The decision by Olympia to completely eliminate the Washington State Tourism Office is the kind of purblind “austerity” that ensures more economic pain. It may not be as damaging as cutting funding for K-12 education and universities, but it makes the point with even less complexity, which we need in a world dominated by talk-radio screamers, Ayn Rand acolytes pushing to turn American into no-tax/no-regulation Somalia and armies of Internet trolls cutting and pasting talking points.
In exchange for saving the piddling $1.8 million dedicated to tourism promotion this year (vs. $7 million the previous year), the state will be abandoning critical support for an industry that generates $1 billion a year in tax revenue from visitors. In other words, it doesn’t just hurt hotels, restaurants and all the other businesses that benefit from tourism, it actually will leave Washington with less public revenue.
Make no mistake: Tourism is a highly competitive business and Americans, especially in the hard times of the Great Recession and Barely Recovery, have only so much money to spend on vacations, conventions and conferences. As the Seattle Times’ Jessie Van Berkel reported today, Oregon spends $10 million on tourism promotion; California $50 million.
Not all budget cuts are virtues, much less economically effective (ask Britain). Some will lead to actual losses in revenues and damage to the wider economy. Research in Michigan indicates $3.29 is returned from every state dollar spent marketing tourism. And we’re not even getting into the failure to invest in infrastructure that would more than repay its costs over time.
All we can hope is that The Killing brought some exposure. Oh, wait, that was filmed in British Columbia.
Links from the week:
- Who says there are no jobs? Oh, you mean in America. Goldman Sachs, that poster child for law-of-the-jungle “capitalism” is apparently going to fire workers here so it can hire new ones more cheaply in Singapore. And these are high-skilled positions. Ross Perot, call your office.
- James Kwak at the Baseline Scenario gives a great primer on the illogic of the budget debate, the notion that there’s a “Washington” eating tax revenue totally disconnected from America.
- Bank of America reached an $8.5 billion settlement with investors over the dodgy securities arising out of its acquired Countrywide, the death star of subprime. Sounds big. But one commentator says it’s a mere wrist-slap that sets a template for more.
- Bullish about Seattle’s Dendreon? Here’s what needs to happen next.
- We never got our Pecora Commission, the Depression-era panel that plumbed the causes of the disaster, roasted the banksters (sorry, Jamie) and led to reforms that kept the system safe until the Gramm/Clinton dereg of 1999. But Phil Angelides, who tried to be our Pecora, is fighting not to let the moneyed elite rewrite the history of how this meltdown really happened, and the consequences that continue to weigh on most Americans.
- A new study from Northwestern University shows that since the recession ended “corporate profits captured 88 percent of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1 percent.”
Today’s Econ Haiku:
So what’s a default?
If it can be made the fault
Of the president