San Juan Mountains

San Juan Mountains
San Juan Mountains: Grenadier Range

Friday, July 22, 2016

Doris Sanders Does Not Understand Von Miller's Economics

Last week my good friend Doris Sanders wrote a letter to the editor of the Denver Post.  To understand the context of her letter you should be aware that the Denver Broncos had just decided to pay linebacker Von Miller a huge sum of money to continue playing for the team the next several years.  I forget exactly how much money Miller is slated to receive but the guaranteed money, all important in football contracts, makes him the highest paid player other than a quarterback in the history of the league.  I believe he will earn somewhere around $60 million over the next couple of years.  As you would expect, many people believe that it is their business how the Denver Broncos football team spends its money and they were quick to weigh in with their opinions on the matter.  Here, in its entirety, is what Doris had to say:
"Von Miller's contract for $114.5 million is a sad reflection on our values as a nation.  We the fans are willing to pay a football linebacker that kind of money; yet we really squawk if we are asked to pay a few dollars more in taxes for education, mental health, homelessness, better roads and infrastructure -- the list goes on and on.  Take a moment to think about how far that money could for for the issues mentioned above, and many more.  Doesn't it say something about our priorities as a nation?"  Let's consider Doris' comments for a while today.
Doris begins by talking about "our values as a nation."  I didn't realize a nation could have values, whatever they are.  I know what my values are.  I believe in the Bible.  I believe murder, abortion, adultery, homosexuality, transvestism, witchcraft, theft and propagating false doctrines are sins, some of which should be punished by death.  I don't think very many other people in the Socialist Democracy of Amerika agree with me so when Doris writes about "our" values I am forced to conclude that she means the values held by the majority.  After all, we are a democracy.  Whatever the majority believes is valuable is valuable.  Whatever the majority rejects is meaningless.  Right now the majority of the folks in this envy-filled land believe that the top 49% of the income population should pay the entire cost of funding the federal government.  I believe that constitutes theft but the majority says it is a good thing.  The majority also believes that homosexuals should have special government privileges and that Christians should be required by law to affirm their lifestyles.  That position is not consistent with my values but I am in the minority so I lose.  The majority believes that marijuana should be illegal, except in Colorado and Washington where the majority believe that marijuana is just dandy.  In that case I don't know what to believe because the majorities contradict each other.  I guess I need to take a poll of the majorities and see who wins before I can know what is right and what is wrong. 
Doris says that she, as one of the fans of the Broncos, is personally responsible for drafting the contract that Miller signed.  She wrote, "we the fans are willing to pay..."  Last time I checked the only things the fans pay for are tickets to the games and all of the clothing paraphernalia associated with modern sports teams these days.  The Denver Broncos, under the leadership and authority of John Elway, is where the money is coming from to pay Miller, not fans like Doris.  Doris is correct that revenue from ticket and clothing sales paid by fans is a part of the income used by the Broncos to pay Miller's contract but that is a far cry from the fans actually paying the bill.  A huge portion of revenue earned by professional football teams comes from commercial television contracts.  If people like to watch football, and the majority of SDA citizens apparently do, football teams can make a lot of money selling their product to commercial television stations. 
Doris is upset that people like me "squawk" when I am forced, under penalty of law, to pay taxes that are used to finance government schools that I don't use as well as paying for my neighbor's daughter's abortions.  Doris' argument is not a new one.  It comes up all the time whenever some celebrity gets paid an enormous amount of money to be a celebrity and people like Doris whine about how that money could be better spent on people who work for the government.  Usually they include the police and fireman so I am thankful that Doris did not include those two groups on her list of most important classes of people.  I am going to focus on Doris' belief that the money "paid by the fans" to Von Miller should have been used to pay government school teachers instead.  That belief, held by the majority of the citizens of the SDA I suspect, is economically ignorant.  When the economics of the matter are properly understood it becomes quite clear that none of those precious priorities Doris writes about are out of whack.
I do not value Von Miller very much.  I will sit through television commercials that air while the Broncos are playing.  As one fan watching 16 games per year of commercial television I am probably responsible for a couple of the dollars that Miller earns.  Miller, unlike your local government school teacher, has millions of fans.  I don't know how many people around the country count themselves as Broncos fans but at least several million citizens of Colorado do.  If each of those fans are like me and they value Miller to the tune of a buck or two per year, we can now account for a good portion of his annual salary.  What everyone always gets wrong about celebrity is the fact that people who are celebrities derive huge sums of money from the fact they have millions of fans, each of whom pays a very small amount to be a fan.
On the other hand, a government school teacher might have 20 students and make $40,000 per year.  If the teacher was operating in the free market that would mean that each of the student's parents values the teacher at the rate of $2,000 per year, a good deal more than they value Von Miller's weekly performances.  Since the government school system is coercive and not free it is hard to say what teachers would be valued by people who are not forced to pay them against their will.
To answer that question we can look at the private school market.  The handful of people I know who work in private schools usually make about half of what government school teachers make.  Kudos to government school teachers for using the coercive power of government to feather their nests at my expense.  Oops, there I go again, I am squawking.  So if a private school teacher makes $20,000 to teach 20 students the parents of those students value the teacher at the rate of $1000/year.  Once again we see that people value the teachers they hire to educate their children much more than they value watching Von Miller play football.  That does not seem like an example of misplaced priorities to me and it shouldn't to Doris as well. 
Doris concludes by wondering how much Von Miller's non-guaranteed $114 million dollars would go if it were given to the government to be spent on various programs she favors.  The current national debt is a bit over $19 trillion.  Miller's $114 million would not make much of a dent in that.  The annual budget for the State of Colorado is a little over $10 billion.  Miller's salary would not pay much of that.  Doris would like to see Miller's money spent on "infrastructure," whatever that is.  I would not squawk as much as I do if that $114 million were used to repave the street in front of my house, if it would be enough to do the job.

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