Thursday, July 10, 2008

Nero and the Wichita government

What do Nero and the Wichita government have in common? It has nothing to do with musical instruments but more with a bread and circus form of government. Nero was a lousy leader. To make up for his incompetence he relied heavily on financing entertainment with taxpayer dollars to the point that Rome's coffers dried up. The Wichita government hopes to follow in his lead by entertaining the city of Wichita to the point of economic ruin.

The Wichita government, all converts to Republican supply side economics, figures it can create demand for a product simply by creating it. It is bound to be as successful as Soviet shoe manufacturers that manufacture only one size of shoe. The government has approved the $6 million dollar interest free loan (which will eventually cost the taxpayers over $7 million) to Bill Warren to invest more in his failing Old Town movie theater.

The belief by the government is that if there is a theater in Old Town then people will flock to Old Town. Never mind the fact that the Old Town theater is more expensive and there are numerous other theaters around town that don't offer the milieu of drunks. It is expected that simply having a supply of a product will instantly provide a demand. If that Reagan economic policy works then we can create a horse and buggy manufacturing empire and draw in millions of dollars.

The fiasco that is the taxpayer financed private theater follows on the heels of a similar disaster, the taxpayer financed arena which won't be too far away from Warren's theater. The arena is also expected to create demand simply by being there. The leaders in our government believe that people will be willing to spend money at the arena then follow with spending money at a theater then spend some more money at local eateries.

Perhaps someone failed to tell our elected officials that America is going through a recession right now. America has an unemployment rate of 10-12% and inflation in double digits. Companies like Starbucks, which appeals to luxury spending, is closing 600 stores, and auto manufacturers are closing down development of SUVs and trucks in favor of more economical cars. This is a sign people are being more thrifty with their spending. If people can't spend four dollars on a carmel macchiatto, then they aren't going to spend $8 on a ticket to watch Home Alone 12: The Retirement Years, nor are they going to spend $50 on seeing some cookie cutter teen idol.

However the Wichita government has this grand plan that their multi-million dollar investments into entertainment are going to pay off big time. Let's add to the problem that the government of Sedgwick County is planning on raising the sales tax in order to give a property tax break to companies and those people living in McMansions they can't afford to live in. They know the people are willing to pay an extra 1% in sales tax after we paid it to pay for the arena. So now that movie or arena ticket is going to cost a little bit more, further discouraging people from attending these venues.

Kiss that corporate welfare goodbye, you won't be making anything back from your investment. The only ones profiting are those picking up their welfare checks that you worked hard to put into their hands.

So maybe I was wrong, there is a good analogy about Nero fiddling while Rome burns. Our elected officials won't be playing a fiddle while our economy burns, they may just take in a movie.


Anonymous said...

I think that Wichita City Council members Carl Brewer, Sharon Fearey, and Lavonta Williams would be astonished to hear them described as converts to anything having to do with Republicans.

Besides, according to Wikipedia, the idea behind supply-side economics is this: "The typical policy recommendation of supply-side economics is the reduction of marginal tax rates."

So it's more about reducing taxes. The Warren loan was a subsidy.

DooDahBlue said...

Thank you for your comment.

If they act like Republicans then they can be considered Republicans. The concept of supply side economics, as described by wiki:
which I've also described as Reaganomics, comes from the belief that if you give corporate welfare to the wealthy it will trickle down and benefit the rest of us. That is the exact justification the mayor and council gave for approving the interest free loan.

What I didn't mention in the article is Warren is allowed to deduct all knew purchases from his tax rolls in agreement with the Economic Stimulus Act of 2008. So we are giving him money so he can reduce the amount of taxes he has to pay, therefore the taxpayers have to make up for the lost tax revenue.

As has been proven by 12 straight years of...anyone...anyone...Vodoo economics, is the rich get richer and the poor get poorer and America's infrastructure falls apart.

Anonymous said...

Not to burst your outburst, but the national unemployment rate was 5.5% for June and inflation was 4.2% for the year ending May 2008.

DooDahBlue said...

Not to worry my bubble isn't burst. When you could all unemployed people, including those rejected as discouraged workers and don't count those with two jobs twice the unemployment figures are much higher.!-Qui-le-sait-_a87886.html

DooDahBlue said...

Oops (pardon the typo the previous post) but I forgot to include inflation data. The government doesn't like to count all price increasing in the Consumer Price Index thereby reflecting a lower inflation rate. The numbers are manipulated that way they can avoid things like pay increases and increased social security benefits. As with the unemployment numbers if you don't count all the numbers then you come up with a lower result. It's basic statistics manipulation and I assumed I wouldn't have needed to point out such extreme basic knowledge about something that's been going on for decades.