Trump threatens to move convention out of Charlotte if demands not met, like former sports owner he is

A former sports team owner threatened yesterday to move a planned event out of town if his arena demands weren’t met, and the only surprise, really, is that the culprit was the president of the United States:

Let’s for the moment ignore the bit where the nation’s leader is demanding to pack 20,000 people into an indoor arena during a pandemic where the one thing we know is that packing people into indoor spaces is the worst possible thing you can do. (And the bit about “building the Arena to a very high standard,” since in fact it was Charlotte taxpayers who just spent $27.5 million on upgrading the Hornets‘ arena.) Instead, I’d like to focus on Trump’s claim that if he isn’t allowed to fill the Charlotte arena to capacity, he will take his “jobs and economic development” and go elsewhere. How many jobs do political conventions create, anyway?

The usual lazy way (or self-interested way, if you’re in the business of staging conventions) of calculating convention economic impact is to add up all the visitors to a city and multiply it by how much you think they spend, which results in numbers as high as $230 million. The better way would be to look at all the cities that have hosted conventions and see if there was any discernable change in job growth or personal income as a result — and sports economists Robert Baade, Robert Baumann, and Victor Matheson did just that in 2008, finding that “the presence of the Republican or Democratic National Convention has no discernable impact on employment, personal income, or personal income per capita in the cities where the events were held confirming the results of other ex post analyses of mega-events.”

In other words, political conventions are much like the Super Bowl: They bring a ton of people into town, but they also drive away other potential visitors who steer clear of the convention week crowds (and convention week hotel prices), as well as local residents who may stay at home if they think restaurants and such will be too crowded. As Baade, Baumann, and Matheson noted, “During the week of the 2004 Republican National Convention in New York City, for example, attendance at Broadway shows fell more than 20 percent compared with the same week a year earlier despite the presence of tens of thousands of visiting conventioneers and journalists.”

(Matheson and Baade also previously crunched the numbers for the NCAA tournament, another brief “mega-event” similar to political conventions, and found that the men’s tournament appeared to have a small negative impact on host cities’ economies, which is impressively bad.)

Reached via email, Matheson further observes that political conventions don’t even provide the “feel-good” effects of a major sporting event, where residents at least report an increase in warm fuzzies from having been in proximity to greatness. (The 2016 Rio de Janeiro Olympics, he notes, seem to have been an exception.) Political conventions, by contrast, are generally remembered in story and song for less cheery reasons.

Now, there’s an obvious caveat here, which is that a pandemic economy is not a normal economy; hotel stays in North Carolina are way down what with much of America not leaving the house, so there may not be many tourists to drive away with a convention (though that’s already starting to change as the state slowly reopens). Matheson writes:

No one is going to fill those rooms up if the convention were to not take place. Hotel occupancy across the country has essentially fallen to zero, so the crowding out effect of mega events has disappeared during COVID-19, leading to real economic damage done by the cancellation of sporting (and political) events.
This also gives Trump’s threat slightly more teeth. In normal times, Trump’s threat to move the convention would be just another inane bit of bluster from a guy who likes to make threats he has no ability to carry out. There would be no city in the country with available hotel rooms and convention space that you could move the event to with this little notice. Nowadays, however, there are probably 30 different cities that actually have availability to host an event like this with last minute notice.

A chunk of the convention spending that advocates like to crow about, however, is from going out on the town during the event: Another paper by Matheson (with co-authors Lauren Heller and Frank Stephenson) found that convention-goers would have to spend seven times as much on food and entertainment as on hotel rooms to justify the most common economic impact claims. Restaurants, though, remain limited to 50% capacity in North Carolina, and if my experience getting takeout food in Brooklyn last night is any guide, there’s plenty of demand for restaurant food from bored, hungry locals right now, so it’s extremely likely that at least some Charlotte residents would choose to stay home rather than line up to sit six feet from Republican convention visitors from who knows where, with their icky who-knows-where germs.

Gov. Cooper hasn’t yet responded to Trump’s demands beyond a brief press statement saying North Carolina will make its decisions based on “data and science,” which certainly could be read as “Yeah, yeah, the president is tweeting at us, give him 24 hours and he’ll be off tweeting at clouds instead.” But don’t sell Donald Trump short: In his time as New Jersey Generals owner, he surely learned something about ways to leverage his power to get concessions from his foes. Or, you know, not.

Economists duel over whether Republican convention did squat for Tampa

If you’ve ever found yourself wondering, “Hey, that University of South Florida economist, does he spend all his time hating on Super Bowls and other mega-sporting events as having no benefit to local economies?”, the answer is no, he does not. He takes the time to puncture the economic-windfall balloon of political conventions, too:

Porter says the [2012 Republican National Convention in Tampa] fails to show up in tax revenue and taxable sales statistics for Hillsborough County. For the evidence, he says, look at this:

From August 2010 to August 2011, sales tax revenues in Hillsborough grew at 5.88 percent — faster than in the rest of the state, where growth was 5.44 percent.

But from August 2011 to August 2012, the month of the convention, tax revenues in Hillsborough rose about 6.75 percent — lower than the 6.92 percent seen in the rest of the state.

Taxable sales statistics were similar, Porter said.

From August 2011 to August 2012 sales in Hillsborough rose 5.83 percent — less than the 6.31 percent seen in the rest of Florida.

“Comparing August to August over time, it is apparent that the RNC did not stimulate economic activity in Hillsborough County,” Porter concludes.

The article quoted above — by Tampa Bay Times reporter Richard Danielson — then goes on to quote rebuttals from University of Tampa economist Brian Kench, who was hired by the convention host committee to find an impact, and found $214 million worth, as well as host committee president Ken Jones, who accused Porter of comparing “apples to bicycles.” Kench said that Porter had erred in looking at onlytaxable sales, and then when you include overall sales — including untaxed items like groceries and services — “Hillsborough’s overall sales rose nearly 10.5 percent from August 2011 to August 2012 — nearly double the 5.8 percent growth in the rest of the state for the same two months.”

To which Porter replied … well, we don’t know, because Danielson ended his article there. But because this is apparently Email Economists So Journalists Don’t Have To Week here at Field of Schemes, I asked Porter what he made of this. His reply:

  • Taxable sales are absolutely the right metric to use, because “RNC visitors aren’t buying medicine, groceries, hiring attorneys and getting haircuts while in Tampa. They pay for hotel rooms, buy meals at restaurants, and buy souvenirs, all of which are taxable. … If taxable sales don’t respond, these visitors are no different than the visitors we normally have in town in August.”
  • Overall sales in Hillsborough were indeed up more than in the rest of the state from 2011 to 2012 — but that’s because they’re always up more in the Tampa area than the rest of the state: “Because we are a port city with significant export activity (not subject to sales tax), our gross sales are large relative to the rest of Florida and growing rapidly as we come out of the recession. …Comparing August 2010 to August 2011 gross sales in Hillsborough rose 11.7%.  Comparing August 2011 to August 2012 the increase fell to 10.4%.  This mirrors the rest of the state wherein August to August sales rose 1.5 percentage points less in the 11-12 period compared to the 10-11 period.”

So, it looks like the Republican convention, like most of the sports mega-events that Porter has studied, doesn’t actually do anything measurable to help the local economy despite how eagerly cities chase after hosting it. Unless Kench has a counter-counter-counter-counter-argument; I’ve emailed him as well, but haven’t — oh wait, here’s a reply from Kench right this second!

That assertion is proven false one month prior (July 2012), when the rest of the state grew faster (8.7% y/y) than Hillsborough county (6% y/y).

Time to go back to Porter to see what he says. I’m starting to have just a smidge of sympathy for why reporters on deadline don’t do this…