Monday, April 21, 2014

Tourism - The Zero Sum Game That Should Be Played

Let me succinctly and briefly explain "tourism" from an economic perspective so that you all may understand why local governments are all about it, even to a level that said local governments don't even understand (but do on an intuitive level).

"Tourism" is very Keynesian in that it is short sighted.

For example, Obama, all of economic academia, the council of economic advisors, and the entire management of the federal reserve really do believe, like Christians do a guy nailed to a plank of wood, that government stimulus will "increase aggregate demand" and with a "multiplier effect," blabbity blah blah blah.

Is it working?

No, of course not.  Average economic growth is the lowest it's been ever, especially considering the INSANE Keynesian-wet-dream-of-a-deficit we've been running these past 6 affirmative action years.

But the reason it isn't working is because the smart money sees what's going on.  The government is merely borrowing money from future producers to pay for current day parasites. Who would invest in such a system, even with (I know, *giggle* for the idiot naive Keynesians) "low interest rates" and "low taxes?"

But that is PRECISELY the same concept of tourism.

You are taking money from one group of people and moving it to another group of people. 

However, instead of Obama's KWD (Keynesian Wet Dream) where we take money from the future and give it to the parasites present, tourism is merely the same thing taking money from one area of the country and giving it to another.

For example, when I lived in Wyoming, there was no shortage of middle aged men motorcycling through town living their motorcycle dream of driving cross-country.  Certainly admirable, certainly something I'd recommend, but whereas Krugman and his Fucktard Keynesians (it's a band of government-quality music) would claim this is "economic growth" or "economic stimulus" in the end it is nothing more than taking money from one area of the country and placing it in another.

The money those motorcycling men spent on gas did indeed go to local economy in Wyoming, but that by mathematical necessity withdrew money that would have gone to their hometown economy in Pennsylvania.

The money those mid-life crisis men spent on booze at the Occidental Hotel (which I highly recommend) did in fact benefit the local economy in Buffalo, Wyoming, but at the expense of Saskanoose, Michigan. 

In other words, the overall economic impact of "tourism" is a zero sum game.  You are merely taking dollars from one area of the country to spend on another. 

This then presents an interesting local-economy-war game where different localities and municipalities must advertise and duke it out for tourism dollars.  This is why you see advertisements to come visit some place or another.  Advertisements to live your dream.  Advertisements where *SNARK* the parasite state of California wants outside money constantly to bail their pathetic asses out (hey California was cool in the 80's! Come visit us, please...we're umm...totally relevant dude!)  It also explains why local taxpayers spend billions every year subsidizing professional sports and marginal teams by building them palaces to throw the spheres into hoops or hit spheres with sticks, or are stupid enough to vie for the Olympics. 

Regardless, in the end you have what is invariably leftist local politicians fighting against other local leftist politicians for other people's disposable income in the form of out of state tourism dollars.  The next national gain is zero, but the local gain can be enormous.  But something tells me the leftist politicians and economists we have in our institutions of leadership can't tell the difference.

14 comments:

Anonymous said...

Well at least the dollars are circulating in the United States instead of dead ending in Iraq and Afganistan.

DrTorch said...

This seems so glaringly obvious that it's hard to understand why it needs to be mentioned.

But you're right, it does.

Look at the main argument to push legalized casino gambling: it will help stimulate our economy!

No, it won't stimulate your economy. It will possibly (no guarantee) just curtail the bleeding that's going on b/c you gave up producing a valuable (aka desired) good or service.

But this approach has severely diminishing returns, and at its logical conclusion it will just slow money flowing from your town to that of more interesting places like Vegas. But there is still a cost associated with legalized casinos, so it will still mean these towns lose money.

J H P said...

"The money those mid-life crisis men spent on booze at the Occidental Hotel (which I highly recommend) did in fact benefit the local economy in Buffalo, Wyoming, but at the expense of Saskanoose, Michigan.."

I wouldn't consider "at the expense of". Not only does it sound as much leftist terminology as it can get, but the money/dollar supply in both places must be also taken into consideration in a "That which is seen, that which isn't seen"-way (à lá Bastiat).

That is, less money circulating in Saskanoose, Michigan would eventually result in a lowering ofprices (all else being equal?), thus benefitting its inhabitants with higher purchasing power.

The opposite effect would occur in Buffalo, Wyoming, I should say.

Eh, non-economist here.

Cheers!

Anonymous said...

Did you write this Cap?

A sum isn't the goal - its the flow. The gas station operator in Wyoming now has 100 dollars to spend on the prostitute from California - who finally has enough saved for a down payment on a brothel in Nevada.

Not news - (and the system sucks) but "new" money is created via debt. In my example the market moved money into the hands of somebody who was able to use it to actually grow the economy.

Money moving from one area to another to find the efficiency (and the entrepreneur) is actually capitalism working properly.

Anonymous said...

Did you write this cap?

A sum isn't the goal - its the flow. The gas station operator in Wyoming now has 100 dollars to spend on the prostitute from California - who finally has enough saved for a down payment on a brothel in Nevada.

Not news - (and the system sucks) but "new" money is created via debt. In my example the market moved money into the hands of somebody who was able to use it to actually grow the economy.

Money moving from one area to another to find the efficiency (and the entrepreneur) is actually capitalism working properly.

TroperA said...

Oh come on! I have a far easier time believing that a man was nailed to a plank of wood 2000 years ago than I do that Keynesian economics will work in any way shape or form. (I assume you're dubious about the whole "Jesus resurrecting himself from the dead" bit, but even the staunchest atheist would have to admit that there's more compelling testimony and evidence presented for the veracity of that over the veracity of Keynesian economics.)

Anonymous said...

I have to give the Ontario (a province in Canada) example. The Ontario government tourism department, promotes tourism within Ontario. We have all sorts of local billboards and local TV advertising, telling us to visit Ontario. They promote tourism to people, that already live in Ontario.
At least in your example, the people of Wyoming get a benefit from the folks visiting from Pennsylvania.
The Ontario government should be promoting tourism to American tourists. That would have a benefit to the Ontario economy.But they can not figure out that simple logic.
Oh and BTW, the TV commercials are politically correct in the extreme. And as you might have guessed, rather nauseating.


http://www.youtube.com/watch?v=NYwS8XataJg

dance...dancetotheradio said...

OT but you gotta check this out.

http://www.the-american-interest.com/blog/2014/04/20/chicago-startup-invests-directly-in-students/

Captain Capitalism said...

Trooper A, that is the funniest more smart fucking shit I've heard in a long ass time.

50 merit points to you my good sir.

Breaker Morant said...

I am a little confused here. Could not the tourism experience be considered a product that adds real value to lives?

I went on a safari hunt in Zimbabwe last summer. The safari operator provided me with a product(the hunt) that I desired.

Without the safari operators providing this product, I could not have gone there. I purchased their product -etc etc.

Also, the trophies will be shipped back here and taxidermy will be completed in the US (some was in Zimbabwe).

I am confused how this whole process is Keynesian.

Dance...dance to the radio said...

What about the tourism that is cross border shopping?
Canadians regularly cross the border to take advantage of the relative tax differential between American and Canadian stores.
(Caused, I believe by the taxes Canadians pay for a larger welfare state and universal health care and equalization payments made to the provinces by the feds to 'guarantee' universal service standards across the country.)
Don't ask me for stats but if the difference is 25% and you can justify your trip by coming out ahead on your purchases then it's not a zero sum game.

What about the comparative tax advantage between states?
I can go to lower taxed Texas and watch the Texas Rangers play the Red Sox far more cheaply than if I went to Boston to watch the same teams play.
Boston will have higher taxes on hotel rooms, drinks, food, gas than Texas.
And I can still stop in Grand Forks on the way back to Winnipeg and do some cross border shopping.

Neil Schnurr said...

Couldn't the same be said for any product or service that competes with products or services offered in other states?

Anonymous said...

There is another big reason for the campaigns to promote tourism. Politicians have discovered that tourists are relatively tax insensitive. 12% hotel tax? 6% ticket tax on top of sales tax? Who cares, I'm having fun!

Tourists pay $25 million dollars in local taxes in my suburban county - and that was before the new casino opened. Thanks, visitors!

Anonymous said...

Captain,

I am writing to you not for anything more important than intellectual curiosity.
I am a casual reader of your blog, and your rhetoric and logic strike me as quite solid and good food for thought.

I am currently living as a bachelor and going to college part-time, hoping to go full-time fairly soon. What I've noticed is that alot of your rants are direct attacks on many basic principles of my macroeconomic class. I'd like to know what authors or books I should read for alternative explanations of economic principles, being that you seem so adamantly against what I'm learning in class.

Cheers.