But What If No One Wants To Come? Part Two

“The plans differ; the planners are all alike…” - Frédéric Bastiat

　
In the video accompanying the post “But What If No One Wants To Come?” there are several political economy, public choice theory and general economic concepts worthy of mentioning.

Private-public partnership is a warm and fuzzy concept politicos love to trot on stage. The concept politicos want to sell the voter upon is that the private sector, the home of efficiency, is going to partner with the public sector, the home of inefficiency and then a magical moment occurs where an efficient outcome results. Nay, nay! As pointed out by Ludwig von Mises in his 1921 book Socialism, An Economic and Sociological Analysis, private-public partnerships produce sub-optimal outcomes with the only worse outcome being a totally public sector endeavor. How so?

Politicos through the mechanism of government use bureaucrats to deploy their dealings. Bureaucrats are by design cautious characters that take no risk. Meanwhile private sector entrepreneurs are risk takers. The mixture of the risk adverse and the risk taker inevitably produce a sub-optimal outcome. Enterprise is a risk taking venture with the bureaucrat being a fish-out-of-water wanting to take little or no risk. Meanwhile the risk taking entrepreneur is stymied by the bureaucrat’s need to be risk adverse, with the result in the main and upon normal occasion, being a sub-optimal outcome. (1)

Incumbent politicos like to show potential voters that they are “doing something”. The “something” proposed can easily be highly uninformed policy. Notional proposition based policy rather than evidence based “something(s)” are routinely proposed by politicos. How can they propose such non-evidence based propositions? The politico knows that contrary to popular belief, voters are uninformed. Voters are rationally-uninformed as the price to become informed is outweighed by the cost (deploying their time and resources elsewhere i.e. the alternative). Hence uninformed policy matches an uninformed electorate.

The “something” proposed in many cases comes in the form of a “monument building exercise”. Politicos love to build monuments to themselves. Monuments depicting the “something(s)”. Moreover, the monument to themselves is generally advertised as anything but a monument to themselves. The monument building exercise is cloaked as doing so for the greater good (whatever that is), for the voter, for you, for the public and generally enhanced as a “legacy for future generations”.

Then comes the complications of central planning of turning the “doing something” into the “monument”. The base uninformed policy, a central plan, inevitably runs into reality. The notional proposition begins to unravel as rather than being spontaneous/emergent order based with free market forces influencing demand and supply, an artificial demand and supply have been created. Hence the central planner has to tweak their “something” in an attempt to fix the many shortcomings associated with notional propositions (non-market, non-evidence based central plans).

And about the legacy and future generations: The incumbent politico’s event horizon is the next election. Therefore the cascading unintended consequences inherent with the deployment of a notional proposition, occurring years into the future, a price borne by future generations of un-born voters, are of no matter to the politico as they will either be dead or out-of-office. Therefore the event horizon of the politico dictates near-term “something(s)” with the “legacy” being no more than the price of failure of near-term something(s) superimposed upon future generations years into the future.

“The inefficiency of political control of an economy has been demonstrated more often, in more places, and under more varied conditions, than almost anything outside the realm of pure science.” - pg. 166, Thomas Sowell, 1999, The Quest for Cosmic Justice

　
Notes:



(1) Socialism, An Economic and Sociological Analysis, 1921, Ludwig von Mises, pg. 256 - 257.


　

Poor Public Investments: Potholes for Stadiums

Redux: Who would be stupid enough to spend $22.5 million to get water and sewer to a Megasite, about 10 miles away from another that already has it?

George Hartzman has a most excellent post regarding the close proximity of the Chatham-Randolph mega site, a completed mega site, and the Greensboro-Randolph fledgling mega site. One should consider visiting the post as it includes plenty of useful data and links:

http://greensboroperformingarts.blogspot.com/2015/02/who-would-be-stupid-enough-to-spend-225.html


Yes, no one would be that stupid, which is likely Mr. Hartzman’s point. Meaning, "stupidity" is not the cause for expending $22.5 million.

One can clearly state, with great certainty, that the deployment of $22.5 million to a fledgling mega site, roughly 10 miles from a completed mega site, has nothing to do with free markets or capitalism. That is, capitalism is much different than "rich-friendly legislation" -or- "politicos through the mechanism of government granting privilege".

Win, lose or draw someone will make money at the expense of taxpayers. The only "failure" possible, is for the taxpayer to fail.

Better yet, say there really is one elusive auto assembly plant out there. The more empty mega sites the better for the rent-seekers of the elusive auto assembly plant. Is it better to have 180 empty mega sites or 181 empty mega sites if you are the elusive auto assembly plant? 181 of course!

Putting the above observations into an action phase: Elusive auto assembly plant X finally strikes its colors and becomes a known-known looking for a location. Beyond the taxpayer funded resources already sunk into many of the 181 mega sites, X can now demand a premium price to locate as only one winner will emerge and 180 empties will remain.

Taxpayer money will be ramped up as the sweetener with the final winner really being the final loser regarding the taxpayer. The taxpayers associated with the remaining 180 empty sites being losers as well.

Regardless of the 181 taxpayer losers, select and particular winners will emerge, at taxpayer expense.

Sweet!

Veterinary Science on the Skids: More Expensive Pet Care Saves You Money

“Cutting the Gas Tax, Giving Teachers a Tax Deduction

Raleigh, N.C. – Maintaining a strong transportation system is crucial to preserving a growing and productive economy. North Carolinians deserve roads and bridges that safely connect them to their jobs and families, and businesses need high quality infrastructure to move people and products and keep our economy thriving.

But the lack of certainty in North Carolina’s gas tax makes it very difficult for the state to plan and fund road projects. One of our state’s most volatile revenue streams, the gas tax, makes up nearly 70 percent of the fund to maintain roads and bridges and approximately 60 percent of the state Department of Transportation’s budget.

That’s why, with wide-ranging support, the Senate passed a bipartisan bill to cut and freeze the gas tax to 35 cents per gallon effective March 1. The bill changes how the gas tax is calculated, providing much-needed funding stability to help protect critical transportation projects. It also provides a tax deduction for teachers who purchase classroom supplies out of their own pockets.

Members of the business and transportation communities – including the North Carolina Chamber and AAA Carolinas – along with local governments have all come out in support of the bill.

This balanced plan provides tax relief for all North Carolina drivers while helping ensure the state has the long-term resources necessary to build and maintain safe roadways, bridges and economic corridors.

A recent report released from NCDOH provided a list of projects in both the Highway Fund and Highway Trust Fund that will be delayed if the gas tax drops to projected levels.

Potential project delays included in the list for Guilford County total $20,527,242 ($5,422,982 from Contract Resurfacing, $743,214 from Pavement Preservation, $412,060 from the Bridge Program, $6,550,490 from Primary and Secondary Maintenance Activities and $7,398,496 from the Powell Bill).”

District 27 Newsletter - Volume 2, Issue 2 - February 24, 2015‏

　
Senator Trudy Wade
300 N. Salisbury Street
Room 521
Raleigh, NC 27603-5925

　

　

Being an expert in one field by no means makes one an expert in another field. Hence Veterinary Science might just, maybe, be a stretch regarding public policy in the field of infrastructure and taxation thereof (public finance).

One might consider engaging in a public choice theory adventure and examine the above news release to see if one can indeed understand pet care more thoroughly:

　

“Maintaining a strong transportation system is crucial to preserving a growing and productive economy. North Carolinians deserve roads and bridges that safely connect them to their jobs and families, and businesses need high quality infrastructure to move people and products and keep our economy thriving.”

Got it, safety and economic growth are the main concern. Very warm and fuzzy stuff!

　

“But the lack of certainty in North Carolina’s gas tax makes it very difficult for the state to plan and fund road projects. One of our state’s most volatile revenue streams, the gas tax, makes up nearly 70 percent of the fund to maintain roads and bridges and approximately 60 percent of the state Department of Transportation’s budget.”

Ah, politicos don’t have enough money and said politicos need a steady stream of other people’s money. Go figure.

　

“That’s why, with wide-ranging support, the Senate passed a bipartisan bill to cut and freeze the gas tax to 35 cents per gallon effective March 1. The bill changes how the gas tax is calculated, providing much-needed funding stability to help protect critical transportation projects. It also provides a tax deduction for teachers who purchase classroom supplies out of their own pockets.”

Oh, new zeniths in rationalization of somehow and in some way all the James and Jane Goodfellow(s) across North Carolina wanted their gasoline tax raised. Yep, politicos just raised your gasoline tax:

Senate bill could push NC gas tax 7 cents higher in future years, news observer.com, 02/10/2015


http://www.newsobserver.com/2015/02/10/4545808_senate-bill-could-push-nc-gas.html?rh=1


　

“Members of the business and transportation communities – including the North Carolina Chamber and AAA Carolinas – along with local governments have all come out in support of the bill.”

That’s the ticket! When notorious special interests and other politicos support tax hikes that makes for good public policy...errr...politics!

　

“A recent report released from NCDOH provided a list of projects in both the Highway Fund and Highway Trust Fund that will be delayed if the gas tax drops to projected levels.”

Great! Raise a regressive tax on the poor and have them build the bridges. Brilliant!

　

One should strongly consider that regardless of the letter appearing after the politician's name, be it D, R or I, they are politicos first and foremost. And as such, one would be well served to consider this quotation:

“So it’s no surprise that governments with vast powers routinely behave stupidly: they are attempting to do the impossible while being overseen by the ill-informed.” - Don Boudreaux