We know public policy obscenity when we see it. And the Allegheny County Airport Authority, often with an assist from “The State,” has been delivering a lot of it over the past year with public subsidies for airline after airline, then patting itself on the back for the economic “progress” it is supposedly commanding.
As if recidivist marketplace perversion is “progress.” As if such government interventionism leads to anything other than the “need” for the government to intervene again and again– to cover up the lie of each succeeding government intervention.
The authority and the usual cadre of county and state officials, accompanied by a brass band and no fewer than three cakes, announced last week that British Airways would end a 20-year absence and once again offer, beginning in April 2019, direct flights between Pittsburgh and London.
Authority CEO Christina Cassotis called it a major coup. A British Airways executive said there were “many great compelling reasons” to re-start service to Pittsburgh.
Actually, he could cite 3 million reasons. As in the $3 million that British Airways will be paid in public dollars over the next two years to restore service – the latest public subsidy to end all public subsidies in what has become a perpetual pump-priming exercise.
Added an industry strategist, quoted in a Post-Gazette story:
“This is really, really a big deal for the folks in Pittsburgh. It really does begin to put you on the global map with such a respected carrier as British Airways. To get a true global network player in your city suggests that your dot on the map is increasingly important.”
Or that the airline industry knows what a soft touch you are in diving into the public’s pockets to provide corporate wealthfare.
This latest bolus of public money to pay for air transport “progress” comes from the state Department of Community and Economic Development — $1.5 million a year for two years. It’s the largest such subsidy ever given at the Findlay Township facility.
And quite frankly, some of the quotes from the principals involved are as obscene as the subsidy itself.
“It’s a partnership incentive that says we’ve skin in the game,” Cassotis told the Tribune-Review. “(British Airways has to) build up this market and make it work, so here’s a way of taking the sting out of the startup.”
That’s not only offensive but nuts. The only “skin” the public should have in this “game” is the buying of tickets. Any “sting” of starting up such service should be borne solely by British Airways. For that’s how it works: In a market economy, a company risks its own money in pursuit of profit. Taxpayers are not venture capitalists.
Then there are the claims – unquestioned in media accounts – that the British Airways flights will have an economic impact of $57 million. Where’s the study that suggests this?
Despite Allegheny County Chief Executive Rich Fitzgerald citing the claimed impact number, his office could not produce the study when contacted by the Allegheny Institute on Friday.
“I presume that it would be something the airport would have so I would reach out to Bob Kerlik,” emailed Amie Downs, Fitzgerald’s spokesperson.
Kerlik, the airport authority’s spokesman, responding to a Friday email seeking the study, said he would “have to get it from our air service person” this week.
Hard to believe that such a highly touted document was not readily available after being so recently touted.
That said, reasonable people would like to know what multiplier effect was applied and how realistic it is. Or was the $57 million number created out of whole cloth?
Additionally, county officials rationalize the public treasury should support these flights because a number of Pittsburgh companies have London offices, among them PPG and the Reed Smith and K&L Gates law firms. But what business do taxpayers have subsidizing the travels of any of these concerns?
None.
Another rationalization is that the routes are public-subsidy worthy because London is a popular leisure spot. Since when should taxpayers at large subsidize anyone’s vacation?
Never.
Then there’s British Airways itself. Said Simon Brooks, the airline’s senior vice president for North America:
“There is a pent-up demand for people wanting to go to not just London but all over the UK, to places like Germany, France, Italy, so we’ll be able to deliver that.”
Well, if there’s such a “pent-up demand,” shouldn’t British Airways be able to deliver its services on the expectation of turning a tidy profit without milking Pennsylvania taxpayers?
You’re darn tootin’ it should be.
As we are reminded in the preface to Frederic Bastiat’s classic “Economic Sophisms” tutorial, the public has been despoiled of a great part of its wealth because it is unable to detect the error in the “delusive sophisms” of government-types who exploit is gullibility and its ignorance of economics.
Recount this sentiment every time someone in Allegheny County government announces the latest dollop of corporate wealthfare and defends it by saying “This is the way business is done.”
Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
