Casey Cagle and entertainment politics

Casey Cagle is tired of attacks on conservatism and wants to make Delta Air Lines the whipping boy for a brand of conservatism that quite frankly does nothing for the masses of Georgians that expect their government to provide an environment that fosters economic growth and public safety. Mr Cagle, who announced earlier this week that he would hamper the shepherding of a bill that would reintroduce a policy of preferential tax treatment for the world’s largest airline, is practicing what I call “entertainment politics.”

Whereas “real politics” applies the various rules of persuasion for moving resources from one group to another group, entertainment politics speaks purely to the emotions of the policy maker and the policy maker’s constituents. In Mr Casey’s case, he did not take too kindly Delta Air Lines’ decision to discontinue a discount issued to members of the National Rifle Association for travel to their national convention. Delta, after being called out as a sponsor of the NRA in the wake of the recent shooting at a Florida high school, decided to quickly dampen any more negative publicity by putting the discount and its association with the NRA on ice. This move got Mr Casey and other conservatives all up in their feelings.

Given that Mr Casey, Georgia’s lieutenant governor since 2007, has thrown his hat in the ring for the governorship, this bold move may be just a play to seal the votes from the social conservative wing of the party. It is bold for five reasons.

First, Mr Cagle put himself way out there. He can’t take back his threat against Delta. Should he win the governorship, he will have to follow through. Delta will face a similar dilemma. To go back on its stance will create bad optics.

Second, whoever wins the Democratic nomination will most likely not get a significant amount of the conservative, gun lobby vote anyway. Mr Cagle did not need to take this action in order to protect his voting bloc from a left wing attack.

Third, Delta has options to move. New York City, Birmingham, Alabama, and Northern Virginia have sent overtures to the airline to move. Mr Cagle may be betting that Delta does not want to incur the legal liability that would result from vacating his lease.  Under section 18.03 of the agreement between the city of Atlanta and Delta, there is no specific “termination fee” described. Besides rent and taxes owed, Delta would have to pay the City’s expenses for taking over the south terminal and other properties plus other fees determined by the city. However, under contract law, the city will have the burden of mitigating Delta’s termination by looking for another tenant.  Delta, under those circumstances, may be willing to take the hit in order to fly off to greener pastures.     

In addition, Delta can argue that Mr Cagle’s action creates a force majeure (unforeseen circumstance) that cancels the contract. The circumstances are unforeseen because Delta did not expect that taken a moral stance on school shootings would be met with such an oppressive move as opposing a tax preference.

Lastly, if Georgia stays a “Red State” (and I see no indication that status will change), then the opposition to a tax preference renewal may continue for years. Rising rates may make the purchase of fuel increasingly expensive making the tax preference all the more important in the next few years. Delta may decide to cut and run.

I believe Delta has more leverage. In the short run, if they stay it will be because their profits were sufficient enough to absorb the loss of the preference. The longer run is another issue. If Mr Cagle backs down, he will likely lose the nomination. Even if he backs down and is able to squeak out a primary win, would he be able to withstand a media onslaught that describes him as a policy maker whose poor judgment may cost Atlanta a major employer and cause businesses to retrench?

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