Category Archives: Corporate Welfare

We Need a Social Economy, Not a Hyper-Financialized Plantation Economy

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By Charles Hugh Smith

Source: Of Two Minds

The key to broadly distributing capital and reversing inequality is to nurture the source of social capital: the community economy.

We all know what a hyper-financialized economy looks like–we live in one:central banks create credit/money out of thin air and distribute it to the already-wealthy, who use the nearly free money to buy back corporate shares, enriching themselves while creating zero jobs. Or they use the central-bank money to outbid mere savers to scoop up income-producing assets: farmland, rental properties, cartels, etc.

The only possible output of a hyper-financialized economy is rapidly increasing wealth and income inequality–precisely what we see now.

What we need is a social economy, an economy that recognizes purposes and values beyond maximizing private gains by any means necessary, which is the sole goal of hyper-financialized economies.

Given the dominance of profit-maximizing markets and the state, we naturally assume these are the economy. But there is a third sector, the community economy, which is comprised of everything that isn’t directly controlled by profit-maximizing companies or the state.

What differentiates the community economy from the profit-maximizing market and the state?

1. The community economy allows for priorities and goals other than maximizing profit. Making a profit is necessary to sustain the enterprise, but it is not the sole goal of the enterprise.

2. The community economy is not funded by the state.

3. The community economy is locally owned and operated; it is not controlled by distant corporate hierarchies. The money circulating in the community stays in the community.

4. The community economy is not dominated by moral hazard; the community must live with the consequences of the actions of its residents, organizations and enterprises.

The community economy includes small-scale enterprises, local farmer’s markets, community organizations, social enterprises and faith-based institutions. Its structure is decentralized and self-organizing; it is not a formal hierarchy, though leaders naturally emerge within civic and business groups.

Few Americans have worked on a plantation. I am likely one of the few who has lived and worked in a classic plantation town (Lanai City, circa 1970; I picked pineapples along with my high school classmates as a summer job).

In my analysis, the current financial system is akin to a Plantation Economy:highly centralized and hierarchical, devoted to maximizing profits for distant owners, a finance-fueled machine for extracting wealth from local economies.

I call this the Neocolonial-Financialization Model:

The E.U., Neofeudalism and the Neocolonial-Financialization Model (May 24, 2012)

Wal-Mart and the Plantation Economy (August 24, 2010)

Colonizing the Plantation of the Mind (August 25, 2010)

Greece and the Endgame of the Neocolonial Model of Exploitation (February 19, 2015)

We can differentiate the community economy by comparing it to a hyper-financialized Plantation Economy. In a Plantation Economy, a once-diverse landscape of decentralized, locally owned small enterprises is displaced by corporations that are dependent on the state for their profits via direct subsidies, tax breaks, or a cartel/monopoly enforced by the state. (Think Big Pharma, Big Defense, the Higher Education Cartel, etc.)

The corporate Plantation’s low wages leave many of its workers’ families dependent on state aid to survive, and so it prospers on the backs of taxpayers who subsidize its low wages and the externalization of costs.

The current system rewards those with access to cheap capital and the power of the state. The community economy has neither.

The Plantation Economy institutionalizes poverty, parasitic finance, externalized costs, moral hazard (since the corporate/state overseers do not live in the community being cannibalized) and centralized wealth and political power.These are the only possible outputs of the hyper-financialized Plantation Economy.

Once the Plantation Economy has displaced the community economy, opportunities for work and starting small enterprises shrivel, and residents become dependent on state social welfare for their survival. By eliminating the need to be a productive member of the community, the welfare state destroys positive social roles and the inter-connected layers of the community economy between the state and the individual.

When the individual receives social welfare from the state, that individual has no compelling need to contribute to the community or participate in any way other than as a consumer of corporate goods and services. State social welfare guts the community economy by removing financial incentives to participate or contribute.

Why is the community economy so important? The community economy is first and foremost the engine of social capital, which is the source of opportunity and widely distributed wealth.

Social capital is the sum of all the connections and relationships that enable productive collaboration, commerce, exchange and cooperation. (I cover all eight kinds of capital in my book.)

Corporations offer a limited version of social capital–for example, meeting a manager in another department at a company picnic–but most of this capital vanishes once an individual leaves the company (or is “right-sized” into unemployment). This social capital is only superficially embedded in a place and community, as corporations routinely move operations in pursuit of their core purpose: expanding profits.

Corporations cannot replace communities for the simple reason each organization has different purposes and goals. The sole purpose and goal of a corporation is to expand capital and profits, for if it fails to do so, it falters and expires.

The purpose of a community is to preserve and protect a specific locale by nurturing social solidarity: the sense of sharing a purpose with others, of belonging to a community that is capable of concerted, collective action on the behalf of its members and its locale.

Political scientist Robert Putnam has described this structure as a web of horizontal social networks. Unlike corporations and the state, community economies are horizontal networks, i.e. networks of peers connected by overlapping memberships and interests.

It is not accidental that the current system of hierarchical corporations, banks and the state increases inequality and erodes the community economy: the only possible output of low social capital is rising inequality.

Putnam identified a correlation between the inequalities enforced by oppressive elites (slavery being the most extreme example) fearful of the potential of egalitarian (horizontal) networks to organize resistance to their exploitation.

Areas with low social capital are characterized by limited social mobility and rising economic inequality. In other words, the only way to lessen economic inequality is to nurture the horizontal peer-to-peer community economy that creates social capital.

This makes sense, as communities stripped of social capital offer limited access to the other forms of capital needed to launch local enterprises and construct ladders of social mobility.

A vibrant community economy provides members with an infrastructure of opportunity, i.e. multiple pathways to building capital, gaining knowledge and connecting with others.

The key to broadly distributing capital and reversing inequality is to nurture the source of social capital: the community economy.

 

 

The Business of War is the Cause of War

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By Sergey Baranov & Ethan Indigo Smith

Source: Waking Times

If you objectively and consistently observe the mainstream media and its interpretation of global events, its omissive and deceptive character soon becomes abundantly clear. This could hardly be called incompetence. The coverage, which is popularly called “news,” is in fact nothing but a propaganda mechanism, designed to persistently shape public opinion in favor of war.

Who benefits from war?

Certainly not the people on the warring sides. People always suffer in war; their futures ruined and their lives destroyed. In fear, they look to their government to protect them, the very same government that is invested in war. War is a dirty business that profits off death and destruction while generating blood money for the profiteers. The people are told to look the other way, outside of their country – where the ‘enemy’ supposedly resides.

But what if the real enemy is inside the country, and wears expensive suits, not turbans? What if he speaks your language while living in luxury and sending his children to study at Princeton, Yale and Harvard? While your kids are sent off to fight in fraudulent wars for corporate interests masquerading as ‘patriotism’.

This is in fact jingoism – a nationalized fervor of aggression, based on the notion of supremacy, and usually founded in a lust for power and riches. This mindset, of course, isn’t new and is no different from Adolf Hitler’s extreme nationalism, or fascism.

Today we are living under the rule of oligarchical, trans-humanist, eugenicist elites that continuously consolidate power in order to control and confine humanity while methodically stripping us of the power to govern ourselves. One of the best ways to achieve this is to keep the people in constant fear of wars and threats of terrorism, that, in reality governments themselves typically create or sponsor. For example, we can look at the current threat of ISIS which is in fact a remodel of Al Qaeda, a group the CIA created in the 1970’s to fight the Russians in Afghanistan.

Constant mainstream promotion of ISIS with newly released videos of beheadings and other types of inhuman cruelty is used to scare the American people into the further submission, and ever-greater losses of rights and personal freedoms. The growing surveillance and domestic police state, and the passage of laws including the recent renewal of the Patriot Act, wouldn’t be possible without always frightening the general public. This policy ensures the constant funding of the military industrial complex, which unfortunately has taken over the government, as Dwight D. Eisenhower, the 34th President of the United States had foreseen and warned us about on Jan. 17th, 1961.

READ: Former Presidents Warn About the “Invisible Government” Running the United States

How can we stop the war machine?

Well, certainly not by fighting against it using its means. That’s what the machine is designed for, and an armed resistance will only be playing into its hands. After all, they’ve got the nukes and they will use them as they have already done in Hiroshima and Nagasaki. There must be another way to shut down this engine of death.

What is the way to a global peace? Certainly it isn’t paved with war… how absurd! Nor is it threats and rhetoric of war.

Furthermore, the nuclear threat means that the situation today is dire. The wars most of us have known in our lifetimes have not been nuclear which is why you need to wake up and get involved before it happens. There are no survivors under mushroom clouds – everybody dies.

There is no defense in the case of a nuclear war being unleashed – unless you were to commit yourself to living underground in a bunker for the rest of your life, without ever again seeing and feeling the sunshine. It is a death by a thousand cuts if you remain on the surface. There is no technology to clean up radiation and take it out of the air, water and land. The half-life of nuclear radiation is 4.5 billion years, equal to the age of our planet. That means that during this time, the radioactive particles will remain as deadly as they are today. This could be the end of all of us if nuclear war were to be released on a massive scale – a probability that is as high today as it has ever been, and growing proportionally with the insanity of politics.

The cold war between the Soviet Union and USA never ended, only slowly heated up. And even though the nuclear arms race developed through paranoia, the threat of nuclear war today, is in fact a very present and real one.

Realizing that war is an instrument to have us kill and be killed on behalf of corporate interests, we should be refusing the very notion of war, no matter how much we are lied to and instigated to do otherwise. War defeats individuals and empowers institutions. Wars do not happen naturally. They are orchestrated for political and economic advantage by corporate entities for which human life is only a means to a greater enrichment. The United States of America is not the only country in which the military industrial complex has taken over. The same can be seen in many modern nations.‘’War is good for the economy,’’ is a slogan often heard on the news in Israel.

But for which economy? For the economy of peace, or for the economy of war? Is it good for the people or is it good for those who are in the business of bullets and bombs?

Traveling the world and observing ordinary people, one will inevitably come to the conclusion that no one actually wants war. Regardless of the geographical location, nationality, skin color, social status etc., people want peace, and to see their children grow. Wars, although they may appear, are not fought between people. They are fought between military industrial factions and alliances warring for domination and control.

READ: All Wars Are Well Planned Banker Wars, Including World War 3

Banks financing the governments of warring sides are even more heavily involved than the war materials industries. They fund the entire game by lending money to the governments, further sinking nations in debt, while they use this money to kill each other off. Federal spending surges as the military is mobilized. Outlays for troops, weapons and munitions increases as conflicts escalate. Thee fraudulent and never-ending war in Iraq has already cost over 3 trillion dollars and counting – a steady flow of income for all those who are employed and benefiting from war.

While the average person wants to be left alone to live his or her life in peace on either side of an orchestrated conflict, government, corporations and institutions drag us into conflict time and again. The world has become a place where corporate interests, backed by corrupt governments, all funded by evil banks, violate human rights, freedom and dignity beyond measure. This poses an existential threat to the survival of our species that will not abate as long as the military industrial complex maintains its grip on our society and our culture.

 

About the Authors

Sergey Baranov is the author of Path: Seeking Truth in a World of Lies. Follow him on Facebook here. Follow Sergey on Facebook here https://www.facebook.com/sergey.baranov.path

Activist, author and Tai Chi teacher, Ethan Indigo Smith was born on a farm in Maine and lived in Manhattan for a number of years before migrating west to Mendocino, California. Guided by a keen sense of integrity and humanity, Ethan’s work is both deeply connected and extremely insightful, blending philosophy, politics, activism, spirituality, meditation and a unique sense of humour. Follow Ethan on Facebook here: https://www.facebook.com/pages/Ethan-Indigo-Smith/423549761069857?fref=ts

The Calling: How Cronyism Worsens Income Inequality (and Freed Markets Reduce It)

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By Steven Horwitz

Source: Future of Freedom Foundation

I recently gave an introductory Public Choice talk sponsored by Students for Liberty at the University of Ottawa. The next speaker was my friend Anne Rathbone Bradley, who was Skyping in from Washington. Anne gave a terrific talk about cronyism and rent-seeking that nicely complemented many of the points I’d made. But one of the side issues she raised really stuck with me, and I want to expand on it.

Anne connected cronyism (I hesitate to call it “crony capitalism”), rent-seeking, and income inequality in a way I hadn’t quite thought about before. The key to the connection is to realize some important truths about the political process.

The first truth is that cronyism is no accident. It is no accident that the U.S. economy has increasingly become one in which your connections to political power matter more for your ability to increase your wealth than does producing a product or service that consumers wish to buy. We are becoming what Ayn Rand deftly termed an “aristocracy of pull.”

The ability of some to get wealthier through political connections does trouble many on the political left, but they often argue that with better elected officials, or more ethical businesspeople, or limits on campaign contributions, we could dramatically reduce this sort of cronyism. What their argument misses is that as long as government gives out goodies, private-sector actors will find ways to get their hands on them. If you really want to take the money out of politics, you need to make it harder for politicians to hand out money.

For libertarians, the state is always little more than a dispenser of privileges to special interests. This is not an accident of who is elected or who is wealthy. Government privileges provide an easy path to profit for those who can capture them — and with none of the hard work of actually competing in the market. This is why many people, including those in the private sector, like the state.

The second important truth is that these political privileges are much more likely to be captured by those who already have financial and political power. Despite the fantasy believed by so many that government regulation and other interventions are all about constraining the rich and powerful in the name of the masses, in fact a great deal of government regulation is driven by the desires of those same rich and powerful to become more so. The more power we give to government, the more power we are giving to those with the money and connections to access political power. In other words, expanding the state gives more power and privilege to the powerful and privileged.

The last truth is that when private-sector actors seek to use political privileges to enhance their profits, they often do so by blocking smaller competitors’ access to the market, or by raising their costs of competing. When Walmart supports a higher minimum wage, it thereby favors raising the costs for their small mom-and-pop rivals. When taxicab companies defend their monopoly privileges, they intend to shut firms like Uber and Lyft out of the market altogether. When entrenched hairdressers demand that hair braiders be licensed, the established practitioners mean to raise their competitors’ costs or shut them out altogether.

When we put all three of these truths together, we get a story about the way in which those who already have wealth and power can and do make use of the state to block the upward mobility of their poorer, less-powerful potential competitors. Small-business owners, Uber and Lyft drivers, and African-American women who want to open hair-braiding businesses are trying to grab on to the bottom rungs of the income ladder and work their way up. These are the very people — start-up entrepreneurs and the working poor — that those critical of the market claim to care about.

In a world where government has all of these powers to intervene in markets, rent-seeking and cronyism are inevitable. Regulation will ensure that those who know the right people can tilt the regulatory playing field in their favor. The result will be a worsening of the income inequality that concerns so many. The rich will get richer through rent-seeking and cronyism, and they will do so at the expense of the poor and relatively powerless. If rent-seeking and cronyism worsen income inequality, and the source of rent-seeking and cronyism is the state’s ability to intervene, then a pretty good case can be made that freed markets will give us a world with less income inequality than the status quo.

Libertarians are right to point out that inequalities of income are not inherently bad. If the existing pattern of incomes were the result of a truly freed market (like in the famous, if simplified, Wilt Chamberlain example in Robert Nozick’s Anarchy, State, and Utopia), there would be no reason for worry. This is especially true because in a freed market, dynamic change would ensure that the same people do not occupy the same rungs on the ladder from year to year.

However, if inequalities are instead the result of a mixed economy in which those who already have wealth and power can enhance it at the expense of those with less — not to mention the consumers who lose out on the benefits of greater competition and lower prices, then libertarians are right to object and look for solutions. Of course, asking for more state action to combat state-driven inequalities is unlikely to work and very likely to make matters worse.

Thus, we can ground our arguments against government intervention in the market in our desire to reduce inequalities that are not the result of voluntary exchanges that benefit both parties.

Finally, this whole argument gives libertarians another reason to love the sharing economy of Uber, Lyft, AirBnB, and the rest. Not only are such companies providing important competition for established firms and thereby lowering prices and bringing better services and more options to consumers, they are also part of the fight against the unearned privileges of the rich and powerful and the fight against politically driven, and therefore unjustified, increases in income inequality.

Classical liberalism needs to reassert its long-standing commitment to progressive goals, even as it rejects the means preferred by most so-called progressives today. We have an opportunity to bring new allies to our cause by recognizing the interrelationships among rent-seeking, cronyism, the sharing economy, small businesspeople, and income inequality. Let’s not overlook it.

8 Facts About American Inequality

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By Pierce Nahigyan

Source: Nation of Change

…that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement. It is a difficult dream for the European upper classes to interpret adequately, and too many of us ourselves have grown weary and mistrustful of it. It is not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.”

– James Truslow Adams, The Epic of America (1931)

The American Dream has been defined many ways by writers of both poetic and prosaic bent, but its essentials tend to involve life, liberty and the pursuit of happiness (or property, depending on your source).

The Declaration of Independence, upon which an entire nation was radically brought into existence, asserts that not only are all men created equal but that this is a “self-evident” truth. The significance of this fact lies not in its semantics, which epistemologists would challenge, but in its utilization as a primary foundational creed. By this “unanimous Declaration of the thirteen united States of America,” a contract was agreed to, that their union would be founded on this principle. Furthermore, life, liberty and the pursuit of happiness are rights that governments are created to uphold. Thus, America was endowed with its dream at the moment of its conception: the freedom to succeed.  

The United States has promoted a self-congratulating exceptionalism for decades, waving its Declaration and Constitution in the faces of other sovereign nations as if the latter had never beheld such concepts. Our capital F “Freedom” sets us apart from the rest of the world, as the political rhetoric has repeated ad nauseam, no matter the freedoms enjoyed by democracies on every continent. And yet our basic freedom, the freedom to succeed, America’s contractual promise, has been shrinking for thirty years.

The freedom to succeed transcends economic systems but it is most potently expressed by capitalist gains. The ability to go “from rags to riches” is ingrained in this nation’s ethos and there is nothing intrinsically immoral about that goal. However, the current state of American inequality reveals a very real and expanding gap between the rich and poor that betrays the foundational endowment of this Union. When the freedom to succeed is denied every citizen, their equality is equally denied. 

The wealth and income inequalities in America do not require socialist reforms to fix, and capitalism is not the problem. The problem is that we have let inequality advance in this country so gradually that its obviousness is masked by its familiarity. Below I outline eight facts about inequality in America that every American should know. 

1) 400 Americans have more wealth than half of all Americans combined. To put that into context, as of 2013 there are an estimated 316,128,839 people living in the United States, according to the U.S. Census Bureau. Just 400 Americans have more money than over 158 million of their fellow citizens. Their net worth is over $2 trillion, which is approximate to the Gross Domestic Product of Russia. This ratio has been verified by Politifact and former Labor Secretary Robert Reich. One explanation for the vast discrepancy in wealth is the definition of “worth,” which includes everything a person or household owns. This means savings and property but also mortgages, bills and debt. Poorer households can owe so much in debt that they possess a negative net worth.

2) America has the second-highest level of income inequality, after Chile. The Organization for Economic Cooperation and Development studies thirty-four developed countries and ranks them both before and after taxes and government transfers take effect (government transfers include Social Security, income tax credit and unemployment insurance). Before taxes and government transfers, America ranks tenth in income inequality. After taxes and transfers, it ranks second. Whereas its developed peers reduce inequality through government programs, the United States’ government exacerbates it. 

3) The current state of inequality can be traced back to 1979. After the Stock Market Crash of 1929, the gap between the rich and the poor began to narrow. For fifty years, wages still differed greatly between the upper- and working-classes, but a robust middle-class took shape, as well as the opportunity for working-class individuals to ascend. In his book, “The Great Divergence,” journalist Timothy Noah traces today’s inequality to the beginning of the 1980s and the widening gap between the middle- and upper-classes. This gap was influenced by the following factors: the failure of American schools to prepare students for new technology; poor immigration policies that favor unskilled workers and drive down the price of already low-income labor; federally-mandated minimum wage that has failed to keep pace with inflation; and the decline of labor unions.

4) Non-union wages are also affected by the decline of unions. The Economic Policy Institute claims that 20% of the growth in the wage gap between high-school educated and college educated men can be attributed to deunionization. Between 1978 and 2011, union representation for blue-collar and high-school educated workers declined by more than half. This has also diminished the “union wage effect,” whereby the existence of unions (more than 40% of blue-collar workers were union members in ’78) was enough to boost wages in non-union jobs – in high school graduates by as much as 8.2%. Not only did unions protect lower- and middle-class workers from unfair wages, they also established norms and practices that were then adopted by non-union employers. Two prime examples are employee pensions and healthcare. Today about 13% of workers belong to unions, which has reduced their bargaining power and influence. 

5) There is less opportunity for intergenerational mobility. In December 2011, President Obama spoke at Osawatomie High School in Kansas. He was very clear about the prospects of the poor in today’s United States:

“[O]ver the last few decades, the rungs on the ladder of opportunity have grown farther and farther apart, and the middle class has shrunk. You know, a few years after World War II, a child who was born into poverty had a slightly better than 50-50 chance of becoming middle class as an adult. By 1980, that chance had fallen to around 40 percent. And if the trend of rising inequality over the last few decades continues, it’s estimated that a child born today will only have a one-in-three chance of making it to the middle class – 33 percent.”

As refreshing as that honesty is, Obama promised no fix beyond $1 trillion in spending cuts and a need to work toward an “innovation economy.” 

In a speech one month later, Obama’s Chairman of Economic Advisers, Alan Krueger, elaborated on the dire state of America’s shrinking middle-class. The contraction, he stated, could partially be attributed to “skill-biased technical change”: work activities that have become automated over time, reducing the need for unskilled labor and favoring those with analytical training. He also highlighted the 50 year decline in tax rates for the top 0.1%, increased competition from overseas workers, and a lack of educational equality for children. Poor children are denied the private tutors, college prep and business network of family and friends available to their wealthier peers, which locks them into the class they are born into.

6) Tax cuts to the wealthiest have not improved the economy or created more jobs. Krueger also revealed that the tax cuts of the 2000s for top earners did not improve the economy any better than they did in the 1990s (meanwhile, income growth was stronger for lower- and middle-class families in the 1990s than in the last forty years). Tax rates for the top income earners in America peaked in 1945 at 66.4 percent. Following decades of gradual reductions, they have since been cut in half. During the same time, the payroll tax has increased since the 1950s and individual income tax has bounced between 40-50% through the present day. Conversely, corporate tax declined from above 30% in the 1950s to under 10% in 2011. All of these tax cuts are made ostensibly to improve the economy and create jobs. However, the National Bureau of Economic Research has concluded that it is young companies, “regardless of their size,” that are the real job creators in America. Tax cuts to the wealthiest do not create jobs. 

7) Incomes for the top 1% have increased (but the top 0.01% make even more). Between 1979 and 2007, the average incomes of the 1% increased 241%. Compare that to 19% growth for the middle fifth of America and 11% for the bottom fifth. Put another way, in 1980 the average American CEO earned forty-two times as much as his average worker. In 2001, he earned 531 times as much. 

Average income across the 1% is actually stratified into widely disparate echelons. Compare the $29,840 average income for the bottom 90% to the $161,139 of the top 10%. Compare the $1 million average income of the top 1% to the $2.8 million of the top 0.1%. Yet both still pale beside the $23 million average income of the top 0.01%. 

If those numbers seem a bit overwhelming, Politizane has created a video that illustrates this staggering inequality:

8) The majority of Congress does not feel your pain. Empowered by the Constitution to represent their constituents, United States Congress members are, for the first time in history, mostly millionaires. The 2012 financial disclosure information of the 534 current Congress men and women reveals that over half of them have a net worth of $1 million or more. After the past seven facts it is difficult to read this last one and believe that these 268 legislators have the best interests of the remaining 99% at heart. But if that is too presumptuous a leap, it is not too bold to say that wealthier donors, lobbyists and special interest groups enjoy greater access to these lawmakers than the average American. 

Life, and the Liberty to Go Hungry

Last week Congress failed to extend emergency benefits for unemployment, leaving 1.3 million people without federal aid. Congress is currently on a weeklong recess that will keep them from debating the issue until their return on January 27. The bill was too divisive for Republicans and Democrats to reach an agreement on, though unemployment is still above 7% nationally. 

Thankfully, the unemployed have their Congress working for them. And at $174,000 annual pay, those representatives are sure to return from vacation committed to fresh solutions. 

The pursuit of happiness is an ephemeral affair, but the freedom to succeed is not. It is something one possesses or lacks. It is the difference between enjoying a more prosperous life than one’s parents and believing there is no way out. A “self-evident” truth is one that is meaningful without proof, much akin to faith. If inequality continues to rise in America, the self-evident truths of its founding will be no more than words on an old piece of paper, its American Dream a tattered faith paid lip service by the deceitful and the blind.

Detroit Cronies Sucking Money out of City to build Red Wings’ Stadium

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Source: Collapse.com and Reason

Though I am usually not a fan of infographics/datagraphics, Reason just published the below graphic which details the horrible deal that the city of Detroit is getting by building this new arena. We see these kinds of deals being struck all around the country as politicians think that any sports team will be a boom to the local economy. What really ends up happening is that the owners of the teams get richer at the expense of the taxpayer.

These programs rarely net a positive result to the local economy. Most economists recognize research that has been done that shows that teams and new arenas do not increase entertainment spending in the region but just divert it from elsewhere that it would be spent. Ultimately, Detroit, a city that is dying already, stands to lose jobs and lose money on this investment and it just might be the straw that breaks the Detroit camel’s back.

Detroit Redwings Stadium Infographic

Sources

The Risky Economics of Sports Stadiums

Pro Sports Stadiums Don’t Bolster Local Economies, Scholars Say

General information about the Stadium proposal

Debunking the Economic Case for Sports Stadiums