Richard Duncan Fears Trade War Could Bring China’s Economy To A “Screeching Halt”

Via The South China Morning Post,

Economist Richard Duncan cautions that China can’t possibly meet the demands on trade laid out by the Trump administration; warns of dire outcome for global economy

The deepening trade dispute between the United States and China could mark a “turning point in history”, ending the system of global trade that brought low-cost goods to consumers and fuelled the rise of the Chinese mainland and other emerging markets in just a few decades, according to noted economist and author Richard Duncan.

Bangkok-based Duncan believes the US$50 billion of Chinese products designated for 25 per cent tariffs by the Trump administration – in addition to a proposed 10 per cent tariff on an additional US$200 billion in Chinese goods – may represent the first steps in a policy shift by Washington that goes far beyond what many observers expect.

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“I am becoming concerned that they really do intend to put up trade tariffs on a very large scale against China and that perhaps there’s more to this strategy than just balancing trade. They may be intent on stopping China’s economic growth altogether, now that China has become so large they are becoming not only an economic competitor, but potentially a military threat to US global dominance. If that’s the case, this could be a turning point in history,” Duncan said in a new South China Morning Post business podcast.

While it is too early to say how the trade talks between the two sides will play out, one concern is that escalating tariffs, beginning with the US$34 billion of Chinese products which went into effect on July 6, are about to become the norm, rather than the exception.

Another is whether the trade policies are really designed to reverse the deindustrialisation of the US economy – a theme made prominent during Donald Trump’s presidential campaign.

“Over the last 30 years the rapid economic rise of China has really transformed the world, but if the US starts putting tariffs on US$200 billion and US$500 billion of Chinese exports, then China’s economy could go into a very serious crisis,” Duncan said.

Duncan, who now publishes independent research at his subscription video newsletter Macro Watch (richardduncaneconomics.com), said China’s growth could come to a “screeching halt”, resulting in millions of job losses, while a domino slowdown would also be felt among its major trading partners.

Another outcome would be rising inflation, higher interest rates, and a global drag on asset prices ranging from stocks to real estate.

“The impact would be global and we would see a drop in metal prices and that would be a blow to metal and mining companies. Also as commodity prices fell, the economies of the commodity-producing economies would go into recession,” he said.

Duncan started his career in finance in Hong Kong in 1986, working as a research analyst for a local brokerage. His insights into the global economy were partly inspired by visits to factories in Guangdong province, where he witnessed first-hand the rapid industrial transformation underway at the time.

“There were factories all along the Pearl River Delta full of 19-year-old women working for US$3 per day. It didn’t take long to realise that this was going to be very deflationary and very disruptive for the US economy if we had free trade with China because clearly this would result in the deindustrialisation of the US because how could it compete when it paid its workers roughly US$200 per day,” Duncan said.

Duncan said his thoughts on global trade were also fuelled by his experience heading equity research departments for James Capel Securities and Salomon Brothers in Bangkok during the 1990s, a period that he credits as his education in “bubblenomics”.

Duncan later worked as a financial sector specialist for the World Bank in Washington.

In 2003, he laid out his theories on global trade in the international bestseller The Dollar Crisis, a book which he said “forecast the global economic crisis [of 2008] quite accurately”.

Duncan, an American, said he does not side with Washington in this conflict. Instead he has been promoting an alternative path that takes advantage of low interest rates to help fund state-backed scientific research on a massive scale.

“I don’t view this as a conflict between the US and China. It is not that simple, it’s not team USA versus team China. There are interests in the United States that have benefited enormously from this arrangement that now exists, in particular, the large US multinationals. They have been able to drive down their labour costs by moving their factories from Detroit and other US cities into China. Their wage costs have collapsed as a result of this move. The share of profits that are split between labour and capital have shifted.”

Duncan thinks a moon shot, similar in nature to Nasa’s Apollo programme of the 1960s – this time in such areas as genetic engineering, biotechnology, nanotechnology and clean energy – is the best way forward.

“It would be much better for the government to undertake at the government level a very aggressive investment programme … in new industries and new technologies,” Duncan said.

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$40 Million Yacht Owned By Betsy DeVos Set Adrift By Vandals

A $40 million luxury yacht belonging to Secretary of Eduction Betsy DeVos was untied from its mooring at Lake Huron marina, according to local police. 

The crew woke last weekend to find the 164-foot Seaquest adrift, and were able to regain control of it after the ship struck the dock – causing $5,000 – $10,00 in damages in the form of several scratches and scrapes, reports the Toledo Blade. 

The Seaquest was moored at the Huron Boat Basin, 330 Main St., according to a police report. The captain of the 163-foot yacht, worth a reported $40 million, called police at about 6 a.m. Sunday, telling them that he and the crew realized at sunrise that someone had untied Seaquest from the dock, setting it adrift. –Toledo Blade

“Around sunrise the crew woke to find the boat had been untied from the dock and was adrift,” reads a vandalism report filed Sunday by the Huron Police Department. 

Police are searching for surveillance video that may offer clues. 

DeVos, the daughter of Edgar Prince of the Prince coproation, is the sister of Erik Prince, the most famous private military contractor in the world. She marrying Richard DeVos Jr., whose father founded multi-level-marketing corporation Amway.

The Seaquest, which can accomodate 12 guests and 12 crew, is one of 10 boats owned by the family, and is registered to RDV International Marine LTD according to a US Customs and Border Protection database. 

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Chicago Funnels A Third Of Property Taxes To Mayor-Managed Slush Funds

Authored by Chris Lentino via IllinoisPolicy.org,

Nearly a third of property tax revenue in Chicago is diverted into 143 TIF districts controlled by the mayor, nearly half of which are located in affluent neighborhoods.

Tax increment financing, or TIF, districts in Cook County generated a record $1 billion in 2017, up nearly 18 percent from 2016, according to the Cook County clerk. Chicago accounted for most of these gains by generating $660 million, an 18 percent increase from 2016. As long as these TIF districts exist, however, struggling school districts in those districts won’t see a dime of this revenue. This comes at a time when Cook County and Chicago face budget shortfalls up to $95 million and $812 million, respectively, by 2020.

In theory, TIFs are a mechanism used to revitalize “blighted” neighborhoods by providing economic incentives for developers to invest in the area. TIFs freeze the Equalized Assessment Value, or EAV, of all properties in a designated TIF district and divert all property tax revenue above that EAV into a private TIF fund. The amount of property tax revenue collected by individual taxing bodies within a TIF district – school districts, libraries, et cetera – is effectively capped at the frozen EAV.

In Chicago, nearly a third of all property tax revenue is diverted into private TIF funds appropriated for the city’s 143 TIF districts. And despite the fact that TIFs are meant to encourage development in blighted neighborhoods, these districts aren’t limited to underserved areas. Nearly half of the $660 million Chicago collected in TIF revenue last year was captured by TIF districts located in affluent neighborhoods, including the Loop. The LaSalle Central TIF district, which is only 12 years old, brought in nearly $57 million in revenue in 2017, the highest among Chicago-area TIF districts.

This leaves taxing bodies such as Chicago Public Schools scrambling for funding to make up for revenue diverted to TIF funds. In order to make up for revenue lost to TIF districts, local taxing bodies resort to raising their property tax levies. This only adds to Illinoisans’ already heavy property tax burden.

Abuses of the TIF system are well documented, but lawmakers have done little to correct these issues. In fact, Chicago is currently considering a new TIF district encompassing industrial land in affluent Lincoln Park. This follows another recent TIF district established at the site of the former Lathrop Homes.

The reality is that TIFs are a bad deal for everyone but the city officials who award TIF money and the developers who receive it.

How to fix the problem

Fortunately, some state lawmakers are looking to take necessary steps toward reform. Two bills with bipartisan support – Senate Bill 2880, filed by state Sen. John F. Curran, R-Downers Grove, and House Bill 5230, filed by state Rep. William Davis, D-East Hazel Crest – would define “blighted areas” as areas in which the median household income is “100 percent or less of the area median income,” as specified by the U.S. Department of Housing and Urban Development. This measure would go a long way toward limiting TIF abuse.

TIFs serve as another example of fiscal mismanagement by city officials. Taxpayers shouldn’t have to foot the bill for irresponsible budgeting practices that benefit connected developers. Until Illinois does away with these political slush funds, local governments will continue to force taxpayers to make up for shortfalls that benefit a select few.

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Watch Ocasio-Cortez Flub Her Way Through Simple Question On Democratic Socialism

The “new face” of the Democratic party, 28-year-old Alexandria Ocasio-Cortez, botched yet another simple question about her political views that sheer spunk and tenacity couldn’t overcome. 

During an appearance on last night’s Daily Show, host Trevor Noah pitched Ocasio-Cortez perhaps the slowest softball he could – asking her to explain how she’s planning on paying for her “Medicare for All” agenda along with her other ideas on funding Democratic Socialism, reports the Daily Caller. 

“This is an excellent question,” she replied – the standard response to buy time while one’s brain clicks away at various options. 

Unfortunately, the rest of her answer did not compute: 

“I sat down with a Nobel Prize economist last week — I can’t believe I can say that, it’s really weird — But one of the things that we saw is, if people pay their fair share, if corporations and the ultra wealthy — for example, as Warren Buffett likes to say, if he pays as much as his secretary paid, 15 percent tax rate, if corporations paid — if we reverse the tax bill, raised our corporate tax rate to 28 percent … if we do those two things and also close some of those loopholes, that’s $2 trillion right there.”

She also said it would take $3 trillion to $4 trillion and a carbon tax to create a “renewable energy economy” and claimed the Trump tax cut bill prevents the wealthiest Americans from paying “their fair share.”

“One of the wide estimates is that it’s going to take $3 trillion to $4 trillion to transition us to 100 percent renewable economy,” she continued. –Daily Caller

“So we’ve got $2 trillion from folks paying their fair share, which they weren’t paying before the Trump tax bill,” she said. “They weren’t paying that before the Trump tax bill. If we get people to pay their fair share, that’s $2 trillion in 10 years. Now if we implement a carbon tax on top of that, so that we can transition and financially incentivize people away from fossil fuels, if we implement a carbon tax — that’s an additional amount, a large amount of revenue that we can have.”

No wonder James Comey and the rest of the establishment left is absolutely freaking out over the “rising star.”

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Barbara-Bush-Death-Celebrating Professor Demands “All White Editors Resign From Power Positions”

Authored by Grace Gottschling via Campus Reform,

An English professor is demanding that “white editors resign,” saying they should “hand over the positions of power” because merely holding such positions is “f**k up enough.”

California State University, Fresno professor Randa Jarrar, who previously made headlines for giddily celebrating the death of Barbara Bush, made the provocative declaration Tuesday in a tweet responding to controversy surrounding an allegedly racist poem.

“At some point, all of us in the literary community must DEMAND that white editors resign. It’s time to STEP DOWN and hand over the positions of power. We don’t have to wait for them to f**k up. The fact that they hold these positions is f**k up enough.”

Jarrar’s outrage appears to have been sparked by a recent controversy about a poem published in The Nation that has been called insensitive to minorities and the disabled community.

The poem, “How-To” by Anders Carlson-Wee, includes the lines “Don’t say homeless, they know / you is” and “If you’re crippled don’t / flaunt it. Let em think they’re good enough / Christians to notice.”

Jarrar has called for the specific resignation of Stephanie Burt, a poetry editor for The Nation, tweeting that Burt “erases and violently silences [people of color].” 

“Stephanie has said some hurtful shit about George W Bush and has hurt Arab American poets in my community,” Jarrar claims. “I ask that she resign.” 

Burt has not resigned, but she did publish an apology along with Carmen Gimenez Smith, another Nation poetry editor, on Smith’s Twitter account.

“As poetry editors, we hold ourselves responsible for the ways in which the work we select is received,” the apology stated. “We made a serious mistake by choosing to publish the poem ‘How-To.’”

“When we read the poem we took it as a profane, over-the-top attack on the ways in which members of many groups are asked, or required, to perform the work of marginalization,” the apology added. “We can no longer read the poem in that way.”

The apology doesn’t seem to be good enough for Jarrar, who replied “resign” to the apology tweet.

Although Jarrar made her Twitter account private shortly after receiving criticism for mocking former First Lady Barbara Bush’s death, copies of her recent tweets were obtained by Campus Reform.

“Barbara Bush was a generous and smart and amazing racist who, along with her husband, raised a war criminal,” Jarrar posted in April. “F*** outta here with your nice words.”

“I’m happy the witch is dead,” Jarrar added in a later tweet. “Can’t wait for the rest of her family to fall to their demise the way 1.5 million iraqis have. byyyeeeeeeee.”

Jarrar later added that she would “never be fired” due to her tenured position. This statement sparked an online petition calling Fresno State to fire Jarrar. The still-active petition has been signed by nearly 90,000 people at time of publishing.

A spokesperson for Fresno State told Campus Reform that the school does not comment on the personal opinions of faculty, but did add that “in this instance, the view expressed does not reflect those of the University.”

Campus Reform reached out to Jarrar for comment on her latest tweet, but has not received a response.

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ICE Banned From Using Philadelphia Arrest Database

Philadelphia Mayor Jim Kenney announced Friday that the city will stop sharing their real-time arrest database with US Immigration and Customs Enforcement (ICE) following protests at City Hall, according to the Philadelphia Inquirer.

“I cannot in good conscience allow the agreement to continue,” the Democrat mayor said, adding “We’re not going to provide them with information so they can go out and round people up.” 

Kenny’s decision means the city will not renew a contract with the agency that expires at the end of August.

The decision comes after months of consultation with community groups, lawyers and immigrant advocates, and follows weeks of tumultuous protests by anti-ICE demonstrators, who on Wednesday took over and held a City Hall stairway.

A formal announcement is scheduled for Friday afternoon at City Hall. ICE officials were informed Thursday in an emailed letter from City Solicitor Marcel Pratt.

Kenney said he had grown increasingly concerned that ICE was using the database “in inappropriate ways,” including to conduct investigations of undocumented immigrants in Philadelphia who had not broken any other laws. –Philly.com

“How anyone can define this as making America great again is beyond me,” the mayor said.

A noted sanctuary city, the Trump administration has attempted to cut federal funding for the city, only to be blocked by a judge. 

The PARS database contains anyone who interacts with law enforcement, including arrests, victims and witnesses – which Philadelphia will now exclude ICE from. 

City officials justified their decision after what they said was multiple considerations (via Philly.com)

— At a July 18 meeting, ICE officials conceded that the agency’s use of PARS can result in immigration enforcement actions against city residents who have not been accused or convicted of a crime.

— ICE claims it was impractical to adopt procedures that would prevent agents from arresting law-abiding residents for civil immigration violations when the agency acted on information found in PARS.

— Each day, ICE probes PARS to find people who were born outside the United States, then targets them for investigation, even though the database does not list their immigration status.

— The agency produced no information to allay city officials’ concerns about the profiling of residents by race, ethnicity, or national origin.

— ICE officials said they do not audit or monitor the agency’s use of PARS.

Philadelphia and ICE entered into their contract in 2008, according to city solicitor Marcel Pratt. In Thursday’s termination letter, Pratt said the contract “has created the false perception that the city is willing to be an extension of ICE,” adding “It is not in the best interests of the city and its residents for the city to acquiesce to that perception.”

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Facebook Follows YouTube’s Lead, Blocks Alex Jones’ Pages

Just days after YouTube barred Alex Jones from live-streaming for 90 days, and President Trump stepped into the Twitter ‘shadowbanning’ of conservatives fiasco, CNBC reports that  Facebook – amid their worst week ever – has banned InfoWars’ Alex Jones from posting for 30 days.

Several Facebook pages tied to Alex Jones, including the official pages for Infowars and Alex Jones himself, are close to being removed from the platform for violating its community standards multiple times,  a Facebook spokesperson told CNBC.

Jones’ personal account was temporarily banned from Facebook Thursday for 30 days after it was found responsible for uploading four videos that went against community standards. The clips were posted on different pages operated by Infowars and Alex Jones. Jones had previously been warned he could be blocked by Facebook for other infractions, according to a Facebook spokesperson.

One of the removed videos shows a man shoving a child on the ground to “prevent liberalism,” while another discusses drag queens in a crude fashion and suggests they are child sexual predators. Another suggests Muslim people have “conquered” Europe, and will kill everyone and sexually assault women.

These are reportedly the same four videos were also removed earlier in the week by YouTube, which also barred Jones from live streaming for 90 days.

InfoWars’ Owen Troyer provides some more color as to what just happened…

 

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Expect More Instability, Corruption, And Crime From Mexico’s AMLO

Authored by Steve Hanke via The Mises Institute,

On July 1st, Andrés Manuel López Obrador (AMLO) won Mexico’s presidential election in a landslide. He pulled in a whopping 53% of the vote. This left the candidate from the governing Institutional Revolutionary Party (PRI), José Antonio Meade, in the dust, with a third place finish and only 16% of the vote. Ricardo Anaya from the conservative National Action Party (PAN) didn’t do much better. His second-place finish only carried 22% of the vote.

AMLO, a leftist, ran a skilled campaign in which he hit the hot button issues with elevated rhetoric: Mexico’s crime and corruption. AMLO convinced the voters that crime and corruption had entered a doom loop, thanks to the established political parties. He also pledged to respect the independence of the Bank of Mexico, while at the same time promising more government spending.

What does this sea-change in the political landscape mean for Mexico? Let’s begin by taking a look at the performance of the Bank of Mexico. The last Forbes column in which I did that was way back on July 4, 1994. It was then that the late Sir Alan Walters and I penned “The Wobbly Peso.” In that piece, we predicted that the peso’s peg would come undone and the peso would collapse. Well, it did in December 1994. Remember the “Tequila Crisis”?

Since those days, the Bank of Mexico has done a reasonable job of maintaining some semblance of economic stability in Mexico. But, while there has been stability, Mexico’s economic growth has been anemic. Let’s analyze the last fourteen years to see how the Bank of Mexico has behaved.

For me, a monetary approach to national income determination is what counts. The link between the growth rate of the money supply and nominal GDP is unambiguous and overwhelming.

As Milton Friedman put it in his 1987 New Palgrave Dictionary of Economics entry, “Quantity Theory of Money” (QTM), “The conclusion (of the QTM) is that substantial changes in prices or nominal income are almost always the result of changes in the nominal supply of money.” The income form of the QTM states: MV=Py, where M is the money supply, V is the velocity of money, P is the price level, and y is real GDP (national income).

Let’s use the QTM to make some bench calculations to determine what the “golden growth” rates are for the money supply. These are the rates of broad money growth that would allow the Bank of Mexico to hit its inflation target.

According to my calculations, the average percent real GDP growth since 2003 was 2.34%, the average growth in Total Money Supply (M3) was 9.71%, and the average change in the velocity of money was -1.92%. Using these values and the Bank of Mexico’s inflation target of 3%, I calculated Mexico’s “golden growth” rate for Total Money to be 7.26%.

Calculations:

Golden growth rate = Inflation target + Average real GDP growth – Average percent change in velocity

Golden growth rate = 3% + 2.34% – (-1.92%) = 7.26%

The Bank of Mexico has, on average, overshot the golden growth rate by 2.45%. Not surprisingly, the average rate of inflation at 4% has been a full percentage point over the Bank’s target of 3%. So, there are good reasons for AMLO to keep his hands off the Bank of Mexico. While it has not turned in a great performance, it has turned in a respectable one.

As for AMLO’s fiscal promises, they are expensive. He wants to subsidize agriculture, expand pensions, and provide university scholarships, among other promises of largesse. If AMLO follows through on these promises, Mexico will certainty experience larger fiscal deficits. And, the Bank of Mexico will experience a big headache. As for the peso, it might wobble. So, with AMLO, Mexico will probably move into a more unstable macroeconomic zone.

When we move to corruption, we find a lot of it in Mexico. The Corruption Perceptions Index (CPI) is a metric that gives us a handle on the level of corruption. A score of “0” indicates that a country is perceived to be totally corrupt, while a score of “100” indicates total “cleanliness” (read: no perception of corruption).

Of the 180 countries rated by the CPI, Mexico is tied at the 135th place with the Dominican Republic, Honduras, Kyrgyzstan, Papua New Guinea, Paraguay, and Russia. All these countries had a dismal score of 29, indicating that they are perceived to be very corrupt. If that isn’t bad enough, since 2013, Mexico’s CPI has been deteriorating, indicating that corruption is getting worse. AMLO is clearly onto something big — something that helped him win the election.

While AMLO’s rhetoric about fighting corruption might be right on target, the reality appears to be much different. To fight corruption, he will have to shrink the government and deregulate the economy. But, he has promised to do just the opposite.

Crime is another hot button issue in which AMLO conquered the rhetorical commanding heights. To appreciate just how bad crime is in Mexico, just look at the Fraser Institute’s Economic Freedom of the World 2017 Annual Report. One of the five categories in which 159 countries are rated is the “Legal System and Property Rights” category. It contains nine elements, including the “Reliability of Police” and “Business Costs of Crime.” Mexico is ranked 117 out of 159 countries in this category. This indicates a very high level of crime. And, its frequency is growing with each passing day.

Again, AMLO scores well with his anti-crime rhetoric, but the reality is that he has no plan of attack. Indeed, one wonders whether he knows what the word “plan” means.

We will have to wait until AMLO is installed as Mexico’s next president in December to receive a clearer picture of his agenda. At this point, it looks like there will be a huge gap between AMLO’s rhetoric and Mexico’s reality. Indeed, I expect more instability, more corruption, and more crime.

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Avenatti Vs. Trump In 2020? Porn Lawyer To Speak At Pivotal DNC Event

Michael Avenatti, the fiery attorney who represents porn actress Stormy Daniels, as well as separated illegal immigrants and a few more Trump accusers, apparently – looks to be getting serious about his early July pledge to take on Trump in 2020. 

In a Thursday tweet, Avenatti announced that he will be speaking at the Iowa Democratic Wing Ding on August 10. The Clear Lake, Iowa event has previously featured Presidential contenders Barack Obama, Hillary Clinton and Bernie Sanders. 

“I look forward to speaking at the Iowa State Democratic Wing Ding next month. Extremely honored to be included as one of the speakers. It promises to be a great event as always!” Avenatti ends with his trademark #Basta and his not so trademark #FightClub hashtags as he works to tear down a D.C. outsider to the benefit of the establishment. 

Avenatti tweeted on the 4th of July: “IF (big) he seeks re-election, I will run, but only if I think that there is no other candidate in the race that has a REAL chance at beating him.”

Meanwhile, Avenatti also claimed late Thursday that he is representing three more women who claim they were paid hush money by former Trump attorney Michael Cohen, or publishing company American Media Inc. (AMI) 

During a panel discussion in West Hollywood, Avenatti said: “There are three additional female clients of mine that have not been disclosed that were paid hush money prior to the 2016 election, whether it be from Michael Cohen on behalf of the president, an entity that Michael Cohen formed or AMI” – a claime he repeated over Twitter. 

AMI chairman David J. Pecker is a personal friend of Trump’s accused of burying accuser Susan McDougal’s story by purchasing the rights from her and then shelving it. 

By burying Ms. McDougal’s story during the campaign in a practice known in the tabloid industry as “catch and kill,” A.M.I. protected Mr. Trump from negative publicity that could have harmed his election chances, spending money to do so.

The authorities believe that the company was not always operating in what campaign finance law calls a “legitimate press function,” according to the people briefed on the investigation, who spoke on the condition of anonymity. That may explain why prosecutors did not follow typical Justice Department protocol to avoid subpoenaing news organizations when possible, and to give journalists advance warning when demanding documents or other information. –New York Times

On Wednesday, CNN reported on a secret recording they were given of a private conversation between Cohen and Trump in which the two discuss purchasing the rights to McDougal’s story. The discussion took place in September 2016, in the lead-up to the presidential election.

McDougal, who claims to have had a nearly yearlong affair with Trump in 2006, sold her story to the National Enquirer for $150,000 as the 2016 presidential campaign was in its final months – only for the story to never run. 

While Trump never paid for the rights, Cohen’s attorney Lanny Davis says that the recording shows Trump knew about the payment. 

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Seattle Mariners Want Taxpayers to Fork Over $180 Million, Or Else

The Seattle Mariners say they won’t sign a long-term lease to remain at Safeco Field unless they receive $180 million in taxpayer funds.

The ballpark is a public facility owned by the Washington State Major League Baseball Stadium Public Facilities District (PFD). The Mariners rent it from the PFD, but their current lease is up at the end of the year, and negotiations for a new long-term agreement have hit a snag.

The team said on May 23 that it had agreed to terms on a new 25-year lease. The same day, King County, Washington—which encompasses the Seattle metropolitan area—proposed setting aside $180 million of taxpayer funds for “Safeco Field upkeep and capital improvements,” according to Seattle Weekly. Now, the Mariners are saying they won’t sign the lease unless the money is approved. Seattle Weekly reports:

According to emails between representatives from both the PFD and the Mariners obtained by Seattle Weekly through a public-records request, the team was explicit about its position that receiving the $180 million from taxpayers was part of the deal even though it was not specifically spelled out in the language of the lease’s contract. “As confirmed and set forth in prior communications with the PFD’s lease negotiation team, final lease agreement is conditioned on King County’s approval of an allocation of a portion of the county’s lodging tax revenues,” wrote Fred Rivera, Seattle Mariners executive vice president and general counsel, in an early June email to PFD board member Virginia Anderson.

The $180 million wouldn’t come out of nowhere. The county currently uses revenue collected from a lodging tax to pay off other publicly owned stadiums, including CenturyLink Field, home of the Seahawks. Once those debts are paid in 2020, state law allows for up to 25 percent of the lodging tax income to be used for tourism promotion. And according to King County Executive Dow Constantine, Safeco Field is a big draw for tourists.

The Mariners are justifying their demand by arguing that since King County owns the stadium, it should help pay for the upkeep. “This [stadium] is owned by the county, and the question is how much should the county pay for its building?” Rivera said to Seattle Weekly. “The discussion [between the Mariners and the PFD] was ‘What’s a fair amount for the club and for the PFD to contribute to make sure that those nuts-and-bolts items are appropriately taken care of over the next 25 years?’ and that’s what resulted in this financing plan.”

The King County Council will officially hear the proposal on Monday, with a vote possible by the end of August. If they don’t get the money, the Mariners aren’t planning to leave the city. Instead, Rivera says the team will likely sign a short-term lease and then try to negotiate a better long-term agreement later.

Of course, it’s ridiculous to fork over $180 million in taxpayer money to a team worth at least $1.4 billion. But this wouldn’t be an issue had the Mariners paid for their own stadium in the first place. There are a lot of reasons not to hand out massive government subsidies to sports teams, and King County is finding that out the hard way.

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