Washblog

NASCAR: A Microcosm of Corporate Economics

Out here where I live in Kitsap County, Wa. there is talk of a NASCAR track going up.  Plenty of typical right wingnuts all supportive of the idea and claiming it will "create jobs".  Plenty of good old regular folk protesting the idea and pointing out how it will negatively impact their neighborhoods.  Well, the "debate" if you can call it that, came to my hometown just this last week.  I must say, I now know more about the economics of NASCAR than I ever wanted to before.  And it's actually quite fascinating how, because of the enlightening discussions I've read here,  I was able to see right through the bullshit straight to the heart of the matter, which, unfortunately, the speakers against the NASCAR track didn't do a good job of spelling out to the public.  They gave everyone all the facts, but they didn't connect the dots.  

That's what I'm going to do right now.  This is how NASCAR works, exactly like Corporatism works in America.

First, some background info.  The Corporation that wants to build a racetrack in Kitsap county is the International Speedway Corporation (ISC).  Are they going to build the speedway with their own money?  No, of course not.  So much for that "rugged individualism" and "personal responsibility" the right wingnuts always bleat on about.  Oh, these corporate types understand that the days of 100% publicly funded playgrounds for the rich are over, so they agree to fork up half the cost, but they insist that the state of Washington pay off the remaining $179 million.

Which begs the question:  Why can't a corporation who's gross profits last year was $405.1 million and how profited $359.2 million the year before afford to fork up a measly $179 million extra out of its own pockets if building a NASCAR racetrack is such a damned fine marketing idea?

I'll get to that one later because it is at the root of what NASCAR is really trying to pull over on the public.

But first, let's take a look at the rest of the deal - it's not essential to this discussion, but the outrage of it just can't be ignored.  These "side effects" are part and parcel with corporate exploitation.  On the surface, it would seem to be that by having the government step in and help pay for this, the real benefit the ISC reaps is that they won't have to pay any property taxes.  Yep, that's right, they get us to fork out for half the track, while THEY are the defacto owners, and because it's now half government financed, they don't have to pay property taxes.  Now, most folks, not being very informed, just shake their heads knowingly and think that's why NASCAR wants us to pay for half their track, that and they get to keep $179 million of course.  I guarantee you, avoiding property taxes are pretty low on the list of reasons to gull the public into paying half the costs of this construction.

But before I move on, let me point out something interesting:  the ISC projects as one of their "selling points" that increased sales taxes from out of state visitors due to the NASCAR events would increase state coffers to the tune of $1.8 million annually.  What they don't mention is that the property taxes they avoid by having us pay for half of it come to $3.5 million annually.  So we not only accept a total tax burden of nearly $500 million dollars (after debt burden with interest is factored in), but we would be would be agreeing to lose out on 2 thirds of the revenue the site would generate for state taxes.  A real loser proposition if ever there was one.

Okay, as I said,  those are all just numbers that concern, and hopefully outrage, the local populace.  What concerns you and I and anyone who wants to know how this NASCAR proposal is really just a microcosm of corporatism and its effects upon our society, is the real reasonwhy it's so important to NASCAR that we fund half this thing.  To understand that, let me explain the economics of NASCAR.

NASCAR's stated goal is to have 50 racetracks in operation.  Nice round number that one.  50.  One for every state I suppose.  But of course, it isn't.  Not every state is that stupid.  Some states are doubly stupid however, so NASCAR is close to realizing its goal.

Now, NASCAR only holds 38 sanctioned events.  So one has to wonder why NASCAR needs 50 racetracks to hold 38 sanctioned events.  I bet our readers here could tell us why in a heartbeat.  For the same reason cheap labor conservatives need unemployment.  Full employment raises the demand for labor which in turn raises workers wages.  Full employment for NASCAR means every racetrack has a sanctioned race.  Which means no leverage for the ISC over the track owners.  So by creating a gap between tracks and races, the ISC can get the best deals.  Problem is, if the ISC owns all it's own racetracks, then it's like that commercial where the exec says he's "sticking it to the man" and his employee points out "but you are the man!".  

That's where WE come in.  You know, Joe Taxpayer.  That's right, they want to stick it to us.  You see, if WE pay for half the track and then NASCAR says, "oh gee, we (their WE being the ISC, not the ISC and the states taxpayers) need more seats to be profitable, we need more safety barriers,  we need bigger and better luxury suites for our elite clientele doncha know?   - BTW, you ever sit in one of those luxury suites?  I did.  Once. To a Mariners game. Because the supermarket picked my little girls drawing out of a box.  That's about as likely a chance as Joe Taxpayer is ever going to get to reaping the benefits of his tax dollars.  Paying for bigger better luxury suites for guys who make more in a day than you or I will make in our lifetimes - what are we going to do about it?  We (being us Joe Taxpayers, not the ISC) will pay to give them those things.

And why will we pay for these things?  Because we'll HAVE to.  You see, if WE  don't pay for these upgrades, then NASCAR and the ISC will just take their race elsewhere and that big expensive racetrack will sit idle for an entire year and all those out of state dollars that WE, the taxpayers, will be depending on to pay off that money we borrowed to build this boondoggle will dry right up.  And so we will get mad.

And who will we get mad at when we realize we've been bamboozled?  At NASCAR?  What good will that do?  They are a corporation.  They aren't responsible to the public and we can't hold them accountable.  No.  We'll get mad at our legislators.  So guess who will save their jobs by signing us up for even MORE taxes to pay for upgrades to a track that only profits a corporation that already makes half a billion dollars a year?  I think even our children can spell  "over a barrel".

That's the REAL reason they need us to finance half this track.  It's how they put us over the barrel.  Without us, they couldn't put all the tracks over a barrel by simply forcing 24% unemployment upon the track owners.  That's what 12 racetracks sitting idle out of 50 is.  24% unemployment.  Gee, where did I just read about 24% unemployment rates before?  Oh yeah, that's the figure someone was quoting as being the unemployment rate during the Great Depression.

And THAT, my friends, is how the economics of  Cheap Labor Corporatism works in a nutshell.

Cross Posted at Conceptual Guerilla

< Bush's junket | Now I know Ray has recommended that we only post ... >
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I do. Honestly. I would not say that I am a "fan". I don't really know enough of the drivers and the teams but I think that the technology of the coverage and the quality of the coverage have made the races good to watch. You watch 'em for a while, fall asleep for a while, watch 'em a little more, fall asleep and wake up for the finish. There's a lot of drama and storylines.

What you also notice is that NASCAR is THE sport with the most corporate endorsements. Okay, fine. It's a product of American industry. The cars and teams are expensive. The tracks are expensive.

I think it would be good for the Northwest to have a premium Nascar event. But the price has to be right. Fortunately, the sport is very geographically skewed versus its viewership (most tracks and big events in the Southeast) and NASCAR should be in more of a hurry to expand itself than states should be to compete for tracks.

I think it would be good if liberals embraces NASCAR a little more. It's not evil. It's working people having fun watching cars go fast and get into the occasional wreck. Maybe there could be a man-made lake in the middle of the track and you could have hydroplane races on the same weekend. I dunno, something Northwest.

But there is no way that the government should pick up the tab for this. Where is the private boosterism? Where are the "thousand points of light"? If business leaders want this in their community, they can come up with the money - otherwise, not a dime for tracks, stadiums, arenas - any of this stuff.

You don't see golf clubs asking the state for money, but they host big events. Hmm, why could that be?

by dlaw on Mon Jun 19, 2006 at 12:29:29 AM PST

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You nailed it perfectly. CG is my favorte website too.  

by Brian on Mon Jun 19, 2006 at 01:38:59 AM PST

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We have had an ongoing discussion of the speedway question on the Kitsap Sun site Tracking the Speedway and there is a specific conversation about this post here.

I don't take issue with the overall point about "Corporatism," but I think some of the details are off.

by Steven Gardner on Wed Jul 05, 2006 at 11:58:21 AM PST

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