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Beware of Vampire Squids and Their Stadium Schemes

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Posted on Apr 21, 2011

By David Sirota

When it comes to media voyeurism and the economic insights it can provide, the ads in Vanity Fair rival Charlie Rose’s television program as the best peep show of all. Between rip-and-sniff Dolce & Gabbana pages and come-hither Gucci models, readers get to see not what the kings are selling the lowly serfs, but what the royal family is telling itself.

This is why I read Vanity Fair—its ads provide a valuable glimpse into the palace. May’s edition is no exception, thanks to Goldman Sachs—aka the investment bank at the center of Wall Street’s 2008 meltdown.

On page 123 of the glossy mag, this very same bank presents itself as the savior of one of those Middle-American cities whose averageness (and baseball bats) makes it synonymous with good ol’ fashioned Americana: Louisville, Ky.

As Goldman’s ad tells it, Louisville’s major problem was its desperate need for a new arena. That’s when the bank swooped in with a “financing strategy” to build the stadium, which then supposedly led to “a vibrant downtown scene, where new businesses are opening, existing businesses are expanding and local restaurants are hiring more employees.”

The ad exposes the bailed-out bank’s secret fears and goals. Tarnished by SEC charges of stock fraud, Senate committee allegations of misconduct and widespread revelations about its shady business practices, Goldman wants to reassure current and potential clients that it’s a straight shooter. In the Vanity Fair fable, Goldman thus casts itself as the altruistic hero, expecting readers to never Google “KFC Yum! Center,” much less visit a place like Louisville, to verify the fairy tale.

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It’s a safe public relations wager—but not without risk. For if you do bother to click around the Internet, you’ll inevitably find that the Louisville metro area is anything but a “vibrant” picture of job growth. Today, it is suffering from an 11 percent unemployment rate—much higher than the national rate. It’s also facing a $22 million budget shortfall.

While those problems may not be the new stadium’s fault, it’s far from clear that the Goldman-orchestrated deal helped improve Louisville’s situation. In fact, new signs suggest the real story may be less the Vanity Fair ad’s hagiography than yet another warning about the dangers of relying on Wall Street and stadiums for municipal economic growth.

As the Lexington Herald-Leader reported in a September 2010 editorial entitled “Arena Cautionary Tale,” public revenue from the stadium “isn’t living up to expectations in terms of paying off the debt incurred in building the facility.” As a result, Louisville’s already-strapped government “may be on the hook for an extra $3.3 million beginning in 2012.”

That’s because, as Goldman admits on its website, the deal was funded by a massive commitment of public revenues from taxpayers. If the arena isn’t generating tax receipts committed to funding this $200-million-plus “Tax Incremental Financing” scheme, then taxpayers have to come up with that public money from somewhere else—most likely, from cuts to social services or from tax hikes.

This is the kind of story the Vanity Fair ad is supposed to obscure—the kind of story that got Goldman its Rolling Stone magazine billing as a “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” It’s a reputation the bank deserves—one that should make every local official in America hesitate the next time that squid slithers into their town.

David Sirota is a best-selling author of the new book “Back to Our Future: How the 1980s Explain the World We Live In Now.” He hosts the morning show on AM760 in Colorado. E-mail him at ds@davidsirota.com, follow him on Twitter @davidsirota or visit his website at www.davidsirota.com.

COPYRIGHT 2011 CREATORS.COM



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By samosamo, April 26, 2011 at 5:53 pm Link to this comment

****************


I had contacted truthdig about the consistencies with the e-mail
and they replied saying they were having sever problems. Would
help if they had put up a notice about that on the home page.

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oddsox's avatar

By oddsox, April 25, 2011 at 11:28 am Link to this comment

It appears TDoff, Alan & Shoes4indstry had their posts wiped off this thread & haven’t reposted.

Seems the problem’s been fixed… give another try now.

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By reynolds, April 24, 2011 at 3:48 pm Link to this comment

samo; the dastardly deed (tif stadium boondoggle cum
george bush windfall taxed at capital gains rate
providing what was then the bulk of his personal
fortune) was approved by the voters of arlington, tx.
as history teaches, art history, anyway; the end of a
society is foretold by lavish spending on stadia. hurry
sundown.

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By Howard, April 24, 2011 at 10:49 am Link to this comment
(Unregistered commenter)

No where are there more fables and abuses of Tax Increment Financing than in Portland Oregon.

This graph was born out of the local abuse to help explain the realities with TIF.

http://en.wikipedia.org/w/index.php?title=File:TIF_graph.pdf&page=1

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prisnersdilema's avatar

By prisnersdilema, April 24, 2011 at 10:04 am Link to this comment

Remember when teachers, public employees, Planned Parenthood, NPR and PBS crashed the stock market, wiped out half of our 401Ks, took trillions in TARP money, spilled oil in the Gulf of Mexico, gave themselves billions in bonuses, and paid no taxes? Yeah, me neither.

Now those same folks want to drive up the price of gasoline to $6 a gallon, so they can make a killing in the commodities market…

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By erehwon, April 23, 2011 at 10:16 pm Link to this comment
(Unregistered commenter)

@“More, smaller banks = more competition.”

these corpsters don’t WANT more competition.
they want monopolies
that’s why they DON’T want the government to compete with them and
actually save money
that’s why they LIE about the government “wasting” money

they are, in their black black hearts, pussies and liars

who wants to do business with pussies and liars?
mafia, that’s who

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oddsox's avatar

By oddsox, April 23, 2011 at 8:01 pm Link to this comment

Samosamo & Chip—Some of my comments un-posted, too, on another thread.  Seems it was just a temporary glitch that’s since been fixed.

Justification for breaking up the big banks must be tied in some way to preserving fair competition in the marketplace.

The Sherman Anti-Trust Act addresses monopolistic practices, I believe there is room to build a case here.
But a better avenue might be the 1914 Clayton Anti-trust Act that specifically addresses mergers and acquisitions that substantially reduce market competition.

Any attorneys out there who want to weigh in on this?

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By chip, April 23, 2011 at 5:50 pm Link to this comment

Thanks Sam
My comment vanished.

Damn the NFL has more power than I thought.

I posted that here in KC the “sheople” voted for a 3/8 cent sales tax increase (for 25yrs) to keep the Cheif and royals from moving away.
The Chiefs built some skyboxes for the rich and a television station so they could broadcast the NFL channel.The women got a couple extra toilets.

The royals built a playground for the kiddies that they have to buy tokens to play at and sold advertising along the field.

And they both still suck.

Thanks for noticing they “disappeared” me, Sam.

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By samosamo, April 23, 2011 at 5:16 pm Link to this comment

****************


There is something peculiar happening on TRUTHDIG’S site. I
have commented here about the bush crime family and little w
making his first criminal millions of dollars but selling a public
baseball stadium, texass rangers, and there were a couple of
other comments about cities taxing the citizens to build
stadiums and arenas, making them one would think public
property, but the private industry would sell them or collect
most of the revenue from them. As dastardly a deed as could be
inflicted on citizens in a city or town.

So what this comment is about is to see what problems truthdig
site is having. If this comment ‘disappears’ either something is
broken at truthdig or someone was highly offend by someone
calling out members of the bush crime family. I would think if
someone reported my previous comment that I would stop
receiving notices that someone had else had commented on it.
Or truthdid is under attack.

Report this

By reynolds, April 23, 2011 at 2:27 pm Link to this comment

a reliable harbinger of the end of a society is their
building of lavish stadia. the texas rangers made
george bush an owner in order to pump and dump the
organization, complete with a new stadium paid for by
the people of arlington, tx, who bent over gladly.
w’s profit, incidentally, was taxed at the meager
capital gains rate. i could hate someone for those
freedoms.

Report this

By samosamo, April 23, 2011 at 1:01 am Link to this comment

****************


Don’t forget the bush crime family in these shenanigans. That
was how criminal w was finally able to score his very first
millions by selling a publicly funded and paid for stadium of
the ranger baseball money laundering team. Stealing public
property to sell for his own fucking profits. But expected I
guess, little w does’nt know how to make an honest dollar.

Wonder how w, marvin, neal and any other siblings will act
when both mom and dad crime heads pass away and the
family’s stolen and criminally derived fortune is divided up via
the will.

Report this

By chip, April 22, 2011 at 10:46 pm Link to this comment

Here in KC the sheople voted for a 3/8 cent sales tax hike for the chiefs and royals, 25 yrs of it.

They built some skyboxes for the rich and made a NFL network TV station also.

Built a playground for the kiddys that requires tokens to play on.

Royals now have billboards surrounding the field.

Ladies got a couple more toilets.
General population just gets screwed, again.

Report this

By samosamo, April 22, 2011 at 5:17 pm Link to this comment

****************


I wonder how many large and probably not so large metropolis’
were or are still offered the deal of the local taxpayers funding a
public arena or sports stadium in the anticipation of increased
revenues all the sideline and supporting businesses would
provide. I know my town did and I amaze that is did not take the
financial lure and run with it. They may still do it, but I rather
think things are so bad all over that even goodman’s scrotum
couldn’t sweet talk a deal.

Alan,

I could be wrong, but wasn’t dow chemical involved in a mass
attempt of genocide in bhopal, india in the late 1980s.

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By TDoff, April 22, 2011 at 4:12 pm Link to this comment

Vanity Fair is an essential read for those who aspire to be ‘In the Know’. If the Celebriterati were not avid readers, and thus ‘Up’ on current fashion trends, they might be wearing their crotchless thongs backwards.

Just imagine 50+ year old Sharon Stone on a beach in a Prada crotchless thong bikini, worn backwards! Darn Vanity Fair.

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oddsox's avatar

By oddsox, April 22, 2011 at 10:49 am Link to this comment

yes, time to look at them again, too.

Report this

By reynolds, April 22, 2011 at 10:40 am Link to this comment

at&t has spent the last 30yrs putting itself back
together again.

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oddsox's avatar

By oddsox, April 22, 2011 at 10:33 am Link to this comment

So break up the giga-banks. Use the ATT breakup of 1985 as a model and anti-trust legislation for precedent and inspiraton.

More, smaller banks = more competition.

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