Hubris run amok is not ‘public policy’
There is a valuable economics tutorial in an Investor’s Business Daily (IBD) editorial on General Motors’ forthcoming restructuring that Pittsburgh and Allegheny County officials should heed.
They won’t, of course. And their failure to do so raises serious questions about their fitness to prosecute public policy.
The crux of IBD’s strident point of order is that GM’s move is “a tragedy caused by embracing government subsidies, not markets.”
That is, the government (i.e. taxpayers) propped up a money-losing operation and, by the perverted government-GM financial nexus ignoring the supply-and-demand signals of the marketplace, “it only made GM’s problems worse.”
Now consider the editorial’s reiteration of some fundamental economic truisms in a narrative that should be mandatory reading for every government official, if not children from a young age:
“Government shouldn’t pick winners and losers. Period. And that’s especially what subsidies are: the government substituting its judgment for that of the marketplace. Why do we do it at all?
“It never works as expected. It can’t. The government, despite delusions to the contrary, can’t possibly know what people want and need. Yet, a perpetual leftist dream remains an economy run and funded by government ‘experts.’”
Now, let’s juxtapose those economic truths with the Allegheny County Airport Authority’s obsession to attempt to command the air-services marketplace at Pittsburgh International Airport. It has spent millions of dollars as of late in public money – tax dollars, shale gas dollars and gambling dollars – to bribe airlines (passenger and cargo) to fly in and out of Pittsburgh International Airport.
And it has not discriminated when it comes to throwing around the public’s money. To wit:
One recipient, OneJet, already was a federal tax scofflaw when it was awarded millions of local and state grants and loans anyway. These days, well, it hasn’t been flying for months, faces numerous legal challenges and most assuredly is headed for bankruptcy (if not already there).
Then one airline, Delta, armed with money from a community development group (gee, where’s that money come from), reduced its overseas flights when those dollars ran out. It then pulled out of the market all together when government threw millions of public dollars at an overseas competitor, British Airways.
Now comes WOW Air. Recipient of $800,000 in a two-year slide through the public-dollar trough, it suddenly has stopped booking flights after mid-January.
Perhaps it’s collateral damage from the British Airways subsidy, too. Or perhaps its financials are suspect, as were OneJet’s. After all, it has given up two big Airbus jetliners “in cooperation with its lessors.” You read between the lines.
Yet Allegheny Chief Executive Rich Fitzgerald says the WOW experience “is and has been a huge success for Pittsburgh” and that “the market has proven that (WOW) works here”?
Then there’s the unbelievable cargo deal with Qatar Airways – paying nearly $1.5 million to a company that, by contract, can fail (and fail miserably) but still reap a massive amount of public dollars and its benefactors pulling a positive spin out of a tar pit that’s hiding a pool of quicksand.
Worse, the architects of these deals are not chastened by their failures but double, triple and even quadruple down on them. Why? In their hubris, they can’t possibly concede the lie that recidivist attempts at commanding the marketplace represents.
But as surely as the swallows return to Capistrano and the buzzards return to Hinckley, Ohio, each spring, Pittsburgh and Allegheny County officials will continue to believe they know better. And, despite their long record of failures, they continue to misappropriate public dollars to prove their point – a point already and repeatedly disproven.
Simply put, it is a manifest failure to govern.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (email@example.com).