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Dinner Should be on the Hall

by on December 15, 2009

The City of Buffalo would like you to dine out. Please. But kindly only do so at sanctioned eateries that the local government has blessed with cash. The Buffalo News recently highlighted the specific flaws of a loan program that removes “free” from markets:

City Hall lending to business has dropped by almost half since Mayor Byron W. Brown took office, and its primary economic development agency is on track to make just 10 loans this year, a Buffalo News investigation has found.

Documenting how little currency the scheme has distributed is one approach for contemplating its weakness. Another is to ponder why the municipality issued 10 loans at all. Buffalo is over-parenting and babying its favorites when they should be letting merchants spread their wings. On top of that, an inordinate number of the establishments in question rightfully owe taxpayers meals and booze, respectively:

Forty-five cents of every dollar lent by the agency under Brown has gone to retail, with most of that – 31 of the 45 cents – going to bars and restaurants. Many development programs shy away from investing in this type of retail activity because of its limited economic benefit.

It’s not as if they lend your money wisely even under those circumstances. Aside from thoroughly sham enterprises such as One Sunset, the story notes that beneficiaries include local favorites such as 8 p.m. darling Oliver’s and 12:15 a.m. standby Pano’s. Such beloved culinary landmarks should function as cash registers that fill themselves. Instead, they have resorted to hitting up the government, which tells you all you need to know about same government’s success at improving the economy.

Buffalo’s administration is attempting to clean up a mess they caused; worse, their solution is to spill more grape juice on the carpet. Even worse, some of the businesses are slipping DVDs they pilfered from you alphabetically into their own collections. As the News reveals,

One-third of the businesses that have borrowed money since Brown took office are delinquent in repaying their loans. Twenty-one of the 58 businesses BERC lent money during Brown’s tenure are anywhere from two months to two years in arrears, accounting for 17 percent of money borrowed as of the middle of October.

Hmmm, it’s not really “borrowing” if it’s never paid back. Mooching aside, there’s also bad news for people still hoping that the stimulus will create or save jobs:

The agency can document the creation of only 99 to 112 jobs over the past four years. That’s less than was typically created in one year under Masiello, which wasn’t necessarily impressive to begin with, and doesn’t even begin to make up for the rising tide of unemployment among city residents.

The results of this small-scale experiment can’t quite please Obamanomics adherents. Alternately, perhaps lowering taxes would allow entrepreneurs to use their own assets or other private resources to generate employment without the city’s heavy hand batting around the game pieces and nah.

Chicago School daydreaming aside, it’s hard to give restaurants grief for exploiting the funding. They’re just taking what’s available. Conservatives can advocate privatizing Social Security. But if they’re paying into the system and the money is being scattered, it makes no sense to pass.

However, the best course remains to remove Buffalo’s spending program as an option. A flourishing metropolis shouldn’t have or need a development agency: they should be dodging away from commerce’s path and letting gastronomical entities compete for themselves. The city also shouldn’t be effectively endorsing one restaurant over another, which is what effectively happens when they determine which meal-dispensing outposts are worthy of financing.

Until the bureaucratic hindrance is removed, Buffalo’s mayor by default will preside over a quasi-command economy. Of all the arguments against letting the city involve itself in the food service business, Mayor Brown serves as about eight of them. The dubious politician who’s ultimately in charge of the city’s credit business is the best reason of many to dump the interventional approach. But what would restaurateurs then do when they need capital? Oh, right: they can go to a bank.

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2 Comments
  1. Nick permalink

    Is it that hard to understand that socialism fails and that it is immoral.

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