Archives for David Strom

PIM Commentary from David Strom: Football and the cultural pork barrel

Published in “PIM” (Politics in Minnesota)  here….

There are few arguments for taxpayers kicking in millions of dollars to build a football stadium which will be owned by a billionaire, and in which millionaires play 15 or fewer games a year.

But there are a few which, ironically enough, appeal to taxpayers who in most circumstances oppose the expansion of government and the increasing of taxes. Since my days at the Taxpayers League of Minnesota, I have been regularly confronted by fiscal conservatives who would pay dearly to keep the Vikings in Minnesota.

This has always struck me as odd, not only because it runs counter to their ideological leanings, but also because watching NFL games in a stadium is vastly inferior to watching it on HDTV. Not only is the game more interesting and intelligible on TV, but the likelihood that some obnoxious drunk spills beer down your shirt drops by at least 75%.

But two arguments have stood out from all the rest, and are hard to refute: 1) we pay all the time for everybody else’s favorite projects, which please nobody but the economic and cultural elite; and 2) the Vikings are part of Minnesota’s cultural identity, at least as well known and associated with Minnesota as the Little House on the Prairie.

Which brings me to the fight over using Legacy funding to help fund the construction of a new stadium for the Vikings.

Opposition is building to using Legacy funds in this manner, but in my opinion that opposition is little more than the cultural and political elite fighting to keep their control over the vast sums of “culture pork” they now distribute.

Right now $52 million a year flows from the Legacy Amendment fund to various arts, history, and cultural heritage projects. That is in addition to over $7.5 million a year flowing from the general fund to the Arts Board, adding up to $60 million a year for arts and cultural spending. That’s a good chunk of change.

And almost all those dollars flow to projects that for the most part are ignored and irrelevant to the lives of ordinary Minnesotans. We hear all the time about the value of the Guthrie Theatre, various dance troops, puppet shows, and historical sites have to Minnesotans, but frankly few of us would notice if they disappeared. Minnesota Public Radio may touch many of our lives, but it would survive just fine without a dime of state funding.

In other words, the current arts and cultural funding may have real value, but that value is enjoyed primarily by the cultural elite.

Not so the Vikings. It is hard to travel Minnesota on any day, and especially during the football season, without seeing a purple jersey. Minnesotans become engaged with talking about the players, coaching strategy, the rivalry with the Packers, and just about anything Vikings related. Boat cruises, speeding tickets, and player injuries all spark hours of conversation. Not even NPR could sustain daily coverage of the latest Guthrie play, but sports radio devours hours out of people’s lives.

And yet politicians are busily engaged in explaining why the Vikings don’t constitute part of Minnesota’s culture or heritage, and don’t have a legitimate claim to a chunk of the $70 million a year we mostly waste on elite entertainment.

That’s BS. Now personally I couldn’t give a rip whether the Vikings stay or leave, but millions of Minnesotans do. And they do because the Vikings are a big part of Minnesota’s cultural landscape—a bigger part than any other single thing funded with the Legacy money. If a Vikings stadium doesn’t count as supporting Minnesota culture, what does?

The fight over government subsidies of arts and cultural heritage shows precisely what is so odd about government spending. It seems as if the basic criteria for subsidy is that too few people care, save the cultural elite. Anything Minnesotans are engaged enough in to kick in real money—Vikings fans spend gazillions of dollars on all things Vikings—ipso facto don’t deserve support when it is needed. That’s insane.

Frankly, I oppose the Legacy spending, the Legacy tax, and taxpayer subsidies for the Vikings. But as we have the Legacy tax, Legacy spending on arts and cultural heritage, and the Vikings and NFL demanding stadium subsidies, it seems like a marriage made in heaven. It makes sense, fits the letter and spirit of the Legacy Amendment, and would avoid raising any new taxes to make it happen.

Watch for the cultural and political elite to scream bloody murder at this solution, but ignore them. Their opposition has nothing to do with preserving the intent of the constitutional amendment, and everything to do with preserving their monopoly on wasting our money.

David Strom, Policy Fellow

David Strom on Ahmed TV: a conversation about how conservatives and liberals see the world.

Policy fellow David Strom was asked to explain the “conservative way of thinking” to liberal-leaning Egyptian immigrant Ahmed Tharwat. David and Ahmed have been facebook friends for several months, and after some correspondence and a meeting at a Caribou Coffee, David and Ahmed decided to try an experiment: a half hour conversation  on Ahmed Tharwat’s TV show  on how liberals and conservatives see the world differently. Nobody changed their minds, but perhaps a bit of cultural comity resulted.
Belahdan appears on TPT 2.2 Sunday and 10:30 am, and several times throughout the week.

Fox News Story Featuring David Strom: ‘Green’ Recycling Company Bankrupt Weeks After Getting Millions

From Fox News in Mankato: Fox News covered this story featuring policy fellow David Strom.

MANKATO, Minn. –

What if you could find a way to make money off other people’s trash? On top of that, you’d be helping the environment, turning that trash, in this case plastic agricultural film, into anything from outdoor decks to plastic furniture. Even better, in the midst of a recession, the company becomes an oasis of employment and economic development.

Genesis Poly Recycling was supposed to do all of that. Taking old silage bags and hay wraps and turning them into plastic pellets to be sold to other companies. But it never got off the ground, and is currently bankrupt… but not before taking millions of dollars in taxpayer money.

Two years ago, Genesis Poly CEO Dan Hauschild said, “We’ll be creating quite a few jobs. 30 to 40 right away and in a couple years be around 120… and then there’s more opportunity to expand we’ll go way beyond that in the next five years.”

Hearing those numbers, Mankato was happy to oblige. The city pulled out plenty of stops… acting as an intermediary of sorts, by purchasing the property at 480 North Industrial Road for $850,000, money acquired through a grant with the state’s Department of Employment and Economic Development (DEED). The old Spartech site would be rented out to Genesis Poly. Along with the site purchase, Mankato lent Genesis Poly half a million dollars for equipment.

That $500,000 was stimulus money given to DEED, and applied for by the city of Mankato. Once paid back, the city could lend it out to another company. At least that was the plan.
Reality however, begged to differ.

Mankato City Councilman Mike Laven says, “I don’t think anyone of us saw a 2-month window and that closing. That wasn’t our process.”

In the spring of 2010, Genesis Poly went belly up. And with it went Mankato’s money. Along with a $100,000 loan from the Minnesota Pollution Control Agency, and another $7.44 million through a loan with U.S. Bank… 70% of which was backed by the Department of Agriculture.

Genesis Poly was in talks with the Minnesota USDA well before they went to U.S. Bank, and small government advocates are saying the USDA’s involvement could have played a role in U.S. Bank’s willingness to throw money at Genesis Poly.

David Strom, a policy fellow at the Minnesota Free Market Institute says, “There’s an implicit sense of Too Big To Fail. If the government is in, they’re going to keep throwing money at it. It looks like a less risky way to spend your money. You don’t even have to look at the books, ’cause it doesn’t matter. Government is going to back you up.”

But perhaps the most disappointing aspect of this whole story: this isn’t the first time Genesis Poly has gone bankrupt.

Back in 2008, with the same idea and the same investors, AGSI Recycling, as it was called, out of Savage, disintegrated as well, costing another $57,000 for the MPCA, and taking the 8 million pounds of plastic they had collected for production and dumping it all in a landfill.

Strom says, “This company in particular had already gone out of business once. The business model didn’t work. Yes they could produce something that was useful, but not at a price that anyone was willing to pay. If government has to shove money in, you’re burning up that kind of green to create another kind of green coming out the other side. And it just doesn’t make sense.”

U.S. Bank refused to comment on the story, citing the ongoing litigation in the matter – a multi-party lawsuit currently making its way through Blue Earth County Court, with the City of Mankato, the MPCA and U.S. Bank suing Genesis Poly and a separate investor, Crown Machine.
The case is currently in the discovery phase, with the first court date set for February 7th of next year.

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