Monday, October 01, 2012

Tom Corbett, Delta, and Pittsburgh

What follows is speculation. I haven't heard anything or found a smoking gun. I'm connecting dots with dashes, in pencil. The big news out of Pittsburgh today is an extension of the Delta Air Lines direct flight to Paris:

Delta began the nonstop Paris flights three years ago under a $9 million subsidy from the state and a regional economic group. The flights will again be offered from May to October next year, five days a week up from four this year.

Emphasis added. I don't want to overshadow the contribution from the "regional economic group." My aim is to highlight Pennsylvania's ante. As I related on Saturday, that's not the only love that Governor Tom Corbett has showered on Delta:

In a move from somewhere out in left field, Delta Air Lines decided in late April to tackle energy risk management head-on by taking a rather unorthodox step of managing their fuel cost exposure by…purchasing a refinery. $150 million later (after a $30 million subsidy from the Commonwealth of Pennsylvania), Delta bought the Trainer refinery just south of Philadelphia, which produces 185,000 barrels a day. In addition to the purchase, they are now retrofitting the refinery (to the tune of $100 million) to maximize its jet fuel output.

Emphasis added. Are the two subsidies related in any way? The point I was trying to make this weekend concerns funding education, which is taking a big hit around the country (not just in Pennsylvania). That's a lot of love for one company given the fiscal constraints of the day. The better return comes from investing in people, not chasing smokestacks.

The cynic in me sees the refinery deal as an exchange for direct flights to Europe. The two might seem unrelated save for Pennsylvania giving two subsidies to Delta Air Lines. That's a sweet deal for Delta. I'm not sure Pennsylvania gets much out of it.

Whether the two are linked or not, the policy still stinks. Pennsylvania should be doubling down on education, not pandering to CEOs. Corbett is mortgaging the future for a few shiny political pieces that he can cash in now. Delta's shareholders should not have a vote in the next gubernatorial election.


DBR96A said...

But you gotta understand, people in Pennsylvania are desperate for jobs! I mean, haven't you seen the movie Flashdance or heard Billy Joel's song "Allentown"? If more Pennsylvanians lose their jobs, then all they'll have left to cling to are their guns and religion! Besides, corporations are people too!

Anonymous said...

DBR, the sarcasm if fine, but your guns & religion and corporations are people comments make no sense in this context.


DBR96A said...

I disagree that they make no sense. Barack Obama talked about poor and working-class Pennsylvanians "clinging to guns and religion" as a method of coping with their dismal economic fortunes. As for corporations being people, smokestack chasers would more than likely believe so, and use that as justification for subsidizing corporations. To a smokestack chaser, money spent on corporations is money spent on people.

Overall, this illustrates how full of shit politicians are on both sides of the aisle when it comes to (socio)economic matters.

Anonymous said...

He made the comment, but that is irrelevant to this and Romney also said that corporations are people, but again not relevant to PIT and Delta and PA.