My industry is failing, can your more successful one help me out?

I had someone ask me in this process—I don't remember who it was, but somebody asked me, you know, 'Are you going to be on the side of the little guy?' And you obviously want to give an immediate answer, but, as you reflect on it, if the Constitution says that the little guy should win, the little guy's going to win in court before me. But if the Constitution says that the big guy should win, well, then the big guy's going to win, because my obligation is to the Constitution. That's the oath.
Chief Justice John Roberts testifying before the Senate Judiciary Committee, 2005.

But of course the US Constitution doesn't say "the little guy should win." Nor does the Illinois Constitution.

Why I'm I bringing this up? Because earlier this evening I took part in a conference call with Andrew Langer, the president of the Washington-based Institute for Liberty. And he's not happy, explaining to fellow Illinois bloggers that "We think a a very dangerous precedent has been set here." On what? Today's St. Louis Post-Dispatch tells us:

Four Illinois casinos are asking the state's Supreme Court to reconsider its June ruling that they pay about $76 million to the state's struggling horse racing industry.

The dispute centers on a 2006 state law that requires the state's top-grossing casinos to pay 3 percent of their revenues to the horse racing industry, including Fairmount Park at Collinsville. The fee came off revenue above $200 million a year, which affected just the four highest-grossing casinos, at Aurora, Elgin and the two in Joliet.

Those casinos sued, arguing the law unfairly taxed them and didn't touch the state's five other facilities, including those at East St. Louis and Alton. The Illinois Supreme Court upheld the law June 5.

On Thursday, the casinos filed a motion asking the state's high court to reconsider that opinion. The motion asks the court to take another look at their argument that it's unfair to "take tens of millions of dollars out of the pockets of casinos to subsidize the horse-racing industry," especially when that burden falls on some casinos but not others.

A very dangerous precedent indeed. The horse racing industry has been slowly dying for years in Illinois. Casino boats are the main culprit, but there's more going on here. Younger people are not interested in going to the track, and unlike a casino, it's hardly an ideal dating locale.

Langer explains what the law does is allow "non-performing small businesses to be propped up by their better performing brethren."

Is that how we want our economy to be run? For decades, unprofitable and dysfunctional industries were propped up the state in Eastern Europe. By the time the Berlin Wall fell in 1989, Eastern Europe, which at the start of World War II had roughly the same standard of living as its fellow Europeans in the West, were living in marked poverty compared to their brethren on the other side of the Iron Curtain.

The horse racing subsidy law is non-sensical. Going back to Roberts' comments, sometimes "the little guy" loses. The first rule of capitalism is that businesses are supposed to fail.

It should be up to the horse racing industry to adapt--or die. One hundred years ago, every small town and every busy city intersection had at least one blacksmith--they made shoes for horses. When automobiles became affordable in the 1920s, did the US Congress, or the Illinios General Assembly, ask General Motors or Ford to subsidize blacksmiths? Of course not. I'm sure some of those former blacksmiths ended up taking assembly line jobs.

And sometimes "the big guys" lose. Eighty years later, General Motors and Ford are struggling. Consumers, the private sector's incarnation of the voter, are choosing Toyotas and Nissans. That's the way it is. That's the way it should be.

The casino industry shouldn't have to bail out horse racing tracks.

But the Illinois General Assembly, and the State Supreme Court, don't understand. Perhaps they should have a chat with Chief Justice Roberts.

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