Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: Subsidies

Taxpayers On the Hook for New 49ers Stadium in Santa Clara

This article first appeared at TheNewAmerican.com on Monday, July 21, 2014:

A custom San Francisco 49ers GMC Yukon XL at t...

A custom San Francisco 49ers GMC Yukon XL at team headquarters in Santa Clara, California.

Last Thursday every politician, every bigwig, every banker, every individual with any interest whatsoever in the new Levi’s Stadium in Santa Clara, California, showed up for the invitation-only celebration of its grand opening. The beer was flowing, the confetti was flying, and self-congratulatory exuberance was on every lip.

Present were Santa Clara Mayor Jamie Matthews, San Francisco 49ers CEO Jed York, John York (Jed’s father and co-chairman of the team), 49ers president Paraag Marathe, NFL Commissioner Roger Goodell, 49ers coach Jim Harbaugh, and some of his star players including Patrick Willis and Joe Staley. In the background were executives from Levi Strauss, who paid big bucks to name the stadium.

The only people not in the audience were the ordinary taxpayers, who could find themselves on the short end of one of the most massive financial disasters in modern history.

In a toast to the fans who are expected to fill the 70,000-seat extravagance starting with preseason games in early August, Jed York said, “You deserve to have the best stadium in the world. And now you have it!” 49ers president Marathe added, “You can feel the difference [here] and you know the fans are going to feel the difference.”

At one point in the ceremony, noted Mike Rosenberg, a writer for the San Jose Mercury News who attended the affair,

Hundreds of workers wearing white “I built Levi’s Stadium” shirts and hard hats marched down two red-carpeted giant staircases. Thousands of white, red and gold pieces of confetti burst into the air at the end of the event, as dozens of cheerleaders waved their pom-poms and guests rushed to take selfies in front of a giant screen on stage.

The deal has been in the works for years, with initial plans to demolish Candlestick Park and replace it with an updated version in its parking lot. Financial squabbles and traffic glitches finally deep-sixed those plans, and in 2006 the team’s new owners announced they were moving 40 miles south to the tiny burg of Santa Clara, home of the 49ers’ administration offices.

Negotiations with the city council began in earnest the next year, with promises that no new taxes would be needed and that the huge stadium would bring in additional revenues without liability. Free money, in other words.

On June 8, 2010 Measure J was passed, with 15,000 voters in favor and 10,000 against. Those voting for it were persuaded by the language in the ballot which said, in part:

No use of City General or Enterprise funds for construction; no new taxes for residents for stadium; private party pays all construction cost overruns; no City/Agency obligation for stadium operation/maintenance.

Within a year that ballot language had already been breached: Twelve percent of the cost of the $1.3 billion stadium was provided by the city, with another $330 million to be borrowed by the city’s Stadium Authority. Goldman Sachs headed up a consortium of banks that provided some $850 million in construction financing (with Goldman taking its usual 10-percent fee) while Levi Strauss ponied up another $200 million to be paid out over the next 10 years. The NFL itself loaned the Stadium Authority $200 million to help out, expecting to be paid back out of gate revenues, seat leases, trinket and beer sales, and so on.

The assumptions underlying the project are mind-boggling: First, it is assumed that the 49ers will continue to have a winning team for as far as the eye can see into the future, drawing fans from not only San Francisco but also other cities within a 100-mile radius of the stadium. That expectation, however, is already flawed, as more than 30 percent of those loyal fans in San Francisco holding season tickets have given them up, as the 40-mile drive each way and the potential traffic jams on game day were just too daunting.

Second, the interest rate on the financing is short-term, and most of the loans will have to be refinanced no later than 2015. Even a small uptick in short-term interest rates could put debt service requirements out of reach of the authority.

Third, the cost of subsidies negotiated to bring the 49ers to Santa Clara haven’t been measured but include the NFL’s requirement that all revenue from its events “be exempt from sales, amusement or entertainment taxes or other surcharge obligations.”

Judith Long, who teaches urban planning at Harvard, concluded that even these costs are usually underestimated when proposed to the taxpayers:

Governments pay far more to participate in the development of major league sports facilities than is commonly understood due to the routine omission of public subsidies for land and infrastructure, and the ongoing costs of operations, capital improvements, municipal services and foregone property taxes.

Adjusting for these omissions increases the average public subsidy by $50 million.

That would bring the taxpayers’ cost for the “free” Levi’s Stadium to more than $200 million, not counting any obligation incurred by the Stadium Authority. Another part of the risk is that Santa Clara itself is such a small town, with such a small tax base. Even adding in the county, its population is just 10 percent of the 17 million populating metro San Francisco. No matter how one does the math, the town is making a massive bet on everything turning out just right. As writers Darrell Preston and Aaron Kuriloff of Bloomberg expressed it, “The city is taking what may be the largest per-capita risk for any municipal sports facility [in the country].” The budget for the city itself is just barely $140 million a year.

Roger Noll, a retired professor of economics at Stanford University, looked at the numbers and came to the same conclusion:

The thing that makes this such a dog is that Santa Clara first of all is a small town. There’s some amount of financial hit the city could probably pay [if things don’t pan out as projected], but the probability that it’s going to exceed that is certainly not zero.

That is how a retired college professor says that Santa Clara is taking a huge risk. Within the next three to five years, after “normalization” about attendance, winning games, traffic congestion, interest rates, and maintenance expenses, the taxpayers will know.

Now that the stadium is finished, all the people behind the massive project are counting on those fans to come. Just because they built it doesn’t mean they will.

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Obama Picks Another Leftist for Housing Secretary

English: Cropped picture of Julian Castro at a...

Julian Castro at a UTSA event. (Photo credit: Wikipedia)

Determined to stuff every nook and cranny of his administration with hard-core leftists, news leaked on Saturday that the President will nominate San Antonio Mayor Julian Castro (no relation, at least by birth, to Fidel) as the next head of the Department of Housing and Urban Development (HUD). He’s a perfect fit.

During a reshuffling of his cabinet, the president is moving Sylvia Burwell from his Office of Management and Budget (OMB) to secretary of the Department of Health and Human Services (HHS) and moving current HUD Secretary Shaun Donovan to take her place. That leaves the HUD spot open for Castro. The official announcement is expected soon.

What makes the appointment especially important is

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UN Report Criticizes Biofuels Mandates

Dual-fuel gas station at Sao Paulo, Brazil. Al...

Dual-fuel gas station at Sao Paulo, Brazil. Alcohol (ethanol) and G gasoline (Photo credit: Wikipedia)

Last week the British newspaper Telegraph leaked a portion of the report by the UN’s Intergovernmental Panel on Climate Change (IPCC) due to be released today, in which Robert Mendick, the paper’s chief reporter, said the UN now officially warns that growing food for fuel rather than for people hurts the environment and starves people. Said Mendick:

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Huge Increases in ObamaCare Premiums are Coming

When Health and Human Services (HHS) Secretary Kathleen Sebelius sought to quell concerns about rising premiums under ObamaCare last week she said: “The increases [we’re seeing] are far less significant than what they were prior to the Affordable Care Act.” This was an echo of one of Sebelius’ spokesmen at HHS, Joanne Peters, who told Fox News, “Since the Affordable Care Act became law, health-care costs have been slowing and premium growth has slowed to the lowest rate in years … making it easier for [small] businesses to offer coverage.”

These claims surprised health insurance company officials who

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More Hidden Costs of Obamacare Coming to Light

The latest tally shows that Obamacare enrollments are just over 2 million, falling far short of the estimated 3.3 million expected to sign up by January 1st, and putting into serious doubt the goal of 7 million by the end of March.

At first blush, it’s the premiums. Many are learning to their dismay that

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1.3 million Lose Federal Unemployment Benefits, Another 2 million to Follow

Because the budget deal signed into law last week didn’t extend federal unemployment benefits, some 1.3 million people won’t be getting their $1,166 monthly checks, starting in January. By June another 1.9 million will be cut off.

Keynesians are sputtering nonsense about the need to extend benefits. President Obama called it an

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Another Obamacare Surprise: Estate Recovery

Just as Sofia Prins and Gary Balhorn were about to sign their application for free coverage under Washington State’s Medicaid program – freshly expanded under Obamacare – Sofia began reading the fine print: if you’re over age 55, the state of Washington will

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The Bubble in the Caribbean: Puerto Rico

This article was first published at The McAlvany Intelligence Advisor on Wednesday, October 30, 2013:

The complacency of municipal bond holders ended in July with the filing for bankruptcy by Detroit, an unhappy town of just 700,000 owing more than $18 billion to investors. Haircuts there have variously been estimated to be between 15 and 60 percent.

Since then, those holders have been looking around to find the next shoe to fall, and they have found it:

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Why are Puerto Rico’s Bond Prices Falling?

Despite the fact that Puerto Rican (PR) municipal bonds are triple-tax-exempt (no federal, state or local income taxes apply on their interest), those interest rates have skyrocketed since the Detroit bankruptcy first ended the complacency among municipal bond investors in July. High quality municipal bonds are paying little more than 1 percent annually but PR bonds, even though they remain investment grade (barely), have spiked

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Progressivism’s Proof: American Indian Poverty

Any man who thinks he can be happy and prosperous by letting the government take care of him, better take a close look at the American Indian.    – Henry Ford

Using their portable forge, members of Lewis and Clark’s Corps of Discovery fabricated various iron implements and traded them to the Mandan and Hidatsa Indian tribes in what is now North Dakota, in exchange for corn, beans, squash and tobacco to sustain them during the winter of 1804-5. Several months and a thousand miles later the Corps was surprised to see that one of their implements, an axe,

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Complaints about Obamacare Rollout Glitches are Merely a Smokescreen

This article was first published at The McAlvany Intelligence Advisor on Friday, October 25th, 2013:

 

The complaints, charges, accusations, finger-pointing, and back-pedaling associated with the stumbling start of Obamacare are real and accelerating. They are also irrelevant, and a smokescreen hiding the real underlying problems with Obamacare itself.

Late night comedians are mining this disaster for all it’s worth. They have struck gold, and they are permanently damaging Obamacare’s image, and along with it

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Delays in the Obamacare Rollout Expose Lies and Deceit

This article first appeared at The McAlvany Intelligence Advisor on Wednesday, October 23rd, 2013:

“Oh what a tangled web we weave, when first we practice to deceive!” Sir Walter Scott, meet Barack Obama. By trying to hide the real costs – far higher than most expected and way above the savings Obama initially promised – of signing up for Obamacare, Obama ordered his techies to force applicants to

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HealthCare.gov Delays Are Way More than Just Glitches

It’s been three weeks since the much ballyhooed start of enrollment for Obamacare and the results are not just disappointing. They are disastrously low. According to Mike Huckabee, fewer than 500,000 of the 7 million uninsured people needed in the next six months to make this program viable have been able to apply for coverage online, and most of them were

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The Messy First Day of Obamacare

This article was first published by The McAlvany Intelligence Advisor on Wednesday, October 2nd, 2013:

 

The president anticipated glitches when his key legislative centerpiece was rolled out on Tuesday, and he got them:

In the first week, the first month, the first three months, I would suspect that there will be glitches.

This is 50 states, a lot of people signing up for something. And there are going to be problems. And I guarantee you, there will be problems….

Even fawning CNN had to admit there were problems: “We tried in about 20 different states’ [exchanges]. In 12 of them we hit glitches. Sometimes it made it impossible to sign up. There were error messages….”

And then Obama had the chutzpah to compare the Obamacare roll out with the recent Apple roll out of its new operating system:

Consider that just a couple of weeks ago, Apple rolled out a new mobile operating system and within days they found a glitch, so they fixed it.

I don’t remember anybody suggesting [that] Apple should stop selling iPhones or iPads or threatening to shut down the company if they didn’t.

There’s just one tiny problem with this analogy. I don’t remember any government agent holding a gun to my head forcing me to buy an iPhone.

But the Obamacare Kool-Aid has affected others, not just Obama. HHS secretary Kathleen Sebelius called the glitches a great success:

We have had a few slowdowns, a few glitches, but it’s sort of a great problem to have. It’s based on the fact that the volume has been so high.

Unspoken is the assumption that Obamacare hits on exchange websites is so high because Obamacare is so popular. Isn’t that like saying that paying income taxes must be popular because so many people file income tax returns?

The problems were rife, all across the country. The moment New York’s new healthcare website was launched at 8AM, it crashed. Seekers “were greeted with error messages … [and] the links for employers, employees and brokers also experienced periodic problems,” according to CBS News. In California an insurance broker scheduled an appointment with two of his clients to be the first in the state to sign up for Obamacare, but had to cancel the appointment when he discovered that he wasn’t “approved” to sign them up, and he couldn’t tell his clients how much they would have to pay for the insurance anyway – the premium calculation bot wasn’t working. Besides, he learned later that his customers’ applications wouldn’t be received by the insurance companies for at least a month. Aside from that, things went well.

In Washington, DC, people trying to determine if they were eligible either for Medicaid or for subsidies to purchase insurance on its exchange will have to wait. In Vermont, that state’s exchange won’t be able to accept premium payments until sometime in the middle of November. In Oregon, only a few specially selected individuals were allowed to get online as its rollout was only a “beta test” – the real rollout would be taking place later.

The administration admitted that its own website was suffering a delay in its online shopping system for small business owners, along with a delay in its Spanish-speaking site. In Colorado, its exchange, Connect for Colorado, was forced to delay certain computer functions, and applicants had to call a hotline to complete the process. In Iowa there were no certified “navigators” to take those calls. Reuters noted that these glitches showed up in 24 of the state exchanges. Maryland’s exchange was delayed for four hours, and Minnesota said it would be late in the day when it would be able to confirm its connection to the federal data base.

So much for the triumphant start. As Joel Ario, a health care consultant who used to work at the Department of Health and Human Services, said: “Nobody is going to say we’re not starting on October 1st. But in some situations you have seen a redefinition of what ‘start’ means.”

Sarah Kliff, a writer for the Washington Post who has been tracking the Obamacare launch for months, said that yesterday wasn’t really “the big day” after all – it was just the beginning of a “soft launch”:

Instead, it’s January 1st, the day that the individual mandate takes effect and any plans purchased on the [exchanges] actually kick in.

The space between October and December is viewed … as a soft launch: the time to make the new web sites live, sort out the kinks and get the sites in prime condition for the beginning of 2014.

Enrollment started on Tuesday but any insurance purchased won’t become effective until January 1. And for those who delay, they have until March 15th to make their purchases or else be faced with paying a fine – oops, a tax, not a fee.

There are some other problems, too. According to the Kaiser Foundation, more than three quarters of those without insurance didn’t even know that the launch date was October 1st. And how about this for a marketing problem: the insurance companies will have to persuade healthy young people to buy insurance they don’t want in order to offset the costs of unhealthy people pouring into the system. Here’s how the Associated Press explained it:

One of the biggest challenges to the law’s success is the ability of insurers to persuade relatively young and healthy people to buy insurance as a way to balance the costs for the sicker people who are likely to get their coverage as quickly as possible.

Previous such rollouts have hardly been successful. When Massachusetts opened its version of Obamacare in late 2006, it took a total of 18 separate interactions – web visits, emails, or phone calls – before an individual could get coverage. After 9/11, the FBI tried – for 12 years – to upgrade its computer system. It began with its Virtual Case File system which was given up for lost in 2005 after $600 million of taxpayers’ money, in favor of its Sentinel system, which finally went live last year.

The task with Obamacare is equally daunting: hooking up the national databases at the Department of the Treasury (the IRS) and the Department of Homeland Security with each of the states’ exchanges. As James Pethokoukis, a writer for the American Enterprise Institute, asked: “What could possible go wrong?”

All of these glitches may be considered in another light: they build the case for a national single-payer health care system that would do away with insurance companies and those messy and confusing state exchanges. Harry Reid, bless his statist heart, was interviewed on Las Vegas’ PBS program “Nevada Week in Review” last month, and was asked “where do we go from here?” Reid, for once, was crystal clear:

What we’ve done with Obamacare is [take] a step in the right direction, but we’re far from having something that’s going to work forever.

When pressed by one of the panelists about whether that meant that Obamacare was just one more step towards a single-payer, insurance- and exchange-free health care system run entirely by the government, Reid said: “Yes, yes. Absolutely, yes.”

For totalitarians like Reid, Obama, Sebelius, and others, those glitches truly signify success after all.

————————–

Sources:

The Washington Post: Reports of problems precede launch of Obamacare

Associated Press: Under fire, ‘Obamacare’ going live — with glitches

The National Review Online: Obamacare: Wrong in Practice, Wrong in Theory

Reason.com: Eight Things That Could Go Wrong With Obamacare

The Washington Post: The White House says Obamacare begins on Oct. 1. Not really.

The Las Vegas Sun: Reid says Obamacare just a step toward eventual single-payer system

Politico: President Obama: Expect months of ‘glitches’

Reuters: Obamacare launch hits early hitch as web traffic snarls up sites

Associated Press: ‘Obamacare’ exchanges start up as gov’t shuts down

Politico: Obamacare D-Day becomes a soft launch

The Wall Street Journal: FBI Files Go Digital, After Years of Delays

Natural News: Obamacare exchanges hit with over 50 percent fail rate; feds claim the worse the glitches, the bigger the success!

Maine Senator is not “one of us.”

Christopher Ruddy, the CEO of Newsmax, thinks that Maine Republican Senator Susan Collins is “one of us.” He takes particular umbrage at an ad from a pro-gun group (the National Association for Gun Rights) that attacked Collins for

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Going green costs a lot of green

Politico thinks that Obama is going to enact, perhaps through an executive order, a “national renewable energy portfolio standard” – a federal mandate that a certain percentage of the country’s energy needs be provided from “renewable sources,” like wind turbine farms, and the like.

As Christopher Booker noted (and I quoted yesterday):

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Happy days coming for conservatives?

I think George Will may be just a tad optimistic, but he does have a point: Obama will implode. It remains to be seen if the so-called “conservatives” will be able to take advantage of the implosion. Says Will:

Happy days are not here again, but

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Surprise! WaPo Gets it Right on Agricultural Subsidies

Combine at sunset

Combine at sunset (Photo credit: The Knowles Gallery)

When I read this article I thought it was from The Washington Times, but no, it was from the Washington Post, the verbal handmaiden of the liberal left. Then I thought that somehow WaPo had been infiltrated by someone with some common sense. But no, this article was put together by the Editorial Board!

The article carefully and intelligently makes the case against agricultural subsidies, calling them just another form of corporate welfare. The 2012 drought impacted food prices far less than expected, due to intelligent drop management practices by farmers, which makes the case for continued subsidies weaker. WaPo calls them

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James M. Buchanan, Nobel Prize Winner in Economics, passes at 93

With the passing of economist and scholar James M. Buchanan, a voice of insight and understanding in a tumultuous world has been stilled.

Born in Murfreesboro, Tennessee in 1919, Buchanan built his understanding of how the world works with degrees from the University of Tennessee and the University of Chicago (the “Chicago School”). He taught at a number of universities from 1950 to 1969 after which he served as Distinguished Professor Economics at the Virginia Polytechnic Institute – Virginia Tech – where he

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Oh, no! Now there’s a “dairy cliff.”

The media is full of “alerts” about how the failure of Congress to continue price supports will result in higher prices for milk, along with other dairy products. Here’s what Dr. Fuhrman, author of “Eat to Live” has to say about the matter:

Out of one pocket, we pay billions of our tax dollars to support the production of expensive, disease-causing foods. Out of the other pocket,

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.
Copyright © 2020 Bob Adelmann