Footsies and Other Political Games

There are countless examples of government intervention in the economy creating unintended consequences. Invariably these results lead to further government interventions in a futile effort to correct the problems created by the initial intervention. As a case in point, consider Discovery Green--the park in downtown Houston that was built with a combination of public and private money.

Land around the park has soared in price, and now costs between $200 and $300 per square foot. Less than 1 mile east of the park, land is selling for only $60 per square foot. While the park has added another feature to downtown, it has also distorted land values in the area. The city wants more hotel rooms downtown in an effort to attract conventions, but the high cost of land makes such projects unfeasible. The city finds this unacceptable, and now plans to offer nearly $10 million in tax rebates to Embassy Suites to build a 262 room hotel.

The city had two conflicting goals--increasing park space downtown and also increasing hotel rooms--and neither are proper functions of government. In pursuing the first goal the city made the second goal more difficult, and found itself needing to offer bribes tax rebates.

I am sure that city officials would argue that additional downtown hotel rooms will be good for the city. We can attract more conventions and the millions of dollars that they bring to the local economy. Construction on the project will create jobs. And the city will eventually reap scads of tax dollars. This may be true, but what other distortions will this scheme create? And what about those who do not receive these cushy political favors?

Mayor Green White has taken it upon himself to transform Houston into his image of what the city should be. He wants Houston to be a world-class city and thinks that we need a downtown park, lots of hotel rooms, light rail, and green building codes in order to rate such a designation.

But I have news for our dear mayor--Houston is a world-class city and it has nothing to do with dog walks, model trains, or funny looking light bulbs. It has to do with freedom and the right of individuals to live their lives as they choose. It has to do with the affordable housing and lower cost of living that results when government stays out of our lives. It has to do with a healthy economy and expanding job market.

Houston's success as an economic powerhouse was achieved despite the lack of feel-good, politically correct programs being touted by the mayor. Houston attracts conventions, but not the kind the mayor wants to attract. Houston businessmen create jobs, but they aren't green enough for White. And when White is unhappy with the decisions that private individuals make, he is more than willing to use a combination of incentives and punishments to get the desired actions.

For example, if he doesn't like your proposed multi-use project, he will use whatever means available to him to stop it. This might include revoking permits that have already been issued, or pressing for a new ordinance aimed specifically at your project, or some other nefarious tactic. If however, he likes your project he may grant you tax breaks or some other political favor.

White continues to play these political games, and he will continue to get unintended consequences. He will distort the market in an attempt to mold the city into his vision, and then he (or future city officials) will deal with those distortions through further interventions.

If White were omniscient and infallible, then his interventions might be somewhat excusable. But he isn't and they aren't. His interventions are violating the rights of all Houstonians, and setting the city on a course that will greatly undermine our freedom and our economic prosperity.