Out of Control Policy Blog

An end of year "Bad Idea" contest

Three recent entries. . .

The city of Phoenix is moving to put $300 million of public debt behind a downtown hotel. Despite repeated requests, no private hotel company thinks the hotel will work, but city leaders say it is necessary!? The public welfare is harmed if there are not additional hotel rooms downtown that customers are not willing to pay for? Oh, I see, the hotel is necessary to prevent the further white-elephantization of the cities Civic Plaza project. One bad idea begets another.

Precisely the same thinking is at work in D.C., where Mayor Williams wants the city to drop $460 million to build a hotel next to the Convention Center. Again, the private sector doesn't see the market being there and won't do the project, so the city figures it is smarter and can step in to fill the gap. Or, more likely, the city fears worse blowback from losing money on the Convention Center.

An yet again in Los Angeles, where a huge downtown development project will apparently require some unspecified hundreds of millions of public investment. 2 of the 5 board members of the project will be from local government, so you can bet the public share of the funds won't be trivial. Much nicer to just talk about all the cool architects and say this will be the a counterpart to the Champs-Elysees (!! yeah, right!)

The bad ideas that stink bad together. What better illustrations could you ask of the "intervention dynamic"--one intervention by government to solve a "market failure" inevitably leads to the "necessity" to intervene yet again. A convention center turns out to require a hotel, and I imagine the hotel will require restaurants and parking structures, or a new mall, and soon you have the city a full-fledged commercial developer, with the crucial distinction of losing money on each enterprise. What a deal.

I heard about these on the Preserving the American Dream discussion list.

Adrian Moore is Vice President, Policy


« Despite Pressure, Federal Competitive Sourcing… | Main | Offshore Outsourcing »




Out of Control Policy Archives