if you build it, the jobs won't come

The title of a piece by Mark Yost in the WSJ...

This nicely and sadly illustrates a common principle in political economy: the triumph of concentrated benefits over larger but more subtle/diffuse costs...

Just a few years ago, the corner of M Street and New Jersey Avenue was not somewhere you wanted to be after dark. It was part of Washington's notorious Southeast neighborhood, rife with drugs, crime and poverty. But today, about 30,000 baseball fans flock here 80 nights a year to watch the Washington Nationals play in their new $611 million stadium.

While the neighborhood is certainly undergoing a renaissance, what's uncertain is how much credit should go to the ballpark. It's a question that has been debated countless times before, over other stadiums, but the historical evidence is pretty clear.

Sports economists have long argued that publicly financed stadiums are a waste of taxpayer money. And they have the data to prove it.

Yes, stadiums do create high-paying construction jobs for a year or two. But the vast majority of long-term employment is low-wage concession jobs. A Congressional Research Service study of the Baltimore Ravens stadium found that each job created cost the state $127,000....

But perhaps the best argument against publicly financed stadiums is straight out of Econ 101: Opportunity cost.

"What else could the city have invested its money in and what kind of a return would it have produced?" said King Banaian, chairman of the St. Cloud State (Minn.) Economics Dept....

And under terms of the deal, the city expects to see about $40 million a year in revenue. The smallest portion will come from the team, which is supposed to pay $5.5 million a year in rent. But just this week the Nationals began withholding payments, saying the city had failed to "complete" the stadium.

The vast majority of income is expected to come from the same people who financed the stadium: the taxpayers. An estimated $14 million a year is projected from taxes on tickets, concessions and merchandise. Another $24 million will come from a new stadium tax on D.C. businesses with gross revenues of $3 million or more....