Why bail out Merritt Paulson?

MERRITT PAULSON has a dilemma.

His father, former Treasury Secretary Henry Paulson, may be one of the most despised men in America after he engineered the $700 billion economic bailout that stuck taxpayers with the bill for Wall Street's losses.

In the wake of this unpopular move, Merritt wants to continue his father's legacy of socializing risk and privatizing profit by getting Portlanders to pay $35-$38 million to renovate PGE Park as a Major League Soccer stadium and another $40-$50 million to build a new minor league baseball stadium.

The problem for Merritt is that new stadiums are a tough sell in the midst of the worst economic crisis since the Great Depression, when Oregon has the fifth-highest unemployment rate in the country and is considering cutting weeks off the school year in order to balance the state's budget.

Merritt Paulson, who recently made his case in an opinion piece in The Oregonian, has an obvious interest in pushing through this unpopular deal. He is 80 percent owner of the Portland Timbers and the Portland Beavers, the soccer and baseball teams that would be housed in the new stadiums. And who owns the other 20 percent? Merritt's father, Henry, the ex-Goldman Sachs CEO, who's reportedly worth $700 million.

According to Merritt, Portlanders should think of his plan as "an opportunity to create more than 600 construction jobs and 300 permanent jobs, an opportunity to leverage at least $40 million in private investment, an opportunity to revitalize our city with millions in private investment and new sustainability-focused development."

But as former pro soccer player and Portland Timbers fan Jules Boykoff wrote in The Oregonian last October:

More jobs? Economic development? Sounds great! The only problem is that it's not true. Recently, sports economists Dennis Coates (University of Maryland) and Brad R. Humphreys (University of Alberta) carried out research asking whether cities that built new stadiums to entice professional sports teams experienced a boost in the local economy. In their study--which spanned nearly 30 years and examined almost 40 attempts to lure teams--they couldn't find a single example of a sports franchise jump-starting the local economy.

Let's try to learn from the failed Wall Street bailout Merritt's father pushed through Congress several months ago. The bailout poured hundreds of billions of taxpayer dollars into the banks--with appalling results. After the government spent our money on toxic assets and stock without voting rights, many of the banks used the money to pay out dividends and bonuses, and many are now lurching toward collapse despite the influx of government funds. Now the government is realizing it may need to buy voting shares in the next round of bank bailouts.

If the Paulsons want new stadiums for the sports teams they own, they should pay for them themselves, just like the bankers should be paying for this crisis. But if they insist on begging for money from Portland taxpayers, we should get voting shares in return.

Portlanders should have a say on where the profit generated from those stadiums will go. Because if we did, we could use the money to keep our schools open and to create public works projects that would create jobs, instead of lining the pockets of the Paulson family with more of our money.

Portlanders voted for change in November, but the Paulsons want more of the same. When the Portland City Council votes on Merritt Paulson's proposal in mid-March, we'll get to see whose side they're on.

First published in the Oregonian.