The dichotomy of Pittsburgh

The dichotomy of Pittsburgh

From the email inbox comes this message from a reader:

“I read your latest Policy Brief (Vol. 17, No. 48) on “Pittsburgh’s minimum wage obsession.” You make some really cogent points about misplaced priorities and cited several previous policy briefs that detail how poor fiscal management by the city and similar matters explain the declining population and the lack of business startups.

“I have been to several public events recently –David McCullough’s presentation at the Heinz History Center and the Robert Morris Speaker Series at Heinz Hall, at which the city was lauded for its rapid growth and it’s ‘hot-city-to-be-in’ status.

“I realize that your statements are backed up by statistics and the laudable comments about the dynamics of the city are based largely on the plethora of new restaurants and some hi-tech/medical advances. But there do seem to be two radically conflicting views of how the city is doing.

“Do you guys have any explanation for the dichotomy in these two points of view? I’d really like to know.”

It’s a great question, to which Allegheny Institute President Jake Haulk responded with this insight:

“Pittsburgh is a dichotomy.

“There are some very good things in the city. Carnegie Mellon, medical facilities and two large banks. There is a legacy of cultural amenities thanks to the generosity of the great business titans of the late 19th and early 20th centuries. Libraries, hospitals, universities, music venues, etc.

“But the government and the school system are disasters that drive people away and limit population and job growth. The water and sewer problem borders on cataclysmic.

“No amount of happy talk about a few good things that are happening can cover the truth about city costs and efforts to impose anti-business regulations on companies.

“It is really a tale of two legacies. Capitalism, that produced enormous fortunes, and the cultural, educational and medical facilities and the foundations that still contribute heavily to the city’s well-being.

“The other is the advent of socialistic government that has survived as long as it has largely because of the enormous benefits it received from the capitalism of bygone years.

“The takeover of schools and government by leftist politics and an electorate that supports big, intrusive government locks the city in a situation wherein little progress toward a truly dynamic economy can happen.”

And here are two more real-time examples of the dichotomous ‘Burgh:

That much ballyhooed revised deal for the Penguins to develop the 28-acre that once hosted the old Civic Arena is a stark reminder that the purveyors of corporate wealthfare have little shame.

To wit, the renegotiated deal strikes a provision eliminating a $15 million credit that the NHL franchise could use to pay to purchase the parcels.

The rationale for the change was sound, at least as far as government principals explained it: The Pens could have essentially never developed anything yet taxpayers very well could have been on the hook to pay the team that credit.

So, the credit is gone. But – the Penguins now simply are conveyed the old Civic Arena parcels for free.

Considering the team was handed development rights for nothing, it should at least have been expected to pay fair market value for the publicly held land.

The Allegheny County Airport Authority has agreed to spend at least $3.4 million to entice a number of airlines to start service to Pittsburgh International Airport.

Authority CEO Christina Cassotis steadfastly defends this use of public money that, in reality, turns taxpayers into the venture capitalists they have no business being.

Her latest defense came in a Friday Post-Gazette story:

“They’re (the airlines) taking risks when they add service to an existing market or to a new market. They are expecting communities everywhere to step up and show their commitment by making an investment,” she said.

Such a statement in defense of using tax dollars is outrageous. This “logic” – illogic, really – is maddening. In fact, it is intellectual/economic dishonesty writ large.

First: Indeed, airlines take a risk when they enter a new market. But, in pursuit of profit and after careful analyses, that risk must be theirs alone.

Second: The manner in which “communities … step up and show their commitment by making an investment” should be by buying tickets for those flights – NOT by the involuntary conscription of tax dollars.

The Airport Authority’s perverted view of economics – socializing the risk for private profit – is anathema to sound market principles.

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