Torrey Pines is quickly showing to be just another Digital Domain in the latest episode of government failing at picking winners and losers. The Problem In Digital Domain state and local officials both threw your hard-earned money to bribe the chosen winner which turned out to be a big loser. None of the officials involved paid. No bureaucrats lost their jobs. But they went belly up with your money that they supposedly know how to spend better than you. Now Torrey Pines is begging for tax-money just to stay open. The finances of Torrey Pines were put under a microscope after the nonprofit asked the city for help in November to secure a mortgage on its building the city paid for in Tradition. Torrey Pines President and CEO Richard Houghten said if his organization and the city couldn’t agree to terms of a deal, banks wouldn’t lend it money, which would have forced the research giant to rethink staying on the Treasure Coast. They need much more after already getting so much of other peoples money. Given the fact city officials had mortgaged several properties, including City Hall and Port St. Lucie Police headquarters, to generate $45.6 million in investment capital for the Torrey Pines project, the revelation that the nonprofit research center needed additional help from the city felt like a blow to the solar plexus. The city used the funds from the mortgaged properties to build Torrey Pines a 107,00-square-foot state-of-the-art facility in Tradition in 2007. St. Lucie County chipped in $10 million; the state gave Torrey Pines about $26 million. What a racket Houghten is running on the taxpayer. Fool the officials into showering with money and building you a home and then threaten to pull out if the money train stops. Another tax-dollar benefactor warns of doom and gloom for the artificially-created Research Park. Richard Jove, president, CEO and director of VGTI, said the 120-acre research park would take a hit if Torrey Pines were to depart and make it nearly impossible to transform the Treasure Coast into the Research Coast. “It would be a lot harder to see a future with other institutions coming with an empty building next door,” Jove said. “That would negatively impact our ability to recruit scientists here, because it wouldn’t be a very positive sign of stability, and I think it would be virtually impossible to convince biotech or other research institutes to come when they see an empty building.” Greg Oravec seems ready to double down on failed policies to save face. Torrey Pines leaving (would be) a psychological blow because of this large investment in biotech (that) would have failed.-Port St. Lucie Mayor Greg Oravec To make matters worse your omnipotent local officials not only mortgaged city property to pay for the building but also promised to give it away. St. Lucie County chipped in $10 million and the state has given Torrey Pines approximately $26 million to date, Houghten said. The building was conveyed to Torrey Pines as part of the original agreement. The land the building sits on will be conveyed to the nonprofit in 2026, pursuant to the original agreement. And PSL has to pay the yearly debt burden. The city pays $4.11 million a year in debt payments on the building through 2027. The payments began in 2009, Fry said. Theres some hope. Either the economy doesnt tank (were soon to hit that 8-year housing cycle) or the city removes an clause from the contract with Torrey Pines. This clause states that if Torrey Pines leaves the building belongs to the city. PSL unanimously voted to remove the clause- a typical move out of the PSL council of fools. Despite all the failures the VGTI head is acting like a snake-oil salesman pitching dreams. Jove said the formula was successfully applied to The Research Triangle Park in North Carolina, a 7,000-acre biotech hub consisting of more than 175 companies and 39,000 employees. “They only succeeded due to a decades long partnership between local governments, universities and business leaders. ... With the same kind of vision and commitment, we can replicate that success here for the Tradition Center for Innovation and Port St. Lucie,” Jove said. The Lesson Henry Hazlitt famously summarized economics into one sentence: the whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups. The Lesson Applied There is a key lesson to be learned from the complete and utter failures of Torrey Pines and Digital Domain- there is only one way to productive exchange. Patrick Barron, former undergrad professor at University of Iowa and Graduate School of Banking professor at University of Wisconsin recently wrote about creating economic activity. The basic unit of all economic activity is the uncoerced, free exchange of one economic good for another. Moreover, the decision to engage in exchange is based upon the ordinally ranked subjective preferences of each party to the exchange. To achieve maximum satisfaction from the exchange, each party must have full ownership and control of the good that he wishes to exchange and may dispose of his property without interference from a third party, such as government. The exchange will take place when each party values the good to be received more than the good that he gives up. The expected — but by no means guaranteed — result is a total higher satisfaction for both parties. Any subsequent satisfaction or dissatisfaction with the exchange must accrue completely to the parties involved. The expected higher satisfaction that one or each expects may not be dependent upon harming a third party in the process. Instead of being funded like every other business on the Treasure Coast which requires the entrepreneur meeting the demands of paying consumers the recent landmark failures have relied on the sweet money train of others folks money conducted by the government fools who do not pay the price for their actions. In taking money from taxpayers to gift to Torrey Pines it is easy to see the benefits to Torrey Pines. A whole research park was built to try to foster these government-picked favorites. What was invisible to your government overlords and their cheerleaders was the harm inflicted to others. Local governments produce nothing, everything they do is based upon the extraction of capital from the productive class. Its much harder to see what local families can never do with the money stolen from them to be given to Torrey Pines. Nobody can see the businesses that couldnt expand or hire more employees because of having to subsidize Torrey Pines and Digital Domain. Barron continues on why government can not force productive investments. Several observations can be deduced from the above explanation. It is not possible for a third party to direct this exchange in order to create a more satisfactory outcome. No third party has ownership of the goods to be exchanged; therefore, no third party can hold a legitimate subjective preference upon which to base an evaluation as to the higher satisfaction to be gained. Look around at the numerous failures of government investment of your money in PSL. City Center. Digital Domain. Torrey Pines. And those are just the recent ones. Ask yourself why? Why must other people reach into your wallet to give money to others? Local officials like Oravec and Tod Mowery will cite their degrees in planning to insinuate they know better than you where your money should go. They dont. They dont know jack about business or creating economic growth. The Answer We must stop the foolish policies of subsidizing business. Its not just locally that subsidization practices are being exposed as failures. Solyndra. Enron. The problem isnt just that local planners and officials cant predict the future. The problem is only the individual can best allocate their resources. Hazlitt continues in Economics in One Lesson, It is obvious in the case of a subsidy that the taxpayers must lose precisely as much as the X industry gains. It should be equally clear that, as a consequence, other industries must lose what the X industry gains. They must pay part of the taxes that are used to support the X industry. And consumers, because they are taxed to support the X industry, will have that much less income left with which to buy other things. The result must be that other industries on the average must be smaller than otherwise in order that the X industry may be larger. But the result of this subsidy is not merely that there has been a transfer of wealth or income, or that other industries have shrunk in the aggregate as much as the X industry has expanded. The result is also (and this is where the net loss comes in to the nation considered as a unit) that capital and labor are driven out of industries in which they are more efficiently employed to be diverted to an industry in which they are less efficiently employed. Less wealth is created. The average standard of living is lowered compared with what it would have been. Instead of favorite companies and privileged businesses all people and businesses should be treated equally. These results are virtually inherent, in fact, in the very arguments put forward to subsidize the X industry. The X industry is shrinking or dying by the contention of its friends. Why, it may be asked, should it be kept alive by artificial respiration? The idea that an expanding economy implies that all industries must be simultaneously expanding is a profound error. In order that new industries may grow fast enough it is necessary that some old industries should be allowed to shrink or die. They must do this in order to release the necessary capital and labor for the new industries. If we had tried to keep the horse-and-buggy trade artificially alive we should have slowed down the growth of the automobile industry and all the trades dependent on it. We should have lowered the production of wealth and retarded economic and scientific progress. We do the same thing, however, when we try to prevent any industry from dying in order to protect the labor already trained or the capital already invested in it. Paradoxical as it may seem to some, it is just as necessary to the health of a dynamic economy that dying industries be allowed to die as that growing industries be allowed to grow. The first process is essential to the second. It is as foolish to try to preserve obsolescent industries... No more handouts to those political favorites. The local officials could help the local economy by allowing it to operate free of interference. Rather than steal money from businesses and working people to give to their pet projects local officials should return the money used to invest in wasteful projects to locals. Rather than create special circumstances (bribes) for the chosen companies to the local economy needs to be freed of the burdens placed on it to finance such gambles. Barron continues, we are led to the conclusion that no outside agency can create greater economic satisfaction than can a free and uncoerced exchange. No more bailouts. No more subsidies. No more ripping off the working class to pay for politicians pet projects. Leave us unmolested and free from robbery so we can create more activity. youtu.be/ROdsf6lVs1c With all these failures of these relatively large building projects on the Treasure Coast one has to wonder if these subsidized are an indicator of coming economic downturns akin to the indicator of Mark Thorntons Skyscraper Curse. https://youtube/watch?v=VMsyugZOifo Analysis: A Torrey Pines departure could spell doom for biotechnology on the Treasure Coast - TC Palm.
Posted on: Tue, 13 Jan 2015 03:18:45 +0000
Recently Viewed Topics
© 2015