Thursday, November 15, 2012

Econ 101 - 121115


Econ 101, A Case Study

            One of the hallmarks of liberal economic thought is the belief that politicians are able to suspend the laws of economics by enacting their grandiose thoughts about the “public good” into law.  Unfortunately for the do-gooders, individuals trying to make ends meet and business owners trying to make a profit tend not to voluntarily cooperate with the social engineers.

            Governor Mark Dayton advocated for, signed into law, and celebrated legislation providing a massive public subsidy to help the Minnesota Vikings build a new football stadium.  The legislation contains a provision that allows the Vikings to license various football related rights, including stadium seats.  The language in the bill can be understood by anyone who takes time to read it.

The Vikings’ ownership recently indicated the intent to license seats for season tickets, presumably as a way to recoup some or all of the team’s investment in the new stadium.  The Governor reacted by sending Zygi and Mark Wilf a sternly worded letter in which he points out that this is supposed to be the “People’s Stadium,” not the “Rich People’s Stadium.”  In other words, the Governor apparently expected the consummate entrepreneur to discontinue looking for ways to make money.  The Governor would like Mr. Wilf to forgo income opportunities for the public good, or middle class people, or the children, or something.  LOL!

            First of all, going to the stadium to watch an NFL game is already an activity engaged in primarily by the evil one-percenters.  Just for the fun of it, I did a little ticket shopping.  If you want lower level seats at the end zone line for the December 9 game against the Chicago Bears, it will set you back $186 a pop.  Let’s see . . . four tickets, $744.  Parking, $20.  Four Cokes and four hotdogs, $40.  Naïve governor, priceless!  “People’s stadium?”  Ya . . . sure.

            To be fair, you can buy less expensive tickets.  But I am really not interested in paying even $50 or $100 to crane my neck or see the action only when the teams are playing on “my end” of the field.

            Lest you think I am casting aspersions on the Vikings, let me be clear.  The Vikings have done nothing wrong.  The Wilfs own the rights to sell a product (NFL football games) that lots people want to buy.  And these consumers of football continue to pay, even when the price goes up dramatically.  Economists refer to this as an inelastic demand curve.  Inelastic demand curves are very good for sellers.  Mr. Wilf has every right to charge whatever price he can get for his product.  Am I willing to pay $186 for a football ticket?  Nope.  But that doesn’t matter.  Other people are willing.  The Vikings don’t need me.  Good for Mr. Wilf!

            By taking advantage of the seat licensing provision in the statue, the Vikings are engaged in smart business decision-making.  They are acting legally to maximize profits and minimize losses.  Despite the Governor’s expectations to the contrary, the Wilfs are in this thing to maximize profits.  It seems Governor Dayton believes the laws of economics should not apply here, because he doesn’t want them to apply.  In his mind the Wilfs should just sit back, write a check, and not attempt to recoup their costs or make higher profit margins.  Sorry Governor, that is not how the world works.

7 comments:

  1. Yes, Senator, I'm sure your name-calling and ideological ranting will be helpful in moving Minnesota forward - NOT! The election is over. You really should think about growing up and talking like an adult.

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    1. Don't believe I have engaged in any name-calling. Simply analyzing an issue.

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    2. Oh, please. "Do-gooders," "grandiose thoughts," "evil one-percenters." The sneer in your voice is audible right through your purple prose. I suppose you're just so used to talking like this that you have no idea how offensive your language is to people who don't subscribe to your version of voodoo economics.

      But compromise, cooperation and putting the good of the State first aren't really your thing, anyway, are they? You need to keep the troops stirred up, so they'll continue to send those cash contributions, and you can continue to milk the State for a salary and the penniless GOP for "consulting," while contributing nothing beyond acrimony to either.

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    3. Interesting to note that my critics rarely address the merits. My argument is rather straight forward. The Wilfs are attempting to maximize profits by adopting a personal seat license program as provided in the law that was signed by the Governor. That is what businessmen and women do. I don't understand the Governor's anger. That is "voodoo economics?" Really? No wonder Dipper has nothing better to do than attack me personally.

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  3. Attack you personally? C'mon, Dave, don't be such a crybaby. I simply pointed out the fact that you're not only milking the public for a salary, while providing us with nothing more than voodoo economics talking points we could get for free at any slow-witted wingnut blog, but you've also been milking the poor, pitiful, penniless Republican Party of Minnesota for "consulting" with them on how to lose elections. 



    The recent election results pretty much demonstrate that your brilliance hasn't kept the GOP in power, right? So how do you justify that cash stream your recently disgraced buddy Tony Sutton kept flowing your way? Intelligent Republicans might want to look a little further into that cozy crony deal you and Tony had going, if they want to understand how you guys helped the party go broke.

    

I do understand that you'd prefer to keep the details of those payments out of sight, Dave. I mean, there's no record of what you actually did for all that dough, right? But it is part of the public record that you scored pretty deeply into your Republican friends' wallets, and that they haven't much to show for it.



    Meanwhile, about the merits of your hyperbolic rant, yes, the Wilfs have the right and presumed ability to enforce any contract to which they are a party and yes, the Governor has the right and ability to demonstrate, argue and enforce the letter and spirit of any agreements, expressed or implied, to which the State and the Vikings are parties.

    

That's what each of them was doing, in this case, by arguing their respective cases in public. You apparently decided to buy everything the Wilfs were selling, and to ignore the Governor's case. That's your right, of course, but I don't think we'll be seeing any big dollar seat licenses at a new stadium, any time soon. The Governor's point was made, and the Wilfs, if they're as smart as I think they are, will take it to heart. Ignoring something you don't like, or don't understand, is what we in the word business call "ignorance." What do you call it, Dave?

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  4. Sometimes decisions to be in one camp can be affirmed by the tactics, class, and debating 'skill' of those in the 'other' camp.

    I am very grateful to be a supporter of Sen. Thompson, and more importantly, of the principles he and I have in common. Gov. Dayton did have a huge error in judgement and now the taxpayers of MN will pay dearly for it. I'm sure the well-off will enjoy their seats in the new stadium, as I will enjoy my seat in front of the TV (Go Vikes!)

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