Tuesday, April 6, 2010

Hoops, baseball and our economy

That was a tremendous NCAA basketball tournament that wrapped up. It had everything you wanted- tons of close games decided late, some shocking upsets, an amazing run by a small school in Butler, and a classic final game that was decided with the last shot in the air.

I consider March Madness the greatest annual sporting event in America, and it works in a way much like how what we would like to believe our country works. There are many more areas in the country that have teams get into the tournament, and many people can relate to some college that is playing, even if they don't care about basketball itself. If you win your little conference title, you get your chance on the floor against the big boys, and sometimes the little guys get the job done. And the title isn't determined by some fixed formula that gives massive benefits to the big boys and makes it near impossible for the lower-resource schools to get through- you gotta earn that spot on the court. Most often, it is not the team with the most individual talent that takes the title (i.e Kentucky, Roy Williams' Kansas teams), but it's the team that can combine its assets the best to be the best team out there. Sure one or two guys mightbe superstars, but often it's glue people like Nolan Smith or Brian Zoubek that play within their roles that take the team to the next level. Duke's students may be overwhlemingly trust-funders that don't have to work hard to end up on top, but their basketball team did, and deserved the title they got (as much as it pains me to say that).

But perhaps it is fitting that Major League Baseball started up yesterday, because in many ways, MLB works much like how our country REALLY works. MLB features some distribution of revenues between teams, but the revenues a Yankees or Red Sox can generate through local radio and television deals overwhelms the amount of revenue a team like the Brewers or the A's can get. Given that all of the teams in MLB are in the same labor market for players, and that players can move relatively easily from team to team once they hit free agency, small-revenue teams have to pay every bit as much as big-market teams to get the same caliber of player, regardless of the differences in items such as cost of living or room for advancement This will help to explain how an arbitrator could legitimately give an average player like Corey Hart a salary near $5.0 million- because other teams have paid the same amount to the same level of player. In fact, a players' lower chances of off-field revenue or on-field success may mean that smaller-revenue teams have to pay MORE for the same player- Wickett and Russell on 1250 AM call it "the Milwaukee tax.".

But it goes deeper than that when comparing baseball's economic structure with the overall economic one. A major advantage the big-revenue teams have is the ability to be wrong. They can offer an extra year or two of guaranteed salary or overpay for a player coming off an injury because if that player doesn't pan out, it's still a small amount of their payroll, and they can cast off the excess baggage with no major hurt to their team. Smaller-revenue teams can't afford to be tied down with a risky long-term contract because it is much more damaging to have to hold on to a dead asset, and their flexibility to right the mistake is greatly compromised.

The same holds true in our greater society. People with money and resources have a much greater ability to take chances and have more confidence in being able to make their moves because they can AFFORD TO LOSE. Poorer people are often locked into their job with their substandard health care and lame town because they can't afford to end with nothing for any amount fo time. Therefore, they become a lot less likely to go back to school, move into a different career, or relocate to a better community- coming up short is far too great a risk to take, so they remain in their current, losing situation instead of making the move that would be more likely to end up with a better outcome.

This is why safety nets like national health care, unemployment, and available student loans are so important, because it expands (or maintains) the choices that remain available to the average citizen, and lessens the chance that they get forced into a substandard result due to their options being limited. And our overall society suffers as well, since you now have individuals taking employment and productivity below what they should be doing, just like how financial constraints keep a number of teams from even trying to compete with the big-revenue clubs. In MLB, you see interest being depressed in numerous markets (think KC, Pittsburgh, Baltimore, Milwaukee under the Seligs), and understandably fans and even players see no major reason to care a lot, since trying hard does not lead to a much different result. It also leads to a 2-tier league where the groups are clearly on different levels of play and expectations....much like what we see in America today.

And the remarks from the winners and losers are much the same, too. Check out Yankees President Randy Levine chiding Brewers owner Mark Attanasio for mentioning the Yankees' huge payroll and budget advantage over the Brew Crew. To an extent Levine's correct, the Yankees are doing what they can to have the best chance of winning under the current system. This includes paying anything they want to free agents and bidding millions to unknown foreign-league players, which are luxuries that smaller-makret teams can't take advantage of for every available player that comes down the pike. This is a lot like how a trust-funder gets extra connections to colleges and employment that open a lot more doors than it does for the average schmoe. Maybe we should give a bit of credit for the trust-funder if they reach a level of success after going through those doors, but Levine's comments are much like trust-funders and othber elites asking "Well, why should you punish my success?"

The bottom line is, 1. a healthy system is the only reason you'd have a chance for that success in the first place, and if the system falls apart and there's less nationwide interest in the game, you'll probably lose too, and 2. You really aren't showing that you're any special, you just ended up doing what you probably should be able to do- win a game that favors you. You should appreciate the advantages that you've been given, and if you really cared about the game, you'd work to make it possible for more people to have a chance to win. Not only does this spark more interest and competition, it makes any success you do have on the more level playing field a real accomplishment, instead of a medicore outcome. Maybe you'd even become worthy of your high self-opinion.

These folks naively think they'll never be the ones that could lose, Losing teaches you limits, and people lose a lot bigger when the rich are allowed to be richer at the expense of everyone else, so more people see the limitations now more than ever. Maybe it's the Midwesterner in me, but I think it's a good thing to find out, as maybe it forces you to recognize what CAN be done, and achieve those realistic goals. Unfortunately, not enough people learn that lesson of limits, and continue the hubris of throwing their weight and opinions around at the great expense (and resentment) of everyone else. In MLB, many of the big-revenue teams and a lot of members of the players union don't want what's best for the game- because they want to stick with what makes them rich and successful. Understandable but still weak, because it shows a lack of vision, and a lack of caring about the game that gave you the opportunities that you owe your success to in the first place. This holds true in baseball, and in American life today.

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