Pittsburgh developers are struggling with high interest rates and construction costs, the Post-Gazette reports. And that has led to a slowdown in local building projects, it says.
The P-G quotes one developer as saying “I’ve heard the expression ‘survive till ’25.’ People are writing off this year and next year.”
But that same developer, speaking on KDKA Radio on Monday morning, argued how now is the time for government to prime the pump.
Say what?
The marketplace is saying “no, No, NO!” So, “government,” i.e. taxpayers, must be forced to make an imprudent “investment”?
The same developer rationalized that public money in past projects, as a percent of the total project costs, is rather small, thus, worth that government “investment.”
That’s daft.
While prudent economists will note how the marketplace has to shake out, as surely as Santa comes to town every Christmas, expect legacy-seeking pols – at the behest of their developer acolytes — to attempt to play Santa by turning taxpayers into the venture capitalists they have no business being.
Again, it is not the taxpayers’ responsibility to take the proverbial edge off the developers’ costs, in good times and, certainly, not in times when the marketplace shouts such behavior is not efficacious.
Speaking of pols and economics, how many times have you heard them lament that the key to economic health is to “revive” America’s manufacturing base?
“We need to start making stuff again,” pol A will say.
“We need to prime the pump,” pol B will add.
That is, dive deep into taxpayer pockets to sow the seeds of a manufacturing “revival.” We see such behavior on a regular basis in Greater Pittsburgh.
But aside from the problem of government-directed “industrial policy,” there’s another problem: Manufacturing output in the United States has been doing just fine, thank you.
As Don Boudreaux, an economics professor at George Mason University, recently reminded (in a letter to a correspondent he shared with me):
“Forget that the absolute number of Americans employed in manufacturing started falling during the presidency of Jimmy Carter, while the percentage of workers employed in manufacturing started falling in the 1940s.
“Yet America’s manufacturing output and industrial capacity have ever since pretty steadily risen and continue to rise. Today, each is near an all-time high.”
Could it be that these same pols are pandering to the organized labor cartel that, like Luddites, can’t accept the kind of innovation that leads to new technologies and the different kinds of jobs created with them?
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
