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Economic Impact of PGA Championship Won’t Be Felt Where Needed Most; St. Louis Looked Favorable To A Wide Audience

August 15, 2018 Economy, Featured, St. Louis County Comments Off on Economic Impact of PGA Championship Won’t Be Felt Where Needed Most; St. Louis Looked Favorable To A Wide Audience

When it comes to economic impact estimates I’m largely a skeptic. Such was the case with last week’s PGA Championship:

The 100th PGA Championship Aug. 9-12 is expected to have an economic impact felt well beyond Bellerive Country Club’s picturesque course, up to $100 million, according to some estimates. Hotels are filling up downtown, nearly 20 miles from the course that’s situated in a mostly residential area with few hotels nearby. (Post-Dispatch)

Two key words: “Up to…” OK, so $100 million is the estimated maximum impact. What’s the very minimum? $10 million? $25 million? $50 million?   And “bel beyond?” I seriously doubt it’ll be felt in the region’s poorest zip codes.

I took a photo of my TV on Sunday

I’m not the only one questioning these estimates.

This month’s PGA Championship in St. Louis will generate $102 million in economic benefits for the state of Missouri.

Actually, it won’t. But inevitably, many fans watching or reading about the PGA Championship will hear or see that figure thrown about.

As in every sport these days, big events bring big claims of economic windfalls for the host cities. Tourism officials on Long Island projected the U.S. Open at Shinnecock Hills would generate $120 million in economic benefit. (Or maybe it was $130 million. Who’s counting?) A similar number was floated by the Angus (Scotland) Council this year with regard to the British Open at Carnoustie. Over the years, the Masters has been said to bring in a comparable nine-figure haul to Augusta, Ga. (GolfWeek)

The reasons are numerous. A lot of the fans that crowded into Bellerive Country Club were local. The money they spent on tickets, merchandise, food, etc would’ve likely been spent within the region anyway. Much of what they spent will leave the region, Visitors to St. Louis did spend money, hotels corporations will enjoy the profits. Some local businesses, such as those near parking venues, saw an uptick in business.

The 47,000 square-foot Championship Shops merchandise venue is located at the Main Entrance along the spectator walkway. This merchandise shopping experience offers men’s, women’s, and children’s apparel and headwear from major brands including Ralph Lauren, Nike, Adidas, Cutter and Buck, Under Armour, FootJoy, Travis Mathew, Forty Seven Brand, New Era, and many more! The Championship Shops also offers a major selection of exclusive accessories, gifts, and memorabilia. (PGA)

Hopefully the new money added to our economy meets or exceeds the money leaving our economy. Though I view televised golf as an event that too often delayed the news or 60 Minutes, I know championship events likely never benefit low income areas. How would they?  Golf and say North St. Louis have no connection. Oh wait…

Bellerive Country Club began in 1897 in north St. Louis as a nine-hole course with 166 members. In 1910, the membership incorporated as Bellerive Country Club, naming the club after Louis St. Ange De Bellerive, the last French commander in North America.

That same year, Scotsman Robert Foulis designed the “new Bellerive” in Normandy where the club remained for 50 years.

Led by Hord Hardin and Clark Gamble, the membership decided to move west in 1955, and allowed renowned architect Robert Trent Jones, Sr. to pick a prime farm location for the new site.

The “Green Monster of Ladue” opened on Memorial Day, 1960. (Bellerive Country Club)

I wanted to know more, so I dug deeper:

The club opened 121 years ago in 1897 as The Field Club, founded by several St. Louis sportsmen who wanted a place for golf and other leisure activities. Northwest of St. Louis, the course featured nine holes until another nine were added some years later. It was built on land leased from the estate of War of 1812 war hero Daniel Bissell.

In 1910, the club moved to nearby Normandy and renamed the Bellerive Country Club after Louis Groston de Saint-Ange de Bellerive, the last French governor of Illinois Country in 1765. With a Georgian-style clubhouse, Bellerive’s first notable event was the 1949 Western Amateur Championship. Four years later, it hosted the PGA Tour’s Western Open, won by E.J. “Dutch” Harrison.

In 1957, Bellerive put its 125-acre (0.5 km2) Normandy site on the market for $1.3 million. At the same time, the Normandy School District began discussing the need for establishing a junior college as an affordable alternative to the privately-owned Washington University and Saint Louis University. The club lowered the price to $600,000 and the Normandy Residence Center opened in a renovated clubhouse in 1960 with classes taught by the University of Missouri; the campus became the University of Missouri–St. Louisin 1963 and the nearby village is Bellerive. (Wikipedia)

A local site offers a little more specifics:

1897 St. Louis Field Club builds a 9 hole course near the Bissell Mansion. Triple A Club is organized. The First City Championship is held and E.E. Steedman of The Country Club is the winner. (STLGolfHistory)

I did find one more document with some great info:

ST. LOUIS FIELD CLUB.—On the Burlington Railroad, near St. Louis; a Field Club station is on the links. Organized and incorporated, 1897. Entrance fee, $25. Annual dues, $25. Membership, 127. The course consists of nine holes, which were laid out in October, 1897, by D. O. Ives and A. L. Kenneth.

President, D. O. Ives; vice-president, Harry S. Cullin; secretary, F. R. Bissell, 306 Wainwright Building, St. Louis; treasurer, Jno. S. Carter; governing committee, above officers and A. T. Perkins; greenkeeper, Ed. McNamara. (Official Golf Guide 1899)

At first I thought perhaps it became O’Fallon Park, but it opened in 1908.  I’d love to know a specific location for the course and train station. If anyone knows please comment oj this post on Twitter or Facebook.

Back to the recent PGA Championship — the television ratings, thanks to Tiger Woods, were impressive:

PGA Championship TV ratings are in and you won’t be surprised to learn that CBS is extremely happy with how they turned out. The network is the latest to reap the benefit of Tiger Woods’ latest comeback, announcing a 6.1 rating for Sunday’s final round, up 69 percent from 2017. Woods finished runner-up, but stole the show with a 64 that included a dizzying three-under par front nine in which he failed to hit a single fairway.

The final round peaked between 7:00-7:15 p.m. ET with an 8.3 rating. And St. Louis, where Bellerive Country Club is located, was the No. 1 market during the broadcast with an 11.5. The 6.1 also tied for the highest non-Masters TV rating since the final round of the 2012 U.S. Open. (GolfDigest)

I was one of those who tuned in (briefly) on Sunday.

While I’ll like to see more realistic numbers and an attempt to share the wealth through the region, I cannot stress enough how valuable it was for golf fans worldwide to see St. Louis in a positive context. Not sure if that’ll lead to anything, but can’t hurt how we’re perceived by those outside the region.

— Steve Patterson

 

Sunday Poll: What Impact Will The PGA Championship Have On Our Regional Economy?

August 12, 2018 Economy, Featured, STL Region, Sunday Poll Comments Off on Sunday Poll: What Impact Will The PGA Championship Have On Our Regional Economy?
Please vote below

With the exception of Tuesday’s primary the news last week was dominated by the 100th PGA Championship held at Bellerive Country Club in suburban St. Louis County.

I’m not a golf fan, so my thoughts turned to economics:

The 100th PGA Championship Aug. 9-12 is expected to have an economic impact felt well beyond Bellerive Country Club’s picturesque course, up to $100 million, according to some estimates.

Hotels are filling up downtown, nearly 20 miles from the course that’s situated in a mostly residential area with few hotels nearby. (Post-Dispatch)

For today’s poll I’d like you to think about the economic impact on the regional economy.

This poll will close at 8pm tonight.

— Steve Patterson

 

Readers Split On Homicide Rate

January 17, 2018 Crime, Economy, Featured Comments Off on Readers Split On Homicide Rate
Vacant & burned out storefront on Dr. Martin Luther King Drive in the Wellston Loop area

Last year St. Louis had more homicides than we’d seen in a couple of decades. This year we have a new police chief, hired from within, and our mayor in her first full calendar year in office. Will they be able to lower the number of homicides this year?

Of course none of us know for sure…we can only guess. My personal feeling is until we make significant progress toward addressing economic inequality we’ll continue seeing the same level of violence. Inequality — real & perceived:

Hicks and Hicks (whose relation is unclear) found that the link between conspicuous consumption and high crime rates is much stronger than the link between income inequality and crime.

That said, when spending is visible, the rates of only certain types of crimes tend to spike. Theft and vandalism, interestingly, aren’t significantly more present, but murder and assault are. These findings actually take a bit away from Gary Becker’s hypothesis, seeing as a visibly luxurious car apparently isn’t likely to inspire theft. Instead, this study adds to what’s called “strain theory,” which is another way of making sense of criminal behavior. Strain theory suggests that when poorer people perceive inequality, they feel less of a commitment to social norms and in turn come to view crime as more acceptable. The key insight the Hicks’s study provides is that when potential criminals are giving up on social expectations, they’re doing so based on information that’s visible, not information that’s password-protected. (The Atlantic)

Placing signs in your yard saying “We’ve got to stop killing each other” or calling on a deity might make you feel better — but they don’t do a thing to address the actual problems in our high-crime neighborhoods. How you ask?

From Talk Poverty in 2015:

  1. If the private market fails to provide enough jobs to achieve full employment, the government must become the employer of last resort.
  2. When growth is below capacity and the job market is slack, apply fiscal and monetary policies aggressively to achieve full employment. Right now, this means not raising interest rates pre-emptively at the Fed and investing in public infrastructure.
  3. Take actions against countries that manage their currencies to subsidize their exports to us and tax our exports to them. Such actions can include revoking trade privileges, allowing for reciprocal currency interventions, and levying duties on subsidized goods.
  4. Support sectoral training, apprenticeships, and earn-while-you-learn programs.
  5. Implement universal pre-K, with subsidies that phase out as incomes rise.
  6. Raise the minimum wage to $12/hour by 2020 and raise the overtime salary threshold (beneath which all workers get overtime pay) from $455/week to $970/week and index it to inflation.
  7. Provide better oversight of financial markets: mandate adequate capital buffers, enforce a strong Volcker Rule against proprietary trading in FDIC-insured banks, strengthen the Consumer Financial Protection Bureau, and encourage vigilant oversight of systemic risk in the banking system by the Federal Reserve.
  8. Level the playing field for union elections to bolster collective bargaining while avoiding, at the state-level, anti-union, so-called “right-to-work” laws.
  9. Maintain and strengthen safety net programs like the EITC and CTC, SNAP, and Medicaid.
  10. In order to generate needed revenue and boost tax fairness: reduce the rate at which high-income taxpayers can take tax deductions, impose a small tax of financial market transactions, increase IRS funding to close the “tax gap” (the difference between what’s owed and what’s paid), and repeal “step-up basis” (a tax break for wealthy inheritors).

To many of us the choice is clear — all of the above or continue to see the violence escalate.

Here is the results of the recent non-scientific Sunday Poll:

Q: Compared to 2017, the number of homicides in the City of St. Louis for 2018 will be…

  • significantly lower 1 [3.85%]
  • slightly lower 7 [26.92%]
  • about the same 7 [26.92%]
  • slightly higher 8 [30.77%]
  • significantly higher 2 [7.69%]
  • Unsure/No Answer 1 [3.85%]

A year from now we’ll know who was right.

“Many white Americans of good will have never connected bigotry with economic exploitation. They have deplored prejudice but tolerated or ignored economic injustice.”
–Dr. Martin Luther King Jr. Why We Can’t Wait, 1964 (Newsweek)

Aresting and locking up more people isn’t the answer, providing an economic alternative to crime is the long-term solution.

— Steve Patterson

 

Opinion: Our Gas Prices Are Way Too Low

October 4, 2017 Economy, Featured, Transportation Comments Off on Opinion: Our Gas Prices Are Way Too Low

Gasoline here in the U.S.is cheap compared to much of the world.

The average price of gasoline around the world is 4.09 U.S. Dollar per us gallon. However, there is substantial difference in these prices among countries. As a general rule, richer countries have higher prices while poorer countries and the countries that produce and export oil have significantly lower prices. One notable exception is the U.S. which is an economically advanced country but has low gas prices. The differences in prices across countries are due to the various taxes and subsidies for gasoline. All countries have access to the same petroleum prices of international markets but then decide to impose different taxes. As a result, the retail price of gasoline is different. (GlobalPetrolPrices)

Comparing gas prices alone doesn’t tell the full picture. For that I turned to a handy Bloomberg site,

Global gas prices are on the decline—about 2.3 percent, on average, in the past three months. Behind that modest decrease is a wide range of price swings felt differently around the world. We ranked 61 countries by three economic measures to see which has the most affordable gas and which feels the most pain at the pump.

It listed the US is the third most affordable — behind Venezuela and Saudi Arabia. Initially I decided to limit myself to the G7 countries:

Canada

Canada is seeking to restore its image as a leader on global warming with a nationwide tax on carbon pollution. The country has a lot to lose: Vast reserves of difficult-to-extract oil will mean either an environmental toll to produce it or an economic toll to keep in the ground. Cheap gasoline in Canada goes hand in hand with high consumption—only Americans use more per person.

France

The French can afford to pay for their expensive gasoline, but they’re increasingly turning to electric cars instead. French automakers Peugeot and Renault are both competing in the expanding market for EVs. France has one of the world’s highest EV sales rates and one of the densest charging networks.

Germany

German gas isn’t exactly cheap, but it’s little bother for the average driver in Europe’s largest economy. Gas consumption is average and is likely to decrease as the country commits to battery-powered cars. Incentives were introduced for car buyers in 2016, and BMW and Volkswagen are now working to electrify their fleets.

Italy

Car ownership in the home country of Ferrari and Maserati is among the highest in the world. However, the prolonged slump in global oil prices offered less relief to Italian drivers than in most countries, largely because of the country’s high taxes on fuel.

Japan

Japan’s long-standing national gasoline tax helped its carmakers take an early lead in developing fuel-efficient vehicles. Toyota and Honda invested big in fuel-cell technology, while the Nissan Leaf became the world’s best-selling electric vehicle. Japan now has more public battery chargers than gas stations.

United Kingdom

Sales of electric vehicles are accelerating in the U.K.—one of the biggest markets for battery-powered transportation. EVs make a lot of sense in a region defined by short driving distances and one of the highest gasoline prices in the world.

United States

President Donald Trump has scrapped environmental regulations and supported fossil-fuel production in the first months of his presidency. But if success is judged by the price of gasoline, there isn’t much room left for improvement. U.S. gasoline prices tumbled under his predecessor, Barack Obama, while oil production soared and cars became more efficient. Americans still guzzle more gas than any other country, so even with low prices, a thirst for the open road takes a bite out of the average paycheck.

I then decided I needed to also look at the country with the most expensive gas and the two where gasoline is more affordable than here:

Norway

Norway’s high gas prices and high incomes are an electric car maker’s dream. The country has the biggest share of electric vehicles in the world. That may seem strange for an economy built on oil, but Norway is one producer that doesn’t subsidize gasoline at the pump. Instead, the country uses its oil riches to fund national services, such as free college education and savings for infrastructure improvements.

Saudia Arabia

The Saudis sit atop two enormously valuable bodies of liquid: oil and water. Both are being pumped to the surface at unsustainable rates. Saudis rank among the greatest gas guzzlers in the world, but they devote a below-average share of their incomes to buying it. That’s because the government heavily subsidizes the price at the pump.

Venezuela

Life, liberty and the pursuit of happiness. Countries have different ideas as to which rights are inalienable, and Venezuela stands alone in considering nearly free gasoline a birthright. In 2016, President Nicolas Maduro raised pump prices 6,000 percent, but filling up a tank of gas still costs less than a cup of coffee. Venezuela isn’t a rich country but consumes gas like one.

I complied some of the information into a chart — looking at price per gallon, affordability relative to wages, gallons used per driver, and how each compares to the highest user of gasoline.

As you can see four other G7 countries (France, Germany, Italy, UK) have gas prices that are at least twice ours. Twice. We use far more gasoline than everyone else — even the two countries with more affordable gasoline.

The recent non-scientific Sunday Poll had fewer responses than usual:

Q: Current gas prices in St. Louis, at around $2.27/gal, are…

  • Extremely high 0 [0%]
  • High 1 [5%]
  • Somewhat high 1 [5%]
  • Neither low or high 7 [35%]
  • Somewhat low 4 [20%]
  • Low 3 [15%]
  • Extremely low 4 [20%]
  • Unsure/no opinion 0 [0%]

Still, more than half said our gas prices are on the low side of the scale. Decades of low taxes enabled us to build a non-sustainable auto-centric built environment. We can’t just raise taxes to where they should be, at least not too quickly. But we can’t continue to neglect our massive amount of crumbling infrastructure.

— Steve Patterson

 

Readers: Gov Greitens Should Veto Minimum Wage Bill

May 24, 2017 Economy, Featured, Missouri, Politics/Policy Comments Off on Readers: Gov Greitens Should Veto Minimum Wage Bill
Missouri Capital, Jefferson City, MO, April 2011

Nearly 85% of those who voted in the recent non-scientific Sunday Poll disagreed with the statement that Gov Greitens should sign the bill that would strip St. Louis of setting its own minimum wow higher than that of the state. More than half picked the “strongly disagree” option.

Here’s the final breakdown:

Q: Agree or disagree: Gov Grietens should sign the bill limiting the minimum wage to the same $7.70/hr statewide.

  • Strongly agree 2 [6.25%]
  • Agree 1 [3.13%]
  • Somewhat agree 1 [3.13%]
  • Neither agree or disagree 0 [0%]
  • Somewhat disagree 3 [9.38%]
  • Disagree 7 [21.88%]
  • Strongly disagree 17 [53.13%]
  • Unsure/No Answer 1 [3.13%]

A thriving economy has goods/services being exchanged at good pace. Those with minimum wage jobs spend every dollar they get:

Those in the bottom 30% of the income scale make an average of $14,000 a year, including the value of many government benefits like food stamps or disability payments. But they spend more than $25,000, or 182%, of their annual income mostly on basic needs like housing, food and transportation, according to a CNNMoney analysis of Bureau of Labor Statistics data. 

Worth noting is that this group includes senior citizens, who supplement their income from Social Security with savings, and students, who turn to mom and dad for help. Also, research shows that some underestimate how much aid they receive from the government. 

But the data also includes many low-income families and individuals who just don’t make enough to get by. Often, they have to decide what bills to pay or they turn to payday lenders or credit cards. (CNN/Money)

This is 182% of their income, while the rich only spend 61% of their income. For the middle class it’s 89%. If we pay those at the bottom a little more the money will circulate through the economy — not sit in accounts here and abroad. Foe nearly 40 policies of both Republicans & Democrats have eroded the middle class and condemned the poor to a life of struggling to stay afloat.

St. Louis needs an improved economy — paying workers more is the best way to do so. Please contact Gov Greitens immediately and let him know he should veto the minimum wage bill.

— Steve Patterson

 

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