The dismal science

Arena scraps: It’s as if the laws of economics have been turned on their heads! While rifling through a colleague’s desk in a frantic search for leads this week, Bites discovered two new maxims that, if proved correct, may totally revolutionize public finance.

The first comes from Sacramento Mayor Heather Fargo, who has redefined the concept of a regressive tax. Normally, a tax that takes a decreasing portion of income as income increases is considered regressive, such as the quarter-cent sales tax proposed to help purchase an estimated $600 million downtown basketball arena for billionaire brothers Joe and Gavin Maloof. But Fargo isn’t so sure the “Maloof Tax” is regressive.

“People with more money spend more, so they’re going to pay more, because they buy more things,” she reasons. “People need to get reminded that when you go to the grocery store, you’re not paying tax on your food or your basic necessities. So, for people who are pretty poor, they’re typically not paying a lot of sales tax, so I don’t know how regressive it is.”

It’s simple, see? Those damned poor people can barely afford to buy food, let alone Kings tickets, so they’re not paying any stadium tax at all!

Holy Smoley: Former County Supervisor Sandra Smoley actually does Fargo one better with her theory regarding potential cost overruns for the proposed publicly financed arena.

“What the city and county are saying is that they will have a reason to make overruns not happen,” Smoley says. “They’re saying because it’s in the public arena, they will have a better chance of following it and making sure it doesn’t have overruns.”

If you believe that, Assemblyman Dave Jones has a Ziggurat in West Sacramento he’d like to sell you.

“I can’t think of one major public project in this county in the last 10 years that hasn’t had significant cost overruns,” Jones says.

Hugo rejection: Several months ago, Bites suggested that readers fill their vehicles up at 7-Eleven, which buys its gasoline from CITGO, which is incorporated in the United States but owned by Petróleos de Venezuela. Bites was impressed that CITGO, Venezuelan President Hugo Chavez and the people of Venezuela have contributed, among many other charitable donations, $83 million to the Muscular Dystrophy Association, 100 million gallons of discounted fuel oil to help warm more than 1.2 million Americans and more than $2 million to the survivors of Hurricanes Katrina and Rita. The least Bites could do was recommend that readers rapidly deplete Venezuela’s oil supply via their favorite local convenience store.

Well, now 7-Eleven has thrown a wrench into the works, claiming that it terminated its contract with CITGO last week after Chavez told the United Nations what most of the world already knows: U.S. President George W. Bush is el diablo. But guess what? According to CITGO, 7-Eleven isn’t telling the whole story. In fact, the two companies agreed to terminate their 20-year relationship three months ago. As CITGO notes in a press release, “[B]oth 7-Eleven and CITGO had informed the media of the decision long before the U.N. speech.”

Of course, bashing Chavez has become commonplace of late. Even the Sacramento Bee editorial board got into the act after the U.N. speech, calling Chavez a “virtual dictator,” even though he’s been elected twice in contests that make ours look like a banana republic’s, and claiming that he’s done little to alleviate his nation’s poverty when in fact the exact opposite is true. Why are these educated editorial-board members willing to lie so shamelessly about Chavez? It couldn’t be the fact that we’re at the mercy of Venezuela, which supplies the United States 15 percent of its oil, could it?