Conventions and Other Delusions
The difficult part was waiting for new administrators to reveal the nature of their plans for the town and then adjusting ourselves to whatever form they might take. This was the system in which we had functioned for generations. This was the order of things into which we had been born and to which we had committed ourselves by compliance. The risk of opposing this order, of plunging into the unknown, was simply too much for us to contemplate for very long. –– Thomas Ligotti, “The Town Manager” (2003)
Milwaukee is poised to host a national political convention for a party whose state leaders have spent the last few decades jeopardizing the city’s finances, preempting traditional local powers, and undermining the city’s political voice. For what?
For Mayor Cavalier Johnson and the Greater Milwaukee Convention and Visitors Bureau (doing business as VISIT Milwaukee), it is about business, not politics. And the economic possibilities are so juicy––VISIT Milwaukee projects a $200 million dollar economic impact––that any attempt to secure a reasonable host fee from Republicans could be portrayed as a poison pill that might kill an irresistible deal.
That $200 million figure is almost certainly a mirage. But because VISIT Milwaukee is a tourism bureau, not subject to public records laws, numbers like these become “stylized facts”, black-boxed claims which gain the pretense of truth through repetition rather than genuine scrutiny. The high priests of the mega-event cult produce such figures through an imprecise pseudoscience whose internal logic remains one of the holiest mysteries of local government. Serious analyses of mega-events’ economic impacts on cities reveal a far murkier picture.
Consider, first, that the largest economic impact of conventions is concentrated in the hotel sector. According to a recent study by regional economists, which analyzes the impact of conventions in 2008 and 2012, the cumulative effect of 29,000 additional room nights adds up to roughly $20 million. The problem is that tourism bureaus often claim economic effects well in excess of $150 million. For these forecasts to check out, convention attendees would need to purchase enough local food and transportation items to equal seven times the amount they spend on hotel rooms. Even assuming a modest economic multiplier effect, local non-hotel spending would have to be four times higher than hotel-room spending for the estimates to make sense.
There are more than enough reasons for skepticism about how sizable local spending is likely to be as a result of the RNC. Consider evidence from cases like Cleveland, where small business purchases actually decreased during the 2016 convention week and restaurants did not see the expected bump. This is one reason why regional economists suggest it is often a better strategy for cities to attract a larger number of smaller and medium-size conventions rather than betting on major returns from a single mega-event.
Suppose, then, that the actual economic impact is closer to $60 million, roughly the size of Milwaukee’s current delinquent property tax balance. Would all of that benefit go back to the host city? Sadly, no. Prior to the pandemic, the planning for the 2020 DNC indicated that about 50% of the convention hotel rooms would be located out of state. Only a fraction of delegate hotels would be in Milwaukee proper. While the RNC is likely to have fewer attendees than the DNC, and while there are now more hotel rooms in Milwaukee than in 2020, anyone making claims about economic impact should be forced to answer the question of where that impact will be concentrated, and just how much of it will be concentrated in the host city, which bears the brunt of the security risk associated with mega events.
There is also the question of who benefits from the economic returns of mega-events. As the economist Victor Matheson points out, higher visitor spending does not always redound to small businesses and hospitality workers. Spending at national chain restaurants, stores, and hotels may result in increased profits, which go directly to corporate headquarters and to shareholders who live outside of the city where the sales take place. Mega-events also tend to attract temporary workers, who take their earnings out of the region after the event is over.
True, city governments might gain notoriety for proving that they can host mega-events. But they also tend to underestimate how much extra security they’ll need to create the militarized zone in which national political conventions unfold. While most of the security money will come in the form of a $50 million federal grant, cities like Charlotte and Atlanta spent tens of millions of dollars for extra security during their 2012 conventions.
If the $200 million figure is a ruse, it is nevertheless hard to fault local proprietors, who reasonably prefer a small windfall over none at all, for seeing value in mega-events. The problem is that mega-events––and the complex of convention infrastructure that allows them to flourish––have become the dominant approach to economic development in cities throughout the country, despite evidence that their impact rarely meets the inflated projections of the mega-events industrial complex (see table below). These investments, as the public administration scholar Heywood Sanders highlights, are often based on flawed or outright misleading feasibility and market studies that, in the face of considerable evidence, suggest a booming national demand for exhibition space. Once constructed, exhibition spaces must constantly find ways of justifying themselves. More consultants are hired to produce studies which receive very little scrutiny and which–unsurprisingly–recommend the construction of yet more exhibition space. Failure to attract business is simply proof of the need for more investments, and yes, more mega-events. The path to salvation for local businesses is apparently narrow, one-way, and leads directly to the teeming sports arena downtown.
The insatiable urge for cities to host mega-events is, then, a deeply political phenomenon. It is the product of decades of maneuvers by largely unelected urban growth coalitions to remove the investment function from popular control. In cities like Milwaukee, the need for investments has been further fueled by conservative state legislatures’ preemption of local functions and a choking-off of state shared revenues. What better way to make big-city mayors an offer they cannot apparently refuse: host our convention and take what you can get of the returns (though in the city’s case that would not even include sales tax revenue), or else.
The result of this structural situation is that––however the mayor or the tourism bureau might want to downplay it––Milwaukee must now host the RNC not because it is a great economic deal for the city, but because the state legislature holds us in a vise grip. Having stripped the city of much of its power and kneecapped its ability to collect revenues, state Republicans could always go further. After all, they do not regard Milwaukee as part of the “real Wisconsin”. As Assembly Speaker Robin Vos put it: “If you took Madison and Milwaukee out of the state election formula, we would have a clear majority.”
Will playing RNC host lead to a better relationship between city and state, rather than simply staving off more depredations? The mayor seems to think so. But his optimism likely reflects the city’s own strategic disadvantages rather than his personal “will to believe”. What evidence, after all, is there to go on? Republicans in the state legislature spent the last few decades ensuring that Milwaukee had as little authority and fiscal capacity to manage its problems as they possibly could. For the state GOP, cities aren’t economic engines. Nor are they the disembodied brands that local entrepreneurs dream up. Instead, they are political theaters whose sole function is to play out conservative fever dreams. The best way to make that happen is to ensure that cities fail and appear ungovernable.
Cities are a threat to the conservative project for a reason: they are potential sites of working-class formation. Their power hinges on broad political mobilization to demand policies that benefit all neighborhoods, not just downtown. Yet Milwaukee has become a managed democracy, in which governing institutions, run by a small number of professionals, are legitimated by elections sanitized of conflict and participation. Lest we forget, only 30% of registered voters turned out in the most recent mayoral contest. If the local investment function remains untethered from popular control, the city will continue to lurch from mega-event to mega-event like a gambler wandering among rows of slot machines, searching in vain for a jackpot.