In case you didn't know, Bossier City Mayor Lo Walker quietly is running a reelection campaign. Joining him are most of the councilors. But with a presidential reelection ongoing, he and the Bossier City Council may not want that in the background to draw comparisons with Pres. Barack Obama, even as their election tries will be a few months after his attempt. For they emulate his economic strategy despite its demonstrated failure, as they fail at their own version of it.
Democrat Obama famously declared the country had to boost its deficit spending by trillions of dollars about three years ago in order to turn around the nation’s economy. A compliant Congress with Democrats in charge did his bidding. The month the authorization for this spending occurred, the unemployment rate was 8.2 percent. Today the unemployment rate is the same and through last October there are 2.2 million fewer non-farm private sector jobs since Obama took office, courtesy of an economy sputtering at a 1.7 percent annual growth rate in gross domestic product since the month after the first package began, less than half the rate below historic norms generally and especially for a post-recessionary period (on average, in the third year after the four deepest previous recessions started – all as bad or worse than this one that ended in mid-2009 – real GDP climbed 7.6 percent; in 2011 its increase was an anemic 2 percent).
In other words, Obama squandered trillions of extra dollars and since has proposed more of the same deficit spending that has deteriorated the U.S. financial condition significantly, in the process retarding recovery. But although Walker is a Republican and so are most of the Council’s members, they did the same locally. Now that the city prepares to complete the 2013 version (hopefully avoiding the bleak 2012 situation that was so bad they had to scale it back before even passing it), one might hope the imperative of an election year finally might bring a modicum of fiscal restraint.
Regrettably, Bossier City is famous for throwing away the people’s money on what it claims are “economic development” projects, such as a money-losing arena, a parking garage for a outdoor shopping mall in receivership, and, most recently and expensively, on a high-tech office building. One would think, after over a dozen years of experience with these busts, these economic illiterates would have gotten it through their heads that the idea of a command economy where government directs tax dollars to specific entities is a far inferior approach to lowering taxes and letting those dollars stay in the hands of and be invested by those who earned them.
Instead, they want to double down just like Obama on a failed ideology. Late last year, the Council approved tossing away another $166,667 to get a state match on behalf of the office building, known as the Cyber Innovation Center, to study expansion of the project to create a center to attract digital media enterprises – begging the question that if the market has not enticed a private sector entity to build one on its own, then why ignore the signal that this is yet another money-losing adventure for the city?
Doubts could be dispelled about this if the city would release a few simple statistics. It should take the current principal and interest costs on the CIC, plus any operating costs involved in its lease to the private foundation that oversees it, balance that with any direct revenues such as rent and indirect revenues such as sales taxes and property taxes collected from holders of jobs created (not cannibalized) specifically and only because of the CIC’s presence, and report these figures. (Actually, that would dramatically understate the real costs because the city only put up about a third of the building cost, with parish and state taxpayers getting stuck with the rest.) If the revenues exceed the costs, they should trumpet this to the world.
But, the city won’t because revenues don’t, and probably are not even close to the costs. In the real world, an employer has to pay that mortgage note in addition to other operating costs with earnings or that business goes under. In the parasitic world of government, elected officials live like leeches off of taxpayers’ subsidization to support deficit projects like this to make them appear important.
Every Bossier Citian should, before any more good money is thrown after bad, demand an accounting of the CIC farce, and be given a credible demonstration that the addition will bring in more money than it costs. If so, then there still is no good reason to build, for why should the city be in the landord business when the private sector can do it and for funds there are far more pressing genuine infrastructure needs, or they could be returned by tax cuts to try something alien to the big government-loving elected officials, to enhance growth prospects?
The most cost-effective strategy concerning the present CIC’s assets is to sell them (likely at a considerable loss) and stop the hemorrhaging. That greedy politicians approve of the opposite confirms the aphorism that insanity is doing the same thing over and over again while expecting different results.
Posted by Jeff Sadow at 08:45