Remarks to be delivered to the Wichita City Council, July 1, 2008.
Mr. Mayor and members of the Council, we are potentially beginning a journey down a road where there are two classes of businesses in Wichita.
There are business owners who seek to earn their profit through market entrepreneurship, that is, by meeting the demands of their customers and the marketplace. That’s a difficult thing to do. An entrepreneur must sense customer demand and desires, and then commit resources to satisfying customers. If entrepreneurs are correct in their judgments and successful in their execution, they earn profits.
There are other business owners who, through TIF districts, tax abatements, and outright subsidy as in the case of the proposed loan agreement before you today, earn their profits by pleasing politicians such as the members of this council. They practice political entrepreneurship. The people they must please are a majority of this council. Investments — to the extent that government spending can be called that — will be made based on political, rather than marketplace, considerations.
We have a proud history of market entrepreneurs in Wichita; men whose names are known not only in Wichita, but across the world. There are many other men and women in Wichita who, although their names are not famous, successfully meet customers’ demands in the marketplace and have built successful businesses.
Mr. Warren is, by all accounts, a talented entrepreneur who earns profits by pleasing customers at his theaters located on Wichita’s west and east sides and in other cities.
The fact that this theater — operated by a person with great experience in running successful theaters — is not profitable tells us all we need to know about the wisdom of investment in this business. If Mr. Warren and his partners wish to run it as a hobby, let them do so with their own money. The citizens of Wichita, however, need to be able to make their own investments in ways that they believe will earn a profit — that profitability being the one sure test of the success of an investment. When government makes “investments” based on political calculation, the people of Wichita are less able to make their own private investments.
The council made an unwise decision some years ago when it established the TIF district for this theater. While the city is bound to pay to retire the bonds that were issued, that is the only obligation we have. The fact that a bad decision was made in the past should have no bearing on the decision to be made today. This is especially true as a decision to make this loan steers Wichita firmly towards the path of less private entrepreneurship and more government control of investment in Wichita.Learn how you can support the Voice for Liberty. Click here.