A number of Allegheny County officials will board a WOW Air jetliner Friday for the inaugural, taxpayer-subsidized, flight to Pittsburgh from Reykjavik, Iceland.
The service was set up only after the carrier secured an $800,000 grant from the Pennsylvania Department of Community and Economic Development.
As the Tribune-Review reports it, the airline will provide at least four round-trip flights per week between Pittsburgh and Iceland through June 2019.
The Allegheny Airport Authority CEO, Christina Cassotis, says if WOW air suspends service before the agreement ends, it would not receive the full subsidy.
“If this isn’t commercially viable, they don’t have to do the whole time,” Cassotis told the Trib. “The reason they picked us is not just the subsidy. … It’s not enough to make it worth it. So (the purpose of the trip) really is to promote the flights … and to make sure people are on them.”
Read that quote again. Now, take more than a minute to digest the market perversion it promotes.
Taxpayers have no business being WOW Air’s venture capitalists or its advertising agency. If WOW believes there’s a market for its services in Pittsburgh, then it should risk its own money, and that of private investors, in its quest to make a profit.
Government – and make no mistake, an authority is “government” – has no business engaging in such a speculative enterprise as lobbing public money at a private enterprise in an attempt to “pick a winner.”
Worse, such activity should be considered a violation of Article VIII, Section 8, of the Pennsylvania Constitution:
“The credit of the commonwealth shall not be pledged or loaned to any individual, company, corporation or association, nor shall the commonwealth become a joint owner or stockholder in any company, corporation of association.”
That said, these days there’s about as much fealty to Article VIII, Section 8, as there is to the fundamental precepts of market economics.
Economic perversions must be baptized then patronized to gain a foothold. Pittsburgh, Allegheny County and Pennsylvania officials long ago performed the former and continue to practice the latter as they insist on picking the public purse to subsidize corporate wealthfare.
Simply put, it’s not the proper sphere of government to do so. And there’s no excuse for behaving otherwise.
Aquion Energy, the heavily taxpayer “incentivized” saltwater battery maker that sought Chapter 11 bankruptcy protection in April, is to be sold at auction on June 20, the Post-Gazette reports.
It says the Austrian battery firm BlueSky Energy appears to be the odds-on favorite to acquire Aquion for $2.8 million.
The question remains what will become of the $13 million in public subsidies that the state “invested” in the enterprise, which was based in Pittsburgh’s Lawrenceville neighborhood and had a manufacturing facility in Westmoreland County. The state previously said it would seek to recover the money. There’s always a price for government attempting to pick winners and losers and usually failing. And it always seems to be taxpayers who get the bill.
Much is being written about the resurgence of coal. And, indeed, there has been some spotty good news around the country and in Western Pennsylvania.
But a recent story in The Washington Times put all that happy talk in perspective:
“Energy market analysts say the long-term forecast for coal (remains) bleak. Although Obama-era regulations had some effect, they say, the biggest impact on the coal sector has been the rise of cheap, abundant natural gas.”
And given the recent rise in shale gas production in Pennsylvania and elsewhere, that’s not likely to change anytime soon – if ever.
As Times reporter Ben Wolfgang further distilled it:
“Absent a major shake-up in the gas market – such as a massive, unexpected price hike – it’s difficult to imagine the coal sector regaining its past glory, especially with coal-fired power plants and utilities moving toward cheaper natural gas.”
Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
