Perverting markets (& other notes of note)

Good grief, someone needs an intensive lesson in what “markets” really are. That someone is Christina Cassotis, CEO of the Allegheny County Airport Authority.

She touted, in the Post-Gazette last Friday, how Condor Airlines next year will expand its twice-weekly flights to Germany. Flights will begin about five weeks earlier in 2018 (on May 18 instead of June 23) and end nearly two weeks later (on Sept. 14 instead of Sept. 1).

“The market has responded well,” Cassotis told the P-G. “(Condor is) pleased with how we have performed as a market. They believe there is an opportunity to do well for a longer season.

“This is what we have known all along: There is a market here dying to be served.”

Oh, where does one begin?

First off, buried in the story – actually, it’s the last line of the story – is this most salient fact: Pennsylvania taxpayers are ponying up a cool half-million dollars over two years to help underwrite these Condor flights. And landing fees have been waived for the same time frame.

Cassotis will argue that but for the carrot of public money, the “market” for these flights might never have materialized. But the real argument here is that Condor is using Keystone State taxpayers to help it determine if there is a market for its services, turning them into venture capitalists.

And that’s certainly not the proper role of government, no matter what government-types argue.

Here’s how “markets” work: Companies that, through their own market research, see a profit potential, then risk their own money in an attempt to make money in respective markets. They don’t risk that capital unless they have pretty good data indicating they will profit.

Government perverts the market by “priming the pump” with public money, thus reducing companies’ risks to enter markets they might not otherwise without such a subsidy.

The all-too-often result? When that pump runs out of primer, companies find their profit potential runs out, too. They then exit the market. Taxpayers were involuntarily saddled with the risk that the private company or publicly traded corporation alone should bear.

But let’s say if when Condor’s publicly primed pump runs dry, its service prospers. Does this not justify the public’s “investment”?  Of course not. For again, it’s not the proper role of government and not a proper use of public dollars to underwrite any business.

Government economic development officials (the phrase should be considered an economic oxymoron) argue ad nauseam that “This is the way business is done!” Actually, it’s the way markets are perverted and the way scarce public resources – taxpayer dollars – are improperly allocated.

To borrow Christina Cassotis’ line, “This is what we have known all along.”

And if, as Cassotis claims, “There is a market here dying to be served,” why should “The State” be allowed to dive into taxpayer pockets in the first place?

Reason magazine offers a handy list of state-by-state requirements regarding the disclosure of lawful concealed-carry firearms should those carrying have interaction with police officers.

The magazine notes that some concealed carriers believe it is “considerate and prudent” to inform officers that you are armed. Others worry that such disclosure risks the escalation of, say, “a routine traffic stop into a tense, unpleasant and possibly life-threatening encounter,” Reason’s Jacob Sullum writes in the upcoming October issue.

For the record: Pennsylvania does not require immediate disclosure that you are a licensed concealed carrier when stopped by police. And why should it require anything more of law-abiding citizens exercising a constitutional right?

It is not the kind of “optic” that does Pennsylvania any favors:

The U.S. Bureau of Labor Statistics reports the average private hourly wage in Pennsylvania grew by 1.5 percent between July 2016 and July 2017, a growth rate that ranks the commonwealth 46^th in the nation.

An hourly wage that ranked 18^th in the nation in July 2016 dropped to 24^th this past July.

You can bet some observers will opine that “It’s time for Keystone State businesses to step up,” or some other nonsense.  Actually, it’s long past time for those same observers finally to take note of Pennsylvania’s onerous tax and regulatory climate, all too often the real culprit behind lagging wage growth.

Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).