Much has been written about the fight among the several states – Pennsylvania included – with the Trump administration over who holds the ultimate power/final say in “reopening the economy” once the coronavirus pandemic wanes.
And although there is one line of scholarly thinking that the kind of “compact” formed among six northeast states including the Keystone State to coordinate such a re-opening is unconstitutional without congressional approval, the preponderance of such scholarship favors the states as the final arbiter of such action.
That said, there’s a very important public policy caution here. Within, that is, this anomaly (hopefully) in which we’ve allowed the government to seize control of the economy.
Those six northeast states have formed what they call a “council” or a “coalition” to ascertain how and when to best reopen businesses, schools and other public institutions while continuing to limit the spread of coronavirus. Officials of some western states have done much the same thing.
But this compact, or whatever it’s called, runs the great risk of smacking of central planning. Simply put, one size does not and cannot fit all.
“The virus news is waning a bit but the technocrats are still trying to hang on to controlling the economy,” says Frank Gamrat, executive director of the Allegheny Institute.
It’s a surefire recipe for political chicanery that just as surely will cause significant new harm to an economy already deeply reeling.
“We’re going to let the governors of New York and New Jersey, two of the hardest hit states, have a say on whether or not Pennsylvania’s economy can reopen,” notes the Ph.D. economist. “That is not fair to the parts of Pennsylvania not as hard hit as Southeastern Pennsylvania.”
Also concerning, at least in Pennsylvania, is that the head of the state Department of Community and Economic Development (DCED), will be a part of this deciding board.
Pardon us, but the DCED has a long-running lousy track record of redistributing taxpayer dollars (and often in unaccountable fashion) in a never-ending attempt to command the commonwealth’s economy.
So, why would anyone in his right mind suddenly think the DCED tiger has changed its stripes?
And given that we keep hearing something along the lines that restarting the economy will not be like turning a key or throwing a switch, this apparently long-term rollout is fraught with command-and-control peril.
These governmental bodies, individually and collectively, will yet again be picking “winners,” create “losers” and most definitely to the free market’s detriment.
Just think of the utter nonsense of Pennsylvania’s “essential businesses” list during the pandemic.
One was that car dealerships were barred from even conducting on-line sales, never mind that they clearly could be done safely.
Early on, while one industry might have been declared “essential,” another critical to the former industry’s supply chain was not. Power plants and steel mills would have struggled to buy coal, the mining of which had been initially termed “non-essential.”
Those command-and-control non sequiturs are two of but many. We cringe at the thought of what additional and economically dangerous nonsense is to come.
The Post-Gazette reports that Pittsburgh International Airport (PIT) has received a $36 million bailout grant from the Federal Aviation Administration. It’s designed to make up some of the revenue lost to the evaporation of most of its business because of the coronavirus pandemic.
An Allegheny County Airport Authority spokesman cautions that the money will “cover about half of the projected revenue losses for the year.”
The P-G reports the grant money “can be used for airport operating expenses, including payroll and utilities, to cover capital costs and to make debt payments.”
The money, by the way, would likely cover more of those losses had the authority not long practiced its own form of command-and-control economics – using public dollars to bribe carriers to fly into and out of PIT and with predictable failed results.
The latest exercise in public policy insanity involved British Airways’ return to PIT after a 10-year absence. The authority agreed to pay it $3 million over two years to “incentivize” the deal.
But a detailed analysis before the pandemic hit — by Jake Haulk, president-emeritus of the Allegheny Institute — suggested the flights thus far were not living up to the be-all and end-all prognostications used to sell/seal the deal.
Now, with the pandemic, Haulk, a Ph.D. economist, has been forced to ask the natural question:
“I wonder if the airport authority is obligated to pay British Airways the (remaining) $1.5 million when there are no flights?”
Sound public policy demands that natural questions receive good and expeditious answers.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
