If Supporting a $700 Million Bond Issue is "As Free Market As It Gets," Well, That's Why We're All So Broke
Like a lot of states stuck in long-term economic goo, Ohio is pushing for more public funding for the shift from old dead technological industries to a bright, shining future of…taxpayer-financed industries. To wit, the pay-for-itself "Third Frontier" initiative which only apparently needs $1.2 billion in public bonds to get the high-tech party started:
Ohioans face the choice whether to authorize $700 million in bonds for the program, extending the $500 million bond issue approved in 2005.
Backers of the initiative claim that already the Third Frontier has generated almost $7 billion in "economic impact" and "a nearly $10 return on every dollar of State investment" (page 9 in PDF). You know, if that's plausible, then why the hell wouldn't they tell voters to quintuple down on the damn program?
Like a lot of states, Ohio is dead-broke, with a current $3.2 billion budget deficit. That's for all sorts of obvious reasons (such as massive and growing pension and health-care commitments, overspending on all sorts of non-core businesses, funding B.S. development programs such as "Third Frontier," etc.) and for some less-obvious reasons. A big one? The mentality that is summed up in the following statement by the owner of the Cincinnati Reds, Bob Castellini, a big supporter of the "Third Frontier":
"This is a no-brainer," said produce-company owner Castellini, calling himself an advocate of limited government who is "about as free market as it gets."
"Ohio needs to transform from an old-school manufacturing state to a technology-based economy," he said.
And what better way to do it than get the public to pay for it? If they don't, Ohio might have to woo new businessess the old-fashioned way: via lower taxes, less regulation, a decently edumicated workforce (try vouchers!), decent infrastructure (a rare good the state might oversee), and other less-glamorous activities than shoveling grants at businessmen. More here.
You know what else was a no-brainer? The deal the Reds got for their newish stadium, which opened in 2003:
Owner: City of Cincinnati and Hamilton County
Cost: $325 million
Public financing: $280 million, or 86 percent, primarily from a half-cent-per-dollar sales tax increase approved by the voters in 1996
Private financing: $45 million, or 14 percent, primarily from a naming rights deal with Great American Insurance Company
Lease: 35 years (2003-2037); $2.5 million annually for the first 9 years; One dollar annually for the final 26 years; The Reds keep all revenue generated by the ballpark.
I'd like to humbly submit that whosoever calls himself "as free market as it gets" and backs these sorts of public fleecings of the economy doesn't understand the meaning of the term "free market."