Tag: incentive

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ideological culture political economy too much government

Socialism Doesn’t Work, But…

socialism, force, incentive, Occassio-Cortez

“Socialism” — we all want to be sociable, right?

Last week’s anti-​socialist moment was not limited to the president’s promise that America would never go socialist, as I noted this weekend there was also Panera Bread’s abandonment of its quasi-​charitable Panera Cares (“pay-​what-​you-​want”) fast food chain.

Isn’t that a bit of a strange connection? Socialism is not charity. It’s bad because it is force through and through, not because it seeks to help people. 

Well, note that while Panera’s notion was the same as many socialists’, to help the poor. Panera’s method was to cajole, or “nudge,” the better-​off to pay enough more to cover the costs of paying less. 

Kinda like ObamaCare, but without the force.

And without the force, it failed.

What Panera management discovered is that not only is it very hard to get the message across, it is almost impossible to set up coherent incentives to successfully alter consumer behavior. 

Getting incentives right is something that plagues all sorts of socialistic experiments, voluntary or coercive, within a capitalist society. 

Take Finland’s recent experiment with a Universal Basic Income (UBI). 

The idea of that nation’s centrist party was to take care of the unemployed beneficiaries’ basic needs so they could get back to work.

Well, those who received the basic income were happy enough receiving the moolah. Sure. But “there was no evidence from the first year of the experiment,” a report in Huffington Post admits, “that the scheme incentivized work.” Despite that, socialists in England are pushing for the UBI.

Socialism doesn’t work, and socialists would rather not work — except to advance socialism.

This is Common Sense. I’m Paul Jacob.

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socialism, force, incentive, Occassio-Cortez

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Small Target, Big Subsidy

Denver, incentive, California, development, rent, graft, corruption

Something has gone wrong when, to get a tenant to move into an empty space in your prime-​location building, you need a $4 million subsidy.

And when I say “prime location,” I’m not engaging in Trumpian over-​statement. The downtown Denver, Colorado, property location sees over 35,000 pedestrians per day … and that’s with the primo slot empty.

But to get that slot filled, the owners have negotiated with the city government to nab a $2 million “incentive” to fix the place up for Target, which is thinking of leasing the location to put up a smaller-​than-​usual “flexible-​format” store. Oh, and another $2 million for “operational” costs, which seems to be some kind of a loan to be paid back from taxes to be collected — and shared by the city for 20 years with the owners.

In other words, it’s the darnedest business deal you’ll ever see (and never get): up-​front money not from a bank or investors, but from Denver’s city government “BIF” — Business Investment Fund — which is obviously part of a convoluted scheme fed by taxes and devised by … people I wouldn’t trust with my money.

Structuring deals like this is how modern cronies — er, cities — operate, I know. Am I alone in judging it corrupt on the surface and corrupting in the details?

If prime commercial property has gone unused for about a decade — as this three-​storied mall space has — I’d think that maybe the owners have set the rents too high or the city has been a bit too greedy with taxes.

Or both.

This is Common Sense. I’m Paul Jacob.

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