Thursday, January 27, 2005

Greasy palms

Dan Onorato is in a tizzy because US Airways couldn't be bribed to keep their reservation center in Pittsburgh:

The cutbacks not only have taken a toll on thousands of lives, they have tested the patience of local officials. An angry Allegheny County Chief Executive Dan Onorato complained at a press conference yesterday that the region never had a chance to keep the reservations center, despite offering $3.5 million in incentives.

"I can only come to one conclusion after you see the facts -- that US Airways had no intention of ever relocating [the North Carolina reservations work] to Pittsburgh," he said. "And that's probably the biggest disappointment. It was a waste of our time and effort."

Yes, but fortunately, they didn't waste our money, which is to say, the taxpayers' money, Mr. Onoroto. Would keeping those jobs at the cost of $3.5 million in corporate welfare been a net economic gain for the county? Did county officials even bother to consider that, or was their Pavlovian response to reach for their checkbooks, regardless of the cost or benefits? Instead of giving away incentives that make little economic sense, how about trying to make Allegheny County a better place to do business, with lower taxes and a leaner, more responsive government? That shouldn't sound like such a radical notion.

4 Comments:

Blogger Mark Rauterkus said...

Greasy palms -- so goes the headline of this blog entry. Rather, we nearly got slimed, as in the thing that Ghostbusters had to cope with. That's more like a whole body job -- not just a stickey handshake.

Dan did some dancing on this one. Wish I had it on tape even.

Nice we didn't build the hanger for the airbus overhauls. We were going to build it and lease it back to the airline.

Perhaps this is the start of a new day? But Dan would still want to rush to go meet with them again. Wonder if he is mad enough to try harder next time or so made that he'll change his tune about corporate welfare?

Kills me too how corporate welfare is so pragmatic in some circles.

11:11 PM

 
Anonymous Anonymous said...

Jon:

Thank you for articulating that. I kept looking at the stories about the loss of the reservation center and thinking, I'm mad, but not about the loss of jobs. It was the statements in the stories that ended with, "despite being offered millions of dollars in incentives." Or comparing what the corporate whores in NC offered to what our own Hookers at the Point were willing to go down for.
I'm no ecomonmist. I couldn't get my butt out of bed to go to that class. And I don't read the business section. But I know when something doesn't make sense. Taxpayers pay for the airport, the infrastructure in and out of it, the staff it takes to run and market it. Consumers pay for the airline that operates there. If consumers aren't there, airline can and should leave. What little I know about markets tells me another airline that can operate more efficiently (did someboday say Southwest?) moves in. If they are successful here, they may set up shop here and bring jobs. That all makes sense in my financially-feeble mind.
But from what I've seen, the more government tries to mess with that scenario, the more my taxes go up, and the more heartache ensues when the airline takes off anyway. If I'm oversimplifying this, please, someone set me straight. Just use language a simple man like me can understand.

-- Dave Conti

8:57 AM

 
Blogger Jonathan Potts said...

Good to hear from you Dave. Unfortunately, the common sense that you articulate so well is lost on our elected officials. Several years ago, Time magazine did a series on corporate welfare, and the authors found that the costs of these kinds of give-aways always exceed whatever economic benefits they create.

No one wants to see people lose their jobs, or have those jobs shipped out of state. But governments need to consider the economic health of the entire community. If we are losing jobs to other regions, we need to ask why that is, and what we can do to learn from them. Otherwise we are merely treading water.

2:57 PM

 
Blogger Mark Rauterkus said...

Treading water? No. The lifeguard in me sees a poor swimmer swimming against a rip tide. Frantic and wrongheaded.

11:39 PM

 

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