Only Pittsburgh Can Go to China

Well, actually, lots of American cities can go to China. But Pittsburgh may actually be going: China's tentative agreement to use Westinghouse nuclear technology is a huge win for the region.

If the emotional energy in Southwestern PA followed economic logic, this deal would be the biggest story in Pittsburgh in months -- because it's far more important than Jim Balsillie's decision not to buy the Penguins, more important than Mellon Bank's being bought by the Bank of New York, and more important than the upcoming announcement regarding a slots licensee. The China deal means jobs, and a couple of thousand of them, coming to Pittsburgh.

Sure, Balsillie was going to move the team. No real loss there (seriously); losing the Pens would have meant that much less political pandering to pro sports, and less pressure to put a casino in a place where its would-be neighbors don't want it. Now that the NHL has made it clear that the team stays put, Mario is getting "fire sale" signs ready for the team's offices. There's no way that any one else will pay close to $175 million for his team, no matter what kind of arena gets built here.

Mellon Bank's leaving means that the door might be open to the "Bank of New York" arena, which sounds odd until you remember the corporate history of companies that buy naming rights to modern sports stadiums. Go ahead, make our day. Bank of New York arena it is. The only thing about the Mellon deal that I found mildly surprising was that Mellon's business ended up in New York rather than Charlotte. But if the naming thing happens, Charlotte may end up a winner anyway.

And the slots license. I haven't blogged about that issue much, but local pols treat Isle of Capri's promise to underwrite an arena as a sure thing. And any economist knows, there is no such thing as a free lunch. The proposal is taxpayer financing through the back door. Gven Pittsburgh's generally desperate financial condition, the last thing that the city needs is to mortgage what's left of its future to ice hockey. I lived in Oakland, California when city officials struck a deal to lure Al Davis and the Raiders back to Northern California. That deal stunk up public finances for years, and that was in a city that wasn't already tens of millions of dollars in debt.