In the meantime, speaking of sports money and politics, did you know that Madison Square Gardens pays no property tax? This is thanks to a deal cut by the Koch administration in 1982, when the then-owners threatened to move the Rangers and Knicks out to Long Island. So… no property taxes paid on that big ugly building in THIRTY YEARS. Even the New York POST was somewhat upset. At $15 M a year, that’s almost half a billion dollars that the rest of us have been covering over all that time.
What does this have to do with Barclays Center, you ask? well, there are protesters out there today and tomorrow who are pointing out (among other things) that the city and state sunk some $300 million into this project on the promise that it would bring 10,000 jobs to town and include 6,300 new housing units, a third of which would be for ‘moderate income’ New Yorkers. Best count on jobs so far: 200 fulltimers at Barclay, and some 2,000 part time, no-benefits jobs at ‘events’–no more than 1,200 full-time equivalencies at Walmart level wages. Everyone working full-time pouring beer or checking ticket stubs at this architectural eyesore is going to be reliant on all sorts of government assistance–everything from food stamps and Medicaid to Section 8. PS–no apartments (affordable or otherwise) yet, maybe 50 or so by the end of the year as part of a 383 unit complex.
And then there’s Spain. There’s finally been some notice of the riots over there (along with those in Greece). Reports I was seeing on Tuesday indicated that tens of thousands had surrounded the government’s offices and were demanding that the politicians inside resign. I’m zeroing in on Spain for now because (more than Greece) it’s a real problem for the rest of the world. Spain’s economy is too big to allow a default–it would drag much of Europe’s banking system through a crisis that hasn’t been seen since the 1930’s. But Spain can’t get out of the current mess without some big changes–they already have a 25% unemployment rate, so the government can’t raise taxes. Cutting pensions and unemployment is untenable. money is rushing out of their banking system. And this is looking more and more like the 1931 meltdown of the Austrian Creditanstalt, which made the recession that started with the stock market crash in 1929 into the Great Depression.
If anything, cascading bank failures following a Spanish default would be worse than what happened in 1931. Thanks to all those unregulated derivatives, there are perhaps trillions invested in credit default swaps and other deals that would come due should the banks start to run out of money.
Scary times, no?