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So let's assume the people who run Anaheim are not idiots. My question would be did they run the cost analysis of these tax breaks for Disney versus the expecte

So let's assume the people who run Anaheim are not idiots. My question would be did they run the cost analysis of these tax breaks for Disney versus the expected boon to the city from other incomes? If the income from externalities is greater than the actual income would have been from Disney, it seems like it would have been a decent decision. This is of course ignoring political principles of fair taxation.

nothis 9y ago
>This is of course ignoring political principles of fair taxation. Of course.
wutbrodo 9y ago
Being an "idiot" is not the only or even the most probable reason for making a bad political decision (if this is one). You're committing the common fallacy of oversimplifying by assuming that the principal and the agent are identical, which is never true in government,by definition. Anaheim is not a person who makes its own decisions: there are politicians who make decisions on behalf of the city of Anaheim (and its constituents). Those politicians, as separate entities, have their own incentives. It's entirely rational (and unethical, but not "idiotic") for them to make choices that benefit themselves to the detriment of their constituents. For example, FTA: > Support for various deals benefiting Disney has come from Anaheim City Council members who have received generous campaign contributions through a byzantine network of political action committees funded by the company Now I'm not saying that this definitely _is_ bad policy, but your assumption that they must be "idiots" to make the wrong decision for the city isn't a well-founded one. It could easily just be garden variety corruption.
- MyneOutside 9y ago
  Well said. On a related note on of my most memorable classes in college was Philosophy of Business Ethics. One of the many takeaways I had was that business do not make decisions. People (agents) in the business make the decisions. Disney did that, Disney decided this, what's best for Disney is, etc. But in reality people are making these decisions, not some nebulous company concept. Same concept as you are pointing out.
exelius 9y ago
If it's like any other large suburb, the people who run Anaheim are only there short term as a springboard to bigger offices. If you want to move up in politics, Disney is a great friend with deep pockets. So they probably did the bare minimum of analysis with the goal of giving Disney what they wanted. Edit: Wanted to add that this is actually a great way to think about people's motivations. Most people are not stupid; so assume a smart person made this seemingly stupid decision. If you do that, you can usually back into their personal motivations, which probably are not aligned with those of the organization they are representing.
JackFr 9y ago
https://en.wikipedia.org/wiki/Principal%E2%80%93agent_problem https://en.wikipedia.org/wiki/Principal%E2%80%93agent_proble...
guelo 9y ago
Disney and Anaheim need each other. It's not as if Anaheim didn't pay for the private parking lot Disney would have picked up and left. It's just pure political bribery corruption of the type that is legal and commonplace in our great democracy.
s73ver_ 9y ago
We don't have to assume they'd do that. How many municipalities around the country have given massive tax breaks for theme parks or sports stadiums, despite every bit of research saying they don't pan out?
toast0 9y ago
If it's anything like cities near me, the problem is that the elected officials have concentrated their concerns on one area of the city, and neglected other areas. Disney tax breaks are probably great for Disney and the immediate area, but Anaheim has a lot of area outside the immediate area of Disneyland. In the Bay Area, see how San Jose officials spends so much focus on the downtown, but the city is very spread out, and many residents have no connection to downtown.
ConceptJunkie 9y ago
You also can't ignore the possibility of kickbacks.

nothis 9y ago

>This is of course ignoring political principles of fair taxation. Of course.

wutbrodo 9y ago

Being an "idiot" is not the only or even the most probable reason for making a bad political decision (if this is one). You're committing the common fallacy of oversimplifying by assuming that the principal and the agent are identical, which is never true in government,by definition. Anaheim is not a person who makes its own decisions: there are politicians who make decisions on behalf of the city of Anaheim (and its constituents). Those politicians, as separate entities, have their own incentives. It's entirely rational (and unethical, but not "idiotic") for them to make choices that benefit themselves to the detriment of their constituents. For example, FTA: > Support for various deals benefiting Disney has come from Anaheim City Council members who have received generous campaign contributions through a byzantine network of political action committees funded by the company Now I'm not saying that this definitely _is_ bad policy, but your assumption that they must be "idiots" to make the wrong decision for the city isn't a well-founded one. It could easily just be garden variety corruption.

MyneOutside 9y ago
Well said. On a related note on of my most memorable classes in college was Philosophy of Business Ethics. One of the many takeaways I had was that business do not make decisions. People (agents) in the business make the decisions. Disney did that, Disney decided this, what's best for Disney is, etc. But in reality people are making these decisions, not some nebulous company concept. Same concept as you are pointing out.

exelius 9y ago

If it's like any other large suburb, the people who run Anaheim are only there short term as a springboard to bigger offices. If you want to move up in politics, Disney is a great friend with deep pockets. So they probably did the bare minimum of analysis with the goal of giving Disney what they wanted. Edit: Wanted to add that this is actually a great way to think about people's motivations. Most people are not stupid; so assume a smart person made this seemingly stupid decision. If you do that, you can usually back into their personal motivations, which probably are not aligned with those of the organization they are representing.

JackFr 9y ago

https://en.wikipedia.org/wiki/Principal%E2%80%93agent_problem https://en.wikipedia.org/wiki/Principal%E2%80%93agent_proble...

guelo 9y ago

Disney and Anaheim need each other. It's not as if Anaheim didn't pay for the private parking lot Disney would have picked up and left. It's just pure political bribery corruption of the type that is legal and commonplace in our great democracy.

s73ver_ 9y ago

We don't have to assume they'd do that. How many municipalities around the country have given massive tax breaks for theme parks or sports stadiums, despite every bit of research saying they don't pan out?

toast0 9y ago

If it's anything like cities near me, the problem is that the elected officials have concentrated their concerns on one area of the city, and neglected other areas. Disney tax breaks are probably great for Disney and the immediate area, but Anaheim has a lot of area outside the immediate area of Disneyland. In the Bay Area, see how San Jose officials spends so much focus on the downtown, but the city is very spread out, and many residents have no connection to downtown.

ConceptJunkie 9y ago

You also can't ignore the possibility of kickbacks.