By Bradley Harrington
“Government subsidies can be critically analyzed according to a simple principle: You are smarter than the government, so when the government pays you to do something you wouldn’t do on your own, it is almost always paying you to do something stupid.” — P.J. O’Rourke, “All the Trouble in the World,” 1994 —
In a market economy, goods, services and dollars are free to flow as they will by supply and demand — and all economic resources are allocated and deployed in a fashion such as to meet market demand.
Concentrations of wealth, therefore, represent the successful gains by entrepreneurs who managed to allocate their resources in a profitable fashion — whereas the lack of it means losses of wealth by those who didn’t.
And properly so, ethically as well as economically. When an individual takes their chances with wealth-investment in the marketplace, it is THEIR wealth they work with, not somebody else’s — and they are solely responsible for whatever leads to that wealth’s rise or fall. Profits and losses are the principle of justice as applied to market activity.
Economically, therefore, it’s the consumer’s market that determines winners and losers. If your product is something people want, you’ll succeed at providing it; if not, you won’t. Wealth in a free society, by definition, flows into the hands of those most able to work with it — and quickly disappears from the grasp of those who aren’t. Cybernetically, it’s a self-correcting mechanism, what Adam Smith called the “invisible hand.”
In a mixed economy, however, all such principles of ethics, justice and cybernetics are heaved out the window, replaced by varying degrees of government force and edict instead.
When government possesses non-market powers to forcibly “acquire” wealth, along with the power to reintroduce that plundered wealth back into the economy wherever it chooses, there really aren’t any market forces left in operation any longer. The “winners” and “losers” — successors and failures in the market economy — become whoever the government thinks they ought to be instead.
And, invariably, in such a situation, you end up with something like this:
“Great Lakes Aviation is behind in lease payments to Cheyenne Regional Airport for its company headquarters and overall operations by about $80,000 … A packet of information from an April 20 Cheyenne Regional Airport Board meeting includes a list of aged receivables. It shows that Great Lakes Aviation owes $78,645.32 … The amount is for five months of payments from December 2016 through April 2017, said Tim Barth, the airport’s director of aviation.” (“Great Lakes Aviation behind on lease payments to Cheyenne Airport,” WTE, April 30.)
But that’s just the tip of the iceberg; it gets better:
“The airport uses the lease payments to pay off a bond that funded building the facility where Great Lakes Airlines is headquartered on Airport Parkway in Cheyenne.”
So, let me make sure I have this straight: The lease payments Great Lakes is behind on are used to “pay off” a bond that the AIRPORT, not Great Lakes, originated. Right? So, Great Lakes shells out nothing down and makes a rent-to-buy lease payment every month … While the airport uses that payment to pay off ITS bond, making nothing else in return. Right? Now THAT is slick!
And, what does Great Lakes have to shell out in order to remain in business as a supposedly viable economic entity? How much of its own operating capital does it have? None … For Great Lakes, as it happens, is also on the receiving end of a hefty “Essential Air Service” federal subsidy (yearly).
In 2013, for instance, those subsidies came to: “$58 million in the last year alone — making it the most subsidized air service in America.” (“Great Lakes soars on government subsidies,” WTE, April 29, 2013.)
So let’s make sure I have this straight, too: We have a company here at our airport that: (1) Can’t build its own headquarters without government help; (2) Can’t even operate its airline without government help; and (3) Can’t pay its bills on time, even WITH all the government help. Right?
The market would have killed off this publicly-funded parasite of an “airline” years ago, and properly so. With the federal subsidies and the sweetheart corporate-headquarters deal in place, however, Great Lakes still runs “full speed ahead,” spreading its economic inefficiencies everywhere it flies. With thanks to you as a taxpayer. Hope you enjoyed your flight!
As for those missing lease payments, not to worry, for Great Lakes is working on that: “Barth acknowledged the amount and mentioned it was indicative of a ‘refinancing packaging that they’re trying to secure right now.’”
Really? From WHO? Sounds to me like Great Lakes is angling to acquire yet another subsidy — the one thing they do quite well.
Otherwise, Mr. Barth, guess who’s really hanging on that hook? Not Great Lakes, but your airport and the taxpayers instead.
Bradley Harrington is a computer technician and a writer who lives in Cheyenne. Email: email@example.com.
NOTE: This column was originally published in the Wyoming Tribune Eagle on May 7, 2017. Here is this column’s original downloadable PDF file.