The News and Observer’s editorial page on Sunday produced a wrong-headed endorsement of Cary’s $6 million soccer stadium expansion:
It’s a lot of money to put into a soccer stadium, but Cary seems to have the right, “if you build it, they will come” attitude. The municipality of 140,000 people figures that its soccer park could draw national collegiate championship playoffs back to town with the 3,000 additional seats that are being added.
In recent years, Cary has lost out to other communities with new stadiums and more space. But Cary, in terms of additional amenities such as hotels and restaurants and shopping, takes a back seat to no one and isn’t shirking from the competition. It wants the 2012 men’s collegiate championship and the men’s and women’s finals in 2013.
Soccer is an international sport whose popularity will only grow in the decades to come. And in terms of facilities, it is not on the super-expensive scale of major college football or basketball. For Cary this adds up to smart sport, and smart business.
The N&O’s endorsement echoes the rosy numbers politicians always give when promoting these taxpayer funded developments. Dr. Mark Steckbeck, an economics professor at my very own Campbell University, gave a short indictment of the faulty economic thinking at work in this editorial, and points to the massive losses Roanoke Rapids has sustained from its publicly-funded Randy Parton Theatre at his blog.
For many like me, it’s not that I regard government spending on things like this misguided, and therefore inappropriate, because markets are infallible and if things like a soccer stadium were truly socially efficient markets would have already supplied it. No, it’s that because of the incentive structures in place, individuals acting in private markets and spending their own money are far less likely to err relative to politicians and bureaucrats spending other people’s money in deciding how to allocate scarce resources
Dr. Steckbeck’s public choice arguments ring true to me – local politicians are ill-equipped to make economic development decisions, and when those decisions go badly, they can sink the finances of an entire town. It is much easier to make risky bets with taxpayer money than to invest your own private capital into a project.