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Originally Posted by Enoch Root
I agree that it is anecdotal. Attempting to draw direct links from one investment to other pods of growth is essentially unprovable. However, the proof is in the growth of our economies overall:
Businesses create jobs and wealth. Businesses and their employees pay taxes. Pretty straight-forward. It is the fundamental principle of investment. The ONLY reason to take the risk of investing capital is growth - an expected return. And every day, trillions is invested because growth happens. Pretty straight-forward.
Governments generally don't invest, however, they are in a position to lend funds to capital-intensive projects. And the return is not just the interest, but also a larger economy on which to tax, along with some sort of a presumed better living experience or whatever.
This is essentially - in simple, internet sentences - the basis on which our economy, and capitalism in general, works.
Some people don't seem to agree. Why, I don't know, because the evidence, while anecdotal, is also insurmountable. Nonetheless, some don't. That is their prerogative.
As a business owner, and investment manager, I understand that business profitability is wealth creation. It is the backbone of the economy and the primary source of growth.
IMO, having governments support, and lend resources to, capital-intensive projects, is a useful and production function for said government to partake in. Growth benefits everyone.
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Anecdotal evidence can never be called insurmountable. It's anecdotal. Especially when there are countless independent studies that have found negligible growth from the construction of stadiums.
You also have to look at the opportunity cost of the money. As an investment manager, I'm sure you have pulled the plug on a few investments where the returns were less than ideal. That money could be better utilized in a different investment, that could grant higher returns.
Cities have the same issue. Yes growth is good. Do stadiums provide it? most signs point to no, if very little. Could cities make better use of the money? they sure could. Even the economist in the John Oliver segment noted that the city could see a greater ROI by simply throwing a billion dollars out of an airplane over downtown.
Cities shouldn't always look at their ROI when deciding to fund a project, as they are in the business of providing public goods, first and foremost. But, when something controversial like this enters the conversation, where the main benefactor from the project will reap immense income from the project, and where said benefactor touts the economic benefits to the city as main factor in contributing public dollars to the project, then it's important for the city to look at the financial aspect of the project and see if it works.