We wrote an article about LeBron James. No Sports Illustrated didn’t want it — but it was written for The Weekly Standard, a national political magazine based in Washington, DC. It was also picked up for the Beltway Confidential column of The Washington Examiner. Our thesis was that LeBron James brought to the fore the way tax policy influences behavior. We then pointed out that politicians typically obscure this cost by cutting special breaks for high profile cases — but politicians don’t know how to do such a thing for an individual.
We went on to question whether the First lady’s current focus on food deserts, which involves subsidizing individual retailers, didn’t obscure the need for society to deal with public policy issues, such as security in inner cities. Here is an excerpt:
Any time there is a big issue, the politicians avoid letting the voters see the cost of public policy decisions by exempting the high profile cases from the law that applies to everyone else — that is what tax abatements are about. They are not chump change either. One of the hot industries of the moment is the battery industry. The Feds appropriated $2.4 billion for this industry, but the states are also wooing the plants. Michigan has offered $800 million in tax credits; Ohio offered $100 million in incentives to get just one plant.
It is not just a tax issue either. Here’s another example of where the LeBron James debate might actually further a substantive policy difference: First Lady Michelle Obama proudly announced a $400 million initiative to help the 23.5 million people she claims live in “food deserts” — defined as anyone who lives more than a mile from a supermarket.
The first lady’s proposal, announced in the heart of the Philadelphia, among other things, aims to help inner city residents gain access to large grocery stores with lots of fresh foods (rather than the local mom and pop shops or more distant supermarkets, they currently frequent to purchase groceries). But, no matter Michelle Obama’s intentions, her proposal misses the root problem. Why directly subsidize individual stores to open in these areas closer to these 23.5 million people? Why not address the public policy problems that cause retailers to stay away?
The retail sector is highly competitive and, generally, many players compete vigorously for the opportunity to open retail food stores. Why, then, should it be necessary to give grants or loan guarantees to get retailers to open in underserved areas? In the inner city the issues involve things such as the inability of the local police to assure safety for patrons and staff plus keep shop lifting to national averages. Those retailers — such as Pathmark — that have made commitments and opened large supermarkets in inner cities have often felt the need to hire uniformed police officers to man the store 24/7. Between vacations, training, holidays and sick days, it can take five or more full time police offers to guard the store. In a unionized police force, take New York City for instance, salary and benefits to man that force can cost over half a million dollars a year.
How helpful it would have been for Michelle Obama to address the security problem directly, acknowledging that one benefit of solving that public policy problem, would be that, freed of the need to spend a half million a year on security, lots more retailers would open in underserved areas. Instead of facing up to the public policy problem, though, she is looking to spend money directly to de facto compensate individual retailers for these high costs of doing business — and doing nothing to resolve the root problem.
The piece is titled, LeBron James Brings the High Cost of Bad Policy to the Fore, and you can read the whole thing here.
