When I go to New York, I often ride the subways up and down Manhattan. Each ride costs $2. Usually I pay $10 for a MetroCard and get a $2 bonus, so you get six rides for the price of five. But on my most recent trip, to give a speech at the Manhattan Institute, I arrived at Penn Station and went to buy my $10 MetroCard–only to discover that the bonus is now $1.50 instead of $2. But what good is that? Now I get five rides for the price of five, and I have a card with $1.50 on it that won’t get me another ride. When I mentioned this discovery to one of the numerate journalists on John Stossel’s team at ABC News, he instantly pointed out that you have to buy four cards before you get your full bonus. After you buy four cards, you can get three bonus rides (instead of the four bonus rides on four cards under the old system). But meanwhile, you have to hold on to each card and trade it in for a new card, unlike the old system where you used the card up and discarded it.
It’s not the price increase that bothered me. I realize that each subway ride is heavily subsidized (less so in New York than in other cities), so I can hardly object to a price increase. It’s just the poke in the eye of promising me a bonus if I spend $10 at once, and then making that bonus extremely difficult to actually realize. And to think that some people want to turn our medical care over to such a system.
On Tuesday, it was Nebraska senators Chuck Hagel (R) and Ben Nelson (D) who provided the winning margin for a Senate bill to begin a phased withdrawal of troops from Iraq.
Today it’s five-term congressman Lee Terry (R-Neb.) deciding that Attorney General Alberto Gonzales should resign.
Pretty soon, the neocons are going to be calling for an invasion of Nebraska.
This Thursday the Domestic Policy Subcommittee of the House Committee on Oversight and Government Reform will hold a hearing titled, “‘Build It and They Will Come’: Do Taxpayer-financed Sports Stadiums, Convention Centers and Hotels Deliver as Promised for America’s Cities ”
Several Cato studies over the years have looked at the absurd economic claims of stadium advocates. In “Sports Pork: The Costly Relationship between Major League Sports and Government,” Raymond Keating finds:
The lone beneficiaries of sports subsidies are team owners and players. The existence of what economists call the “substitution effect” (in terms of the stadium game, leisure dollars will be spent one way or another whether a stadium exists or not), the dubiousness of the Keynesian multiplier, the offsetting impact of a negative multiplier, the inefficiency of government, and the negatives of higher taxes all argue against government sports subsidies. Indeed, the results of studies on changes in the economy resulting from the presence of stadiums, arenas, and sports teams show no positive economic impact from professional sports — or a possible negative effect.
In Regulation magazine, (.pdf) Dennis Coates and Brad Humphreys found that the economic literature on stadium subsidies comes to consistent conclusions:
The evidence suggests that attracting a professional sports franchise to a city and building that franchise a new stadium or arena will have no effect on the growth rate of real per capita income and may reduce the level of real per capita income in that city.
And in “Caught Stealing: Debunking the Economic Case for D.C. Baseball,” Coates and Humphreys looked specifically at the economics of the new baseball stadium in Washington, D.C., and found similar results:
Our conclusion, and that of nearly all academic economists studying this issue, is that professional sports generally have little, if any, positive effect on a city’s economy. The net economic impact of professional sports in Washington, D.C., and the 36 other cities that hosted professional sports teams over nearly 30 years, was a reduction in real per capita income over the entire metropolitan area.
Humphreys will testify at Thursday’s hearing.