The law of supply and demand

Editor’s note: This column is written by a resident of Piqua and it does not reflect the views of the Piqua Daily Call and its staff. This is a contributed column provided by the writer to the newspaper for printing on the Opinion page.

We are in world dominated by laws. When a law is broken, there are consequences. There are different types of laws but by its very nature, law means that specific actions will have a specific outcomes. When we brake these laws, then imbalances and other types of predictable outcomes occur.

Take for example, the law of gravity. It doesn’t make any difference whether you believe in it or not. As long as you are on earth, you are bound by it. You can jump off the Empire State building and be yelling all the way down, that you don’t believe in the law of gravity. But when you reach the bottom, a predictable outcome will occur..

Take the laws we live by. Our state legislatures have made laws against murder. So, if you go out and murder someone you have violated the law. A judge will come along and pass judgement . A predictable outcome will occur.

So, consider the law of supply and demand. We call the intersection of supply and demand equilibrium. When forces are exerted on supply or demand, equilibrium changes and outcomes are predictable.

As a rule we discourage and make neutral government participation in our economy. In cases where we interfere, it is because we are regulating a particular behavior so that it is fair and just to all. This is why we have an EPA or a FCC.

We also discourage government from competing against the private sector in our economy. We don’t build airplanes, we buy them. There are predictable outcomes when government interferes.

There is no such thing as passive interference. The economy- micro or macro- has a mind of its own. It is governed by the law of supply and demand.

In Piqua, we keep relying on government because our charter system has us addicted to this type of bureaucracy. There is no self reliance. There is no inspiration from within. There is no way to unleash the entrepreneurial spirit in a community like Piqua. We have become reliant on a professional bureaucracy.

The people capable of creating this environment are driven out because it is too hard to make money in a town as poor as Piqua.

I don’t care how you candy-coat it. I don’t care how many times we pat ourselves on the back. I don’t care how the city creatively masks it, the Fort Piqua Plaza Hotel is a loser and the opportunity cost on this community will be measured in the millions and millions one of these days, The structure is too big and there is no way to ever get enough revenue to cover the operating and maintenance cost.

The tenants in that building will never be able to afford the place without substantial help from the city and taxpayers. It will be a subsidized endeavor forever. To make matters worse, we are going to double down and start a whole new subsidizes venture known as the riverbanks.

One of these days when the economy slows, all of the subsidies driving the downtown will evaporate. Our city manager will be retired, the city commission with an average age over 66 will be gone and we will have driven out all the local guys who’ve invested their livelihoods in their businesses.

That is how downtowns become public wastelands. Subsidized businesses create unfair competitive advantages for businesses who do it on their own. They either go elsewhere or fold up because of the unfair competition.

Secondly, no one on the city commission or the city manager have invested a penny of their own money in downtown Piqua. What makes them experts on our downtown. And all of this emphasis on the downtown is stealing time, effort and money away from legitimate economic development in Piqua.

Twenty-five million was invested into the Fort Piqua Plaza Hotel. A lot of the financing came from two agencies that hook up investors with economic development projects. Large tax credits were used that are only available for low-income communities like Piqua.

The irony is that the same agencies and funding could have been used for any type of economic development. Imagine where we would have been today if we would have put that kind of money into economic development projects that attract good paying jobs.

You can’t change the law of supply and demand. And there is no substitute for wise public investment. Changing the dynamics with taxpayer money is unfair, unproductive and costly in the end. Judgement always comes.

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