Entries associated with the tag "Subsidies":

Thanks to the Community Media Workshop for pointing to Good Jobs First's update on the ongoing stream of government subsidies to the neediest: Wal-Mart. Illinois is shamefully #1 in both number and dollar value of taxpayer funds being given to the giant retailer. Press release here, Wal-Mart Subsidy Watch web site here.

In suburban Country Club Hills, for instance, the new Wal-Mart supercenter "was awarded a 50% property tax rebate and a 50% sales tax rebate through 2013. Based on local tax estimates, the property tax portion is likely worth $6.25 million and the sales tax portion $6 million."

Who decided that the schools and cops didn't need that money as much as the world's largest corporation did? You might ask Robert Weissman.

Over at Gristmill, Jason Scorse--an environmentalist who believes in market principles, and an economist teaching at the Monterey Institute of International Studies--posted his four favorite policies for cleaning up the world:

"Eliminate all natural-resource subsidies.  Subsidies to timber companies, fishermen, farmers, and the oil and gas industry are by far the most damaging environmental policies engaged in by governments around the world." These subsidies both encourage environmental degradation and make natural resources seem cheaper than they are, making it hard for alternatives to compete.

"Expand property rights in areas where they are weak or non-existent.  The areas in the world where we witness the greatest levels of environmental degradation (the oceans, many large tropical forests, and the atmosphere) are those where property rights are absent, unclear, or poorly enforced." Whether held by individuals, groups, or governments, make those rights clear.

"Empower society with information.  Basic environmental science is something that will be underfunded in a pure 'free market,' because it is rarely profitable; therefore, governments should do more to support scientific research."

"Enlarge green markets through government purchases.  Since governments are some of the largest buyers of natural resources in the world (e.g. paper, power, food), their purchases have a huge impact on markets and the environment."

There are some interesting comments both at Gristmill and at Environmental Economics, where Scorse also posted.

Meanwhile, back in Chicago, Adam Bilsky (aabilsky@comcast.net) of DePaul's Management of Public Services Graduate Program would like to know "what obstacles currently face supporters of green residential building in Chicago, and what action steps might remove them to stimulate market demand." If you'd like to help, take  his survey (confidentiality promised) before Thursday at surveymonkey.com/s.asp?u=355372368977. It's not excessively long.

• Hell is hot but entertaining. Rich people dress like bums, top executives have no title on their cards,  beautiful women dress down: it's called "counter signaling." More examples over at Marginal Revolution.

• Hell has a mild day. Local ultracon Tom Roeser endorses and seeks to expand the century-old progressive reform of primary elections, calling for a state law requiring that the runner-up in any primary election should automatically succeed to the candidacy if the winner cannot continue. Thus Jim Oberweis would have run against Barack Obama for Senate in 2004, and Forrest Claypool would now be running for Cook County Board chair against Tony Peraica. Conservatives are just liberals who take longer to get it.
  

• Hell is air-conditioned. Richard Cohen writes in the Washington Post, "The greatest mistake Israel could make at the moment is to forget that Israel itself is a mistake. It is an honest mistake, a well-intentioned mistake, a mistake for which no one is culpable, but the idea of creating a nation of European Jews in an area of Arab Muslims (and some Christians) has produced a century of warfare and terrorism of the sort we are seeing now." (Hat tip to Cliopatria.)

• Hailstorms in hell. The New Standard ("Independent. Commercial-free. Nonprofit. Uncompromised.") reports that Illinois will offer extra subsidies to companies locating "near affordable housing units or public-transportation routes," a move that has sucked some subsidy foes into speaking kindly of this form of boodle.
  

• Hell just froze over. Environmental Defense is hiring a "project manager" to work with Wal-Mart in Bentonville, Arkansas, "to create substantive, measurable and lasting environmental progress." (Hat tip to worldchanging.)

Wal-Mart supporters in Chicago have a constant refrain that seems hard to argue with: "Something is better than nothing." A new study suggests that, at least in rural areas, that may not be true.

The first meticulous academic study of Wal-Mart's effects on county poverty levels has just been published in Social Science Quarterly. (Abstract here; full October 2004 version here; press release on earlier version here.)  Wal-Mart haters are pushing it, but what does it actually say?

"Holding constant the initial (1989) poverty rate, the results show that counties with more Wal-Mart stores (in 1987) had a higher poverty rate in 1999 (or a smaller reduction in the rate) than did counties with fewer or no Wal-Mart stores in 1987.  . . . [T]he spread of Wal-Mart stores during the 1990s was associated with higher usage of food stamps per capita, or with smaller reductions in this variable, holding other factors constant.  . . . The chain is not the engine of local economic growth that the company's spokespersons and public relations material suggest."

The authors--Stephan J. Goetz of Penn State's department of agricultural economics and Hema Swaminathan of the International Center for Research on Women--controlled for other causes of poverty. (They also took special care to control for the possibility that Wal-Mart might choose poorer locations to start with.) They acknowledge that they do not provide a complete balance sheet: they were unable to factor in either the benefits of lower prices or the cost of government subsidies to Wal-Mart.

No one study is conclusive, but any locality weighing the costs and benefits of a new Wal-Mart will need to consider this one.

The authors also don't know exactly how new Wal-Mart stores marginally increase poverty. They theorize that the causes might include the demise of existing mom-and-pop stores, lower retail wages overall, closing of local suppliers that had served the mom-and-pop stores, or the loss of local leadership and "social capital" if proprietors and suppliers choose to leave the area.

Many of these factors have more to do with rural than urban areas. But anyone who proposes subsidies for new Wal-Mart locations should bear the burden of showing that a new store's benefits really do exceed these costs. It's not all good.