The economics department is hosting its debate of the semester, “Do Free Markets Promote Overall Social Happiness?” on Wednesday, March 12 from 11:30 a.m.-1:00 p.m in Sondheim 101. The department is bringing in economists from Towson University and the University of Munich to participate in the debate.
Arguing for the affirmative is Howard Baetjer, Jr., lecturer in the department of economics at Towson University. Dr. Baetjer blogs at freeourmarkets.com, and is the author of Free Our Markets: A Citizen’s Guide to Essential Economics. An abstract for his book states: the freer the markets people live in, the better they flourish. Free Our Markets explains why, in terms of foundational economic principles. Dr. Baetjer aims to show readers that liberty, not the force of government, is the means to achieve the goals we all have for humanity: high and rising standards of living, increasing security and abundance for all. In his book, Baetjer presents the principles of spontaneous economic order and explains why, for practical economic reasons, free markets produce better results than even the best intended and most carefully crafted government interventions.
Arguing for the negative is John Komlos, professor emeritus of economics at the University of Munich. In addition to Munich, Komlos has taught at other institutions such as Harvard, Duke and the University of Vienna. He received his Ph.D. from the University of Chicago where he studied under the Nobel-Prize winning economic historian Robert Fogel. Komlos’ work has been cited in the New York Times, where Paul Krugman wrote about it, and has been featured in The New Yorker magazine in 2004. The trauma of 2008 and the Great Recession induced Komlos to write about the need for a paradigm switch in economics which culminated in the publication of What Every Economics Student needs to Know and Doesn’t Get in the Usual Principles Text.
From 11:30 a.m. until noon, free pizza will be available and there will be an opportunity to speak informally with the participants. The debate will begin at noon. RSVP’s are not required, but would be appreciated just to keep a head count for pizza. RSVP to David Mitch (firstname.lastname@example.org).
The Daily Iowan’s editorial board recently published a column arguing that the Iowa Senate should reject a $9 million tax break for a motor racing track in Newton, Iowa purchased by NASCAR. The authors contend that accepting tax breaks and appropriating public funds to build and maintain complexes for organizations such as NASCAR can harm the local economy.
A study by economics professor Dennis Coates was referenced in the article in which he argued sports welfare negatively impacts local residents because most money generated by sports stadiums ends up going to the owners.
“The professional sports environment in the 37 metropolitan areas in our sample had no measurable impact on the growth rate of real per capita income in those areas. The professional sports environment has a statistically significant impact on the level of real per income in our sample of metropolitan areas, and the overall impact is negative,” the Coates study noted.
You can read the full column published February 17 here.
Professor Ehrenberg will explain why the financial models under which both private and public higher education institutions are operating are breaking down and the actions they will have to take in the future to remain financially solvent and deliver high quality education to their students.
Thursday, March 6 at 4 p.m./Albin O. Kuhn Library, 7th Floor
Sponsored by the Department of Economics.
Ronald Ehrenberg, Irving M. Ives Professor, Stephen H. Weiss Presidential Fellow, and Director, Cornell Higher Education Research Institute (CHERI), Cornell University
A proposed NBA arena in downtown Sacramento would have an $11.5 billion economic impact, according to a study commissioned by the mayor’s political action committee. The group is designed to make the case for the city’s proposed $258 million subsidy for the arena.
Economics professor Dennis Coates was interviewed for an article in The Sacramento Bee about the report. He argued against studies such as the one in Sacramento, saying sports stadiums simply move money from one part of the city to another as consumers spend money on tickets for sporting events rather than other forms of entertainment.
“Basically they are just PR documents,” Coates said. “I’m pretty sure people eat and drink even if they don’t have a team in town that night,” he added.
You can read the full article in The Sacramento Bee here.
The Nassau County Legislature unanimously approved a $229 million bid by Forest City Ratner to restore and update the Nassau Coliseum on Monday. Naussau County voters turned down a plan to borrow $400 million to build a new arena two years ago and this deal is intended to save taxpayers the expense of the renovation, but critics wonder if the Coliseum can be successful without the New York Islanders, as the team will move to the Barclays Center after the 2014-15 hockey season.
UMBC economics professor Dennis Coates tells The New York Times that he doubts the arena can generate the revenue it needs without the draw of a big sports team. He suggests the arena could be forced to rely on concerts for revenue, competing against Barclays, Madison Square Garden and the Izod Center.
“The bottom line is,” Coates says, “are they going to have to back out of the deal at some point and come back to the county and say we need more money, and the county will be on the hook.”
In Newsday coverage of the deal Coates notes, “There does not seem to be any corporate welfare in this plan. And that makes me wonder — where is the corporate welfare? At what point are they going to say: ‘We need a handout to pull off what we promised but never in a million years could have delivered’?”
Read the full articles in The New York Times and Newsday.
The U.S. Olympic Committee is expected to decide on a site to propose for the 2024 Summer Games in September 2015. Under the plans DC 2024 — the group exploring a Washington, D.C. bid — Baltimore-area venues would stage Olympic events and Baltimore would support the games with transit and hotel infrastructure. Critics are asking what benefit this would bring to the city and region, and if the costs could outweigh the revenue.
Econimcs professor Dennis Coates told The Baltimore Sun that the Olympics are a financial boon to the International Olympic Committee, but not necessarily to the host cities. “The question is: How much do we have to pay?” Coates said. “Just putting together a bid is an expensive proposition. It’s not an easy thing to do.”
Even with his misgivings, however, Coates, shared, “This could generate an enormous amount of pride and an enormous amount of happiness among the population, particularly if you pull it off well.”
As Baltimore anticipates the start of the 2013 Grand Prix, a well-known 2011 economic impact analysis by UMBC economics professor Dennis Coates is again making news. The Press Box Online article “What Is Best Way To Measure Grand Prix’s Economic Impact?” notes that race organizers believe the 2012 Grand Prix generated $42.3 million in economic impact for Baltimore and the 2011 event generated $48 million. Coates, however, contested the 2011 figure in a assessment following that year’s Grand Prix, which indicated the impact was approximately $20 million less than the race organizers claimed. The article notes, “Coates’ argument centered on the $10 million that his study found would have occurred in Baltimore anyway, without the race.”
SB Nation also recently referenced research by Coates and Brad Humphreys, now at the University of Alberta, on “The Novelty Effects of New Facilities on Attendance at Sporting Events” in an online story about stadium construction.
Towson University’s new Tiger Arena opens tonight. The arena cost $70 million, funded through $20 million in Towson’s reserve funds, combined with bonds paid back through a student fee set aside for construction projects. UMBC economics professor Dennis Coates told the Baltimore Sun that although new arenas generally succeed in increasing the owner’s ability to generate revenue, whether that benefits those who pay for construction is less clear. “It creates a nice buzz,” said Coates, “but otherwise, the impact is spread out.”
Coates also commented in a recent Wall Street Journal article on how Brooklyn’s Barclays Center impacts local retailers, particularly food vendors.
Economics professor Scott Farrow is co-author and co-editor, with Richard Zerbe, Jr., of the new book, Principles and Standards for Benefit-Cost Analysis (Edward Elgar Publishing 2013). The book website notes:
Benefit–cost analysis informs which policies or programs most benefit society when implemented by governments and institutions around the world. This volume brings together leading researchers and practitioners to recommend strategies and standards to improve the consistency and credibility of such analyses, assisting analysts of all types in achieving a greater uniformity of practice.
Reviewer John D. Graham of Indiana University writes, “This book is a superb textbook treatment of benefit-cost analysis. It is well designed for students in public policy, public administration, public health, social work, environmental affairs, law and business.”
NBC Chicago’s politics blog “The Ward Room” recently posted an opinion piece affirming Mayor Rahm Emanuel’s decision to refuse to provide public money for a $500 million renovation of Wrigley Field. The writer, Edward McClelland, cited research by UMBC economics professor Dennis Coates that found pro sports reduce a city’s per capita income by putting entertainment dollars into the hands of athletes and team owners who live outside the area rather than local businesses around the stadium.
Coates wrote, “money paid to players does not circulate as widely or abundantly as it would were it paid to people with less wealth and more attachment to the city.” Read the article to learn more.