities are a rather poor investment.”
First note that we have a Vanderbilt University economist saying “there’s no debate” on the public funding of sports facilities. The overwhelming consensus of liberal, conservative and libertarian economists and public policy researchers is that public funding of sports facilities is terrible economic and public policy.
Second, note that we have Economics Research Associates (MCC’s consultant) acknowledg- ing sports facilities are a poor investment of public funds. Yet according to your own newspaper, the ERA rep a few days ago apparently tried to suggest to the MCC board ways to save the sports stadium (no doubt in hopes of collecting a fee). ERA is engaging in “rent seeking,” as is Mark Houser and his baseball stadium associates.
Rent seeking is the term economists use to describe businesses, groups and individuals who use government to give themselves certain advantages. (Here is a good definition for you from Auburn University.) This can happen through government contracts, direct subsidies, regulations that hinder competitors or hurt consumers, etc.
They often cast their rent seeking in t erms of “public-private partnership” or some such thing, but the main aim is to get government to give them advantages and assume risks.
Public benefit is often the excuse that is used to justify rent seeking, even in the face of clear evidence that the rent seekers’ private gain will come at the public’s expense (through higher taxes, higher prices for goods and services, slower economic growth in other areas, etc.).
Businesspeople who engage in rent seeking, and government officials who aid them, often call it “economic development.” They do this even though economists overwhelmingly conclude there likely will be no net economic gain, as in the case of subsidized sports facilities.
Motorola in the mid-1990s engaged in rent seeking, receiving taxpayer “incentives” worth well over $50 million (in inflation-adjusted dollars) for the cell phone plant in Harvard. (This does not include several million dollars of road work done at Motorola’s request after the plant opened.) Have those incentives created the promised number of jobs? Generated the promised tax revenues? Sparked the promised ancillary development? No, no, and no.
Given this sorry record and the cheerleading the Northwest Herald did for the Motorola plant subsidies, I would expect the newspaper to be more circumspect about this whole stadium/entertainment issue.
Maybe it would help to bar executives at your newspaper from serving on the board of the county’s economic development corporation. This way perhaps the newspaper would take a more clear-eyed and balanced look at such issues.
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Northwest Herald Group Editor Chris Krug is seen top left.
Economics Research Associates spokesman Richard Starr is seen trying to tie a baseball stadium into McHenry County College’s mission statement, which is etched in the glass panel. Earlier his firm submitted a devastating 3rd party review of the Equity One feasibility study.
At the bottom are two views of the now underutilized Motorola campus in Harvard. In the bottom photo, note that the driveway was blocked by gates when I took this photograph in early October of 2006.