Mayor Ballard Gives Pacers Eleven Million Per Year, They'll Save Twenty-Five?!?

I've written before on how my objection to the City bailing out the Indiana Pacers to the tune of eleven million per year for the next three years is informed by the fact the team's financial woes are caused by the NBA's terrible business model. I've also said NBA Commissioner David Stern is coming to the rescue.

Stern has said the NBA will pursue more aggressive revenue sharing to bring it in line with the NFL's extremely successful model. Any change to the existing revenue sharing model will put more money in the Pacers' hands as a "small market team."

But more importantly, Stern has consistently said the owners will try to lower the salary cap. He just hadn't floated a number until now.

According to Stern, the owners will ask for a thirty-three percent reduction in NBA players' salaries.

NBA owners pay their players roughly $2 billion, and the Pacers, with a payroll of $64,368,000 (19th highest of the 30 teams), account for 3.21 percent of that total.

So what would a thirty-three percent reduction ($800 million total) mean for the Pacers on a pro rata basis? An annual savings of $25,680,000 per year.

Many may rightfully contend that the players won't agree to a thirty-three percent reduction. Fair enough. But if the league gets only half of its requested savings ($400 million for a twenty-percent reduction), the Pacers still save $12,840,000 per year, or more than what the City is giving them.

Even if your goal was to keep the team at all costs, would you agree to give the Pacers taxpayer's money while knowing that a year from now they will be sitting on tens of millions more?

Here's your answer.

Not unless you were a mayor who (a) either has lousy business sense; or (b)made a pledge to GOP bigwig and Pacers CEO, Jim Morris, and/or to Bob Grand, a/k/a "the most influential man in the Ballard administration," a/k/a "the former President of the Capital Improvement Board, a/k/a "partner at Barnes and Thornburg, the Pacers' law firm."

One wonders exactly how many more times the Mayor can take an idea that is not bad in principle (see Citizens Gas sale, parking renovation) and craft lousy deals that benefit the politically influential to the detriment of average taxpayers.

Mayor Ballard Gives Pacers Eleven Million Per Year, They'll Save Twenty-Five?!?

When Will We Bailout of the Bailout?

Last evening, I listened to Neel Kashkar, the interim Assistant Treasury Secretary for Financial Stability, talk for an hour about the bank "bailout plan," and what I heard NOTHING concretely about loosening credit.

Mr. Kashkar kept talking about “confidence” in certain banks, such as "the Citi." Folks, this is talk for shareholders, not consumers. Nobody is running to the bank to withdraw their money. American consumers know there is no bank run. The notion we need to maintain “confidence” is a sham. What happened on the bailout is what we all expected. We gave money to banks, and they have kept it to pay off ongoing losses to hold stock prices. All of this talk about a bailout stimulating the economy was pure hokum crockery (bull feces in a bowl).

This is where I might differ from many of my Democratic colleagues, but I have difficulty supporting a bailout of any company or industry. It requires government to prioritize our industries, and given our current deficit, does anybody have confidence in our government's ability to make the right call on that one?

Other than the fact that Michigan has so many electoral votes and union members, what is so significant about auto versus other industries, such as pharmaceuticals and computer technology? If they start getting their butts kicked globally, will we be bailing them out next?

Why can't the arena football league get a bailout? You say, "Because it didn't employ as many people, and it's not essential to America." To which I say, yes, but a bailout of the arena football league probably wouldn't have cost as much as the auto and financial industry bailouts on a per job saved basis. AND if the Big Three went under, I can still get a car. In fact, what will happen is some entrepreneurs would start small companies that offer and market fuel-efficient American cars. This would be in stark contrast to an industry that basically ignored those technologies and advertising of its cars to get rich quick by offering and marketing zero percent financing on gas guzzling SUVs that people now regret owning. You want me to trust THAT to rebuild itself? Didn't we do this before, Lee Iacocca? How many times is enough?

So when Larry Flynt asks for a five billion dollar bailout for the porn industry, I say, "Why not?" Why should that industry be any different? If you count up people with webcams, it probably employs as many as the auto industry, and I've never heard ANYBODY say that Japanese porn is better than ours. U! S! A! U! S! A!

When Will We Bailout of the Bailout?

IPOPA’s Random Thoughts on Politics and Culture

- The tone at John McCain and Sarah Palin rallies lately is a bit terrifying. I’m not saying John McCain and Sarah Palin are racists or would ever wish harm to Barack Obama, but you can’t whip up this kind of “he’s not one of us” frenzy without expecting at least a few people to pick up the torches and pitch forks. Before the election is over, expect a member of the “liberal media” press corps that follows McCain to get more than just “the finger.” Nice family values, by the way.

- I’m morphing into a populist before my own eyes. I’m one of the 2/3 of Americans who opposed the bailout. Giving $700 billion to people who created the problem is like giving the guy who blew up his garage more dynamite and asking him to “be more careful.” I promise you that nobody you know will benefit from the $700 billion dollars in Monopoly money that we’re giving the Treasury Secretary. I was extremely disappointed when Congressman Andre Carson switched his vote in favor of this package. (Kudos to Baron Hill, Pete Viscloskey, Dan Burton, and Steve Buyer for getting this right).

- The fact the stock market has plunged AFTER the bailout is perplexing. Maybe I just don’t understand this. Isn’t it the case that companies that make things of value still make things of value? That they still own the same property? If worry about mortgages can make Microsoft, Lilly, or BP tank, weren’t they overvalued to start with? Might it not be the case that prices are going down based on irrational panic, and now is a great time to get a deal?

- I’m sick of the mythology that owning your own home is the American dream. This is marketing crap spouted by homebuilders. Living free is the American dream, and we're all living it the second we're born here. Everything else is just gravy. I’ve rented places, and I’ve owned homes, and I didn’t notice any more psychological comfort with the home. In fact, minus the tax benefits, the only difference with being a homeowner is you spend half your summer powerwashing your wooden fences.

- If I bought more home than I could afford, how can I complain when the bank comes to get it? Why are we trying to keep people from foreclosure? They bit off more than they could chew. I promise you when the home market goes low enough, people who DIDN’T overextend themselves will start buying those houses. I'll be one of them.

- And can someone explain this “credit crunch” to me. Everybody is walking around acting like Warren Buffet can’t get a loan. I don’t get this. People with good credit (i.e., those who SHOULD get loans) can still get them. I know this because a buddy of mine just bought a car for 2%. This is going to be a crazy idea, but maybe, just maybe, all the people whose credit is not good enough to get them loans should try living within their means for a while.

- Americans, including me, have spent more than they should for at least three decades now. If we need a financial shock to cleanse the system, I’m for it. We need to get back to when we actually waited to make purchases until we had the money. We also need to save more in America so that when we do borrow money, we’re borrowing our own, not China’s. The days of easy credit are gone, folks, and the idea that the government is trying to keep it alive says America hasn’t learned its lesson.

- I’m no prude, but I'm disugsted that little girls' costume options include “slutty witch.” We all know men use Halloween to induce their women to go scantily clad in public with the excuse "it's just a costume," but do we really need little girls looking like tramps? Who MAKES these costumes? The Pedophiles of America?

IPOPA’s Random Thoughts on Politics and Culture