It has been a little more than 16 years since I loaded up my first post on Room Eight, a group blog, after being asked to do so by Ben Smith, then of the New York Observer, later of the Daily News, Politico, Buzzfeed, the New York Times, and now something else. At the time Tom Suozzi was running for Governor, […]
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It has been a little more than 16 years since I loaded up my first post on Room Eight, a group blog, after being asked to do so by Ben Smith, then of the New York Observer, later of the Daily News, Politico, Buzzfeed, the New York Times, and now something else. At the time Tom Suozzi was running for Governor, but every special interest in the state had gotten together and decided to make Eliot Spitzer Governor, and they demanded that Suozzi drop out so an actual election could be avoided. But that would have meant that those who agreed with Suozzi would not have had a chance to express themselves by voting. Suozzi did the right thing, stayed in, and lost. Spitzer resigned in a prostitution scandal sometime later.
Suozzi has won and lost a variety of elections for a variety of offices in the years since, until once again running for Governor this year. And once again all the special interests got together and decided whom to appoint as Governor and as state legislators, and once again demanded that Suozzi drop out to avoid an election, even monkeying with the dates to ensure as few people voted in the primary as possible. Once again Suozzi defied them, stayed, in and lost. Once again this was the right thing to do. You take your shot, speak your piece, and when you lose, you lose.
That could the theme for this blog too. Because after 16 years of rowing into a social tsunami, and shouting into a social hurricane, I find I know longer have the heart and energy to keep grinding out what are, in effect, research reports in my spare time, while also working full time doing something very similar. This will be my last post for the foreseeable future, and quite possibly ever. It explains why I have done this, and why I will now stop.
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My first post on Saying the Unsaid in New York was in January 2013, nine and one-half years ago, but as noted my first blog post was on Room Eight back in May 2006. Room Eight started having technical difficulties in 2012, and was shut down after people started threatening its administrator in 2016.
One could, however, date my participation in public discourse, such as it has been, back further, when I got fed up enough to do my duty as a citizen in a democracy and run for office as a minor party protest candidate. Here is what I said at the time, in 2004 – as of the date I write this it is still on the internet.
And before that, in 2001, the Taub Urban Research Center at New York University had published my compilation of data from the 1997 Census of Governments, my first such compilation.
And before that, while on the staff of the New York City Department of City Planning, I had been tasked with writing several sections of the Annual Report on Social Indicators, a report mandated by the then-new New York City Charter that passed in 1989. That was the first time I compiled and analyzed data on the regional economy, commercial real estate market, and local government finances, compared with the past and other parts of the country. I was 28 years old at the time. Here is the cover of the first such report.
And a table from it. Back then, we’re talking about Quattro Pro spreadsheets with data typed in from photocopies or copied by hand at libraries, not downloaded from the internet.
Here is my first chart summarizing the data, from the 1992 Annual Report on Social Indicators, two years later.
Ah, so that’s what’s going on! I later would come to understand that most of social services “for the poor” was actually mostly Medicaid for the old. I would watch with growing confidence over the years as city spending on interest and pensions – costs from the past — fell per $1,000 of personal income, allowing spending on actual public services and benefits to increase. Until that ended, and reversed, and Generation Greed politicians cashed the city and state’s future in.
That was the beginning, and here is where my research on state and local government employment and finances ended up.
That information will stay there, but new data will only be made available in the future if someone else is willing to compile it. I remain willing to help by showing any honest and independent party how to do so – if my explanations of where the data comes from and how to compile it, in the first post in each series, are not enough. Regardless of how it may seem to you, it actually isn’t all that hard once you know how to do it. This is funny enough that after seeing this online I added it to the post after the fact.
I left City Planning in 2001. So why keep doing all this work, on my own time for free, for another 21 years?
At first, I was motivated by hope. I have been the beneficiary of the prior work of generations who came before, in this country and in my family, who made it better for those coming afterward, including myself, and felt an obligation to make a similar contribution to the future to the extent I could.
And then by fear, as I discovered that starting with Generation Greed the opposite was happening. The generations in charge, and in particular those on the inside, were making things worse and worse for the common future and those who will live in it, with every deal, policy, economic and social trend working to the detriment of the later born and ordinary people. Someone had to try to do something to turn this around, or else.
And then by anger. Not only was the future being cashed in to benefit those working the system, in the public and private sectors, but this was taking place without being explained in the media, controlled by those cashing it in. What was and is happening, and who was and is benefitting, seemed to be under Omerta. So that those generations and interests that were grabbing, grabbing, grabbing wouldn’t even have to face the psychological accountability of having the link between what they took and others lost widely reported, discussed and, understood. Especially if the grabbing was at point in time A, when there was “plenty of money,” and the consequences for others arrived at point in time B, “due to circumstances beyond our control.”
The difference between what was being said and reported, and what I knew to be true (and obviously so based on even a cursory look at readily available data), made me mad as hell. From 1976, though it could have been yesterday.
This has continued to get worse, with the media saturated with so-called news based on press releases from interest groups and the faux think tanks they fund. So-called news that divides people based on tribalism. So-called news that tells people who have benefitted from the economic, social and fiscal trends that have left later-born Americans worse off what they want to hear — that someone else is to blame.
From 1976.
All while readily available sources of information that could describe what has actually happened are ignored. Shouldn’t the media be examining that data, and then going out to find qualitative information to back it up and explain it? I guess that wasn’t’ and isn’t what sells.
And now, new generation, new media, same misinformation, disinformation, ignoring politically inconvenient information that isn’t what you want to hear, while providing a zillion outlets for non-information.
More than once over the past 20 years I have been struck by what is called “news” and what is called “opinion.” On both Marketwatch and Bloomberg News I have read articles that analyzed readily available public data, considered its strengths and weaknesses, reported what the data showed, and explained what it might mean. These articles were in Marketwatch Opinion and Bloomberg Opinion.
If the reporting of factual information is “opinion,” then what is “news?” Look at the so-called news stories in just about any media outlet and you’ll read “so and so said something.” For some reason someone saying something is considered news, and not opinion, even if the so and so that said something is a Kardashian, or some other celebrity.
There is a consequence of this. Consider what David Gergen, journalist and advisor to Presidents, said about this country back in 2010.
In general we’ve been very, very good at responding to emergencies. Where we’ve had real trouble is in responding to chronic conditions that build up over time. A sage once said that America is excellent when we have a wolf at the door; we are pretty terrible when we have termites in the basement. That has been my experience to a significant degree in politics and what I continue to see happening today.
What he didn’t get was that the country was and is being run by the termites – termite groups, termite interests, termite generations.
Over time we have allowed all these problems to build up, and now they are all falling on us at the same time. All this postponement is coming home to roost at the very moment when our political system seems so polarized and paralyzed. Many of us thought that President Obama could turn the page, that he could open a new chapter in American politics. We still hope that, but frankly that hope has waned for a great number of Americans, and if anything we are more polarized today than we were before he was elected. It’s a sad thing to see, and it’s troublesome about where we find ourselves.
In the face of this I have tried to break the Omerta, with regard to Generation Greed and the consequences of its choices for those coming after, and with regard to the executive/financial class and (in New York) the political/union class, and the consequences of their self-dealing for the serfs. And tried and tried. And tried and tried and tried.
Some have suggested over the years that I engage in more self-promotion, perhaps on social media sites such as Twitter or Facebook and the like. But I’m not a social media type of guy – the only social media site I’ve ever been on is Linkedin, and only because I needed to find a new job. You can’t present facts and evidence in 180 characters. I don’t accept something to be true just because someone else, usually someone with a selfish interest involved, says so. I don’t expect that anyone would accept that from me either. Why bother to read anything I write in the absence of facts and evidence?
Perhaps 100 tweets on 100 ways Generation Greed has left those to follow worse off? I’ll leave that to someone else. They can find the facts to back it up in what I have already written.
The assertion that I have wasted my time, because I have failed to engage in self-promotion, is ironic. Three years ago, I found that I had been simultaneously banned from commenting on two websites, and that someone had apparently tried to get me banned from commenting on others.
When commenting on those sites I had at times provided links back to posts I had written that contained spreadsheets, charts, links to original sources, etc. – facts and evidence – as support for what I was saying. I had also found that Disqus allows charts to be dropped right into the comment. After banning me from commenting, I found that the two sites then went back and deleted every comment I had made with a chart in it.
When Ben Smith asked one of the sites why I had been banned, the answer was because of self-promotion! I don’t believe that was the actual reason, but if it was — damned if you do, damned if you don’t, damned if you don’t and they say you do.
The Twitter and Facebook crowd, however, is not the audience I wanted anyway. I wanted the sort of people who would actually download the spreadsheets, look at the data themselves, follow the links to articles cited, compare all this with their own experience, and make up their own minds. That’s why when I compiled a dataset and used it to write a series of post explaining what I found, the first post just explained where the data came from and what was done with it – and put it out there, so people could see it and make up their own minds, before hearing from me. I have been writing for open-minded, curious, fair-minded people. All 77 of them, on planet earth, because for some reason lots of people outside New York – or even the United States – have been reading this blog.
In addition to providing information for policy wonks, one of the main goals of this blog was, for lack of a better word, plagiarism. To have others, perhaps those in the media who have the ability to digest information into easier, more palatable forms, absorb the information I was producing, come to think of it as their own, and reproduce it after following up and trying to explain it. Thus getting around the ego problem – people only really being interested in what they think of themselves. After all, aside from patterns I’ve noticed in numbers, where did all my own knowledge come from? From being curious, and learning a little bit here, a little bit there, and having it mix together in my brain until something new came out.
As far as I know this happened just once, when someone told Brian Rosenthal of the NY Times that I knew a great deal about mass transit finance, and I pointed him to a comparative analysis of mass transit finances I had done using data from the National Transit Database. Don’t just read what I wrote and write “Larry Littlefield said,” I told him. Look at the actual data and go back to the original source to make sure I didn’t just make it up. And see if you see anything in it I didn’t. So instead of “Larry Littlefield said” the Times could say “this is the way things really are,” before finding out why. He actually did this.
I hoped at the time that a lightbulb would come on, and journalists covering the city and state would start combing through the data that gets released all the time by major statistical agencies, looking for important trends and conditions to be described and explained. It didn’t happen.
Even so, WordPress tells me that more and more people have been downloading the spreadsheets in recent years, both as they are added, and from the past. Often far more people than the number who are recorded as actually reading the posts. And that’s good.
Why stop now?
Changing personal circumstances have led to a loss of heart and energy. After a long spell of unemployment during the pandemic, I find I am no longer able to ride a bike 8 ½ miles to work, work all day downloading data, analyzing spreadsheets, and writing reports, bike 8 ½ miles home, eat dinner – and then spend free time downloading data, analyzing spreadsheets, and writing reports. I just want to go to sleep.
I had been able to repeat to myself “the journey of 1,000 miles begins with a single step” and start writing. Now I find the single step that I used to take easily has become very hard. Many people started blogging around the same time I did. I think I outlasted most of them.
Nothing new to say.
I’ve tried to put everything I know about state and local government policy, in New York compared with elsewhere, now compared with the past, on the internet. At some point, however, you know so much, and have said so much, that there isn’t going to be much that is new. I long had a set of MS-Word documents, in the upper left and corner of my home computer desktop, with the start of outlines of things that I wanted to write about at some point. That is now empty.
I’m just glad I’m not a professional journalist. I only had to write something when I had something to write.
No confidence I’ll find a better way to say it.
I have to face the reality that my ability to analyze and explain things may have peaked. I was once disappointed to find, having written a new post on a subject, that people were reading an old one from several years before, perhaps directed there by a search engine. Now I wonder if a new post I write might instead make it less likely that someone will read a better one I have already written.
When I started Saying the Unsaid in New York I wasn’t sure if Room Eight would remain on the internet, and created a page of some of the better posts I had written there from 2006 through 2012, in MS-Word format.
Read through these, and the data analysis posts in The Most Recent Public Finance Analyses, Charts and Tables page, and you’ll know most of what I do. Combine that with things learned elsewhere, and perhaps you’ll have a much better idea of what has actually happened that what you are getting. I feel pretty good about what I’ve written over the past five or six years. I don’t think I can top it, or even match it, going forward.
Diminishing confidence in the data.
There is always new information coming out, of course, but some of the data I used to write about routinely is no longer made readily available, or is coming out with big errors – generally only for New York City, in ways that makes New York’s state and local government appear to be less of an extreme case.
I worry about falsification. I never wrote much about the federal government, but I did once compile and write about long term trends in federal revenues, expenditures and debt every four years. Somehow, however, during 2020 I didn’t feel like downloading that data from Whitehouse.gov. With the spread of fascist-like autocracy around the world, this seems to be a global trend.
In a modern economy there is no substitute for high-quality national data-gathering. The sunlight provided by accurate figures is often unwelcome for an increasingly autocratic government: transparency invites accountability. But neglect of the statistical services also leaves Indian policymakers flailing in the dark, unable to quickly spot and respond to brewing economic and social problems. ■
In the U.S., it used to be the Republicans who wanted to suppress data and de-fund statistical agencies, often using “privacy” as an excuse — even as private companies created increasingly detailed dossiers on every one of us with neither compensation nor permission. After the wave of retroactive pension increases and underfunding led to soaring public employee pension costs, and given soaring Medicaid costs, however, not wanting too much “uncurated” information available to those who could not be relied upon to provide the “correct” interpretation – and none of the back-up – has become bi-partisan. We have passed the point of peak transparency in the United States.
And so data that was once readily available in easy to analyze form has been only put out in raw form, if at all. Forcing me to do more and more work to compile it.
One example is the DAC-REX files that the Governments Division of the U.S. Census Bureau once put out – spreadsheets with state level data on state and local government finances with every data item for every available year starting in 1972. That data could be adjusted for inflation for a trend in per capita spending or revenue by category, or divided by the personal income of each state. The Census Bureau stopped putting those files out after FY 2008. But I have spent many, many hours painstakingly updating them through FY 2019.
These files, up to 7.2MB, are too large to upload to this site. But I loaded them on Google Drive and there is a link to them in the THE MOST RECENT PUBLIC FINANCE ANALYSES, CHARTS AND TABLES page – for anyone’s use.
Even if decent data continues to be compiled and published – not something to be taken for granted with Generation Greed still in charge – the past few COVID years are not representative of where things may be going in the long run – my main interest. Since good data lags, it may be 2024 before new data I’d want to write about becomes available. That’s too a long span to try to cover with Old Man Yells at (the) Cloud posts.
There is ever more tribalism, allowing Generation Greed to limit public discussion to its culture war issues.
The Supreme Court has done Democrats and their special interests, Republicans and their special interests, and Generation Greed –a big favor with their recent decisions on culture war issues such as abortion and guns. They were starting to struggle to come up with culture war issues to change the subject to – having politics and news coverage be exclusively about where the transgendered go to the bathroom was a bit of a stretch. Now it will be easier. And yes, keeping the reality of Generation Greed, and the executive/financial class and political/union class vs. the serfs, under Omerta is what the culture wars are really about.
Congressman Zeldin and Governor Hochul are now in a narrative war, and whoever wins it will win the election,” political consultant Bill O’Reilly told The Post in a text.
“To Zeldin, this race is about inflation, taxes, and crime. To Hochul, it’s about abortion, guns, and January 6. That’s all we’re going to be hearing from the candidates for the next four months.”
You bet the party of Anthony Weiner and the party of Roger Stone want to control the narrative. So they don’t have to talk about how O’Reilly’s generation inherited a country that had been built up and improved, in prosperity, power and fairness, over many generations – and cashed it in.
Or why it is that New Yorkers find their public services inadequate and the needs of the poor unmet, despite the nation’s highest tax burden, and who has benefitted from this.
Or how much of this situation in New York City is not only because money is sucked into the past by those now dead or in Florida, but also to other parts of the state, and other parts of the country.
I hope those who have read this blog will always remember that the falsehoods that are said are the unsophisticated lies, the Fox News and MSNBC-level lies. The sophisticated lies involve the unsaid.
If I was going to succeed in breaking Omerta, it would have happened already.
There is this from the aforementioned David Gergen just this year, putting a little crack in the Omerta, and calling for the Baby Boomers and those older to get out of the way, having failed the country and robbed the future, and allow Millennials and Gen Z to take over and perhaps turn things around.
Gergen later tweeted that Millennials and Gen Z should take over from the Baby Boomers, something that got an immediate reaction.
Generation X was forgotten, again. David Gergen, CNN analyst and adviser to four presidents, tweeted that it was time for Baby Boomers to step aside and let a new generation take the reins of power. But he skipped right over one.
“Baby Boomers have been running the country for nearly three decades. Some successes, a number of disappointments. It is time to pass the baton to younger generations: Millennials and Gen Z.”
Notice what’s missing?
Plenty of people on Twitter did. He completely ignored Generation X ― both in his tweet and during the CNN appearance he promoted.
I’m a late Boomer myself, and late Boomers – born after 1957 – actually share most of the characteristics, and situation during their formative years, with Gen X. So not Generation Greed. Generation Apathy.
We were in high school when the average male wage started to fall, and in college when the Reagan tax cuts first caused the federal debt to soar. We knew we’d be made worse off to pay it back. Then there was the 1982 legislation to raise our payroll taxes, just as we hit the labor force, and cut our future Social Security benefits, less than a decade after benefits had been increased for existing beneficiaries. Two-tier labor contracts, with lower pay and benefits for new hires, were rolling through business and industry at the time.
And our response? “We’re screwed anyway, so we might as well just worry about ourselves.” I’m not paraphrasing here. It is a direct statement I recall from a classmate. One reason Generation Apathy was apathetic is that after a rough start, things turned out OK, at least thus far, for college educated people who entered the labor force in the 1980s. And after a rough start, things turned out OK for graduate school educated people who entered the labor force in the 1990s, the core of Gen X.
And these articulate groups didn’t worry about what was happening to the less well educated – though we will share their fate in old age, as the government goes broke. If the U.S. ever does bite the bullet while it remains an alternative to biting the dust, it is now too late for us to be around to reap the later benefits. We’ll be gone, perhaps quite a few years earlier than those who came before. Meanwhile, among the Millennials even the highly educated are much worse off that those who came before had been at the same point in life.
Former President Barack Obama was born exactly one day after I was. Great! I remember thinking back when he was elected. From now on the leadership will pass to those younger than me, instead of the miserable lot that is older than me. Perhaps the next generation will do better. It can’t do worse.
Obama took office in early 2009. The next President will take office in early 2025 – sixteen years later. Sixteen years! If Generation Apathy was going to push out Generation Greed and start turning things around, that’s when it would have, could have, and probably should have happened. That was our chance.
As it is, Obama turned out to be a very conservative president, keeping us on the downward glide path, making a few tweaks – and running up a lot of debt to protect all existing interests from significant change. In part because that’s what the Baby Boom congress wanted, especially after 2010. Get the government out of my Medicaid! So now, after Generation Apathy, we have generations even more screwed. To misquote JFK, with the same generation still in charge, a new generation has gotten torched.
Back when I was in college, I got started on college radio (WRCU Hamilton) by doing the 11 pm Sunday news. I would introduce my newscast by saying here are things that have already happened and you can no longer do anything about. Another 42 years of such things have been added, and Generation Apathy didn’t do anything about them. Too late now.
And 42 years before that, my parents were born. Back then there was not only no internet, but also no television. Barring disaster – the wolf at the door – things don’t change that much day to day, or year to year. But look back further, as far back as there is reasonably comparable data – or data that could be made reasonably comparable – and you see that big changes have happened. And probably will happen again, if not in my lifetime, then in my children’s lifetime. Direction uncertain, but it doesn’t look good.
But no one seems to compile and report that long term data, to see the massive things that are actually happening that don’t involve things celebrities are saying, and narratives various tribes among Generation Greed are pushing.
Now another century gone. What are we going to leave for the young? What we couldn’t do, or what we wouldn’t do. It’s a crime, but does it matter? Does it matter much? Does it matter much to you? Does it ever really matter? Yes it really really matters.
Is there nothing we can say or do? Blame the future on the past, always lost in blood and guts, and when they’ve gone, it’s me and you.
I may be a member of Generation Apathy, but after blogging for 16 years you can’t say I’m apathetic. But I am burned out.
I will do a couple of things. I’ll turn on two factor authentication. I was reluctant to do so because at some point my old flip phone will stop working, I’d lose control of its number, and be locked out of my own blog. That’s OK now.
And I’ll see if I can take some counter-party risk and pay up to keep those annoying ads – about toe fungus and rectal issues – off the site for at least a few years. I actually believe the ads are phony, meant to embarrass people into paying for WordPress instead of using it for free. In my case, once they were pointed out to me, it worked like a charm. I get the sense that quite a few people are reading what I write on mirror sites somewhere. If you are seeing ads you aren’t reading my blog directly. I have paid — through February 2028.
So how shall I end this? Perhaps by linking to a video by the Saw Doctors, led by Davy Carton (born 1959) and Leo Moran (born 1964), my late boomer contemporaries, who created so many great songs and should have been better known. Here is one about being depressed that the community is going to hell (in their case because their hometown sugar beet industry was failing). But somehow holding out hope, like David Gergen, that despite the accumulated thicket of privileges, favors, deals, and deficiencies, the next generation can still control its own destiny and turn things around.
But the kids have dreams, brand new dreams, they’re in control of a bright new future, the kids have dreams.
Yup, dreams like crypto, internet sports betting, internet porn, vaping, extremely potent marijuana, and in the end – fentanyl. Sorry kids, I did what I could. Goodbye, and good luck.
When it comes to state and local government in New York, the primary subject of this blog, it is now reasonable to be unreasonable. Because after decades of being reasonable and fair minded, willing to pay more in taxes and accept less in services while being supportive of the “heroes,” we find that we have been […]
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When it comes to state and local government in New York, the primary subject of this blog, it is now reasonable to be unreasonable. Because after decades of being reasonable and fair minded, willing to pay more in taxes and accept less in services while being supportive of the “heroes,” we find that we have been robbed and robbed and robbed. Things have gone so far that demanding more, and demanding that we pay less, including a demand that the State of New York, City of New York, and related agencies declare bankruptcy — and shirk their obligations to those who have shirked their obligations to us — is now a fair-minded thing to so. And the reverse – expecting that we’ll be forced to pay and pay and pay even more, while getting less and less and less in exchange, and be required to provide what used to be public services for ourselves, bike riding instead of transit, homeschooling co-ops instead of schools, neighborhood watches instead of police – is now the sensible thing for those who choose to live here.
On the other hand, with regard to the current whining about inflation, in general and with regard to specific goods and services, and decreasing asset prices, I have the opposite attitude. What seems to be happening is that those who benefitted from their own past inflation, for decades, at the expense of those (people, groups of people, generations, industries) left poorer and facing personal deflation, now find that the serfs, and the lowest-wage workers in particular, have briefly gotten a little more at their expense. And demand that something be done – by force through the government, rather than through voluntary action by themselves in the marketplace — to restore the natural order of things.
Question: did the super-rich, today’s seniors – the richest in history, those working in industries that have been raising prices far faster than the average for decades, existing homeowners that bought their houses decades ago at far lower prices, and the political/union class in places such as New York, ever, during the past four decades, really concern themselves with those who have been facing personal deflation to offset their own personal inflation? Those who were being left further behind so those cutting the deals could get further ahead? The average later-born worker, and the lowest wage workers in particular, have been falling behind overall inflation, compared with those at the top and the generations that preceded them, for decades. Yet only now, when the self-dealing winners of the past four decades are paying more, that is a national crisis that requires drastic measures? And if an economic era is now ending, is that really a bad thing? Bad for whom?
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There is so much whining going on, and being amplified by the media with no perspective at all, I thought that someone ought to at least offer a corrective. To start with:
Oh no, stock prices are falling!
That’s because they were too high to begin with.
Artificially inflated by decades of federal policy to bail out existing asset holders very time the stock market went down or a financial crisis threatened to erupt. This was described as “saving the economy,” but mostly benefitted those existing asset holders – the rich and richer earlier born generations. While dooming young savers, seeking to save and invest for their own futures, to lousy or even negative future returns. Income redistribution on a massive scale. Did those who seemed to have a de-facto guarantee of higher stock prices for when they sold ever worry about the effect on later-born buyers? Nope! High stock and bond prices are good, the media said. Sure, good for those who have them already, and good for sellers. Not for buyers.
I’ve written about this in the past, but in the event that anyone believes that I lack financial bona fides, here is the same explanation from someone else.
There are two sources of return on an investment: income and capital gain. The income on, for instance, a government bond is the interest (or “coupon”) paid once or twice a year. Bond prices and yields move inversely. So when interest rates fall, as they did for much of the past four decades, bond investors enjoy a capital gain.
In essence a capital gain of this kind brings forward future returns. You get the income now you were going to get later. But as yields fall ever lower the scope for further capital gains becomes more limited. So low yields imply low expected returns. This bond-like logic holds for other assets—equities, property, private equity and so on. Dividend and rental yields have fallen in response to the secular fall in interest rates. Owners of all kinds of assets have experienced windfall gains. But today’s low yields imply low expected returns in the future.
That’s what young savers who invest in stocks or bonds or anything else today will get, because they are being forced to pay more for assets than their future income is worth. What will happen in the future, when those who benefitted from this are gone – or perhaps now?
Low expected returns can materialise through either “slow” or “fast” pain. In the slow-pain scenario, assets remain expensive and investors receive desultory bond coupons, equity dividends and rental receipts for years on end. In the fast-pain scenario yields revert to their higher historical averages. This implies a spell of brutal capital losses followed by fairer returns thereafter. The choice is between well-heeled stagnation and a crash.
Long time readers of this blog and its Room Eight predecessor know which one I’d prefer. I said “let it burn” in 2000, I said “let it burn” in 2008, I said “let it burn” in 2020, and I say “let it burn” now – and would hope that this time asset prices stay at a level that provides fairer returns thereafter instead of another government bailout keeping asset prices inflated. Here is a screenshot of a chart of the historic dividend yield for the S&P 500.
Buy stocks today, after all those recent declines from the absurd highs, and how much would you, as a saver, get in dividends as a percent of your investment? Just 1.58%, meaning the value of your savings would decrease by 6.0% or so compared with inflation current inflation. What about stock buybacks? Those are used to offset the stock and options that those controlling American businesses issue to one another, transferring wealth to themselves from everyone else. How much would stock prices have to fall (assuming no change in dividends) for the dividend yield to rise to the historic median of 4.23%. They’d have to fall approximately 64% — well more than half.
To this add the impact of demographics. Baby Boomers own all the stocks. What happens when they start selling, net, to finance their retirement? They have left the generations behind them poorer, and those poorer generations can’t afford to pay as much as the earlier born generations expect to get.
I’m tired of the media describing soaring stock prices as good, and falling stock prices as bad. Good and bad for whom?
Oh no, house prices are going down!
Perhaps, like stock prices, they were too high to start with.
Intentionally kept high compared with the past to benefit senior citizen homeowners (who got to buy at lower prices as young adults) and the financial sector, which holds the mortgages, to the detriment of young adults who might aspire to become homeowners themselves.
For well more than a decade the federal government has done everything it could to re-inflate housing costs – to avoid losses on the massive debts run up against houses during the 2000s housing bubble. Allowing banks to sit on millions of homes to the point where they deteriorated and were abandoned, to inflate the value of millions of other homes to the point that private equity firms were willing to buy them up. Increasing the share of income that could be used to pay for debts to as high as 50%, so that Millennials could borrow and pay more, and therefore would be forced to outbid each other and borrow and pay more, for Generation Greed’s houses.
But during the pandemic many gave in, and house prices truly exploded. Making a crash almost inevitable. So what is our geriocracy going to do now? Force those with massive mortgages to keep paying 50% of their incomes for debt, so the financial sector doesn’t take losses, by prohibiting the discharge of mortgage debt in bankruptcy – as was done for student loan debt? Take additional action to try to push the price of houses to new highs? After all, a generation that didn’t save is counting on inflated house prices to fund their retirement.
The Boomers may not start selling until they start dying. Perhaps that’s why there are so few houses for sale – too few empty nesters are willing to downsize. But all those houses are going to hit the market eventually. The later born can follow the propaganda and overpay now, or hold out.
Oh no, food prices are going up!
Perhaps they were also too low to start with, after getting cheaper for decades.
Not in terms of what is paid, but in terms of how much of what is paid is food, as more and more of the food dollar goes to packaging and preparation, and less and less to the farm.
Yes, I’m concerned about food scarcity in the developing world. In fact, I have been since my formative years in the 1970s, when we last had soaring food prices and widespread famine in places where war was not the cause. My own food choices during my entire life have reflected that concern. But here in the United States we throw a lot of perfectly good food away, have lost the cultural skill to efficiently buy, prepare and fully use our food without wasting it, and eat way too much meat, something that is bad for the economy, budget and health.
Around the world, grain production went up by 17% in the 2010s, exceeding population growth by six percentage points. Consumption per person, however, remained flat, even as many went hungry.
Instead, the extra grain was put to other uses. Nearly one-tenth was converted into biofuel, which is used mainly to power cars. But the lion’s share went to animals. In 2019 pigs ate 431m tonnes of grain, 45% more than the people of China did, according to our calculations. Overall, from 2010 to 2019 the amount of grain used for animal feed rose from 770m tonnes per year to 987m, as the world’s pasturelands shrank and appetite for meat grew.
Some grain by-products, such as maize husks, are unsuitable for human food. And feeding grain to animals does generate food for people indirectly, in the form of milk, meat and eggs. However, this process is highly wasteful. For every 100 calories of grain fed to a cow, just three emerge as beef. Along with other feed crops and pasture, rearing animals also uses land that could produce human food.
I’m not a vegetarian, because some meat is healthy, and there is lots of land that could be used for pasture that is unsuitable for the plow. But that land isn’t going to produce enough meat for every American to continue eating as much meat as they have been – let alone everyone else in the world.
Moreover, part of our cheap food has been made possible by unsustainable and environmentally destructive but temporarily cheap and effective farming methods. One reason food prices are going up is because the price of artificial, fossil fuel-based fertilizer is going up. You’d think our biotechnology industry could figure out a way to use less.
Then there are the low wages for food producers in rural America. Did those enjoying the cheap food ever consider what that meant for those communities, where people were struggling to buy things from those getting paid more while getting paid less, relative to overall inflation, themselves? Consider this map of 2010 to 2020 population growth, and see the widespread decline of rural America.
Only tourist and second home counties are not losing population. Since my children attended the same Upstate NY college my wife and I had 30 years earlier, I ended up riding on the same roads through the same communities, and saw the decline first hand.
My view – Americans should stop whining about prices, and start eating more non-meat foods cooked from scratch, and throwing less food away.
Oh no, energy prices are going up!
Maybe they were too low to start with.
And because they were low, the American lifestyle and landscape were transformed in ways that force people to use lots of energy just to live decently. Places where one has to drive a motor vehicle to go anywhere and do anything. Where not only the motor vehicles, but also the houses, are larger and larger and larger even as the number of people in them is, on average, smaller and smaller. Americans can’t afford cars and houses, but somehow we have 276 million motor vehicles for 267 million people age 16+, and also far more bedrooms than people.
With regard to the cost of energy, Americans have put a gun to their own heads with their own choices, and are now blaming everyone else for the consequences.
When it comes to commodities, “the cure for high prices is high prices.”
People are apparently finding ways to drive less — for example trimming or consolidating trips to run errands, limiting the number of days they go to newly reopened offices or turning to public transit.
There is enough pent-up demand for vacations that it’s not clear many people are willing to forgo long-planned trips to avoid $5 gas. But the end of this summer’s travel season could result in an even bigger drop in demand for gas come fall, and an even bigger drop in prices. US gasoline consumption — and prices — typically decline steadily in the fall and early winter.
They may be finding ways, but they are still stuck with gas guzzling SUVs, and oversized McMansions in low density areas where they have a significant drive to get to anything. That doesn’t change overnight. We have had nearly five decades since the 1973 Arab Oil Embargo threw the U.S. into recession. Generation Greed, always putting its own short term wants first, felt those to be needs, and wasted those decades.
Increasing energy supply, especially enough to rebalance markets, will be difficult. It would take many months, maybe years, to significantly increase US refinery capacity to match where it was before the pandemic. And oil companies seem committed to not flooding the market with oil, which could drive down prices. Instead, oil companies are using their windfall profits to increase share repurchases or dividends and help boost their stock prices.
That’s because they know that if they invest a lot of money, the price of energy could plunge and they would lose that money. OPEC (and Russia) have slashed the price of oil over and over again, every time people started to conserve, switch to alternatives, and produce more fossil fuels in the United States, to keep the world dependent on them. And yet every time they have done so Americans (and Europeans) went with the cheap and easy, and increased that dependence.
People seem to have forgotten that just two years ago the price of oil was negative – since you couldn’t just dump it somewhere thanks to environmental laws, if you were stuck with it you had to pay someone to take it. That’s why there isn’t enough oil and gas being produced today, not the reasons they are telling you.
If everyone knew that prices were going to stay high, on the other hand, then it would make sense for consumers and businesses to start to make the kind of changes that should have been made decades ago, for economic and national security reasons even before anyone even heard of global warming. Imagine if the inflation-adjusted price of gasoline had stayed where it was in 1981, because public policy kept it there.
We wouldn’t be so supine and dependent and feckless and facing recession today. We are in this situation because of Generation Greed’s four-decade party, a party to which most of those coming after are not invited to.
So today, if over the next 30 years you want to get rid of $5.00 per gallon gasoline, and its natural gas and electricity equivalents, pass a law that guarantees at least $3.80 per gallon gasoline, and the equivalent for natural gas and fossil fuel-produced electricity, inflation-adjusted. Then producers would know they could invest, and consumers would have an incentive to save and switch to alternatives. And since the price of imports would be no different than the price of domestic, our remaining fossil fuel consumption as we transition to other sources – and that of Europe – could be produced right here in the U.S.A.
Oh no, overall inflation is too high!
Or perhaps the real issue is that it is now high in categories where privileged people are used to it being low – while benefitting from high inflation in what they themselves get.
Consider this chart of the average annual increase in prices by type of good or service from 1993 to 2020 (April data) and then from 2020 to 2022.
The average annual increase from 1993 to 2020 was 2.2%. Low inflation. But the average increase for personal care was 2.0%, and the average for recreation was 1.1%, meaning those who work in those industries were gradually falling behind. Food away from home went up in cost by 2.7% per year, but work that had previously been done only by teenagers has instead come to be a “career” for adults. These are industries were low-wage workers work. The price increases for these sectors were higher from 2020 to 2022, but so was overall inflation, so they are still falling behind – the natural order of things.
But take a look at health care and education, particularly college tuition. The price of these services went up much faster than overall inflation from 1993 to 2020, with health care up 3.6% per year on average, education up 4.8%, and college tuition and fees up 5.1%. These services were becoming more and more expensive, but for those who worked in those industries, what they bought from others was getting relatively cheaper and cheaper. Since much of the money for education and health care comes from the government, directly or indirectly, they never had to worry about whether their customers could actually afford what they were charging.
In fact, add shelter to that, another service that went up by more than inflation. Education, health care, and housing are the three industries most affected by public policy, and most likely to be financed through debt, public or private. And lo and behold, these sectors increased their prices faster than the average for nearly three decades – and longer.
And now? Note the health care and education inflation has actually gone down the past two years. So perhaps these politically active and influential industries, and those who work in them, are feeling the pain they have been imposing on everyone else for decades. Their inflation had been high all along, but has slowed as that of other industries has increased.
The cost of private transportation went up just 1.7% per year from 1993 to 2020, less than overall inflation, as gas was mostly cheap, and the vehicles themselves got bigger and bigger. Now it has soared 17.4% per year for two years. Again, this is mostly about people putting guns to their own heads. Instead of just paying up, even those in the suburbs could start carpooling, or buy an e-bike instead of another SUV. Yes, they’d have to buy some clothing for inclement weather to go with it, but the best models are less than $2,000, offer the option of also getting some exercise (or not), go up to 25 miles per hour, and go up to 30 miles on a single charge. For most trips it is the only type of transportation required, and it is an option that didn’t really exist 20 years ago.
Meanwhile, what about “seniors on fixed incomes,” another loud and self-interested group. Aren’t they hurt by overall inflation? Only affluent seniors, because unlike at the start of the 1970s, Social Security is automatically adjusted upward for inflation. Low- and moderate-income seniors remain better off that low-, moderate-, middle- and recently even upper middle-income workers in that regard. Many seniors are homeowners, with their house price locked in from when they bought long ago. Health care costs were soaring until a couple of years ago, but the government paid most of them for seniors through Medicaid and Medicare. Otherwise? With COVID, they probably don’t need to taking three cruises this year anyway.
For the limited types of people who had been getting richer relative to overall inflation, the complaints about falling behind for two years come down to…
Oh no, the pay of low wage workers is going up!
Yes, that is actually the attitude in Washington and on Wall Street right now. Rising wages for low wage workers threatens to increase the cost of services for the retired and the better off, and/or reduce margins and make it more embarrassing for top executives to pay each other so much, and thus action must be taken to force unemployment up, and make workers settle for less.
Summers said in a speech on Monday from London that there needs to be a lasting period of higher unemployment to contain inflation — a one-year spike to 10%, two years of 7.5% unemployment or five years of 6% unemployment. Put a different way, Summers is calling for the unemployed rolls to swell to roughly 16 million from just under 6 million in May.
Is their any better exemplar of Baby Boomer yuppie liberalism than Larry Summers?
The fact that prices are going up means there aren’t enough goods and services to go around. How does rising unemployment, meaning even less in goods and services produced, solve that problem? Perhaps because if there isn’t enough to go around, someone is going to have to settle for less. Who should that be? Seniors? $billionaires? Unionized public employees and retirees? Those who work in the health and education sectors?
How about low-wage workers? That is the “progressive” solution, and the “conservative” solution. It has been for 40 years.
You know what the supposed problem with Biden’s stimulus really is? It was too broadly distributed. For decades, every time the government printed up a bunch of money and handed it out, through tax cuts or the Fed, it all ended up in the hands of those at the top, causing asset price inflation – stocks, houses, bonds. That somehow didn’t count. This time more went to those at the bottom, leading to inflation in the cost of the goods services instead. This is somehow considered worse.
Meanwhile, the federal minimum wage is $7.25. It was $2.64 when I earned it in 1977 – or $12.76 in today’s dollars, adjusted for inflation. Back then the federal government sought to push up the wages of those at the bottom, compared with what might happen in an unfettered free market. And today, now that Generation Greed is increasingly out of the labor market? I guess too many workers are getting wages in excess of the minimum for free market reasons, so Generation Greed demands government action to force wages down. It’s like something out of the middle ages.
Sorry to tell you, but because of falling birth rates and more and more Baby Boomers moving into retirement, labor scarcity is permanent. It has nothing to do with Millennials not being willing to work, the stimulus package, the Great Resignation, and extended unemployment benefits. And everything to do with more and more seniors who still want to buy goods and services, but no longer produce them. We had a big labor surplus for years, as the very large Baby Boom generation was still in the labor force, more and more Millennials, another big generation, were trying to get in, and lots of immigration on top of that. But now more and more Baby Boomers are leaving the workforce due to age, the generation entering behind the Millennials is smaller, and immigration is more limited and more contentious.
The last time labor was scarce was in the 1960s, before the large Baby Boom generation reached working age in large numbers – and the median male wage started falling (in 1973). Back then people didn’t expect that someone would be available for cheap to clean their houses, mow their lawns, clean their pool, cook their dinners, watch their kids, etc. etc. Back then, the plunging share of the workforce employed as domestic servants was thought to be an indicator of economic progress – because workers had better options. Eating out was a rare treat, and the much smaller fast food industry relied on teenagers – who found it much easier to get part time jobs doing work that is now done by adults. Today, with fewer workers, there is some work that isn’t worth doing anymore, so that other work can get done. So get used to consuming less in services, paying more for them, and doing more for yourself.
Reluctant to raise prices, refusing to sacrifice profits, travel companies, retailers and restaurateurs are cutting corners wherever they can, usually without telling their customers. Is poor quality the new normal?
Did your flight get cancelled in the school holidays? Has the delivery of your new sofa been delayed? Was your last meal out disappointing? Are your new socks see-through? Are you reading this while you are on hold to customer services? Does everything feel just a little bit worse?
Welcome to “skimpflation” – a term popularised in the US and gaining traction in the UK. “Skimpflation is when consumers are getting less for their money,” says Alan Cole, a writer at Full Stack Economics and formerly a senior economist at the joint economic committee of the US Congress. “Unlike typical inflation, where they’re paying more for the same goods, skimpflation is when they’re paying the same for something that worsened in quality.”
There is an alternative. If the executive/financial class still wants people to buy their goods and services, how about cutting executive pay and using the savings to keep quality up, or maintain or increase cash dividends for investors? That is possible, isn’t it? I remember when executive pay first started to explode, in the late 1990s stock market bubble. It wasn’t a concern, it was said at the time, because executive pay was only a tiny component of total costs. But that isn’t true anymore here in the U.S. The C-suiters do have the power to reduce inflation and worker pay by starting with themselves.
Oh no, supply chains are disrupted!
Or perhaps people have been buying too much cheap imported crap, rather than keeping stuff longer and fixing it.
For decades, earlier born generations and the wealthy have seen their own dollars go farther, because large companies like Amazon and Walmart substituted cheap stuff made by the very abundant very low wage workers in the developing world, in place of more expensive stuff produced by better paid Americans (who ended up not being better paid anymore). But with COVID-19, supply chains have been disrupted, China isn’t producing as much cheap stuff anymore, and what is available is having trouble getting to store shelves, because there aren’t enough truck drivers (a formerly high-paid job that became low-paid).
Consider that CPI chart again. See how cheap clothing has gotten, compared with the overall value of the dollar? What has been the result? A faster and faster trip from the store shelf to the landfill. A mass consumption party in which the future of the United States has been mortgaged so people could buy so much unnecessary junk that they later have to pay other people to get rid of it.
Buying those unused items is all that has given meaning to many people’s lives.
And consider that population change map again. By the early 1980s manufacturing had displaced agriculture as the biggest employer in rural America, but those rural manufacturing jobs have been displaced by imports.
I’m sorry to tell you that the increase in the price of imports is going to outlast “supply chain issues.” Birth rates are falling elsewhere in the world too, other countries are aging, and the number of desperate workers available at ultra-low low wages is going to go down.
On November 24th India’s government declared that the country’s fertility rate had dropped to 2.0 children per woman. That is below the replacement rate—at which new births are sufficient to maintain a steady population—and puts India in the company of many richer economies. Indeed, fertility rates are now below replacement level in all four “bric” countries (Brazil, Russia, India and China), with the population probably falling in Russia and China. It is no surprise that emerging economies should follow a demographic trajectory similar to that travelled by rich economies before them. But the pace of change seems to be accelerating, with potentially profound implications for the global economy.
Even as rising living standards elsewhere means they are going want to keep more of what they produce themselves. You think inflation is bad now? Imagine if, due to our approaching bankruptcy, the dollar was falling instead of rising – making the imports we now depend on even more expensive instead of cheaper. That is bound to happen sooner or later, perhaps with a bang as the dollar ceases to be the global reserve currency.
I’m not against free trade. I’m in favor of it, but only if imports are paid for with exports, not with debt. Thanks to 40 years of unbalanced trade, our grandchildren will be paying for stuff that’s already in the landfill.
And now that aging developing countries may not be producing that surplus anymore, they’ll be calling for Americans to consume less than they produce, to pay them back. Later-born Americans who never benefitted from importing more than was exported. Some of the goods that have imported for the past 20 years will either have to be made domestically somehow, or done without, so the U.S. can have enough exports to pay for imports that are really worth it.
The last time the global economy shifted, importers like Amazon and Wal-Mart replaced others major retailers that had business relationships with domestic suppliers. I only hope that, starting now, these companies and their networks will in turn be replaced by new companies networks that create a more balanced – and sustainable – global economy. Stop whining, and stop buying.
Oh No, Apps and Airfare Aren’t Cheap Anymore!
In addition to low wages for later-born American workers, and even lower wages for workers in the developing world, the fantasy economy of excess consumption financed by debt was also supported by investors willing to lose money, or who at least assumed the federal government would bail them out so they wouldn’t lose money.
For the past decade, people like me—youngish, urbanish, professionalish—got a sweetheart deal from Uber, the Uber-for-X clones, and that whole mosaic of urban amenities in travel, delivery, food, and retail that vaguely pretended to be tech companies. Almost each time you or I ordered a pizza or hailed a taxi, the company behind that app lost money. In effect, these start-ups, backed by venture capital, were paying us, the consumers, to buy their products.
Part of this was low wages.
The old ways were made possible by an era of lower demand and weaker labor markets, which was not a winning combination for most workers. Many people drove an Uber or delivered Thai food because they didn’t have competing job offers that would clearly pay more per week. Today, job openings are historically plentiful and nominal wages are rising fastest for low-income workers. That virtuous adjustment has shown up in higher Uber and DoorDash prices.
But that wasn’t all of it.
Rising interest rates turned off the spigot for money-losing start-ups, which, combined with energy inflation and rising wages for low-income workers, has forced Uber, Lyft, and all the rest to make their services more expensive. Meanwhile, global supply chains haven’t been able to keep up with domestic consumer demand, which means delivery times for major items like furniture and kitchen equipment have bloomed from “three to five days” to “sometime between this fall and the heat death of the universe.” That means higher prices, higher margins, fewer discounts, and longer wait times for a microgeneration of yuppies used to low prices and instant deliveries. The golden age of bougie on-demand urban-tech discounting has come to a close.
So walk to the store, ride a bike, or take the subway – at least until subway service completely collapses again. If it’s too much to pay, don’t pay it.
Many people were very, very poor in the early 1960s “heyday” of the United States. Much poorer, in terms of goods and services they could buy, than poor Americans today. But the American middle class felt it had it pretty good, in their little houses, with one car per family, etc. What do people expect to have now that they didn’t have then? Is it necessary? A lot of it is worth it. But a lot of it isn’t. It’s just what Americans have been sold that they could no longer afford. Marketers and influencers are constantly pushing for an increase in what people have to spend in order to be happy, whether it makes sense or not. And now they can’t even deliver what people cannot afford. Welcome to the Fyre Festival economy!
When it comes to investors losing money and government bailouts, there is no industry like the airline industry. Post-1980 de-regulation a formerly overpaid industry became underpaid, companies went bankrupt over and over – wiping out the shareholders who paid for the airplanes, there were government bailouts, and fuel was cheap – and untaxed. As a result of cheap labor, capital and fuel, the real cost of air transportation plunged, and we were now free to move about the country. Close-by vacation destinations – such as Upstate NY for NYC and Michigan for the Midwest – went into decline, as ordinary people flew to Florida, the Caribbean, Europe, etc.
This was never sustainable. And it has now collapsed, despite the airline industry getting vastly more bailout than the motorcoach industry or Amtrak. So the kind of places, and ways to get there, that we used to have 50 or 60 years ago will have to be recreated. It will be different. It will not be worse.
Oh no, the pay of unionized public employees is too low!
That’s what’s coming next. Based on what has already happened in the UK.
The underlying problem is that high inflation is eating into people’s income. In May prices rose at an annual rate of 9.1%, the highest level since 1982 and much more than was expected when the government set departmental budgets last October. The Bank of England expects the inflation rate to hit double digits later in the year.
That has made conflict over wages all but inevitable. Public-sector employees want their pay to keep pace with rising prices: one teachers’ union is demanding a 12% pay award, for example, against a government suggestion of 3%. But each one-percentage-point increase in the wage bill would cost the government around £2.4bn ($2.9bn), or 0.1% of gdp. That would require offsetting spending cuts, higher taxes or more borrowing.
Again, the question is whose “inflation” gets to be higher? Who “gets ahead” in buying power, by making others fall behind and ends up poorer?
Next April the state pension will rise by at least September’s rate of inflation—why should public-sector employees not be afforded the same protection as pensioners?
What about low-wage private-sector serfs?
According to Ben Zaranko of the Institute for Fiscal Studies, a think-tank, average pay in the public sector is still higher than in the private sector but the gap between the two has narrowed significantly… Indeed, if you adjust for differences in the two workforces for factors like age and education, the premium disappeared altogether in 2021-22, although this does not account for relatively generous public-sector pensions.
Maybe in places such as Arizona, Texas and Florida, where public employees have not fared that much better than the serfs. But certainly not in New York, where mean public sector compensation (including benefits) has soared relative to private sector compensation.
And our taxes have been higher and services worse to pay for it. New York’s taxpayers and service recipients have been facing the kind of rising costs and diminished services people are now complaining about in the private sector, for more than two decades.
And not for the first time. I showed how our state and local government employees grabbed, grabbed, grabbed so much in the 1960s and early 1970s that New York State and New York City nearly collapsed. They were only saved by high inflation, which allowed everything else to catch up.
And yet who will be described as the “truly needy,” whom everyone else will be expected to sacrifice even more to “keep our promises?” Will it be even higher taxes in New York, or more of the public sector equivalent of “skimpflation?”
Get ready for the excuses – COVID-19, the Republicans, the Congress, the Russians. Get ready for the abortion rights tax increase, and the gun law pension increases, the “Wall Street stole out money” service cuts, the poor left to die on city streets and the “progressives” flee to the suburbs. The media will report what the press releases say, but just look to the long term and realize – there is no excuse.
In summary…
We have had an era of inflating asset prices, including inflating house prices, inflating executive pay, inflating education and health care costs, and inflating public sector compensation compared with private sector compensation. No one complained about that inflation. It was an era of cheap and available servants for the upper middle class, cheap goods imported from the developing world, cheap services produced by less and less well-paid serfs, and cheap borrowing to pay for it all.
Now some of this seems to be unraveling, and everyone is shocked.
In a paper published in May, Jeremy Rudd of the Fed made a provocative point: “Our understanding of how the economy works—as well as our ability to predict the effects of shocks and policy actions—is in my view no better today than it was in the 1960s.”
Or worse, because back then decisions made in Washington for the United States could set the course for the U.S. and world economy. Today, the U.S. is a smaller part of a bigger world, albeit still a bigger part of that bigger world than any other individual country. Chinese demographics and Russian militarism can change our situation. But people can also change their own situation. They should focus on that, rather than expecting the government to bail out choices they have made and refuse to change. What do they think they are, Wall Street banks?
In any event, I won’t be disappointed to see some of this go away, because in the end it was neither sustainable or healthy. The consequences of a society and economy of self-indulgence are shown by an average U.S. life expectancy that fell for three years in a row before COVID-19 even hit, as a result of the higher death rate for the later-born – including all those born after 1957 or so.
Note the date on the article – December 3, 2018, pre-COVID-19. The most significant news of this century so far, and it is a marker of societal failure, not success. Getting back to the economy and social norms that produced that by further mortgaging the common future is not something I think is worthwhile, no matter how much privileged people whine about falling asset prices and inflation.
It started after the 2008 Great Financial Crisis. During that frenzied time, as asset markets collapsed, the bank cut interest rates to near-zero and turned real rates negative. It justified the action by saying, first, it had to prevent a collapse of the financial system and, second, it wanted to spur an economic recovery. The ultimate effect was that it made the rich richer and the poor poorer.
Just why central banks should feel the need to underwrite asset values is itself an interesting question. Nevertheless, the justification of preventing collapse did at least make sense in the context of the crisis. The justification of spurring recovering, on the other hand, always looked flimsy.
Now think about that. If you’re a young graduate entering a job market where real wages are moribund because productivity growth is so poor, but your rent is rising by double-digits each year, someone telling you that inflation doesn’t matter might seem at best insensitive, at worst hostile. Or even, you might say, a bit like a class warrior. With the bank’s loose monetary policy effectively transferring money from workers to owners, in this case the owners of the houses workers had to buy or rent, it would seem to have been taxing the poor to feed the rich.
A cohort of investors must get to grips with the new regime of higher interest rates and scarcer capital. That will not be easy, but they should take the long view. The new normal has history on its side. It was the era of cheap money that was weird.
Further update: Larry Summers, who called for higher unemployment to push down wages in an article cited in the original post, now calls for another financial sector bailout or else.
The sudden implosion of SVB delivered a deep blow to a sector already reeling from layoffs, falling stock prices and diminishing funding for startups. The bank is most known for its financing in the venture capital community but also serves as a financial supermarket for tech executives, providing mortgages on mansions, personal lines of credit and financing for vineyards.
Summers says it’s not a time for moral-hazard lectures
Summers warned that “one of the mistakes the authorities could make would be — out of a fear of consolidation coming from some kind of populist concern about concentration — blocking combinations that would ultimately operate in the direction of financial stability.”
The Supreme Court, while also having ruled that abortion is up to the states, nonetheless ruled that regulations for carrying firearms are not up the states. Someone other than a complete cynic might had expected a little more consistency one way or the other, though one might say the new inconsistency is a mirror image of […]
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The Supreme Court, while also having ruled that abortion is up to the states, nonetheless ruled that regulations for carrying firearms are not up the states. Someone other than a complete cynic might had expected a little more consistency one way or the other, though one might say the new inconsistency is a mirror image of the old one.
The court seems not to care about the difference between a firearm (or bomb or chemical, biological or nuclear weapon) on one hand, and a knife, sword, club or baseball bat on the other. If someone uses a knife, sword, club or baseball bat to defend themselves – or just swings them around to feel macho and intimidating – they are not likely to kill or injure someone they did not intend. Whereas volley of bullets from a firearm – shot at someone in self-defense, just popped off for the fun of it, or set off by accident — can travel a long distance and strike unintended targets. The likelihood of firearms killing or injuring people those carrying it did not intend, but didn’t really care to avoid, depends on the density of people at a given time and location.
Immediately there has been a reaction that the upper middle class suburbs must be protected. Those who live in private, gated communities, ride in private SUVs to private parking lots at private shopping centers or office parks, and work out at private health and recreation facilities, should be able to do so without fear that some depressed, angry hot head who is locked and loaded (and perhaps also loaded), might get into a dispute and start shooting.
Hochul…said she also wants to “create a system where the default position is for a private business that a concealed carry is not allowed unless they affirmatively offer the right to someone to come in with a concealed carry.”
Or be harassed in other ways. The private property owners, in suburban and Sunbelt America, have a right to set rules. The public in urban America does not.
I have a different suggestion.
X
So-called sensitive places – and times — should be objectively based on the density of bystanders likely to be present.
As it happens, the Census of Population has data on population — and acres — by zip code. That data provides the density of residents. Zip Business Patterns data (part of the County Business Patterns series) has an estimate of the number of private sector workers in each zip code, which could also be divided by Census of Population acres data to get the density of employees.
Five-year American Community Survey data has information on the share of the households in each zip code that have private vehicles available, and the share of the workers in each zip code that use a mode other than driving alone in their own motor vehicles to travel to work. These factors could be used as proxies for the likelihood that residents of a given zip code might be walking on a public sidewalk, spending time in public park, or using public transit – and thus available to absorb stray bullets.
To this could be added an element of time. Perhaps those traveling around New York City after 1 am and before 5 am might have reason to carry a firearm. And perhaps it might be reasonable to limit firearms at Saratoga Raceway during the most highly attended races of the year.
And there you have it – an objective measure of “sensitive” places where there should be stricter requirements as to who should be walking around with loaded semi-automatic rifles with the safety off, pointing them this way and that so that everyone else knows who needs to be respected. And yet one that is the opposite if what our politicians, including those who use their placards to live the suburban life in the city, are likely to give us.
Where does it make sense for the carrying of firearms to be regulated? The places where this is objectively more likely to happen?
They say she was an innocent bystander caught in a hail of bullets in the Bronx. “I know they say when you live by the gun, you die by the gun, but the girl lived by laughs, she lived by love,” Ntim told CBS2’s Aundrea Cline-Thomas.
A 61-year-old woman was killed by a gunshot wound to the back in the Bronx on Monday night. She was walking near East 188th Street and Creston Avenue when a dispute between two groups of men broke out, police said. Multiple guns were pulled out and someone opened fire, striking the woman. The woman was not involved in the dispute and was the victim of a stray bullet. Police described her as a “complete innocent bystander.”
It seems to me that according to the Supreme Court, if two groups of men get into a dispute and shooting breaks out, they are all innocent by reason of self-defense. Except for the person who fired first – if and only if that could be proven beyond a reasonable doubt. Though evidently some Hatfields and McCoys did go to prison. Not sure if that would be true today.
A woman wounded in a shootout near a Bronx baseball game that killed a gunman on a moped was an innocent bystander, police said Monday. At least 20 shots were fired in the gun battle that erupted about 7:40 p.m. Sunday as a baseball game was being played at Bill Rainey Park at Rogers Place and Dawson St., cops said.
An 11-year-old girl became the latest victim of a stray bullet on Monday after she was hit in the stomach by a gunman riding on the back of a scooter through the Bronx. The girl, identified as Kyhara Tay, was just an innocent bystander half a block away when two men drove past on a moped and opened fire at around 5 p.m. Their target was another man they were chasing near Westchester Avenue and Fox Street in the Bronx’s Foxhurst neighborhood, Police said.
A woman who was shot and killed when gunfire erupted on a Brooklyn street Tuesday night was an innocent bystander, law enforcement sources said. Police said it happened just after 8:30 p.m. as the 30-year-old victim was standing at the corner of Georgia and Belmont avenues, in the East New York section. A group of men nearby got into a dispute and at least one person opened fire, an NYPD spokesperson said.
“As alleged in the complaint, Bynum showed no regard for human life when he opened fire in the middle of the day on a group of people standing on Dean Street in Brooklyn, severely wounding a pregnant bystander,” stated United States Attorney Donoghue. “The Eastern District will continue working tirelessly with our local and federal partners to hold violent drug traffickers responsible for their activities that put the entire community in danger.”
Or the places where the people at risk subjectively count for something? Perhaps based on percent with a college degree in Blue States and median household income in Red States.
There is a certain symmetry between this Supreme Court decision and the views of people who now call themselves “progressive.” The view is that public spaces – sidewalks, public parks, subway vehicles and stations – are not shared spaces that belong to all of us, where we all should co-exist under a set of common rules of mutual respect that everyone has to follow. They are the very places where people should be able to do as they please, to satisfy their ego, let loose their Id, or just make some other people feel their pain.
Like aggressive panhandlers, those peddling without permits, those sleeping and excreting in public, drivers in over-powered vehicles going out of control and mounting the curb, and the addicted and the mentally ill seeking to vent and at and terrify someone. The “conservative” Supreme Court seems to have added stray bullets to the “progressive” list of things anyone who dares to spend time in public space outside an SUV should have to put up with. Not long ago, people reacted with outrage at the arrest of an unlicensed vendor in the subway system after several warnings.
My view was that if we want vendors in the subway, using public space for their business, then the MTA should issue permits. Not that we should have a free-for-all. One outraged post was “it’s not just about the churro ladies.” No, it isn’t, the Supreme Court says in concurrence. It’s also about semi-automatic rifles. In Blue States, where we have unreasonable restrictions on what can be done in private space, where you are not allowed to even divide your half-empty (after the kids are gone) suburban house into a two-family home, somehow in “public” space anything goes.
This is the very public policy that is responsible for the fact that just about every public space added south of the Mason-Dixon line since 1970 is in fact a private space, where the freedom from mutual respect and responsibility people enjoy in public spaces does not apply.
According to the Foundation for Community Association Research, approximately 25-27 Percent of the U.S. population live in private communities governed by condominium, cooperative and housing associations.
No one has a constitutional right to walk around with a Streetsweeper there.
One can live one’s entire life in much of the country and never have their feet touch public space. Just their tires. When affluent residents of these areas want to enjoy public spaces without fear for their safety, the jet over to Europe. (Most are smart enough not to go to Latin America, the one place with more violence than the USA). They would never do that here, aside from football games where people are screened with metal detectors.
So, in those places, sure, let people carry all kinds guns into the workplaces they were fired from, the places of business where they didn’t think they were treated right, the high school where they felt bullied, the health club that won’t let them cancel their membership, out in rural and exurban America. The places where the New York State residents who sued to overturn New York’s concealed carry law are from.
Heck, let NYC gangbangers head for such places and have their disputes there, as long was their weapons are unloaded and have the safety on until they are out of the densely populated zip codes people live in to use shared public spaces. And if a bullet goes astray, we can give them tickets just like reckless drivers who kill people. Because, freedom (from responsibility).
Just not in the places where someone shooting off a firearm is objectively more likely to hit a bystander. If nothing else, there should be a hell of a marksmanship test for anyone permitted to carry a concealed weapon there. They should have to get it out and get off 4-5 shots in a couple of seconds, and have every one hit a human sized dummy 15 feet away. While being blasted in the chest by a paint gun. And have none of the bullets hit the human-sized dummies a few feet to either side or behind, even after passing through the actual target. I wonder how many members of the NYPD could pass that test?
census bureau government finances dataeducationlocal government employmentlocal government tax burdennew york city budgetnew york state budgetpublic education spending in 2020School enrollmentTeacher unions
As everyone who has gotten their information from New York’s local media over the past 20 years is aware, the New York City schools and its unionized teachers owe the children of New York City nothing, because the schools are underfunded and understaffed, and teachers unsupported by the rest of us, leading to large class […]
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As everyone who has gotten their information from New York’s local media over the past 20 years is aware, the New York City schools and its unionized teachers owe the children of New York City nothing, because the schools are underfunded and understaffed, and teachers unsupported by the rest of us, leading to large class sizes and teachers leaving for better jobs. There is a constant stream of press releases to this effect, and no elected official seeking to maintain perpetual incumbency dares to contradict it. And those seeking to advocate for more school funding or better conditions for teachers elsewhere would prefer that the New York City public schools not be discussed at all.
So, it has been left to this unpaid avocational blogger to tabulate and publish the readily available data released by the Census Bureau each year on how much New York City schools actually spend, compared with other places and with the past. Since others are paid to not make this information available.
The past two years, years of pandemic, have been unusual and unrepresentative, and perhaps not relevant to any discussion of choices that have been made. Therefore, I’m not going to go into the kind of detailed multi-post comparisons I did last year based on FY 2019 data, and two years before that based on FY 2017 data. But perhaps a simple FY 2020 to FY 2000 comparison will be easier to digest. A discussion of seven nine charts (sorry, can’t help myself), a correlation analysis, and spreadsheets with data for every school district in New York and New Jersey for FY 2020 and for FY 2000 (adjusted for inflation into $2020) follow.
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One could argue that FY 2020 and FY 2021 were the greatest years in the history of the United Federation of Teachers. One of the big productivity gains in education over the past 50 years has involved the increase in the share of families in which all adults work outside the home. The schools, therefore, not only provided education, but also child care as well. During the pandemic, however, that child care was taken away, and the quality of the education fell drastically as well. As millions of private sector workers lost their jobs, however, everyone at the Department of Education kept getting paid, even if there was nothing for them to do.
Now that the children are back, no wonder they resent it. The UFT-backed candidate for Mayor who promised two teachers for every class, so one could move away and in effect retire at age 40 while checking in on Zoom every now and then, didn’t win. But the UFT did order their state legislators to order the City of New York to hire more teachers, even as enrollment falls. Because the campaign-contributing union needs more dues-paying members despite falling enrollment, or else it will continue to provide some of the largest class sizes in the state. We’ll see how many it already had below.
The Census Bureau’s public school finance data has been moved around, and it takes a little work to find it, but it is here.
Those who don’t want to trust my tabulation, and don’t want to bother with checking it against the original data, can download the “Summary Tables” spreadsheet there, or my upload of it here.
The key tabs are 8, “Per Pupil Amounts for Current Spending of Public Elementary-Secondary Schools Systems By State;” 12, “States Ranked According to Relation of Public Elementary-Secondary School System Finance Amounts Per $1,000 of Personal Income,” which adjusts to the cost of living in different states and the ability of their residents to pay for schools; and 18, “Per Pupil Amounts for Current Spending of the 100 Largest School Systems in the United States by Enrollment.” New York City, helpfully, is right at the top.
As usual, I downloaded the “all data items” spreadsheet to get some more detailed information on spending by category. What does it show?
In FY 2020 the average U.S. school spent $15,674 per student, up 29.5% from 20 years earlier after adjustment for inflation. (The median wage of American workers fell during this time). For a fair comparison with the U.S. average and Upstate NY I have, as usual, adjusted spending in New York City, the Downstate NY Suburbs and New Jersey downward for the higher cost of living and average income and pay here. Even with that adjustment, New York City spent $24,707 per student, up 89.2% over two decades (nearly doubling even after adjustment for inflation). NYC spending was 57.6% higher than the U.S. average in FY 2020, even with that downward adjustment, and well above the similarly adjusted averages of $22,489 for the Downstate Suburbs and $20,081 for New Jersey. The Upstate Urban Counties, at $24,007, were at about the same spending level as NYC, and the Upstate Rural counties, at $26,271, were somewhat higher.
Note that by category the big increase in NYC spending per student is in instructional employee benefits, due to the massive 2000 and 2008 retroactive pension increases, and all the other pension increases and early retirement incentives in between– with many of the latter passed back when a “teacher shortage” was being claimed.
On instructional (ie. teacher) wages, salaries and benefits alone, the FY 2020 U.S. average spending was $7,106 per student, up 24.9% from FY 2000 after adjustment for inflation. Even with a downward adjustment, New York City spent $14,260 per student, up 94.8% over two decades (nearly doubling even after adjustment for inflation). That was more than double the U.S. average, despite downward adjustment for NYC, and well above the similarly adjusted averages of $12,979 for the Downstate Suburbs and $9,001 for New Jersey. The Upstate Urban Counties, at $12,635, and the Upstate Rural counties, at $13,521, were also lower than NYC with regard to instructional wages and benefits.
With its massive economies of scale, the New York City public schools were once far below the U.S. average in non-instructional spending per student, if a downward adjustment for the higher cost of living here was applied. Not anymore. The U.S. average was $5,318 per student in FY 2020, up 34.1% from FY 2020 in $2020. The New York City average was a slightly higher $5,372 (adjusted) per student, up 86.3% over 20 years – but still less than the $6,844 (adjusted) for the Downstate Suburbs, the $7,297 for the Upstate Urban Counties, the $7,904 for the Upstate Rural Counties, and the $7,339 (adjusted) for New Jersey.
The horizontal orange line shows how things could have gone differently. Outside NYC, New York’s schools were considered very good in 2000, with funding well above NYC, the U.S. average, or the average of New Jersey, adjusted for inflation and the cost of living. By 2020, the U.S. average had risen to where other parts of NY state were in 2000. If other parts of NY state had stayed the same (adjusted for inflation), NYC and New Jersey had risen to that level, then things might have been fair. Would teachers have fallen behind? Most school spending is on labor, and this was a period in which the cash wages of most U.S. workers were falling behind inflation while many were being turned into gig workers with no benefits.
As it is, all parts of NY State, including NYC, and New Jersey blew past where the portions of NY State outside NYC had been in 2000. Instead of “fiscal equity,” the alleged goal of the Abbot Districts in New Jersey and the Campaign for Fiscal Equity in New York, we got fiscal pillage.
Here is the unadjusted data for New York City, compared with other high cost of living states and areas. In FY 2000, adjusted for inflation into $2020, New York City schools spent $16,878 per student, and owed the children nothing because they were cheated out of $billions. In FY 2020 the NYC schools spent $32,377 per student, and still owed the children nothing because they were cheated out of $billions. Despite that $32,377 per student being far higher than the average of $29,470 for the Downstate Suburbs, the average of $22,058 for New Jersey, the average of $20,529 for Massachusetts, the average of $16,621 for California, the average of $23,163 for Connecticut – and the averages or $24,382, $25,890 and $28,310 for Darien, Westport and Greenwich CT, respectively. Chappaqua was at $34,511, but my hometown of Yonkers was at $24,230.
On instructional wages and benefits alone New York City spent $18,687 per student in FY 2020, which is $373,733 per 20 students. While having, according to recent reports, among the highest classes sizes in the state, because there weren’t enough teachers, and having turnover, because teachers weren’t paid enough. Even so, the horizonal line shows how NYC’s spending per student on instructional wages and benefits compares with other high-cost areas around the Northeast. It is vastly higher. Only New York’s Downstate Suburbs are close.
Data on instructional employment is found in a different data series.
Unlike the education finances data above, which separates them out, “instructional” in this data series includes both teachers and also other pedagogical employees such as administrators and guidance counselors.
The data show that the “understaffed” New York City schools had 7.5 students per instructional employee in 2020, down from 9.1 in 2000. Somehow, I think the average class size was a little higher. The U.S. average was 10.0, down from 11.0. There were also fewer students per instructional employee in New York City than there were, on average, in New Jersey (8.3), Pennsylvania (9.4), California (13.1), Illinois (9.7), and Ohio (10.1), let alone low tax states such as Florida (11.5), Texas (10.0), Colorado (11.2) and Oklahoma (10.5). But the Rest of New York State (6.8), Massachusetts (7.2) Connecticut (7.2) and Vermont (6.8) had even fewer students per instructional employees than NYC.
The 7.5 students per instructional employee for NYC is up from 7.3 when I did the same calculation for FY 2019.
And the number of non-instructional employees is up from 19.5 in 2019 to 22.8 in 2020. Did NYC reduce its headcount slightly relative to the number of students, perhaps because of a hiring freeze or some extra COVID-19-related retirements? Maybe.
For NYC, I also had to take a guess that part time employees were half time, because the Bureau’s “individual unit” employment data for 2020 doesn’t provide part time hours, or full-time equivalent employment, as it does statewide.
In any event, just 7.5 students per instructional employee hardly seems like a shortage of teachers. And yet that’s what we hear in the media. Note the recent state legislation to require New York City to reduce class sizes. The media coverage? Are smaller class sizes good? Hey parents, would you like smaller class sizes? Instead of objecting, Mayor Adams should have demanded answers as to how it is that despite all that instructional wage and benefit spending, despite just 7.5 students per instructional employee, class sizes are so high? Is it management? The UFT contract? Who did this to us? It should be possible to slash class sizes immediately without spending a nickel more.
You hear the same propaganda about other types of organized, unionized public employees. For example, this from the New York Post:
Some 524 cops have resigned and 1,072 have retired as of May 31, NYPD pension stats obtained by The Post show. The 1,596 total is a 38% spike from the same period in 2021, when 1,159 cops called it a career, and a staggering 46% climb from 2020, when 1,092 left the force by the same date.
Anti-cop hostility, bail reform, and rising crime have fed into frustration among the NYPD rank and file, according to one NYPD officer who recently fled for greener pastures at a Long Island police department after 6 1/2 years with the New York’s Finest.
New York City has about 35,000 officers, and they are only required to work 20 years before retiring with a full pension and retiree health care and never doing anything for anyone again. And what is 35,000 divided by 20, the average number of officers one would expect to retire in a year even if none leave for other reasons? It is 1,750. So how is 1,596 a “spike?” Perhaps because the union wants a $15,000 per year pension increase for officers to stay beyond the 20-year minimum?
Of course, the New York Times says that is the public defenders that are underpaid and leaving.
It seems to be a nationwide propaganda campaign. I even saw a piece about U.S. public employees leaving, because they deserve more pay, on the PBS Newshour. Where did they get that information? Did they spend 15 minutes to check the average level of government employee quits in BLS data?
What was the typical level of private sector employee turnover, as people move, change careers, find a better job, retire, etc., and how has it changed? Any media source want to look it up?
According to the Bureau of Labor Statistics, the U.S. average private sector quit rate averaged 26.3% per year from 2001 to 2021. The government quit rate was 8.3%. Both are higher when the economy is up and other jobs are available, as in 2021, and lower when the economy is down and other jobs are not available (layoffs and firings do the reverse).
Perhaps there were fewer children per instructional employee in 2020, compared with 2000, because school districts aren’t reducing their teaching and pedagogical administrative staff in proportion to their falling enrollment. With the relatively large Millennial (Baby Boom Echo) generation exiting school, and a smaller generation behind it, despite an increasing share of children attending kindergarten and pre-kindergarten U.S. public school enrollment increased just 3.4% from 2000 to 2020. It fell 11.1% in NYC, despite universal pre-K, while falling just 0.8% in the Downstate Suburbs and rising 5.5% in New Jersey, as another generation of parents fled the city’s public schools.
Enrollment also fell in the rest of the Northeast — by 14.8% over 20 years in the Upstate Urban Counties, 22.8% in the Upstate Rural Counties, 8.9% in Connecticut, 6.4% in Massachusetts, 12.1% in Pennsylvania, and 13.6% in Vermont. Isn’t public education better in the Northeast? I also found decreases of 5.1% in California, 3.9% in Illinois, and 13.5% in Ohio.
Meanwhile, public school enrollment increased by 19.4% in Florida, 30.2% in Texas, 26.0% in Colorado, and 4.9% in Oklahoma. Isn’t public education worse in these low spending states? Does this make any sense? More on that later.
And in any event, just as NYC’s non-instructional expenditures per student are no longer significantly lower than the U.S. average, neither is NYC’s non-instructional employment when compared with its number of students.
In 2000, New York City had 33.6 students for every non-instructional employee, much higher than the U.S. average of 25.9. In part because of administrative economies of scale, in part because NYC contracts out services such as school buses and school lunches. Those private sector workers don’t count as school employees. Even so, in FY 2020, NYC had just 22.3 students per non-instructional employee, below the U.S. average of 23.2. The number of non-instructional employees in the NYC public schools, previously low, increased by 31.1% from 2000 to 2020, even as enrollment fell.
In 2020, however, there were still even fewer students per non-instructional employee in the rest of New York State (15.8) than there were in New York City (22.8). And the rest of New York State was also low compared with New Jersey (23.9), Connecticut (23.5), Massachusetts (27.8), Pennsylvania (23.9), Vermont (18.2), California (22.6), Illinois (24.7), or Ohio (19.3). Let alone Florida (26.4), Texas (21.7), Colorado (24.7) or Oklahoma (24.4).
From 2000 to 2020 enrollment in Florida public schools increased by 19.4%, but the number of students per instructional employee fell from 15.2 to 11.5 –which could mean smaller class sizes. While the number of students per non-instructional employee increased from 18.6, less than the U.S. average, to 26.4, above average, which could mean rising efficiency. Or so they said. Remember, Florida is the state most like New York in terms of being extreme (just in the other direction) and deceptive. So perhaps the numbers reported to the Census Bureau were fudged.
This chart compares expenditures per student in Upstate NY with the U.S. average, and Pennsylvania, Ohio, and Vermont school districts with at least 500 students (Vermont has many school districts with expenses but no children).
As one can see, Upstate NY school spending per student soared from FY 2000 to FY 2020, with total spending in the Upstate Urban Counties rising from $15,799 per student in 2000 to $24,007 in 2020, and total spending in the Upstate Rural Counties rising from $16,608 to $26,271, inflation-adjusted increases of 52.0% and 58.2% respectively.
The 2020 figures of $24,007 in the Upstate Urban Counties and $26,271 in the Upstate Rural Counties compare with the U.S. average of just $15,674, up just 29.5% over 20 years after adjustment for inflation; $19,268 in Pennsylvania, up 36.4%; $19,024 in Vermont, up 50.8%; and $15,964 in Ohio, up 33.9%.
On instructional wages and benefits alone, the $12,635 per student spent in the Upstate Urban Counties in FY 2020, along with the $13,252 in the Upstate Rural Counties, were far above the averages for Pennsylvania ($9,921), Ohio ($7,279), and Vermont school districts with 500 or more students ($9,240), though all these areas were above the U.S. average, as shown by the orange line.
For the U.S. FY 2020 average of $15,574 per student to be average, however, there have to be some states on the other side. Including Florida ($11,313), Texas ($13,326), Colorado ($14,451) and Oklahoma ($10,766). Total spending, adjusted for inflation, increased 29.5% from 2000 to 2020 in the U.S., compared with 7.0% in Florida, 15.9% in Texas, 26.7% in Colorado, and 21.0% in Oklahoma. Illinois? All that extra spending compared with the U.S. average seems to be non-instructional. That’s bad.
The $4,543 per student in instructional wage and benefits in Florida is just $90,860 per 20 students – compared with $373,733 per 20 students in NYC. As I have noted elsewhere, while the UFT and NYSUT have repeatedly ordered their state legislators to increase their pension benefits, and their Mayors to increase their out of classroom assignments while decreasing their workday, in Florida America’s least taxed taxpayers are underfunding the pensions that teachers were promised to start with. But at least they are eligible for Social Security, like teachers in New York and New Jersey. Teachers in 12 states — Alaska, California, Colorado, Connecticut, Illinois, Louisiana, Maine, Massachusetts, Missouri, Nevada, Ohio, and Texas — don’t have coverage arrangements with Social Security. Teachers in Texas argue that although their salaries are average, low benefits mean they are underpaid. No one makes the opposite argument in New York.
In addition, three other states — Georgia, Kentucky, and Rhode Island — have varying degrees of coverage that differ by school district. This source also puts Oklahoma and Utah in the mixed category.
Where you can also find a worksheet called R-squared. I was stuck by falling enrollment in high school spending states and rising enrollment in low school spending states, so I put the 2000-2020 percent change in enrollment, and the level of public elementary and secondary school spending per $1,000 of state residents’ personal income, for all 50 states plus DC, in the same spreadsheet, and measured the correlation between them. Function @CORREL.
It turns out that school spending and enrollment growth are negatively correlated. ??? States with higher school spending per $1,000 of their residents’ personal income have less enrollment growth and/or greater enrollment decline, as if parents were running away from states that spend more on their kids, and bringing the kids with them. The strength of correlation was 28.3%, meaning that the level expenditures in FY 2020 explained 28.3% of the change in enrollment from 2000 to 2020. Does that make any sense?
Perhaps it is a spurious correlation, and some additional factor is causing both higher spending and enrollment declines. More school spending means higher state and local taxes too. Is the former worth the latter? I used Google to search for a ranking of teacher union strength by state, and found this.
Ranked 1 to 51, with 1 (Hawaii) the strongest unions and 51 (Arizona) the weakest. I have no idea who these people are, and no way to judge their rankings. For one thing, many of the states ranked high for teacher union power are also states where retired teachers don’t get Social Security. Does that make sense?
(Maybe. If the union orders the state legislature to retroactively increase pension benefits for teachers with seniority, they get an immediate benefit, while the cost is shifted to the future – future children, future teachers. Unions seem to like that. Whereas, entering teachers into Social Security would entail an immediate cost for everyone today, with most of the benefit going to younger and later hired teachers, who would have most of all of their careers to get Social Security credits. For the past 40 years, just about every public policy decision has benefitted those born earlier at the expense of those born later, not vice-versa, in Red States and Blue States alike and at the federal level.)
In any event, teacher power as measured by the Fordham Institute is positively correlated with higher public school spending per $1,000 of state residents’ personal income. The negative number is because lower power is a higher number (closer to 51). As the that number goes up teacher union power goes down, and school spending goes down. While a lower teacher union power number (closer to number one) is associated with greater teacher union power and with higher school spending. The correlation is -43.8, meaning teacher union power explains 43.8% of a state’s public school spending as a share of its residents’ personal income.
Put it together, and one finds that teacher union power is negatively correlated with the change in enrollment. One finds that lower teacher union power (closer to 51) is associated with enrollment growth, while higher teacher union power (closer to 1) is associated with enrollment decline. Teacher union power explains 45.0% of the change in enrollment. The other half of enrollment change could be explained by factors such as warn weather, lower housing prices, lower taxes due to spending on other things, etc.
Parents are fleeing, it would seem, because they are paying more in taxes for schools, but not getting as much in more and better education, at least in their perception, to make it worthwhile — because of the teacher unions. What they get for added money for schools doesn’t balance the added taxes they have to pay. And if you think the rising enrollment in two big states explains this, not so. In the correlation analysis states are not weighted by size, and Texas and Florida count the same as low population states such as Rhode Island and Wyoming 1/51st.
And remember, it is working parents who are paying, because the same union-Democrat Blue states that tend to spend more on schools also tend to have lots of special deals so seniors don’t share in that tax burden. With state income tax exemptions from retirement income from Connecticut…
Plus the special STAR program for poor seniors, which many state legislators want to modify so that the retirement income of retired public employees doesn’t count as income, so they appear to be “poor” seniors and don’t have to pay property taxes either.
And with more and more of the “education” spending in these states going to retired teachers, who aren’t taxed, you can see why parents would be running away, and taking their children with them.
Kind of an interesting thought experiment if you ask me, although I don’t understand how New York State’s teacher’s union is not ranked number one in power. Perhaps not in 2000, when it was local 1199 and the Greater New York Hospital Association here, but certainly in 2020. (Other New York workers not controlling the government in Albany have the least power of the serfs in any state).
In any event, if you’d like a spreadsheet showing the average private sector wage data I used to adjust school spending for the cost of living, it is here.
So you could make comparisons for other school districts over 20 years. Note the school districts, other than the big cities, are in county order, starting with Albany County school districts.
What do I mean by the Downstate Suburbs? How is all this calculated? I’m not going to write that up again. Look to last year’s post.
Update: school test scores have been released for 2022, and frankly I’m shocked by what they show. I was prepared to be upset that due to greater learning loss during the pandemic, the scores for high-tax high-spending New York State would fall to the level of low-tax low spending Florida, with its underfunded schools and underpaid teachers. Instead I found that in 4th grade math, New York was already behind Florida back in 2019 — before falling further behind. This chart was published by Chalkbeat USA.
I am willing to bet that Florida children are more likely to be poor, and that their parents have lower educational attainment and average incomes than those in New York State. And there are plenty of immigrants in Florida too. To me, this almost doesn’t see possible. Fraud on the part of Florida, with teachers filling out the tests? Otherwise, this just shows what winning has been for the New York State United Teachers and United Federation of Teachers.
Human beings are social animals. We didn’t come to dominate the planet by overcoming lions, tigers and bears on our own as individuals. We did it by working together, helping each other, learning from each other, sharing in groups large and small. We need each other, and our institutions from the smallest (the family) to the largest (the […]
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Human beings are social animals. We didn’t come to dominate the planet by overcoming lions, tigers and bears on our own as individuals. We did it by working together, helping each other, learning from each other, sharing in groups large and small. We need each other, and our institutions from the smallest (the family) to the largest (the nation) to those in between (businesses, communities, friends, state and local governments).
But contributing to those groups carries risks. Risks of being exploited, caring without being cared about, being misunderstood, cheated, neglected, deceived. Because others might exploit those personal and social and business and government relationships to their own ends, taking as much out, and putting as little in, as possible. Since that is also part of human nature – to see everything through the prism of self-interest.
To live and work together, human beings require trust. But trust can be exploited, abused, betrayed. That’s the human dilemma. It has been for thousands of years. Societies where people can trust each other, and their leaders, thrive. People who betray that trust can come out ahead — until everyone is doing it. And then the very social foundation that makes that betrayal possible crumbles to dust, taking all with it. And here we are.
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Philosophers have wrestled with this for millennia. For Plato, in a discussion of Gyges and the Ring, the best thing of all is to do wrong without consequences, and the worst thing of all is to suffer wrong without justice or redress. So once people had had a taste of both, they in effect cut a deal to treat each other decently. It wasn’t what any of them wanted, but it was what all of them agreed to.
That is what right or justice is and how it came into existence; it stands half-way between the best thing of all—to do wrong with impunity—and the worst, which is to suffer wrong without the power to retaliate. So justice is accepted as a compromise, and valued, not as good in itself, but for lack of the power to do wrong. No man worthy of the name, who had that power, would ever enter that compact with anyone. He would be mad if he did…
The next point is men practice it against the grain, for lack of the power to do wrong. How true that is, we shall best see if we imagine two men, one just, the other unjust, given full license to do whatever they like, and then following them to observe where each will be led by their desires. We shall catch the just man taking the same road as the unjust; he will be moved by self-interest, the end of which it is natural to every creature to pursue as good, until forcibly turned aside by law and custom to respect the principle of equality.
In agreement was Thomas Hobbes in Leviathan. All men (we would now say people) believe themselves to be of equal value, but without a common set of rules and powerful ruler to enforce them, they will be either in continual war, or in fear of war, against all others.
Whatsoever therefore is consequent to a time of Warre, where every man is Enemy to every man; the same is consequent to that time, wherein men live without other security, than what their own strength, and their own invention shall furnish them withall. In such a condition there is no place for Industry, because the fruit thereof is uncertain; and consequently no Culture of the earth; no Navigation, nor the use of commodities that may be imported by Sea; no commodious building; no instruments of moving, and removing things that require much force; no Knowledge of the face of the earth; no Arts; no Letters; no Society; and what is worst of all, continuall feare, and danger of violent death; and the life of man, solitary, poore, nasty, brutish and short.
For others, notably Socrates, evil was a sickness of the soul the way disease is a sickness of the body. But this presumes one has a soul.
Where is the scientific evidence that God exists? In response I ask this – assuming the non-existence of God, where is the proof that you exist? Exist as something more than a series of chemical reactions that is more complex and short-lived than the table my computer is perched on, which will decay to atoms over tens of thousands of years. And if you are a thing, why should any enlightened other thing with a full understanding of reality not exploit and abuse you, even kill you if that’s what they feel like? What’s the big deal? No different than throwing something unneeded in the garbage.
Over the centuries, until recently, most thought otherwise. You might have heard the phrase “I think therefore I am.” That is from Rene’ Descartes’ Meditations on the First Philosophy, written as a proof of God’s existence. I have consciousness, therefore I’m more than just a thing, and can imagine a universal consciousness that is not a thing at all. That was written in the 1600s.
Similarly, in the 1930s Jewish scholar Martin Buber, in the book I and Thou, used a sense of connection, to nature and to other people, to infer that there is also a “universal you” that is not just an “it.” We relate to people mostly as “it,” but if “will and grace are joined” we can connect in the you, he wrote.
The world is two-fold for man in accordance with his two-fold attitude. The attitude of man is twofold in accordance with the two basic words he can speak. The basic words are not single words by word pairs. One basic word is the word pair I-You. The other basic word is the word pair I-It; but this basic word is not changed when He or She takes the place of It…
The life of a human being does not exist merely in the sphere of goal directed verbs. It does not consist merely of activities that have something for their object. I perceive something. I feel something. I want something. I sense something. I think something. The life a human being does not consist merely of all this and its like.
All this and is like is the basis of the realm of It But the realm of You has another basis.
Whoever says You does not have something for its object. For wherever there is something there is also another something; every it borders on other Its, It is only by virtue of bordering on others. But where You is, there is no something. You has no borders.
Whoever says You does not have something; he has nothing. But he stands in relation.
Others tried to make the point that reason could be a foundation of morality. Immanuel Kant, in Groundwork for the Metaphysic of Morals, had his own version of the Golden Rule. I ought never to act except in such a way that I can also will that my maxim should become a universal law. Lying works if only I lie, but if everyone lies no one will believe anything, lies will be ineffective, and society will collapse. Stealing works if only I steal. If everyone steals, no one will produce anything and society will collapse. Immorality, according to Kant, contradicts itself because it doesn’t work if everyone does it.
But what if that collapse only happens after a generation that takes advantage makes it to the grave?
Others saw more problems with explaining why people should act in a socially responsible way in the absence of God and a soul, but still saw a reason for ethical conduct. Take Jean-Paul Sartre, in Essays in Existentialism. Written after the horrors of World War II.
If God does not exist, there is at least one being in whom existence precedes essence, a being who exists before he can be defined by a concept, and that I his being is man, or as Heidegger says, human reality. What is meant here by saying that existence precedes essence? It means that, first of all, man exists, turns up, appears on the scene, and, only afterwards, defines himself…Thus there is no human nature, since there is no God to conceive it. Not only is man what he conceives himself to be, but he is also only what he wills himself to be after his thrust toward existence.
But somehow, according to Sartre, he still wants to be good. Because at the end of his life, even with no pre-conceived rules, it can be judged like a work of art to be good or bad. And not having a set of rules to follow causes anguish.
What that means is this: the man who involves himself and who realizes he is not only the person he chooses to be, but also a lawmaker who is, at the same time, choosing all mankind as well as himself, cannot help escape the feeling of his total and complete responsibility. Of course, there are many people who are not anxious; but we claim that they are hiding from their anxiety… “What if everyone acted that way?” They shrug their shoulders and answer “Everybody doesn’t act that way.” But in reality, one should always ask himself, “What would happen if everybody looked at things that way?” There is no escaping this disturbing thought except by a kind of double dealing.
So, back to Kant, and back to Jesus, “do unto others as you would have them do unto you.” Believe it or not, people used to worry about stuff like this, and believe that the unexamined life is not worth living. Rather than the examined life is a bore and a pain in the ass.
But I’m pretty sure that the majority of the generations that have been running, and pillaging, this country for the past few decades have no problem with anguish, and no difficulty with rationalizing double dealing.
People were once concerned about their reputation and self-image as a Good Woman or Stand-up Guy. Think of the characters Humphrey Bogart played in so many movies. He was a cynic who didn’t expect others to do right by the community as a whole, but did so himself anyway because that’s who he is.
The African Queen and some others too.
That doesn’t seem to matter as much anymore, especially since anyone that spent their 20s after the creation of social media doesn’t have much of a reputation to be concerned about.
More recently, some have looked to Darwinian biology to show that species that cooperate and sacrifice for the common good, and work together to bring up the next generation, are more likely to reproduce and grow. That, however, doesn’t mean that an individual member of those species can’t do better for themselves alone by taking advantage of others’ cooperation, and self-dealing for themselves, if they are smart enough to realize this.
From what I see on Channel 13, the more we find out about other creatures, the more we find the sort of individuals that seems to predominate in the generation I have identified as Generation Greed. In a show on wild bees, there was a bee working and working and working to prepare and furnish and defend a nest where its young could be reared. And a wasp looking for an opportunity to sneak in and, having done no work, place its own egg into the nest, where it will emerge first, and eat the baby bees and all the food that had been left for them.
So, who is admired and respected in our culture? The bee or the wasp?
Perhaps the philosopher who was most willing to confront the implications of God is Dead and human beings not having souls was Nietzsche. Hitler’s favorite philosopher. From Beyond Good and Evil.
We must not yield to humanitarian self-deception about the history and origins of an aristocratic society (in other words, the pre-suppositions for the heightening of the type of “man”): the truth is hard. Let us tell ourselves without indulging ourselves how every superior culture on earth got its start! Men whose nature was still natural, barbarians in every frightful sense of the word, men of prey, men still in possession of unbroken strength of will and power drives—such men threw themselves upon weaker, better-behaved, more peaceable races, possibly those engaged in commerce or cattle raising, or else upon old hollow cultures in which the last life-powers were flickering away in flashing fireworks of intellect or corruption. The distinguished caste in the beginning was always the barbarian caste; their superiority lay not primarily in their physical but in their psychic power; they were more whole as human beings (which on every level also means “more whole as beasts”).
To refrain from wounding, violating, and exploiting one another, to acknowledge another’s will as equal to our own: this can be proper behavior, in a certain coarse sense, between individuals when the conditions for making it possible obtain (namely the factual similarity of the individuals as to power and standards of value, and their co-existence in one greater body). But as soon as one wants to extend that principle of society, to make it the basic principle of society, it shows itself for what it is: the will to negate life, the principle of dissolution and decay. Here one must think radically to the very roots of things and ward off all weakness of sensibility. Life itself is essential assimilation, injury, violation of the foreign and the weaker, suppression, hardness, the forcing of one’s own forms upon something else, ingestion – at least in its mildest forms exploitation…
“Exploitation” is not part of a vicious or imperfect or primitive society: it belongs to the nature of living things, it is a basic organic function, a consequence will to power that is the will to life. Admitted that this is a novelty as a theory—as a reality it is the basic fact underlying all history. Let us be honest with ourselves at least this far!
I haven’t read this stuff in 40 years, but it’s amazing how much Nietzsche’s writing is like a series of Trump tweets. Sad!
Nietzsche, not only the first Nazi, but also the first Baby Boomer. Sex, drugs and rock and roll. Putin, Xi, Modi, Bolsonaro, Erdogan, Trump and Johnson.
They present a threat not only to the well-being of their own countries, but also to a world order in which liberal, cosmopolitan ideas are increasingly embattled.
To varying degrees, they all claim to speak for the common man, while undermining institutions, stoking nationalism and cultivating a personal style of politics, if not an outright personality cult.
And in federal, state and local economic and fiscal priorities: Generation Greed and the less well-off generations to follow; the executive/financial class, the political/union class, and the serfs.
One wickedly cynical and enjoyable book that examines the theories of how people actually act is by Peter L Berger, An Invitation to Sociology. It came out in 1962, before the field of sociology dissolved into the separate sociologies of various grievance groups, and marketing and influencer manipulation.
He describes the various theories of the process of “socialization” by which children are taught to suppress their individual urges and participate usefully in society. The book was written before the social revolution of the mid-1960s and onward. Back when a President could say to the less “enlightened” generations who were adults at the time (and were responsible for changes such as the civil rights revolution) ask not what your country can do for you, ask what you can do for your country, and be believed that doing so made you part of something larger than yourself, and not a sucker. Even if, as it turns out, that President was personally a kind of sleazebag.
Just when in the biography of an individual can one assume that his youth has come to an end?…
The middle-aged Joe Blow, having accepted the fact that his wife will not get any prettier and that his job as an assistant advertising manager will not become any more interesting, looks back on his earlier aspirations to possess many beautiful women or write the definitive novel of the half century were quite immature. Maturity is the state of mind that has settled down, come to terms with the status quo, given up the wilder dreams of adventure and fulfillment. It is not difficult to see that such a notion of maturity is psychologically functional in giving the individual a rationalization for having lowered his sights. Nor is it difficult to imagine how the young Joe, assuming the gift of augury, would have recoiled from his later self as from an image of defeat and desperation.
Berger divides the forces of socialization into two main categories.
Man in Society is external, the laws, the economic pressure to earn or living or starve, the need to comply with culture and custom to be accepted in a group, with smaller and larger nested circles of social control. The individual deceives himself by deciding that compliance is inevitable. This means that every institutional structure must depend on deception and all existence in society carries with it an element of bad faith.
And Society in Man, in which the human characteristic of being a social animal influences people to want to be controlled and in control, and having a role in the broader society is part of the essential identity of each individual.
For most of us the yoke of society seems easy to bear. Why? Certainly not because the power of society is less than we indicated in the last chapter. Why then do we not suffer more from this power? The sociological answer to this question has already been alluded to – because most of the time we ourselves desire just what society expects from us. We want to obey the rules. We want the parts that society has assigned to us. And this in turn is possible not because the power of society is less, but because it is much more than we have so far asserted. Society not only determines what we do but also who we are. In other words, social location involves our being as well as our conduct.
I remind you again that this was written in 1962, when the oldest Baby Boomer was 15. What if an individual, or a generation, were hip enough to see through this vast façade and realize that for them, if not for others, rules are made to broken, with the maintenance of the façade left to those less enlightened others?
Freedom is still possible, Berger asserted, in Society as Drama.
We thus arrive at a third picture of society, after those of the prison and the puppet theater, namely society as a stage populated with living actors. This third picture does not obliterate the previous two, but it is more adequate in terms of the additional social phenomena we have considered. That is, the dramatic model of society at which we have arrived does not deny that the actors on the stage are constrained by all the external controls set up by the impresario, and the internal ones of the role itself. All the same, they have options—of playing their parts enthusiastically or sullenly, of playing with inner conviction or “distance,” and sometimes refusing to play at all…Social reality now seems to be precariously perched on the cooperation of many individuals.
What does freedom mean? Freedom to be who you are, to choose your own role, identity, lifestyle in your one and only life?
Or freedom from responsibility?
And why should anyone refrain from doing what they feel like because an authority figure asserts that they need to be responsible, as no one does anymore?
The ingenuity human beings are capable of in circumventing and subverting even the most elaborate control system is a refreshing antidote to sociological depression. It is as relief from social determinism that we would explain the sympathy that we frequently feel for the swindler, the imposter, or the charlatan (as long, at any rate, as it is not ourselves who are being swindled). These figures symbolize a social Machiavellianism that understands society thoroughly and then, untrammeled by illusions, finds a way of manipulating society for its own ends.
In watching the swindler take on various roles in respectable society, we are pushed toward the uncomfortable impression that those who hold these roles “legitimately” may have attained their status by procedures not so drastically different from the ones employed by him.
Ever since Donald Trump’s rise from a local charlatan to a national catastrophe, I have heard the word “norms” used casually in the media, after having not heard it since college. It was fun for a generation to violate the norms, but much less fun when others violate them even more, to the point where every institution – from the family, to business, to state and local government, to the federal constitution – is on the brink of collapse.
Rather than norms, I thought we had rules. In reality, those in “the game” were not exactly in favor of free and fair elections, in which any citizen had a right to run and speak their piece, and the public was well informed by truthful information. But perhaps they had an “honor among thieves” set of unwritten rules, kind of like the mafia, including don’t violate your oath to the constitution and overthrow the government. And then everyone is shocked when our Marlo equivalent shoots someone on Sunday.
In the early 1990s, as the Baby Boomers were taking power at all levels and in all institutions, the authors of The Day American Told the Truth interviewed 2,000 Americans and promised them absolute anonymity to say what they actually believed.
Our leaders are still giving advice but we are not listening. America’s leadership no longer leads anymore.
We asked people to give letter grades of A to F to leaders in four categories: religion, politics, business and education.
The highest grade that any kind of leader got was a C+ for religion.
(Note: this was written in 1992. What would the grade for religion be now?)
All the others got grades low Cs or even a grade of D. C- was the combined grade of leadership in America!
Why? One reason is because they have lied to us—over and over and over. Our leaders have told us the most bold-faced lies.
(I wonder what people would think about that 30 years later?)
So who are our moral leaders now? Well, the overwhelming majority of people (93 percent) said that they – and nobody else – determines what is and isn’t moral in their lives. They base their decisions on their own experience, even on their own daily whims.
In addition, almost as large a majority confessed that they would violate the established rules of their religion (84 percent), or that they had actually violated a law because they thought it was wrong (81 percent).
We are a law unto ourselves. We have made ourselves the authority over church and God. We have made ourselves the clear authority over the government. We have made ourselves the authority over laws and the police.
The fact is that Whites are much more likely than others to follow their personal sense of right and wrong. So are Jewish people and Catholics. The same goes for college graduates, liberals, and those earning $45,000 or more a year. (That would be $73,115 in today’s dollars).
The people who rely most on religious or political authority (that is, laws) are blacks, Protestants, people who did not graduate from college, conservatives, and those who earn less than $10,000 per year.
There are important implications that follow from all of this. For example, most of us are not prepared—as so many were in earlier generations – to sacrifice our lives for our country. Or anything else, it seems.
And what is the consequence of all this? Back in 1990…
Six in ten Americans have been victims of a major crime.
Two thirds favor capital punishment and one third would throw the switch.
One in five women have been date-raped.
Americans do not trust any politician and blame executives for our business decline…We don’t expect to be number one in the next century, nor even in the next decade.
Only 13 percent believe in the ten commandments.
Ninety-one percent of Americans confess to lying.
There is no meaningful sense of community. Most Americans do not participate in any community action whatsoever.
One in seven Americans has been sexually abused as a child—and one in six Americans has been physically abused as a child…A startling percentage of American children lose their virginity before the age of thirteen. They’re losing their childhood, all their innocence, in other ways as well.
While we still marry, we have lost faith in the institution of marriage. There is a breakdown in filial piety. A majority of us will not take care of our parents in their old age.
That was then, when the Baby Boomers were in middle age. Soon they’ll be expecting their children to take care of them, or at least live in poverty to pay taxes for someone else to take care of them — even if they had previously put themselves ahead of their children too. A generation that put itself first at every phase of life.
What we have seen in our culture, over and over again, is a kind of social blackmail. As social animals, the modern equivalent of what Nietzsche called weaker, better-behaved, more peaceable races, possibly those engaged in commerce or cattle raising – or generations — are told they need to accept the diminishment of their own lives and/or their children’s future to prevent an institutional collapse. But then those in control of the institutions simply take more out, and the collapse is merely postponed, until it can’t be anymore.
You see it in Washington, where over and over again the rich and the financial sector are bailed out, because if they aren’t the economy will collapse and ordinary people will be even worse off. Blackmail. But the resulting increase in debt means a collapse hasn’t been prevented, just postponed.
And where payroll taxes on the later born are increased, and their benefits are reduced, to “save Social Security” in 1983. And this is offset by lower taxes on the investment and retirement income, with ongoing federal reductions in taxes and capital gains, and ongoing state increases in tax breaks and exemptions for seniors. In Red States and Blue, Republican and Democratic Administrations.
You see it in Albany, where higher taxes, fees and fares are agreed to improve the New York City schools or the New York City transit system. And then the money somehow goes to richer pension benefits, higher prices for the construction industry, etc. Leaving the serfs no better off than before. But then people are told to pay up even more and accept even less, or else those systems will collapse. Because of “fairness.”
New York is the worst for this, but not the exception. In California they increased pension benefits, then slashed the education money that actually went to education to pay for it, and once the schools were bad enough, they then raised taxes “for the schools.” Why didn’t they come right out and say taxes had to be increased to pay for those who retired with richer benefits and left the state? In Red States, they cut taxes for the rich, claim it will cost nothing, and then when public services are gutted, claim it is because “government doesn’t work.” And postpone (but increase) the consequences by adding debt and not funding pensions.
You see it in finance, where the big goal in the wake of all the scandals around the year 2000 was to “restore faith in the financial system.” So there could be another round of pillage, and another effort to “restore faith in the financial system.” And another.
Where is the leader who can restore a sense of responsibility, and trust that the responsible won’t be abused? I don’t see any. It seems that the leaders who are attracting page views, money, votes, and the most successful media, are the opposite. Those that provide an excuse for freedom from responsibility.
Should we even want them to? Wouldn’t that just allow more abuses?
Especially in the wake of a generation that will leave the federal government bankrupt, after decades of seeking lower taxes on themselves and more benefits for themselves. Leaving future elected officials (if elections continue) to tell those coming after that instead of Social Security and Medicare, they’ll have to settle for medical marijuana followed by legal assisted suicide. That isn’t the kind of government that is going to inspire much loyalty.
Especially after four decades of an unsustainable economy based on ever rising debt to the rest of the world, living large on the credit card, paying people less and selling them more, and bailing out the rich by inflating asset prices whenever they threaten to fall back to reality.
Especially here in New York, where people have trusted – accepted higher taxes and more fees, have respected those who work for government more – and yet have been robbed, robbed, robbed, and robbed. Inevitably there will be more tax increases, and even less in services, due to irrevocable deals that have already been cut, because those who cut them are still, collectively, controlling everything.
And all of this remains under Omerta, without the perpetrators facing even the burden of psychological accountability. The amount that any generation or other group in our society, from the C-suite to New York’s public sector and publicly-funded union halls, has already taken out while putting less in seems to perfectly predict how much more they feel entitled to. And when the crisis hits and its time to allocate the losses, it’s always “let’s not talk about the past. That’s not helpful in finding creative solutions!” Say those who pillaged in the past, and exempt themselves from further social contributions in the future.
Instead, notice how good the swindlers and charlatans are at shifting the blame by turning the serfs and the later-born against each other. Launch culture wars, seek out scapegoats, change the subject.
Where does all this leave us, our children, our city, state and federal constitution, once the generation that was too hip for the room finally leaves the wreckage behind? Without family, a dynamic economy, viable and affordable state and local government services and federal benefits, national security. Even, in the view of some, a livable climate?
I said years ago that someday soon we’d have general strikes in this country, a nationwide economic riot in an attempt by those with nothing to lose to bring the ever-shrinking minority with a stake in things down with them. And in Washington we just had an attempted coup. Should people try to steer the boat over the falls to drown the overseers with them, or just end up rowing below decks while others enjoy the view?
That’s where the human dilemma is in the U.S. today. Of course it could be worse. We could be in Russia. But the way things are going, who knows?
Governments enact rules to force people to do and not do things, or force them to pay taxes and use the money to do things for them. You have the political power, the monopoly of legitimate violence, and the economic power, using incentives to made it harder to do one thing and easier to do another. That’s […]
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Governments enact rules to force people to do and not do things, or force them to pay taxes and use the money to do things for them. You have the political power, the monopoly of legitimate violence, and the economic power, using incentives to made it harder to do one thing and easier to do another. That’s public policy. But what about all the choices people make in their own lives, with regard to how to live, how to live with each other, and how to act in society? This can be influenced through leadership.
In a democratic society a politician is not the leader, the way they are in a totalitarian society. But a politician could be aleader, one of many. At one time, in addition to elected officials, Americans looked to poets, preachers and priests, philoseophers and artists for direction. At one time even architects and city planners aspired to leadership, creating buildings and communities that facilitated a certain lifestyle and society. And then there were parents and grandparents, aunts and uncles, back when more people spent their lives nestled in a large web of family relationships. Not anymore.
But that doesn’t mean that people, most of whom don’t really figure things out for themselves, aren’t being led and influenced. Celebrities and paid influencers have taken the place of the prior sources of leadership. Who is providing meaning and direction in people’s lives? Who is deciding what it means to live a good life, or to be a good community? The advertising industry, which means that a good life ends up costing more and more and more for people who have (in inflation-adjusted dollars) been paid less and less, generation by generation. Did Governor Cuomo and Mayor DeBlasio try provide an alternative? Not really.
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It might seem strange to think that a mayor should speak about why people should, and how people could, live in their city. And yet New York City Mayors have often done so. For John Lindsay, New York was “fun city.” For Ed Koch, it was a city of people who walk faster, talk faster, and think faster. David Dinkins emphasized the advantage of all the different kinds of people in the city, the “gorgeous mosaic.” For Rudy Giuliani, the key value was everyone’s ability to enjoy shared public spaces in peace, without being threatened or hassled or having those spaces diminished by vandalism, as part of “one city, one standard.” For Mike Bloomberg, New York was the “luxury city,” the best place for rich people.
Incoming Mayor DeBlasio, in contrast, focused on what was wrong with New York City. New York is a racist city where only a few people at the top benefit, and people who work for the government or government contractors are underpaid, he asserted. Taxes should be increased, he said.
What DeBlasio didn’t talk about is how and why one should live in New York City, or in pre-automobile places like it. Places where people have less personal space, and rely on shared amenities like parks instead of backyards, and where it is more expensive and difficult to travel around you own motor vehicle, but unlike in most of the United States there are alternatives. You can walk to things, bike to things, take mass transit to things. You can find a sense of community, and meet new people.
Perhaps he didn’t feel the need. Such a large share of the Millennial population was seeking to live in such places that their cost exploded, and their quality of life fell. Perhaps as a result of teenagers watching TV shows like Friends and videos like this one, which came out in 2004, not long after a time when I couldn’t believe someone from outside the city would live along the J train.
Here is another one that came out in 2001. This stuff was enough to screw New York’s sex ratio.
The Millennials joined the immigrants among the exploitables. Given their pursuit of this urban fantasy, Millennials could be paid less, charged more in rent, charged more in taxes, see their subway commute to go hell, and still they kept coming. For a while.
And perhaps the problem is, like most of New York’s political/union class, he didn’t live that way himself. After the NYPD bullied him out of his Brooklyn rowhouse, by making life hell for his neighbors (somehow Bloomberg got to stay put), DeBlasio ended up living in a detached house surrounded by a law and traveling everywhere by private motor vehicle – most notably to a private health club – just as most people do everywhere in suburban and Sunbelt America.
Leaders deal in symbols, and the symbolism mattered. If you want your political party to be in favor of people making individual sacrifices for the common good, with regard to issues like global warming, you have to model that to a T. Not just be in favor of laws to force others to live in a way you do not live yourself. Those opposed to making such sacrifices, those seeking political power by telling people they shouldn’t have to make those sacrifices, those opposed to other parts of your agenda and seeking to discredit you, will seize on that hypocrisy. And that’s what happened.
What is a limousine liberal? Someone who wants the government to force less well-off others to live in a way they are unwilling to live themselves, and to pay for things they are unwilling to pay for themselves.
If Mayor DeBlasio wanted to try to influence people, he had a good story to tell. As a product of a broken home, who did not end up creating one himself, he could have spoken about the importance of family. And as someone in an inter-racial marriage, he could have spoken about getting beyond those divisions and finding family and community with people who are perceived to be different. In other words, he could have spoken about taking responsibility, living in family, living in community. But he did not really do so.
I can understand this. It isn’t just your life, it’s your family’s life, and especially when they have teenagers going through teenage issues, politicians may believe it is their right, and even their obligation, to maintain their privacy. As a consequence, however, there is no DeBlasio lifestyle, no DeBlasio culture, no DeBlasio idea of what it means to live a good life and be a good person that the rest of us know about.
Unless it is this.
Suddenly there has been a big upsurge in anti-social behavior, from driving with defaced and fake/temporary license plates to avoid tickets and tolls, to shootings, to graffiti and litter. The very opposite of living together in community. It is like a reversal of Giuliani’s big idea of collective rights to shared spaces.
Now everyone seems to think that shared spaces belong to whoever can seize them and drive everyone else out. And in response more and more people are seeing the value of the suburban life, without shared public spaces but more private spaces under your control, the control of someone else, the control of someone. Where those who make things worse than others can be made to leave.
Shopping malls won over a wide range of admirers, from teens to seniors, by providing something they couldn’t find in their public parks or sidewalks: a safe pedestrian experience.
No public space where you have to deal with others getting their ya-yas out. Not even sidewalks, in the post-1980 suburbs.
Perhaps the music video of the next generation will be like this song from the 1960s, when everyone moved to the suburbs and the cities went into the tank.
Why is anti-social behavior suddenly much more common, in New York City particularly among Black teens and young adults? It isn’t because they see Barack and Michelle Obama as their role models, that’s for sure. It is this a Generation DeBlasio that took the wrong message from his “bullies bill of rights” when they were in school?
“Everyone is so concerned with the rights of the two or three upstarts in the room, that the other 30 kids — their rights to get an education … to be able to sit in an environment that’s not intimidating, that’s not scary, that’s not filled with noise” don’t matter, said Perez, a reading specialist who won a $125,000 legal settlement from the city after she was hurt by out-of-control teens in class. “No one has ever had an answer to that.”
Olivia Ramos said her son was assaulted five times at Manhattan’s 75 Morton, a West Village middle school which pushed restorative justice.
“There’s no punishment to the kids who misbehave,” she said. “He was calling me from the bathroom, in seventh grade, scared because there were fights in the bathrooms, in the hallways, in the staircases, really bad fights.”
Teachers are complaining, but there is a perfect symmetry to this. The United Federation of Teachers has ensured that there is no accountability for teachers either, and that they are believed to owe the children nothing, despite a doubling of per student spending to double the national average and more than just about anywhere else. Something “President” DeBlasio went along with. And now the children also have no obligations, to their fellow students, teachers or anyone else. Tough luck for the scab teachers who actually care about the children and their jobs, and the uncool children who actually try to do what they are supposed to do. (Though trying to force high-energy kids, particularly boys, to sit still and pay attention with no exercise for six hours probably doesn’t make sense in any event).
After all, Bill DeBlasio is on their side. And their side. And their side. In fact, he’s even on my side. Or so he said, as when he came to my neighborhood as a Councilmember along with then-Assembymember Jim Brennan, back in the early 2000s. When he repeated my name, which he had almost certainly just heard for the first time (a neat trick to pull off) and said how much he agreed with me.
Sometimes leaders have to challenge people, tell them they have to do better, for themselves and others. Always seeking popularity, that’s something Mayor DeBlasio never did, except when he got frustrated and let something slip. Like teachers having a hyper-complaint culture, Governor Cuomo screwing New York City residents because he knew he knew they would still vote for Democrats like him, and the judges not having trials. Perhaps true, but from a panderer like him it sounded like an attempt to shift responsibility.
Come to think of it, perhaps the children have absorbed the right lesson from our actual leaders, whoever those are. In contrast with the way Gen Z is acting out, Gen Y – the Millennials – did everything they were supposed to do, or at least a higher percentage of them did. Stayed in school, borrowed to go to college, and were less likely to get addicted to drugs, less likely to become teenage parents, more likely to work, didn’t commit as many street crimes – the crimes of youth and young adults. And what happened? They were screwed, and screwed, and screwed by the less responsible generations ahead of them.
So perhaps Gen Z has concluded they don’t want to be like those responsible Millennial losers. They wanted to let out their adolescent Id, like the cool generations, and just do as they damn well please, and tough luck for the impact on anyone in the way. Of a stray bullet or a Dodge Charger. Let’s just smash everything, because we feel like it, and leave the clean-up to the responsible losers!
Lest Mayor DeBlasio think I’m a total cynic, he ought to know that when he said people should eat out in Chinatown, my wife and I went out and ate in Chinatown.
A week into the first confirmed COVID-19 cases in New York City, restaurateurs across the city say they’re already seeing reservation cancellations, while four huge dim sum restaurants in Sunset Park have closed in response to dropping sales as more people limit public outings.
In response to a question about how the city would help curb the economic impact, the mayor mentioned new no-interest loans for small businesses that experience a 25 percent decline or more due to new coronavirus. He also said that they’re “telling people to not avoid restaurants, not avoid normal things that people do.”
Like to cooperating responsible losers we’ve been. That turned out to be a mistake, but I’m OK with it.
The mayor emphasized that officials are trying to be careful about cancellations of services such as school or asking that businesses close down, saying that people losing their livelihoods also will have a huge impact.
Because we are finding that has also been true. I don’t blame the pols for tough calls in no win situations that weren’t created by their crowd or themselves.
Other stuff? Not so much.
Mayor DeBlasio’s idea seemed to be that we should all be nice, and treat people nicely. And now lots of people are being nasty, and blaming him for all the nastiness. It probably isn’t the way he thought it would end up, and it wasn’t the way I thought it would end up either. But apparently while he wasn’t leading, others were. I guess this is where freedom without responsibility ends up.
Compared with Mayor DeBlasio, Governor (Andrew) Cuomo was even less of a leader through most of his time in office. Or at least not one we noticed here in New York City. Since Pataki, it seems that New York Governors are in reality Governors of the Rest of New York State, who treat New York City as a funding source. Perhaps he was probably more of a presence elsewhere in the state, as Pataki was.
Moreover, like Charles Barkley Andrew Cuomo didn’t claim to be a role model.
That is just as well in light of later accusations.
But he had some big shoes to fill. His father, Mario Cuomo, was a role model, someone who could speak eloquently about what his values were, how he tried to live those values, and who his role models were in developing those values. The different values of a different generation.
By the values of his own generation, Andrew Cuomo (and his ex-wife) are pretty mainstream people. Yet he we went from the hero of COVID-19 press conferences (I didn’t watch them) to the villain of sexual harassment (I didn’t follow that or read about it) because those values seem to have suddenly changed, and passing women’s rights bills doesn’t excuse personal conduct. I would sympathize with Cuomo as a man who found the ground shift under his feet, damned for conduct that in his generation might have been considered acceptable. Except that I like his father’s generation’s values more than his.
There is this idea that everything that is wrong should be illegal. For Cuomo’s generation, what goes along with that is the idea that anything that benefits you and it isn’t illegal also isn’t wrong. Or, in the even more hip version, even if it is illegal, but is very hard to prove beyond a reasonable doubt, it’s still OK. And here we are.
The one good thing I can say about Andrew Cuomo’s leadership is that I admired his wardrobe. The business suit is obsolete, so what is it that a person in authority ought to wear? Cuomo came up shirts and jackets with the Governor’s seal on them. I thought that was pretty smart. Otherwise, I’m only bothering to include this section because I said I would write a review of the leadership of the DeBlasio and Cuomo Administrations. And I can’t even think of what to say.
After his long run as Governor, what do we think of as the Andrew Cuomo way to live, the Andrew Cuomo set of core beliefs, the Andrew Cuomo culture, the Andrew Cuomo good life? Live in the suburbs, drive everywhere, don’t use mass transit, and don’t concern yourself very much with those who do? Nobody’s life changed for the better because of an idea they got from Andrew Cuomo.
Governor Cuomo and Mayor DeBlasio were not leaders. There is no Cuomo or DeBlasio way to live. No Cuomo or DeBlasio way people should live together. No Cuomo or DeBlasio way our institutions should be improved. Just a bunch of deals and shifts with the wind.
Leaders change things, but to change things you have to be willing to challenge people, not just pander to the most entitled among them. You don’t get love for doing so. Only, perhaps, respect — if you walk the talk.
Perhaps politicians shouldn’t try to be leaders, because they will just end up having their imperfections exposed. Perhaps people should learn to accept some imperfections and make their own judgements about people’s advice.
But here is the problem when other politicians are not the kind of people who can lead. You know who is a leader? Donald Trump. There is a Trump way to live, a Trump set of values, a Trump set of business practices, a Trump kind of family, a Trump attitude toward community, a Trump view of the constitution and rule of law, a Trump understanding of the world (even if it’s just a con he doesn’t actually believe himself). Where THE MAN of his generation has led, others have followed, or perhaps the other way around. Perhaps it is easier to lead when you are in step with your generation. Going in the wrong direction.
By the standards of our culture in his generation, did Jeffrey Epstein lead a great life, a life many would aspire to? Think about it. Enjoying a life of massively high consumption, right down to a luxury Manhattan townhouse, luxury Palm Beach mansion, and private Caribbean island. Lots of sex with fresh young things, but no family responsibilities whatsoever. And being in with the in-crowds, all of them, from the political and economic elite to celebrities and even royals. Isn’t that what matters? Isn’t that what is worthy of respect and admiration? What if anything he for anyone did to deserve all of this is unclear. And in the end, he escaped both accountability for his actions and the infirmaries and challenges of old age.
Who is admired and emulated? Those boring people who meet their responsibilities, or those fun people who beat the system? When you have a whole generation that sets out to beat the systems, all of them, you end up in the place the U.S. is going.
We have a cultural problem in this country. A culture of disrespect not only for authority, something authority might have earned, but also for everyone else. It manifests itself in different ways among different types of people, and in different situations. The mass shootings, rising murder rate, and attempts to overthrow the government get the most attention because they are the most dramatic. But the accumulated social and economic impacts of the culture of freedom from responsibility will have a far greater impact in the long run.
It is a cultural problem that government policy can’t fix. You don’t fix a cultural problem by passing an ordinance at city hall, or a statue in the state legislature, or a bill in congress. And you don’t do it by telling the most selfish and entitled among us what they want to hear. That’s following, not leading, even if it does lead to more campaign contributions and more advertising revenues.
I’m writing a more general follow up to this, and will post it later this week.
What would I have spent my career doing if I had stayed at the New York City Department of City Planning, instead of leaving 21 years ago? Nothing good, based on what I know, and it’s a good thing I got out when I did. New York City is gradually becoming a giant co-op board, with different […]
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What would I have spent my career doing if I had stayed at the New York City Department of City Planning, instead of leaving 21 years ago? Nothing good, based on what I know, and it’s a good thing I got out when I did. New York City is gradually becoming a giant co-op board, with different rules based on who you are, and who you pay. There are plenty of obsolete and unjustifyable restrictions and exclusions on the books, many dating from the early 1960s when city planners decided the city would have to become a second-rate suburb to survive. And as I increasingly discover, any rules at all are optional for those on the political inside.
In fairness, New York City has never been a place of simple, fair rules strongly enforced against everyone. The trend of pretending to be tolerant and open because you only oppose the businesses and buildings the lesser people might patronize, not the people themselves, not only pre-dates the DeBlasio Administration, it goes back hundreds of years. In the 1850s, according to the book Gotham, snobs wanted to prohibit the sale of alcohol on Sunday, the only day off for working class Irish and German immigrants to gather in their pubs and beer gardens for a beer. “Reform” mayor Fernando Wood gave them the rules they wanted, then used selective enforcement as a source of graft. Astute reformers noted that Wood’s anti-vice crusades were highly selective. His men rounded up streetwalkers but left brothels alone, raided the grubbier gambling dens but not the fashionable establishments, and bypassed Sunday saloonkeepers who voted the right way.
Still, the trend toward regulation by special deals for the special people got worse under special interest-backed Mayor Bill DeBlasio, and based on who is contributing money to whom, and what even 21st century “progressives” are like, the trend toward different rules for different people is likely to continue to get worse.
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The City Planning profession is in a strange position. One might fairly say that its only big idea is to try to undo the regulations city planners put in place after 1920, and in particular after 1970, to allow the types of development patterns the market produced on its own before the government intervened. All over the county cities and small towns find that many or most of their most desirable and loved existing buildings and neighborhoods could not be built today, due to parking requirements, use restrictions, and bulk restrictions imposed to try to replicate the suburbs.
To call these rules obsolete is to give them too much credit – they were never justified to begin with. But political operators like the unjustified rules, because it requires anyone who wants to operate a business or build a building to crawl before them and cut a deal. And all the land use lawyers and consultants, who make campaign contributions, take a cut. Thus the city planning profession is unable to fix its own mess.
New York City isn’t the worst in this regard, despite the community boards and local political NIMBYs. But it still has lots of stupid rules on the books that aren’t coming off, as I discovered as the head the Commercial Use and Parking Study in the 1990s.
The framers of the 1961 zoning decided that to compete with the suburbs, the government had to take the role of shopping center owners and carefully curate which type of business went where on a commercial street. High volume retailers over here, lower traffic services over there. Thus, only Use Group 6 is allowed in C1 zones, while Use Groups 7, 8 and 9, including workshops and repair shops, studios, small wholesale establishments, and places of assembly such catering halls, health clubs, and theaters were banished to C2 zones.
The two types of zones alternated and were often right across a street from each other. And a few decades later, there were as many businesses theoretically in use groups 7, 8 and 9 in C1 zones as in C2 zones. You couldn’t tell the difference. Enforcement was only in response to complaints, and those complaints came from business competitors, or those who didn’t like the race or ethnic background of the business owners or customers.
When you make everything illegal, the authorities can target whoever they like. And there are co-op board type people who like that just fine. And in fact, any type of business that didn’t exist in 1961 is, in theory, illegal because it isn’t listed in the zoning resolution. Umbrella and typewriter repair establishments? Fine. Electronics repair establishments – not permitted anywhere in New York City, but tolerated for those who play ball.
In addition, the 1961 zoning eliminated zoning that permitted businesses in areas where businesses were already present, and required parking for new commercial buildings, in the hopes that existing storefronts would be replaced by a smaller number of strip malls. That’s right, the zoning on the books is intended to replace urban main streets with strip malls. In particular, new supermarkets were prevented by the parking requirements and the prohibition on food stores with more than 10,000 square feet in manufacturing zones, leading to food deserts.
This is something I tried to change in the 1990s. You’d think the Giuliani Administration, based on what Giuliani said, would have been in favor of getting rid of useless restrictions on businesses. All the research was done, the report was ready to be printed, and then it just didn’t happen. I still have all the photographs of all the criminal businesses that were, in reality, no problem at all.
A couple of decades later, a former colleague introduced me to the next set of city planners. They had been directed to all my research, and were ready to try to fix this mess during the DeBlasio Administration. “Good luck” I told them. And once again, despite their efforts, nothing happened. The DeBlasio Administration had made a non-decision to leave new businesses vulnerable to harassment for no reason. They didn’t even loosen up the parking requirement in manufacturing zones so that new loft buildings, suddenly in demand again, could be built like the ones that are already there. I can only assume that the political level squashed them again.
I could write 100 pages on all things that the DeBlasio Administration should have been in favor of doing, if it were “progressive” and in favor of the disadvantaged like it pretended to be, but did not do because that was all a pose.
Take for example school segregation. DeBlasio made a big deal about the seven test-in schools such as Stuyvesant, precisely because their status as test in schools is a matter of state law and there was nothing he could do about it. While not doing anything about the system that sorts children into winners and losers at age 3 and 4, something that was totally in his control, until he made a proposal – on his way out the door. People can argue about whether or not it makes sense to bus kids all over the city to reduce segregation, but does it ever make sense to bus kids all over the city to increase segregation? The Catholic Schools, what’s left of them, put all kinds of kids together until 8th grade, and only then sorts them out based on their differing needs. That makes sense. But New York City has campaign-contributing school bus companies to satisfy.
Of course, this goes back a long way too, with the fake address scheme for the right people to get into the wrong schools. It was even in A Tree Grows in Brooklyn.
But let’s talk about what DeBlasio did do, and given him credit for one thing.
On his way out the door, the DeBlasio Administration did make it legal to open a health club.
The Health and Fitness Text Amendment is intended to remove outdated and onerous regulations that exist for gyms, spas, and licensed massage therapy, making it easier for these businesses to open and provide health-related amenities in communities across New York City. The proposal would remove an existing special permit and restore these activities to as-of-right uses, as they were within the 1961 ZR
The 1961 ZR listed Physical Culture or Health Establishments (PCEs)—a definition that included gymnasiums, reducing salons, masseurs, or steam baths—as Use Group 9. These activities were permitted as-of-right in most commercial districts.
Use group 9 was only permitted in C2 zones, not C1 zones.
During the 1970s, concerns were emerging by members of the public and elected officials regarding the proliferation of commercial sex in New York City. Many establishments engaging in such activities were masquerading as health clubs and massage parlors.
So they just required a special permit for all health clubs. Large chains could just open and be legalized after the fact, after demonstrating they were not sex clubs. But anyone who wanted to open an independent business was harassed – and had to pay “expeditors” who then passed on money to the right people. It was not possible to open a health club or anything like it, such as a yoga studio, anywhere in New York City without a review lasting up to a year.
The BSA process for obtaining a permit is extremely costly, often adding six months and up to $50,000 in additional startup costs to open a gym, creating a high barrier for small and independent businesses.
In theory all of those special permits were in C2 zones. In practice, if you hired the right expeditor, who paid off the right people, and convinced the community board you would be serving the right people, people the zoning distinction between C1 and C2 zones was simply ignored. The Board of Standards and Appeals issued one special permit after another to large corporate chains in C1 zones, “contrary to zoning.” They simply ignored the (stupid) rule on the books.
When the DeBlasio Administration proposed getting rid of the special permit, many community boards (to which DeBlasio had long pandered) objected, because they liked the idea than new businesses had to bow and plead before them.
The proposed action would categorize all facilities dedicated to physical fitness and health, limited to 10,000 square feet of floor area per establishment, as Use Group 6 and Use Group 14. This includes gyms, spas, and other facilities with activities designed to promote physical fitness. Through this framework, the use would be permitted as-of-right in all commercial and manufacturing districts.
Fair enough.
But consider what else the DeBlasio Administration did on its way out the door. It now requires an environmental review, a city planning commission special permit, to open a new hotel anywhere in New York City. Anywhere!
By establishing a new CPC special permit, the proposed actions would establish a case-by-case, site-specific review process intended to ensure that new hotels do not create conflicts with surrounding uses.
Which is to say, that the proposed hotel would be “upscale” and only affordable to the affluent, so others can’t visit the city. You didn’t hear an objection from the real estate industry. Those who overpaid for buildings and sites, and can only be profitable at $500 per night, are probably relieved that someone from Gujrat can’t open a hotel and charge $150 per night, the way they do everywhere else in the U.S. But what about moderate- and middle-income households who might want to visit New York City, and wouldn’t mind staying with the Gujratis? And what about all the jobs those additional tourists could provide?
However, the proposed text amendment would retain the existing findings and regulations of the special permit for hotels in M1 districts (N 180349 ZRY), which was adopted in December 2018. The existing rules in M1 districts address specific issues related to common business activities in light manufacturing districts.
As in, making sure the hotel is costly enough that it can’t be used for less-well-off singles, the way old hotels were for hundreds of years before the hypocritical Democratic progressive snobs intervened.
This is an absolute disgrace. Bill DeBlasio wants to run for Congress. He should be asked over and over again how it is that he decided that any new hotel requires a political deal to open anywhere in New York City. After all, that’s one place he got the money to run for another election to begin with. What is the ideological, philosophical, moral values behind this? What does this say about his values, so-called progressive values?
And it isn’t just that.
I happened to flip on, I believe, TV channel 25-2, and saw a public hearing on an application to rezone a large property owned by the applicant, and one smaller lot next to it. The rezoning would allow a much larger residential building than other property owners could build. The applicant presumably got the property cheap, because less was allowed to be built or the land was set aside for less lucrative but needed land uses (warehousing and transportation). Now, by hiring lawyers and consultants and perhaps making political contributions, the city will in effect hand them a bunch of money that nearby property owners cannot get. They may use the rezoning to build something, or just flip it for a cheap profit without having to do anything.
This is called spot zoning, and it is illegal. I did a search of something I could link to back up that assertion, and was surprised to find this.
From the New York State Department of State, revised in 2015 but for some reason reprinted in 2021. Why did they feel the need to do that?
Consider the equal protection clause of the constitution. You have two people or entities that own similar properties in nearby locations. How can the government decide that one of them will have regulations that make their property worth less, and the other have regulations that make their property worth more? Based on what? Politics, connections, corruption, favoritism, race, class?
Basically, land use regulations are required to be based on legitimate public purposes such as health and safety, and to be consistent with a well-considered land use plan. These were the legal requirements set down when the courts held whether, and under what circumstances, land use regulation is allowed to start with.
Spot zoning, as defined in the document above.
Spot zoning refers to the rezoning of a parcel of land to a use category different from the surrounding area, usually to benefit a single owner or a single development interest. Size of the parcel is relevant, but not determinative. Illegal spot zoning occurs whenever “the change is other than part of a well-considered and comprehensive plan calculated to serve the general welfare of the community.”
A review of the relevant cases reveals that spot zoning is the antithesis of zoning undertaken in accordance with a well-considered plan. The landmark case in the field of spot zoning is Rodgers v. Village of Tarrytown,29 in which the Court of Appeals defined the rezoning of relatively small parcels of land in terms of the comprehensive planning requirement:
Thus, the relevant inquiry is not whether the particular zoning under attack consists of areas fixed within larger areas of different use, but whether it was accomplished for the benefit of individual owners rather than pursuant to a comprehensive plan for the general welfare of the community”
New York City has no comprehensive plan. We are on the verge of having every new business that opens, and every new business that gets built, subject to a co-op board-type “right kind of people” review. With some types of people allowed to ignore every law, and other subject to unreasonable harassment and restrictions.
Consider something else that happened prior to the DeBlasio Administration. In Corona.
Northwest Queens is the earliest area of the borough to be developed and the most urban, with extensive multifamily housing in proximity to the Flushing #7 subway line and other subway lines. Queens is one of the most ethnically diverse counties in the United States, with immigrants from a large variety of counties living in enclaves, especially along the Flushing Line.
Data for zip code 11368, including both North Corona and South Corona, reflects that diverse, immigrant, working class character. According to five-year American Community Survey (ACS) estimates data through 2020 from the U.S. Census Bureau, just 14.0% of the adult population had a bachelor degree or higher, and 36.4% had not completed high school, and yet an unusually high 67.4% were in the labor force, working or looking for work. Nearly 60.0% of the population was foreign born, with nearly 80.0% of the foreign born having been born in Latin America, and 70.8% of the total population speaking Spanish. Corona is the most Latin American area of Queens.
Only 14.4% of employed Corona residents drove their own vehicle to work, compared with 11.5% who walked and 63.2% who used public transportation. An unusually high 34.0% of the workers were in blue collar occupations, with 37.4% in service occupations, 15.9% in sales and office occupations, and just 12.7% in management, business, science and arts occupations. The median household income is $56,904, and 26.5% of the population is in poverty.
ACS housing data shows a densely populated but low-rise housing stock that was mostly built after WWII. Only 30.4% of the total housing units are in buildings with 20 or more units, and only 10.0% were in one-family homes. Two- to four-unit homes predominate, but are wood frame and mostly in poor condition. A plurality of the housing stock, some 45.6%, was built between 1950 and 1980. The population is packed in, with 27.3% of the housing units having more than one person per room. About 80.0% of the occupied housing units are renter-occupied, and the estimated rental vacancy rate is just 0.8%, with a median gross rent of $1,686 per month, and 57.2% of renter households paying 30.0% or more of their income in rent.
With good transit access and Flushing Meadow park nearby, you’d think this would be the perfect place for new mid-rise housing development.
Nonetheless, Corona was downzoned twice, once in 2003 and once in 2009. In the first rezoning, it went from R6 to R6A and R6B, which allow the same level of development but with consistent height limits. I can agree with that. If we want rooftop solar, you don’t want to have people installing $20,000 systems only to have a development next door put those solar panels in the shade. But the next rezoning limited 68 blocks to one-and two family detached houses. Much of the area is zoned R5A today. R5A contextual districts permit only one- and two-family detached residences with a maximum 1.1 floor area ratio (FAR).
Why? Maybe to appease community board members like this, who also objected to bike lanes because they were associated with “change.”
So, what did the DeBlasio Administration propose do about all this? Ignore it, and then propose to legalize, illegal cellar apartments. Under the building code, basement housing – with more than half its height above grade is legal, but cellar housing – underground – is not. Having prevented building up in Queens, the city turned a blind eye to building down – until it rained, and a bunch of people drowned.
The Department of Buildings confirmed Friday that five of the six buildings where New Yorkers lost their lives had illegal basement or cellar conversions.
Why does allowing this, but not allowing new masonry buildings to replace deteriorating wood-frame buildings, make sense? It doesn’t make planning sense. But it makes political sense.
As does the snobby opposition to new businesses that seek to provide rapid delivery by occupying vacancy spaces on commercial streets.
City Councilwoman Gale Brewer demanded Wednesday that Mayor Adams and Gov. Hochul start cracking down on high-speed, app-based delivery services like JOKR, Buyk and Fridge — businesses she claims are violating the city’s zoning laws and possibly state liquor license requirements.
The so-called dark stores, many of which promise delivery within 15 minutes, occupy spaces zoned by the city for commercial use, but, according to Brewer, they essentially serve as warehouses where the services store their products and dispatch their delivery workers from. That, she said, is not allowed under city zoning rules.
“I don’t think they’re legal,” she said just steps away from a JOKR storefront on the Upper West Side. “The concern is they are going to drive out our beloved bodegas.”
First of all, wholesale establishments with up to 1,500 square feet of accessory storage are in fact legal – in C2 zones, but not C1 zones. Even if such establishments were in C1 zones, however, what right do existing businesses have to keep out new competitors who might offer lower prices, better services, and more fresh food?
You have savers who are looking for a place to invest their money. Landlords who have vacant stores, in part because they paid too much for the buildings and are required to charge too much to pay the loan, in part because the city put independent businesses out of business during the pandemic, in part because shoplifting has been decriminalized. They are looking for tenants. You have people looking for jobs is a city with an unemployment rate double the national average. You have consumers looking for a better deal. What right does the city have to prevent them from voluntarily getting together and creating a new kind of business?
And why do food selling companies from “socialist” Europe see opportunity in the U.S.
Even before the current bout of inflation, food prices in America had been rising faster than most other prices for the previous 20 years. A study in 2017 by the UN’s Food and Agriculture Organisation found that the cost of eating healthily in America was 65% more than in Britain, and among the highest in the rich world (see chart). The inflation figures suggest that this will, if anything, have worsened since. Though Americans still spend a smaller proportion of their income on supermarket food than Europeans, the gap has been narrowing. In absolute terms they spend more, even though they also eat out more, and eat less healthy, cheaper foodstuffs.
And that’s the with the biggest and most efficient companies, let alone bodegas.
Do I think ordering food and getting it delivered in 15 minutes is a practical idea as a business? Maybe not. Is it for me? I still don’t have a smartphone. But I don’t think I have the right to tell other people what they can do without a very good reason. If they don’t work out, they’ll go out of business and be replaced by something else – if the city deigns to allow something else. Ah, but we want boutiques and cafés, not a neighborhood distribution hub frequented by blue collar workers on e-bikes! Damn these kids with their sex, drugs, and rock and roll apps! It’s our world and they are just living in it.
Mayor Eric Adams is moving to crack down on the proliferation of warehouse-like spaces that grocery delivery apps have created inside former Big Apple storefronts – ordering them to allow customers to shop there or move to the outskirts of the city, The Post has learned.
Critics including City Council members Gale Brewer and Christopher Marte have argued that storefronts operated by apps like Gopuff and Gorillas violate zoning laws because they operate mostly as warehouses and should therefore move out of neighborhoods zoned for retail use.
I’ve got a better idea. Go after every business in a C1 zone that isn’t specifically listed in Use Group 6, and any business that doesn’t conform with the sign regulations (including every bodega out there), fine the hell out of them and shut them down. But only in these two councilmembers’ districts. (And perhaps publish a schedule of required bribes to allow them to stay open).
This is the same kind of mentality that emptied retail space in the City of San Francisco.
An established ice-cream shop, Garden Creamery, was attempting to prevent a prospective soft-serve shop, Matcha n’ More, from moving onto the same block, using a provision of a state law designed to protect against environmental degradation.
Ensue public comment! The first caller asked why the question of whether two dessert shops could operate on the same block was an issue for the planning commission in the first place. The 64th caller was more blunt. “I support the new business,” the person said, per Fruchtman, whose tweet thread on the meeting went viral. “The whole process is dumb as shit.” Still, Jason Yu of Matcha n’ More ended up spending $200,000 navigating San Francisco’s bureaucratic processes. After two years of procedural wrangling, he gave up…
In San Francisco, “instead of bright-line rules, where a developer knows I’m allowed to build this here, everything is a negotiation and every project proceeds on an ad hoc basis,” Jenny Schuetz, a housing economist at the Brookings Institution, told me. Small-d democratic-citizen participation has led to profoundly regressive outcomes.
There it is. Co-op board zoning, with the neighbors deciding if you and your clientele and employees are “upscale” enough to be allowed. For businesses and buildings, not people by race, because, you, how, we’re “liberal.”
If I wanted to live in a snobby, exclusive area like Westport, CT I would have moved there. Actually…
Existing houses can have accessory apartments within the house itself, but they still can’t exceed 25 percent of the square footage. The proposed change would increase the maximum footage from 800 square feet to 1,500 square feet, however.
The commissioners were generally supportive of the changes to allow accessory apartments throughout town, but said there should also be guidance on the logistics for those who want to add them.
New York’s suburbs are worse, and New York City’s politicians are as bad as those in the suburbs. Except that those with the money to provide “consideration” can always cut deals.
Getting back to Mayor DeBlasio, the battle over the Prospect Park West bike lane is a measure of the man.
Democratic mayoral candidates agree: the city failed to do enough outreach before installing the controversial Prospect Park West bike lane — but making a section of the street for cyclists only was probably a good idea anyway.
The consensus of true-blue hizzoner hopefuls at a May 6 forum in Park Slope was that the city should have gone further in getting neighborhood feedback before converting a lane of the thoroughfare into a two-way route for bikes. The change bred bitter hostility among many residents and provoked several lawsuits.
The bike lane had been requested by the Community Board, gone through a full public review process, and had the support of the local member of the City Council. But several local Democratic pooh-bahs whose support for higher office DeBlasio was seeking opposed it, so he did as well. When they lost and it was built anyway, he was in favor, but still said “the community” was not consulted. Who is “the community?”
This is the same DeBlasio who had nothing to say about the Staten Island Expressway expansion from six lanes to ten getting approved with no environmental impact statement virtually no consultation with anyone at all.
When it comes to regulations, for DeBlasio and those like him it isn’t about “what.” It’s about “who.” DeBlasio pandered to the city as giant co-op board, and now we get even more of it. A conservative is someone who thinks advertising is a free speech right but protesting is a quality of life crime. A liberal is someone who wants to legalize marijuana and ban tobacco. And a libertarian is a liberal who was mugged by a co-op board (or homeowners’ association or any board).
Given that, Mayor DeBlasio was probably saved by the bell, because a third term for the DeBlasio Administration would probably have ended up like Koch’s third term.
This is an insane story that should be turned into a true crime miniseries. You’ve got the shocking story of the two suicides of the Queens Borough President, a kickback and bribery scandal that ensnared three Dem county leaders, a Congressman and dozens of party hacks, the first Jewish Miss America acting as a beard for the-everybody-knew-he-was-gay Ed Koch, Giuiani when he was still an effective lawyer and the Trump Organization lurking at every corner.
Instead, that might be the Adams Administration. With the BSA is prepared to approve anything, but only for the right people. You know what land use lawyers call the seven findings required for a zoning variance? The seven lies.
The big picture is, I’ve been irritated by these “environmental” and “process” NIMBY lawsuits and rules since back when I was a junior planner at NYC planning.
And disgusted at the extent to which city planning, and environmentalism, have been hijacked by “I’ve got mine jack” feudalism that has nothing to do with planning for the future or the environment.
Over time, I’ve come to be less offended by selfish people advancing a philosophy of selfishness than by selfish people hiding behind “progressive” and “egalitarian” motives. The sort of thing that is thick on the ground here in metro NY, home of exclusionary zoning in the suburbs and class (less so than race) bias in the city and suburbs alike.
I’ll say it again: Under capitalism, you get what you earn, at least in theory. Those who believe that people need an incentive to work and innovate can agree with that. Under socialism, you get what you need, at least in theory. Those who believe that we are all part of one human family can agree with that. But over time, when you have the same group of people in power, both capitalism and socialism degenerate into feudalism, under which the privileged expect to continue to get what they have been getting, and perhaps a little more, whether they need it or not, deserve it or not. For those who have real needs, and who produce real earnings, it’s just tough luck.
For those who have the deals, those who are already there, those who are working the system, feudalism has its appeal, and it can be the basis for a political career. But the idea that having this kind of arbitrary power and selective enforcement will ever work to the benefit of the less powerful, less advantaged, less wealthy is a fraud.
It appears that retail renegade Rick Caruso is running for Mayor of Los Angeles. Good for him.
Caruso was an early pioneer of the “lifestyle center” form of shopping center, one that attempts to bring the social advantages and feelings of a downtown or main street to the suburbs. And to bringing mixed-use to the suburbs, with apartments at the shopping center. The public wanted it. The city planners wanted it. Local politicians wanted it. It was approved. But since he was building a better mouse trap, owners of a crummy old shopping mall attempted to use California’s out of control “environmental,” NIMBY and litigation culture to prevent him from opening it.
Caruso beat them.
In 2001, the city of Glendale awarded Mr. Caruso a 15.5-acre site near the Galleria in downtown Glendale to build Americana at Brand, a $369 million open-air shopping center. The next year, General Growth bought the Galleria, an enclosed mall with five anchor department stores. It owns the mall in partnership with the New York State Common Retirement Fund.
General Growth, which has interests in more than 200 shopping centers in 45 states, including the South Street Seaport in Lower Manhattan, tried several strategies to keep the Americana from opening and potentially siphoning off the most desirable retail tenants.
General Growth, a real estate investment trust, first collected enough signatures to hold a referendum on the project, but voters approved its construction. A lawsuit challenging the environmental impact statement for the project was also unsuccessful.
Scheduled to open in April, the Americana is similar in concept to the Grove, except that it will have 238 apartments and 100 condominiums in addition to 475,000 square feet of retail and entertainment space.
In 2004, Mr. Caruso filed a lawsuit against General Growth accusing the company of antitrust violations and unfair competition as well as illegal interference in his lease negotiations with store chains. The antitrust and unfair competition charges were recently dismissed.
The case was closely watched by analysts who cover mall companies because retail brokers have complained for years that large operators use their power to dictate where retail chains open their stores.
As an environmentalist with a masters in city planning who is disgusted by the bastardization of both environmental and land use regulation, I was pleased to see him win. He struck a blow against it. What are developers to think of land use regulation when some are hassled for trying to do anything, while others get away with everything? I turns the whole thing into a scam.
generation greedgenerational equitynew york city budgetnew york city pensionsnew york state budgetnew york state legislature corruption, dean skelos, sheldon silvernew york state pensionsCuomo Administration managementDeBlasio Administration managementNew York City public managementpublic sector management
Imagine it’s 10:30 am on a typical weekday during the school year. At that time New York City is paying 211,843 members of the NYC teachers’ retirement system (or was a couple of years ago). What are they doing? If you made a pie chart, what would it look like? How many are retired? (We know that, it was […]
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Imagine it’s 10:30 am on a typical weekday during the school year. At that time New York City is paying 211,843 members of the NYC teachers’ retirement system (or was a couple of years ago). What are they doing? If you made a pie chart, what would it look like? How many are retired? (We know that, it was 88,507, or 41.8% of the total). How many are out sick? How many are in preparation periods? How many are on break? How many are in out of classroom assignments or administrative posts? How many are on release time? How many are on sabbatical? How many are the second pedagogical employee in a classroom? How many are doing not much useful because they are waiting for something from someone else, because of some disorganization that wasted their time? And finally, how many are actually doing something useful with regard to the education and child care of children?
What if, instead of the pie chart being based on the number of people, it were based on the total cost of the NYCTRS members in each category – their cash pay or pension, their health benefits, their other benefits? Now imagine the same charts being produced for all the other city and state agencies – police, sanitation, fire, transit, corrections, judiciary, parks, social services, hospitals, etc.
Good management seeks to ensure that workers have the qualifications, motivation, training, tools, organization and scheduling to do useful work almost all the time they are being paid, and to limit the amount going to those not doing such work, to the extent possible. So that the workdays fly by, and the maximum (or at least a fair) amount in services is produced for a given about of cost. By that standard, how good was the management in the Cuomo and DeBlasio Administrations? How fair is the deal the employees and contractors of the City and State of New York provide to other New Yorkers, compared with what public employees, retirees, contractors and their retirees expect to be provided with by private sector workers in exchange? What would happen if an organization such as Consumers Union (Consumer Reports) were to examine the quality and value of public services provided by state and local governments the same way it looks at the goods and services provided by private corporations? That is the topic of this post.
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This post is going to discuss three aspects of management: the motivation and credentials of the workers, relative to their cost; the organization and the efficiency of their deployment; and the tools that they are provided with. Followed by a discussion of the role of voluntariness.
Before that, however, it’s worth thinking back to the time when the Cuomo and DeBlasio Administrations first came in, in 2011 and 2014 respectively.
The State of New York is a corrupt and exploitive organization through which those working the system rob everyone else and the common future, before departing to Florida. All the real decisions are made in back-room deals with no public debate, and those deals are irrevocable.
The deals are done in secret because they could never stand up to public scrutiny. At some point more than a decade ago, however, it became clear that things had gone so far, with rising taxes, collapsing services, and state legislators going off to jail for corruption, that it was at least conceivable the people would rise up and rid themselves of the incumbent state legislators and their designated replacements (usually former members of their staff), and force the special interests that control them to give something back.
For incumbents, and the special interests, the goal was not (and is not) change or progress, but rather the preservation of their political positions and ever-expanding privileges. For the politically active and New York’s media, the goal was (and is) preventing any blowback over the raw deal here from affecting the issues that seem to actually matter. Issues such as where LGBQT people go to the bathroom, for example. It’s forgotten now, but during the 2010 election the cry of pretty much everyone on the inside with regard to Cuomo was — “Andrew save us!” He was basically anointed Governor because, given that New York politics is a closed club of self-dealing insiders, there seemed to be no alternative.
Cuomo had a reputation as a thug. That is the literal word I heard a fellow bureaucrat use to describe him in the early 1990s, when he was at HUD, and the reputation apparently went back much further. The powers that be apparently decided that it took a thug to make the de facto mafia work just well enough to prevent significant change, given just how bad our state legislature was (and is). That’s what Andrew Cuomo promised – to make the system of back-room, three men in a room deals work somewhat better. Not seeing any other options, I even thought so at the time. Cuomo set up a Moreland Commission to investigate state corruption, but then terminated it when he found out that just about everyone was guilty, including everyone around him.
Unlike Cuomo, who was virtually appointed Governor by the insiders (a trick they are trying to turn with Hochul as his replacement, because that’s what they do up there), DeBlasio actually had to run for election as Mayor. He didn’t do so based on any discussion of making public services better. Instead, the basis for his campaign was opposition to “stop and frisk,” opposition to horse drawn carriages, opposition to bike lanes that had spent several years in review because “the community” had not been fully consulted, and a willingness to take on the rich to benefit – as it turns out, earlier hired public employees and government contractors.
Once elected, DeBlasio immediately got a reputation as a slacker who showed up to work late.
I don’t usually interact with politicians, but I actually sent his office an e-mail pleading with him to show up on time. While I know that Mayors have commitments in the evening, they absolutely cannot be seen as slacking off. Because he now had 450,000 people working for him, many of whom would like nothing better than to show up late and slack off. And his image was poisonous to his ability to get unionized, tenured, civil service workers to do their job. Why bust your hump if the boss is taking it easy?
Nonetheless, the slacker reputation is one that he maintained throughout his administration.
The point is that neither Governor (Andrew) Cuomo nor Mayor DeBlasio came into office as a successful operations manager with knowledge of how to improve the operations of organizations with (roundly speaking) 250,000 and 450,000 employees, respectively. According to this website,
If they were private companies, the City of New York would have had the 10th most employees of any in the world, and the State of New York would have been 50th. Then consider their budgets. Just including direct expenditures (not including money sent on to other governments) that would have been $119 billion for the City of New York and $129 billion for the State of New York, back in FY 2019. That would rank among the highest expenditures among U.S. companies, if their expenditures on goods purchased wholesale for retail resale (by Wal-Mart or Amazon for example) were excluded.
All this under the control of politicians with no concept of operations management whatsoever. And that’s OK, because as I pointed out the job of a public chief executive is actually three jobs: policy, leadership, and management. And they could have a high-powered direct report in charge of each one. Does anyone recall who that high powered top executive was with regard to management in the Cuomo and DeBlasio Administrations? No? I recall a competent transit manager who lasted a little while.
Come to think of it, does anyone know who the de facto COO (chief operating officer) would be in a Hochul Administration, or in the administrations of her challengers? Is any top executive willing to retire from business because they have made “enough money” and enter public service anymore? And no, a former Wall Street executive would not be useful, as the City and State of New York have enough asset stripping going on as it is.
In theory if an organization pays its workers more, they will be more qualified, more motivated, and more determined to do a good job than are the employees of organizations that pay less. The organizations that pay more, in theory, attract “self-starters” who will do the job because they are doers who want to accomplish things. Those that pay less have to exert extensive management effort to get less qualified and motivated workers to do the job, and overcome high turnover despite attracting less qualified applicants.
Is that the way to works in the City and State of New York?
First, let’s consider the total compensation of public employees (including benefits) compared with the private sector workers (including those in the gig economy) who pay for them.
Bureau of Economic Analysis (BEA) data shows that in 1969, the mean earnings per worker in Downstate NY (adjusted for inflation in $2019) was $61,370 for the Finance, Insurance and Real Estate sectors, $60,233 for the rest of the private sector, and $69,463 for state and local government employees. State and local government employees earned, on average, 15.3% more than those in the rest of the private sector.
In 2019, on the other hand, the mean earnings of those working in the Finance, Insurance and Real Estate sectors was $122,813, and falling. The rest of the private sector averaged $81,575. The mean earnings for state and local government workers Downstate, meanwhile, was $124,095. That is not only 52.1% higher than the mean for the rest of the private sector, including all the one-percenters outside finance, a record high difference. But also – for the first time – more than the Finance, Insurance and Real Estate sectors.
The situation is even more extreme in Upstate NY, where the average state and local government worker earned 10.5% more than the average private sector worker in 1969, and 72.1% more than the average private sector worker five decades later.
So, New York’s public employees must be vastly more qualified and motivated than private sector workers, on average, must be showing up to work with a feeling of enormous gratitude and obligation, and must be vastly more productive, right? Especially after a Great Recession when none of them were fired, followed by a weak recovery in which inflation-adjusted pay fell for most private sector workers, many of whom ended up “self employed,” followed by a COVID-19 shutdown during which, once again, no public sector workers were fired, not even those with nothing to do. Even as millions of private sector workers were laid off.
In exchange for that level of support and consideration for public sector workers, New York’s working serfs get this…
Angered by the lack of workplace flexibility and facing a strong job market, city workers appear to be exiting en masse. An analysis by the Independent Budget Office (IBO), a nonpartisan public agency, found that as of early May the total number of full-time city workers was 282,000, a 6% drop from pre-pandemic days when head counts rose above 300,000.
The exodus, which comes as hiring has slowed, is raising questions about a flight of talent at a critical moment in New York City’s recovery…This isn’t just normal attrition … The city’s struggling to keep up with the rate of attrition with corresponding new hires.
There it is – public workers and contractors feel cheated, and we need to pay higher taxes or accept worse services as a result. No one contradicts this. Nor does anyone ask – what is normal attrition? And take three minutes on the Bureau of Labor Statistics website to find out.
And speaking of propaganda on behalf of the already privileged, and looking at the spreadsheet, where did that whole “Great Resignation” thing come from? Exasperation that low wage workers were leaving for somewhat higher paying jobs? The nerve! How come no one coined the term “the great termination” and asked why private sector workers should remain loyal to organizations that shrank their pay in a growing economy and them laid them off in a recession?
The outcry from city workers began last fall when de Blasio ended remote work for roughly 80,000 municipal office workers…But the decision to nix remote work enraged many city workers, who argued that they had proven during the pandemic that they could perform the same functions at home.
They could, and many would, but plenty would not. And given civil service protection, unlike private sector workers, no one could make them. Others would simply have to cover for their age 35 pre-retirement to some other state with lower taxes and better public services.
As it is, some these workers do some work only because since they have to be there anyway – not showing up is one thing that can get you fired in government – they might as well do something. That’s why there are all these battles over time and attendance in civil service – because it’s one thing that could perhaps be measured well enough to get rid of someone who isn’t doing the job in general. For tenured teachers, I’m not even sure that not showing up is enough. In an irony, it seems that thanks to tenure, the only reason a New York City teacher can lose their job is a political reason – saying something, even in their private life, that embarrasses the powers that be.
So it is one thing for an at-will private sector workers who can be replaced if they can’t get the job done to work at home, and quite another for a unionized, tenured, civil service employee. And as for the case with DeBlasio’s lateness, if some workers stop doing the job, and others are pressured to make up for it, eventually most of them will get aggravated enough to stop doing the job.
When I was laid off during pandemic, I waited months to file an unemployment claim, because I was receiving severance, I knew they were backed up, and others needed the money more. But it still took another five months after I applied to process my claim. I could afford to wait, but what about those less well off? And despite all these delays for those actually entitled, there was still massive fraud among those that received benefits.
Failures like these aren’t even an issue, it seems, because most people don’t expect New York’s public agencies to actually work. State Department of Labor workers were working from home at the time. You don’t think that had an effect on their ability to do their jobs?
In any event, if a New York City or New York State job could be done by someone anywhere in the country, why not just contract it out to those in another place, and save hugely? That’s what I have said about work from home in the private sector: beware, the next logical step is work from India, at Indian wages.
So here you have this contrast. The media and unions report resentful, demotivated public employees who are quitting, leaving behind even more resentful, demotivated and less qualified colleagues. Even as the average total compensation of public employees has soared compared with the serfs who pay for them. How is this possible, and who created this situation? One could read this for a clue.
And consider this chart of the cash wages and salaries of state and local government employees – those actually on the job – compared with the total personal income of all residents.
From FY 2000 to FY 2007 (peak to peak in the economic cycle) the state and local government tax burden soared in NYC as a percent of personal income, as shown in the prior post…
But public wages and salaries stayed about the same as a percent of city residents’ personal income.
Then from FY 2007 to FY 2019, peak to peak covering the DeBlasio and Cuomo Administrations, the NYC state and local government tax burden stayed at about the same level (at a level far higher than anywhere else), but public wages and salaries went down per $1,000 of city residents’ personal income, from $81.76 to $73.46, a 10.2% decrease.
Some of that was the result of a huge increase in taxable personal income from young and immigrant working serfs who did not require, or at least did not get, much in the way of public services. But the number of public employees fell compared with the city’s population, particularly outside public education, and there since were no offsetting productivity gains, public services fell also. And, it is now emerging, some titles faced long-term wage freezes, which meant cuts in real cash pay.
So there is your choice – soaring taxes for the same public services (and decreasing benefits for the poor) in one economic cycle, and decreasing public services for the same taxes in the DeBlasio-Cuomo administrations. How should New Yorkers be made worse off in the next cycle?
Much of the blame goes to the repeated rounds of massive retroactive pension increases for those cashing in and moving out over the period from 1995 to 2008, before DeBlasio and Cuomo even got there. Pension increases for those who already had the richest pension benefits, compared with private sector workers, allowing many to retire with full tax-free pensions seven years earlier than they had been promised when hired. This, and soaring debts, and soaring health care costs, meant more and more of working serfs’ taxes was going to tax free bonds and pensions and private (mostly non-profit) health care organizations, leaving less for the wages and salaries of public employees still on the job.
Both Governor Cuomo and Mayor DeBlasio had a chance to reverse some of this. Neither did so, because they wanted public union support for their next career move.
Cuomo could have publicly tallied the damage from all the retroactive pension deals (and debts) before he took office, held that the deceit and self-dealing around them put the beneficiaries out of solidarity with other workers, and demand that the social injustice be mitigated by having the actual beneficiaries of these deals give something back. Instead, he went the union-friendly route of drastically reducing pension benefits for new hires only, those in Tier VI, to less than members of his Generation Greed had been promised to start with.
It’s 7:50 am, the sun is rising and Assembly members have just hustled to the elevators after approving the governor’s Tier VI pension plan. The initial vote tally was 95-44.
All of this, of course, happened in the dead of night while most people were fast asleep.
“It was all done in darkness and under a message of necessity,” Jordan said. He added that this is, ironically, Sunshine Week which is supposed to be a celebration of openness in government.
The pension increases for those cashing in and moving out had passed the same way, also with bi-partisan support. And you don’t recall the public unions taking to the streets to demand that all their members including those existing be part of the shared sacrifice, do you? They were in on the deal, as were the state legislators who got pay raises as part of it.
Cuomo also froze reimbursement rates for some services, and Cuomo and DeBlasio froze the pay of some workers, for years – a 20-30% real decline when adjusted for inflation. These savings went not to pay for better services – we got worse – or lower taxes – they had soared and stayed the same. Just to pay for all those big union pension scores, debts, and a few other things.
I’ll credit another Streetsblog commenter, who thoughtfully said that with regard to the transit system, Andrew Cuomo was the worst of both words. On one hand, unlike the state legislature and Bill DeBlasio, he didn’t want our already high taxes to go further. On the other hand, in order to gain union backing to stay in office, he forced public sector managers to accept deals that allowed workers to do less and less for the same money. Notably when he stepped in to prevent MTA managers from reforming one of the most corrupt and rapacious agencies in New York – the Long Island Railroad.
It’s worth noting that the MTA’s offers to date have been generous, and I don’t believe the MTA should move from their position. According to materials the agency released after talks fell apart on Monday, the MTA has promised 17 percent raises in exchange for some health care contribution concessions. It’s unclear if badly needed pension and work-rule reforms are on the table, but so far, the MTA hasn’t shown a willingness to fight for much reform in a way that would overhaul the labor problems the agency currently faces.
I’m worried about Cuomo’s interference because the MTA almost needs the strike. In the short term, it would mean headaches for subway riders and major hassles for Long Island commutes (including reverse commuters), but in the long time, the MTA has to fix systematic problems with LIRR work rules, pensions and other benefit obligations. They won’t be able to do so if Gov. Cuomo is putting pressure on to settle before voters get upset. Such are the travails of labor relations during an election year. Can we look beyond the next three months?
We can look back beyond three months now, and find that NYC riders ended up paying for the Long Island deal Cuomo cut, along with other deals with unionized employees, contractors and consultants who commute in to city and city contractor jobs from places like Long Island.
In fact, Cuomo never again stood up for a fair deal for public service recipients, after the organization that controls the state legislature, the New York State United Teachers, showed it was willing to spend as many taxpayer paid-in dollars as it took to ruin his reputation, if he didn’t go along with paying more for less.
NYSUT President Karen E. Magee said the ad campaign is designed to educate New Yorkers about the damage the governor’s “billionaires’ agenda” would do to teaching and learning. “The governor should be listening to the true experts – students, parents and educators – about what’s really needed. It’s not more emphasis on standardized testing, but fair and equitable funding that benefits every child in the state and more support for our already strong public education system,” Magee said.
In another case of accidently saying to what they were all secretly thinking, Magee once said NYSUT would never accept any teacher evaluation system that could lead to a negative effect on any teachers’ career – no matter what they did or didn’t do.
This after Cuomo had questioned why, after spending more and more and more than anyone else, New York didn’t have the best schools. He would never ask that question again. Nor would he talk about how much of that increase went to the pension increase the teachers’ union pushed through.
Mayor DeBlasio had an even better chance to reverse some of the damage from all the pension increases — for taxpayers, service recipients, and even later-hired public employees. Tier VI, with lower pension benefits and higher contributions for new hires, had already passed when he came into office. Mayor Bloomberg had also agreed to contracts with lower cash pay increases (teachers) or even big starting pay cuts (police, fire) for new hires, to fund bigger increases for those at the end of their careers (and thus their pensions), while thinking of running for President.
Then he reversed course and tried to limit the damage by demanding some givebacks. So the unions simply refused to negotiate new contracts, and simply waited until he was replaced by someone willing to follow orders.
It worked.
DeBlasio could have said that since those in Tier VI will be retiring later after paying in more, all the money available for raises should go exclusively to them, in higher starting and early career pay. And that if those in Tier VI wanted raises, they would have to agree to offset them with higher retiree health care contributions for those who got to retire years earlier than they had been promised when they were hired – with up to 10 years of high costs before Medicare picked up most of the bill, rather than three.
This would have evened things out between tomorrow’s, today’s, and yesterday’s public employees, at least a little, and made a city job more attractive to newcomers. Including those Gothamist claims are leaving because public employees are “underpaid” (in starting and early career cash pay, which is all anyone is allowed to talk about). They would have had higher cash pay to offset later retirement and higher pension contributions, but would have had the option to contribute some of that higher pay to a 401K if they wished.
Instead, DeBlasio did what the unions ordered, and agree to wage increases in excess of inflation for all public employees – including the existing employees who go the richer pension deals and lower employee contributions (even as the wages of the serfs who pay for them continue to fall behind inflation). And claim it was partially paid for by an agreement for health insurance cost reform that never actually happened. (He may have cut a deal just before he left, eight years later, that was actually never implemented).
And then jacked up the property tax burden, and allowed those employees to produce worse services.
(Come to think of it, Mayor Adams has the same opportunity that Mayor DeBlasio had – no wage increases during my term except for Tier VI, or in exchange for higher health insurance payments for those who got to retire earlier than Tier VI or the initial Tier IV promise. Think he’ll do it)?
In an echo of Tammany Hall, if anything Cuomo and DeBlasio are associated with having private government contractors also get richer and richer compared with the serfs who pay for them, rather than just public employees.
In Cuomo’s case this includes the construction unions and construction contractor management, who have been allowed to pay for most of the cost of their own retroactive pension increases around the year 2000 by charging vastly more for public projects. Especially the MTA, now extra $billions in debt to pay, in effect, for work done in the long ago past on private development projects.
New York has long has “prevailing wage” rules, which require that the equivalent of union contract wages on public construction projects. In the 1980s and 1990s that mean cash wages only – public projects were kept affordable because excessive benefit costs and goldbricking work rules were avoided. That’s how all that affordable housing was built at affordable prices back then. Ask Kathy Wylde, who is still around, and oversaw the program, and hired many minority non-union workers to do the building at a time when the construction unions were racially exclusive.
Then the managers of the construction companies and their unions cut deals to retroactively increase their pensions around the year 2000, creating massive underfunding and raising the possibility of pension plan bankruptcy, before retiring to Florida. Soon after the “prevailing wage” law was changed to include benefits, even as private development went non-union to avoid the cost of the pension increase. Most of the cost of the pension increases was shifted to the public sector. (As in the public sector, later-hired construction workers were also screwed to pay for those cashing in and moving out). This also benefits private developers, who avoided those costs. Both Cuomo and DeBlasio were funded by the real estate industry as well as public unions and contractors.
This is what is meant by “practical solutions” and “creative solutions.” Screw the future and those who will live in it. Cuomo expanded “prevailing wage” even further, to benefit those still commuting from the suburbs for construction work, retired, or already dead.
In brief, when a project is subject to prevailing wage requirements, workers must be paid set hourly wage rates and hourly benefit amounts as determined by the fiscal officer of each New York county. These rates are substantially higher than minimum wage and also traditionally far greater than average non-union rates largely due to the added benefits amount.
Under the Budget Bill, S.7508-B A.9508-B, signed into law by former Governor Cuomo on April 3, 2020, workers must be paid prevailing wages on “covered projects,” which refer to “construction work done under contract which is paid for in whole or in part out of public funds where the amount of all such public funds, when aggregated, is at least thirty percent of the total construction project costs” and “where such project costs are over five million.”
Previously, projects were subject to prevailing wage requirements only if a public entity was a party to a construction project and the purpose of the work was to benefit the public.
This is very much like the multi-employer pension changes passed at the federal level. Later hired workers who don’t even get pensions – and probably won’t get Social Security either – will be forced to pay for already retired or soon to retire workers who got retroactive pension increases compared with what they were promised. Members of Generation Greed promised themselves more and more, and then forced those coming after to pay for it. New York’s multi-employer pension funds won’t need that federal bailout, because New York’s serfs have already bailed them out through inflated prices on government contracts.
Among those private entities to whom DeBlasio handed over extra $billions in taxpayer dollars were the private school bus companies, long the largest contributor to members of the City Council in exchange for automatically renewed no-bid contracts. New York City has long spent vastly more per student on bus transportation than anywhere else as a result.
When Mayor Bloomberg tried to change routes to cut costs, the school bus companies used the politician-controlled court system to stall until winter, and then dropped handicapped children off at the wrong places in freezing weather, threatening their lives. “President” DeBlasio undid even Bloomberg’s mild reforms, and then gave the school bus companies nearly $1 billion in taxpayer dollars when their services were no longer needed during the COVID-19 shutdown.
The price of NYC school bus services per student soared further from 2007 to 2019, from already high levels.
The $billions stolen on behalf of contractors just adds to the extent that the total wages and salaries of public employees who are actually working have to go down compared with the income of city residents. And the city’s inability to provide help to its poorest.
Having given away the store to the unions and contractors, did Cuomo and DeBlasio at least leave them happy on the way out? Hardly. Achieving something only former Mayor John Lindsay had previously achieved, Cuomo and DeBlasio left office despised by those they had in fact favored over everyone else, as a result of their failure to challenge that entitlement. In DeBlasio’s case it seems as if every public agency was, de facto, on strike, or at least a slowdown, during his last year on the job. Yes, some of that was the pandemic, but the attitude predated it. What does winning look like for those on the inside? How about the Department of Corrections, with 30% of the workforce on paid sick leave, leading to an overstaffed (relative to the number of prisoners) agency forcing later-hired corrections officers to work 24 hours in a row – put themselves and the prisoners at risk of severe harm.
And while the presence of public workers who don’t do their jobs is one issue, the attrition of fed-up workers who actually want to do their jobs is another. Imagine five levels of motivation – “on a mission,” “proud professional,” “just a job,” “that’s not my job,” and “beat the system.” Because the bureaucracy, the unions, and the politicians, whatever level you come into public service with, it will be knocked down one level per decade. Eventually, many who had hoped to work in “public service” leave because they realize that the service part will not happen.
The Cuomo and DeBlasio Administrations left us paying more, for a resentful and entitled workforce that believes it is being paid less. No one who hopes to have a political career will say otherwise.
There is a way that one group of workers can grab higher compensation than other workers, without forcing those other workers (in their other roles as taxpayers and consumers) to pay more for less. Or retain the same compensation while allowing other workers to pay less for more. By increasing their productivity – the services they produce per hour that they work. Through less wasted time and effort, and more efficient use of time and resources.
It is only because of rising productivity across the economy that people have been able to able to achieve the standard of living we have today, as opposed to the standard of living of 100 years ago. Having benefitted from the higher productivity of others, I believe that public agencies, employees and contractors have an obligation to increase their own productivity – bit by bit, year-by-year – in exchange, to benefit those others. Fairness requires a little more in exchange for a little less, not the other way around.
It is a measure of the disinterest in “productivity” in the public sector that the word isn’t even used for what it actually means – more and/or better work done in the same amount of worker time.
When there is a budget crisis, and thus a sudden, temporary need to pay attention to costs, the word “productivity” is at times used to describe cuts in public worker compensation. No wonder the workers are against it. I recall a day’s work in city government to be eight hours, with one hour for lunch – seven hours of work. In the early 2000s, after the dot.com bust and 9/11, there was a proposal to require eight hours of work, perhaps 8 ½ or nine hours in total, with no increase in pay. That would be a 14.3% increase in hours worked for the same compensation, or a cut in compensation per hour worked. This was described as a “productivity gain.” But it would not be an actual “productivity gain” unless the actual work done (or quality thereof) went up by as much or more than the time spent to do it. Since this is a public sector situation, a more likely outcome would have been little or no increase in actual work in despite in the increase in time working (or at least on the clock) — a productivity decrease.
The word “productivity” is also used to describe cuts in public services. Subway stations that were previously staffed become unstaffed overnight? A so-called productivity gain. Stations and parks cleaned less often, even as garbage piles up? A so-called productivity gain. Preventative maintenance cut? A so-called productivity gain, even if the transit system later falls apart. The 311 system devolving into a joke, like those “push to cross” buttons at traffic signals that don’t actually connect to anything? A so-called productivity gain.
The truth is that lower quality services in exchange for less hours worked is not a productivity gain. In fact, if the decrease in services exceeds the decrease in hours worked – as is usually the case because there is generally no reduction in overhead costs – what you actually have is a productivity decrease.
Real productivity gains cannot be had instantly in response to a budget crisis. They require year by year effort at slow, continuous improvement – in training, in organization, in less time spent on background tasks and more on direct service provision, in less time wasted. That’s what high quality private sector organizations do. More commonly, that’s what the new businesses that replace low quality private sector organizations do. That’s why at any given point one-third of private sector jobs are in business establishments that had not existed five years previously.
Sometimes private sector organizations go too far. For example, the abusive labor practice of requiring workers to be available – without pay – to start working for pay only when there is a need for them, instead of having a schedule set in advance. That is clearly shifting the cost of inefficiency – not knowing when there will be more or fewer customers – to the workers, rather than reducing that inefficiency. It could be considered “productivity fraud,” and there has been a legitimate blowback against it.
Fraudulently or not, however, operations managers at private companies are always seeking ways to produce more and better work in less time and with less waste and effort, because that’s how they get ahead in the marketplace. At the very least, there is always an economic incentive to get a full day’s work for a full day’s pay.
In government the political incentives are different.
Since there aren’t many real elections at the state and local level, what matters is campaign contributions. The more unionized public employees there are, the more dues the unions receive, and the more they can pass on to politicians in the form of campaign contributions. The same may be said of contractors, who are often paid on a cost-plus basis, and their unions. They are always pushing for more people to do the same work, or the same people to do less work, because that gets them more money.
That’s why the number of active members of the New York City Teachers Retirement System increased from 113,258 in 2007 to 124,000 in 2019 even as enrollment fell – more workers serving fewer children. That’s why New York City has 2.2 times as many police officers per 100,000 residents as the U.S. average and more than any other city other than DC. That’s why the NYC Department of Sanitation has more employees per 100,000 people than almost all other cities with public trash pick-up. It’s why there are always large groups of police officers, or road workers, or sewer workers, or something, waiting around to get their equipment, materials orders and organization before actually doing something. It’s why upstate road crew employment and upstate and suburban school administration employment is off the charts.
Consider this example. In New York City there are currently two employees on every subway train, one to operate the trains, and one to operate the doors. Meanwhile, multiple companies are trying to create systems that allow motor vehicles to drive autonomously on local streets filled with pedestrians, bicycles, intersections, and other complications. Why couldn’t such a system drive the subway trains, with no pedestrians, cyclists, or intersections to contend with, even with the existing signal system? And if it did, wouldn’t one MTA employee per train be enough?
That would mean that about 2,500 MTA employees would no longer be needed. Or perhaps 2,000 fewer, because there might still be 500 second employees on trains as trainees, or in certain areas. Half the jobs could be eliminated to save money, perhaps, and half shifted to do more work. Perhaps to increase service, or maintenance. Who would be worse off? Not the workers. Not the riders. Not the taxpayers. They could be spitting up the gains from the savings. It is the Transit Workers Union itself would be worse off, because its dues revenue would go down, and that would mean less in campaign contributions for its incumbent politicians.
Let’s get back to the question at the start of this post. It’s 10:30 on a typical workday during the school year. What are all the city and state employees, and private sector workers the city and state are paying, doing? The State of New York and its local governments (including New York City) had 31,514 full time equivalent employees in the “financial administration” function in March 2019, according to the Census Bureau. You’d think this is something they could print out off a database somewhere. In reality, Comptrollers such as DiNapoli and Stringer are put in that job, by those who benefit from arrangements as they are, to not ask questions like that.
Even if public managers push for more efficiency, their bosses – the politicians – are cutting deals that go the other way. Deals to require even more employees to do the same work, or less work for the same number of employees, that are enacted into labor contracts that remain in place in perpetuity, whether fair or not, like all those abusive provisions in the Long Island Railroad contract.
All this got worse under Cuomo and DeBlasio, because less work in the future is something they could trade away for political support in the present.
“President DeBlasio” agreed to create more out of classroom and administrative posts so United Federation of Teachers members could get an even earlier semi-retirement out of the classroom. The city’s schools once had one real productivity advantage — economies of scale meant that administrative costs were relatively low compared with the U.S. average. This was true even in the bad old days of 110 Livingston Street and the Board of Education. DeBlasio got rid of that, and by the time he left NYC administrative costs per student (adjusted downward for the higher cost of living here) was at the U.S. average (it is far above average in the rest of the state).
And public education had one big productivity gain in the past 50 years. As more women worked outside the home, schools that had once provided education instead provided both education and child care. During the pandemic, however, not only did the extent of education plummet, but also parents were shown they could never count on the schools for child care again. This is as candidate for Governor Hochul promises that New York will hire even more teachers, as enrollment falls.
In addition to the political incentives, there are the managerial incentives. Imagine that the workers and management in one public agency actually tried to do a better job at a lower cost. Their reward at budget time would be a reduced budget, which would be cut and cut and cut again until the quality of their public services collapsed.
Meanwhile, what of public agencies that do a worse and worse job? That is held to be proof that they need more and more and more money. That’s why the level of school spending actually benefits from worse education, the police budget benefits from higher crime, the sanitation budget benefits from dirtier streets, the corrections budget benefits from people dying in jail.
And that’s why, when asked to find efficiencies, public sector managers typical try to cut their expenditures in ways that do the most damage possible – even in those rare situations when they have a choice to do otherwise.
I saw this dynamic firsthand in the early 1990s, during the Dinkins Administration. The City of New York was facing the worst fiscal crisis since the 1970s. Dinkins’ COO, Norman Steisel asked city agencies to find ways to reduce their budgets. Yes sir Mr. First Black Mayor some of them said, including the Department of City Planning where I worked. Others refused, or played games. So, what was the easy path? Cut the budget of the agencies that cooperated even more, leading to layoffs.
Being a public employee and trying to actually do something means being constantly frustrated by complete wastes of time. I recall doing field work with colleagues back in the 1990s. First everyone went to the office, waiting for whoever was the latest to arrive. Then we got back on the subway to head over the city car lot at the Brooklyn Navy Yard, to get the agency car. We had to wait our turn, and then fill out all the paperwork. Then we traveled from there to the actual worksite. A little work and then guess what, it was lunch time. The car was ancient and in poor repair. Once the work day ended before it began with the car broke down.
I showed how starting with a brand-new organization, without all the built-up practices and inefficiencies of the existing organization, better scheduling, and some better tools, New York City could have a class size of 12, with plenty of time for the teacher to work with students in ones and twos, and a more desirable career for teachers, all for far less money.
And how with better coordination between agencies, picking up the trash could be made far easier for the workers, and also require fewer of them, despite providing additional services.
But no one in the public sector thinks this way. Instead, there are those who are constantly thinking, scheming, campaign contributing, lobbying for less rules and deals that increase the time paid for not working.
The bottom line is that in business, there is a year-by-year-by-year effort to eliminate waste, increase efficiency, increase output, and limit cost. And in New York City and State there is a year-by-year effort to reduce efficiency, increase waste, decrease output, and then demand more funding. It has been going on for decades. There is no pushback against it. It is often irrevocably set in labor contracts and even state laws. And it got worse during the Cuomo and DeBlasio Administrations.
In addition to organization, scheduling and training, businesses increase productivity by investing in tools. Better equipment allows workers to more work with less effort, often by doing repetitive tasks for them.
Seventy years ago, government agencies had the most advanced equipment of any organizations in the United States. Government purchases in effect created the computer industry and the internet, and the public sector was an early adopter of office automation. The post office once had sorting machines that were far more efficient than the private logistics organizations of the time. Today, however, public sector workers work in lousy buildings and other worksites using obsolete tools. There are several reasons for this:
In the press of interest groups grabbing for money, long-term investments in labor-saving technology lose out. The benefits will come in the future, when Generation Greed expects to be retired to Florida.
Why invest in labor-saving technology when civil service rules and contracts mean you won’t actually save labor?
Even tools that will make things easier in the long run make things harder in the short run, as they are learned, fail, and are improved. Many public employees don’t want to make the effort. Tenure and civil service rules mean they don’t have to.
The only people pressing for public investment in new tools are the government contractors who produce the tools. Like public agencies, it isn’t in their interest to actually deliver at a fair price, and they make campaign contributions too. Meanwhile, public sector managers generally lack the expertise to effectively purchase new tools, especially information technology tools. People say the private sector is more efficient. Unfortunately, one thing it is efficient at is ripping off the government.
Investments in new tools take a long time to implement. Even the longest serving public sector managers are not around long enough to see them through. Especially since top jobs are often seen as places to put people for a year or two or three to increase their pension benefits, just before they retire. During those few years, most just hide in their offices.
Investments in new tools are risky, even for those who know what they are doing. As a private executive, Michael Bloomberg made $billions buying information technology and using it to provide information for financial companies. As Mayor, however, his attempt to create a new payroll system to prevent timecard fraud by city workers ended in fiasco.
Although given the goal of the investment, sabotage from the inside, as well as contractor greed, may have led to the failure.
“The massive scheme” started as an outsourced city contract to design a payroll system that would precisely track the hours worked by city employees. After a couple of false starts with other vendors, defense contractor Scientific Applications International Corporation was awarded the job in a no-bid contract by the Giuliani Administration.
Under Mayor Bloomberg, the contract ballooned from $63 million where it had started out in the Giuliani years, to more than $700 million. Federal prosecutors now say at least $600 million of that was “tainted.” At every level, federal prosecutors allege grafters had honeycombed CityTime in to a paragon of corruption.
“Between 2003 and 2010, the CityTime payroll project served as a vehicle for an unprecedented fraud, which appears to have metastasized over time,” said Baharara.
The prime contractor was the defense contractor Scientific Applications International Corporation. The city’s contract database notes SAIC has been the subject of “multiple investigations by the Department of Defense, the U.S. Department of Justice, NASA and the General Services Administration.”
The contract went from a fixed-price contract to a fixed-price level of effort contract. What that meant is that from then on, it would be the city – not SAIC – that would become largely responsible for future cost overruns. What followed as described in the indictment was a dramatic acceleration in costs with the city on the hook for all of it,” explained Baharara..
The city’s lobbying database shows a small army of former prominent city officials who did work for SAIC and Technodyne. Defense contractor SAIC has retained former City Comptroller Liz Holtzman, Peter Powers, who served as Mayor Giuliani’s top deputy Mayor for operations, and Seth Kaye, who worked in both the Giuliani and Bloomberg administrations. Technodyne’s lobbyists include former Bloomberg Department of Information Technology and Telecommunications Commissioner Gino Menchini and Agostino Cangemi, who also held key posts in both administrations.
The CityTime scandal, WNYC said, is a cautionary tale. And public agencies and politicians are nothing if not cautious about spending today’s money on tomorrow’s needs – since so much of today’s money is going to yesterday’s privileges. Under the circumstances, the safest course is to do nothing. But if nothing is done over decades, you end up with public agencies having information systems that run on COBOL, which no one even knows how to program anymore. And that’s where we are, especially in public financial agencies such as the IRS.
The federal tax collector runs some of the oldest IT systems in government, including the 60-plus-year-old Individual Master File system that intakes and processes individual tax returns. While that system runs on Assembly, many of IRS’ other systems run on a slightly younger programming language: the common business-oriented language, or COBOL.
Despite its age, COBOL continues to get widespread use in some sectors, particularly finance. And as banks and other financial systems connect to the IRS, the agency’s systems must be able to communicate and process the incoming information.
But the IRS also has to make sure those systems are secure, which can be difficult when dealing with older programming languages that aren’t supported by modern security tools.
Consider the only unemployment insurance application I ever filed after a career if paying in. It was rejected because, according to the New York State Department of Labor, I had not worked in the prior year. That happens to be the year I worked for a different employer, though in the same job, because the company I had been working for was bought.
What the Department of Labor should have been able to see, but apparently could not, is that I paid state income taxes on the work that I supposedly didn’t do. It would appear there was no link between the New York State Department of Labor and the New York State Department of Taxation and Finance, and with both agencies working at home in 2020, no way for the workers to get together and create one.
Meanwhile, the State Department of Labor had to implement a new unemployment benefit for self-employed people who lost their incomes due to pandemic-related shutdowns. Since they hadn’t been paying in unemployment insurance taxes, how did the State Department of Labor know if anyone was, in fact, self-employed? Couldn’t anyone just claim to have been self-employed and lost income, even if they never were? Apparently, that’s what happened.
Could that have been checked? Anyone legitimately self-employed would have been paying FICA taxes on that income, even if the income was too low to require that federal, state and (in NYC) local income taxes be paid. The IRS would therefore know if someone was self-employed, and New York State Department of Taxation and Finance has a direct link to the IRS. In theory this could have been checked instantly. In practice, with three different legacy systems, it probably wasn’t’ check at all.
And come to think of it, why is your age and birthday different for the IRS, part of the Department of the Treasury, than it is for the Social Security Administration, part of the Department of Health and Human Services? Why does one have to apply for Medicare? Doesn’t the federal government know you hit age 65? Doesn’t it know when you are age 67?
The agency most connected to our (or rather their) state legislator hack politicians is the judiciary. Long before COVID-19 and work from home, law firms were downsizing their office space massively, all over the United States. Why? A shift from paper records to electronic records means that not only do law firms require less space, but also waste less time combing through all that paper. Office automation should also be accelerating judicial scheduling. In theory the number of cases the courts can handle, and the speed at which they are handled, should be soaring. Is that happening? I’m willing to guess the answer is no. We may find out the judiciary is the most backward and unproductive public agency of them all.
Despite the risks, private business has been transformed by information technology, and the gains are accelerating.
Take the case of two relatives who had to get hospital procedures a few years ago. In Hospital A, it was all paper records, written in doctor scrawl. With each new shift new doctors and nurses showed up who had no idea who the patient was, no idea what the problem was, no idea what the treatment was, no idea what to do. We had to explain it, as they thumbed through the paper records. It wasted time and did not inspire confidence. In Hospital B, all the records were automated, updated, and accessed. Every health care provider could check their device and have all the information in seconds before walking in the room, spending less time on finding out and more time on health care. It inspired confidence.
I wonder what the situation is at the New York City Health and Hospitals Corporation? Hopefully after Hospital A and Hospital B overcame all the hurdles, worked out the bugs, and implemented the systems, the HHC was able to then buy it a few years later as a discount. But that’s not the way to bet.
There is no media article about the productivity gains that have not occurred, or the services that are not provided, as a result of low and failed investments in better tools. No criticism of things that were not done. Were there any major new systems improvements during the DeBlasio and Cuomo Administrations? My guess is the answer is “no.” Is there any public criticism of this? Not that I can recall. In government you never get in trouble for the things you don’t do, no matter how little that is. Only for trying to do something.
The best management is self-management, and the best cause of self-management is voluntariness. It is the only check on human selfishness. If a relationship is voluntary, and one of the parties does not feel it is getting a fair deal, they can always take their business elsewhere, if there is an elsewhere. Monopolies always rip you off, whether they are large corporations, business associations, labor associations, mafias, governments, or political parties. Perhaps not in the short run, but always in the long run, if there is no consequence for failure, no reward for success, no reason to try to do better, no accountability for doing worse.
Consider some private sector organizations.
Google has done some wonderful things, for its users, investors, workers. Its search engine allows access to all kinds of documents one could not find otherwise. Its maps allow you to tour the whole world from your computer. Its advertising is for things you actually want to buy, as opposed to ads that try to manipulate you into blowing your money on things you don’t need. And best of all, its motto is “don’t be evil.” But look ahead 20, 30, or 40 years, when the founders are long gone and forgotten, replaced by those skilled in the art of office politics. If it maintains its near monopoly position, what are the odds that it will become evil? I would say 100%.
Vanguard has done more than any company to reduce the exorbitant fees that were once charged to investors, with an innovative mutual model that pays all its profits back to those same investors. Its market share has grown, and grown and grown as a result. But look ahead 20, 30 or 40 years, long after its founder has been forgotten. If it becomes even more dominant, don’t you think that those who control it will start thinking that perhaps they deserve a little more in exchange for a little less – just like the firms Vanguard replaced? You betcha.
Costco, another great deal. By going with a membership model, selling in bulk, limiting the choices, and going with barebones fit-outs, it slashed the cost of packaging, transportation and overhead, allowing better wages for workers, lower prices for consumers, and a solid return for investors. But look ahead 20, 30 or 40 years, when its founder and his associates are long gone. Don’t you think those who control it will decide they deserve a little more, in exchange for a little less? Don’t you think the sloth will set in? Don’t you think that it will end up like Sears, or Kmart?
Now think about some large private companies that offered a worse deal, but end up sticking around anyway. What do they have in common? Government mandates, government protection, government bailouts.
Like GM. Several relatives of my grandparents’ generation worked on the assembly line up at the Fischer Body plant up in Tarrytown, so I know what a dum dum is. Management would speed up the line to cut costs to increase profits. In response, unionized workers would stick some silly putty (the dum dum) in place where a bolt or screw was supposed to go, to make their work easier, especially on a Monday or Friday, when you didn’t want your car to be built. Enough cars came off the line that management got their bonuses, but half of them were sitting in the parking lot where other workers tried to find and fix all the defects before they were sold.
GM’s reputation never recovered, but people had the option to buy Toyotas. They didn’t have to buy lousy cars at high prices, so they stopped doing so, no matter how many flag waving commercials were put out for Chevrolet, and GM’s market share plummeted. (Full disclosure – I’ve owned four cars, a used Plymouth Horizon, a new Saturn, a used Ford Taurus, and a used Chevy Impala).
In the early 1980s, Toyota agreed to take over GM’s worst plant with its worst workers. A plant full of Oakland Raider fans, I guess.
With GM, you had managers and workers who thought they could dictate terms. With Toyota, everyone knew it was the last chance or they were gone. With the same workers, but different management, Toyota produced more and better cars than GM had.
Long after that, I recall my grandmother, long since retired, telling me about the latest GM labor deal. She was getting a pension bonus, and she thought it wasn’t right. The company is going down the tubes, and the last thing they need is to provide more to those who got enough already. Some years after that GM went bankrupt, and as part of the deal the later-hired were turned into temps at $15 per hour. Just like the public sector.
We won’t even talk about Wall Street, the bond raters, the accounting firms. Where are their replacements?
Voluntaryness and choice, not votes in favor of incumbents – generally the only people on the ballot — are the real power the little people can have to get a fair deal for themselves. That’s why private organizations seek to use the government to limit that choice.
In the public sector, on the other hand, lack of choice is par for the course. You want to know why opposition to charter schools and private schools and homeschooling is considered “progressive?” That’s why. Because new organizations and ways of doing things don’t have the built-up deals, favors and entitlements of the old, and are able to offer something better. And if something better is on offer, the argument that existing organizations need more money because they are doing a worse job doesn’t stand up.
So “President” DeBlasio was against choices, and “President” Cuomo was persuaded to stop being in favor. Because organizations that don’t exist yet, employing workers who have yet to be hired, don’t make campaign contributions and don’t threaten to runs ads against you, ad DeBlasio and Cuomo were careerists whose ideology was the advancement of their own careers.
Private organizations don’t offer a better deal because they want to, or because those who work in them are smarter. They do so because bad ones are continually replaced by better ones. Absent bankruptcy, absent choice, given monopoly, they’ll function the same way as New York City public agencies. And New York City public contractors, such as the school bus monopoly. All at the expense of less well-off serfs and later-born generations who could do a much better job, at a fairer cost, in place of those in on the deal, if allowed.
Mike Mulgrew, head of the United Federation of Teachers, once let slip that with regard to school reform (remember that?) his job was to screw things up. And they did.
But imagine state law forbid the same labor organization from representing workers at public agencies and competing private organizations (such as charter schools), on anti-monopoly grounds.
And imagine that the same labor organization was also now allowed to represent workers at two competing public agencies. And then imagine that instead of just re-authorizing Mayoral control, the state legislature were to leave half of NYC’s public schools under the Mayor (and without the UFT), recreate the Board of Education without Mayoral appointees to operate the other half (with the UFT), and lift the charge school cap.
Suddenly, even New Yorkers who didn’t have the money for private schools, or the time and social connections for homeschooling coops, would have three choices. I’d bet that instead of Mulgrew thinking it was his job to screw things up, he would instead suddenly decide he damn well better find a way to make things better, lest parents and teachers choose otherwise — and what is left of his dues revenues (other than from the retirees the UFT has actually represented) disappear. With voluntariness, the incentive structure completely changes.
You know what would make sense, based on the value New York’s serfs have received for their tax dollars? Take 75% of everything that is being done in house by public employees, and contract it out. And take 75% of everything that is contracted out, hire public employees, and bring it in house.
As it is, the only voluntaryness New Yorkers have is to leave. Stay here, and its their world and you are just living in it — their world even though many of them are living elsewhere, or retired elsewhere.
And as it is, only in an absolute crisis, as at the New York City Transit Authority in the mid-1980s under David Gunn, are New York’s public sector managers even allowed to try to make things better. Otherwise, public sector management is not a job I would wish on my worst enemy. But under Cuomo and DeBlasio, most agency heads weren’t appointed to engage in management. They were there to engage in political pandering. And so it remains.
bureau of economic analysiscensus bureau government finances datanew york city budgetnew york state budgetGovernor Andrew CuomoMayor Bill DeBlasio
Have you seen all those ads from candidates for Governor? I can’t seem to avoid them. You turn the channel and you run into another one. I’m here to tell you that if you are just a regular person living their life, what is said on the commercials doesn’t matter. What matters is: Who paid for them? What, during […]
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Have you seen all those ads from candidates for Governor? I can’t seem to avoid them. You turn the channel and you run into another one. I’m here to tell you that if you are just a regular person living their life, what is said on the commercials doesn’t matter. What matters is:
Who paid for them?
What, during the real campaign that takes place in secret, were they promised in exchange?
How and when will you be made even worse off to pay for this?
I’m not in a position to answer those questions about the future. The deals are secret, and stay under Omerta for eternity. What we can do is see who the DeBlasio and Cuomo Administrations, with help from the state legislature and NYC council (always eager to cash in the future of the serfs) did in the past. At least to the extent that Comptrollers Stringer and DiNapoli didn’t completely fudge the data they reported to the Census Bureau, also in exchange for consideration, this post will attempt to find out.
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I discussed what data I used, how I used it, and why I used it here.
As noted, I’ll measure the actual choices of DeBlasio, Cuomo, the state legislature and city council circa FY 2019, before the pandemic. When they should have had all the money they could ever ask for, a fortunate circumstance that made them less unpopular than they should have been.
How can FY2019 be fairly compared with the past? It can only be compared with other peak bubble years. The Pataki and Bloomberg Administrations were in office at another economic peak in FY 2007; the Pataki and Giuliani Administrations were in office at the peak before in FY2000, and the Mario Cuomo and Koch Administrations in were in office in FY1989, another peak year. What about the Dinkins and Spitzer/Paterson Administrations? They didn’t have economic peak years, and only lasted one term, so we’ll have to skip them.
The discussion of the charts in this spreadsheet begins below.
The consensus in New York’s media, based on who feeds them information, is that New Yorkers have cheated those who provide public and publicly-funded services by paying too little in taxes. This despite the state and local tax burden being higher in New York that in any other state, and higher in New York City than in the rest of the state. And nowhere else is close.
Still, the data shows that the total state and local government tax burden, per $1,000 of personal income, was essentially flat in New York City from FY 2007 to FY 2019, during the DeBlasio and Cuomo Administrations, following a huge increase from $134.77 to $162.50 during the Pataki/Bloomberg Administrations. That earlier increase, as we’ll see, was driven by retroactive increases in pension benefits, debts, and soaring spending on Medicaid and schools.
DeBlasio and the state legislature wanted to raise taxes further, but Cuomo would not go along. That was the first fight between them. Instead, Cuomo wanted to accommodate making those who work for, or are funded by, state and local government better off relative to other New Yorkers — by cutting services and further deferring costs instead of raising taxes further. And that’s what happened. The New York City tax burden edged up from $92.89 per $1,000 of city residents’ personal income in FY 2007 to $93.05 in FY2019. The New York State tax burden edged down from $69.61 per $1,000 of state residents’ personal income to $67.30.
The overall tax burden on city residents slipped slightly from $162.50 per $1,000 of city residents’ personal income to $160.35. The chart, however, presumes that the burden state taxes is divided between NYC and the rest of the state in proportion to personal income. It isn’t – MTA taxes are only collected downstate, and the exemption of public employee retirement income from taxation favors the rest of the state, where even the highest paid former NYC public employees live.
In the rest of the NY State, the total tax burden also jumped from $120.18 per $1,000 in personal income in FY 2000 to $135.47 in FY 2007, before slipping to $133.04 in FY 2019. The local tax burden edged down in the rest of the state while edging up in NYC.
BTW, you see that reduction in the tax burden from FY 1989 to FY 2000, during the early Pataki and Giuliani Administrations? Knowledgeable people understood at the time that taxes weren’t actually being cut during those years, they were being deferred. We started paying them after 2000, and are still be paying them two decades later.
Some of the trends on the spending site that affected New York – rising Medicaid expenditures and rising public employee pension costs – affected other parts of the country too. But like Governor Cuomo, most politicians elsewhere chose to further defer costs and cut services and benefits rather than increase taxes further. In fact, the U.S. average state and local government tax burden fell from $106.83 per $1,000 of personal income in FY 2007 to $101.06 per $1,000 in FY 2019. The tax burden has been going down in already low tax states just as it has gone up in high tax New York.
One way Cuomo was able to hand out money to interest groups without raising taxes was to slash aid payments to local governments. Some reduction would have been expected, since most NY state aid payments are for schools, and school enrollment was falling as the large Millennial generation exited. It was a national trend from FY 2007 to FY 2019. But you’ll notice that New York State aid to NYC per $1,000 of city residents’ personal income also fell from FY 1989 to 2000, as Millennials entered school and enrollment was rising. To make the state aid formula work out this way, at one point a NYC child was defined as less than one child. General municipal aid, meanwhile, is now sent everywhere in the state except NYC, using taxes collected in part in NYC.
The FY 2007 to FY 2019 decrease in New York State aid to NYC was 22.1%, from $56.45 per $1,000 of personal income to $43.97. The decrease in state aid to the rest of the state was 11.8%, from $43.24 to $38.11. NYC was also getting richer compared with the rest of the state during these years. That could partially explain this difference. So today, with NYC having one of the worst economic situations in the country, is the rest of the state now being forced to sacrifice because New York City is getting poorer?
New York is the only state in the country with significant local government aid to state government, mostly for the state’s Medicaid program, with some for the MTA. Most of that aid is paid by the City of New York. New York City Mayors from Beame to Giuliani have made an issue of “state mandates,” but nothing changed until candidate for Governor Tom Suozzi’s “Fix Albany” campaign in the 2000s, when an aging population meant Medicaid costs were hurting other parts of the state too. So how did the fix go? From FY 2007 to FY2019, the local tax burden of aid to the State of New York on New York City taxpayers fell 14.4%, from $11.33 per personal income to $9.69. And the local tax burden on taxpayers in the rest of the state decreased 33.3%, from $9.37 to $6.25.
And in a Census Bureau data quirk, the amount of aid to the state New York’s local governments report sending is now vastly higher than aid from local government that the State of New York reports receiving, whereas they had once been about the same. It is fair to say, however, that the money drained from NYC to the rest of the state increased during the Cuomo Administration.
While state aid to local government was going down in New York, federal aid to New York State as going up – even before the pandemic (most federal aid to local governments passes through state governments first). This is part of a national trend driven by rising expenditures on Medicaid, mostly for seniors.
Medicaid is one of the few categories of federal aid for which New York State gets more than its pro-rata share of federal assistance, but rising federal to state aid is a national trend. The national average federal to state aid increased 10.9% from $33.90 per $1,000 of U.S. personal income in FY 2007 to $37.59 in FY 2019. Federal aid to New York State increased 15.9% from $41.71 per $1,000 of state residents’ personal income to $48.33. But all of this additional federal money, and the additional surge of federal money from FY 2019 to today, was borrowed, like money that offset the city and state tax cuts in the Pataki and Giuliani administrations in New York. Americans, including New Yorkers, are going to be made worse off to pay for it in the future.
Most federal aid directly to local government goes to local housing authorities and disaster relief. New York City has traditionally gotten quite of bit of this due to its large public and publicly subsidized housing system. Federal aid to New York City edged down from $10.43 per $1,000 of personal income in FY 2007 to $9.48 in FY 2019, as the New York City Housing Authority fell into ever greater disrepair and a large share of theoretically entitled households did not receive Section 8 housing vouchers. But the FY 2019 level was still higher than the $6.42 in FY 1989, when New York City had a large subsidized housing construction program – with city money — under the Koch Administration.
During the DeBlasio Administration soaring rents and property prices led to soaring property tax revenues for the city. The burden of both fell primarily on later-born generations, who were not fortunate enough to have scored subsidized or rent regulated apartments, or buy houses at pre-bubble prices and have lower property taxes locked in, in the past. In the past, the fact that NYC residents were also burdened by a virtually unique local income tax kept the overall NYC property tax burden to about the national average. Under DeBlasio, however, the property tax burden soared from $31.12 per $1,000 of city residents’ personal income to $43,82, well above the U.S. average of $30.36. So now NYC residents have above average property taxes and a local income tax.
That is how the DeBlasio Administration had so much money to hand out to various interest groups. Never have the interests that own the state legislature – the real estate industry and public employee unions, contractors, and government-funded non-profits – been able to take as much from New Yorkers at the same time. Generally, in the past NYC has either had relatively expensive real estate but relatively extensive and good public services (the 1950s) or lousy public services at high taxes but cheap real estate (the 1970s).
With sky high school spending, but without a local income tax, property taxes have always been very high in the rest of New York State. With a lower decrease in state aid than NYC received, a larger decrease in local to state aid than New York City received, falling school enrollment, and the property tax cap instituted by the Cuomo Administration, the property tax burden in the rest of the state edged down slightly from $50.07 per $1,000 of state residents’ personal income in FY 2007 to $46.87 in FY 2019. The total New York City property tax burden, with an additional local income tax, in now nearly as high as the average for the rest of the state, without a local income tax (except in my hometown of Yonkers).
With more Millennials earning income, and fewer in school, one would expect elementary and secondary education spending to fall per $1,000 of personal income, while per student spending remained the same. In many Red States, however, per student spending was slashed from already low levels during the FY 2007 to FY 2019 period, while in New York State it soared from already high levels. U.S. elementary and secondary education expenditures fell from $44.52 per $1,000 of U.S. personal income in FY 2007 to $39.01 in FY 2019 – slightly lower than the $40.17 in FY 1989.
School spending in the rest of New York State fell only slightly from $60.76 per $1,000 of personal income in FY 2007 to $57.70 in FY 2019. School spending there is not just about education, but also a state-funded gold-plated welfare program for areas in economic decline. Thus, the pressure to keep sending more state aid regardless of enrollment.
New York City’s elementary and secondary education expenditures soared from $43.28 per $1,000 of personal income in FY 2007 – about the national average even though NYC has relatively fewer children and more of those were in private school – to $51.89 per $1,000 of personal income in FY 2019. This at a time when NYC’s income was soaring by the most relative to the rest of the country since the 1920s. Where did the money go?
Here is the spending change from Bloomberg’s last budget, FY 2014, to DeBlasio’s economic peak budget in FY 2019, adjusted for inflation. Spending on the NYC schools increased by $8.26 billion, accounting for nearly 60.0% of the $14.0 billion inflation-adjusted increase in City of New York expenditures. This is NYC OMB data, and includes pension and benefit costs. The NYPD was “defunded” by an increase of $1.1 billion. This as school enrollment and crime were falling, as were the inflation-adjusted wages, salaries and benefits of NYC’s private sector workers.
There was also an increase in spending of $1.05 billion on the Department of Homeless Services (147.1%) and $761 million on Department of Social Services spending other than cash welfare and Medicaid. Though the number of addicted and homeless people was going up. Medicaid aid to state government fell by $596 million over the period, although the rest of the state benefitted more from Suozzi’s Albany fix.
One might say these shifts are product of the DeBlasio’s emphasis on early childhood education, but that isn’t true. So great was the decline in Grade 1 to 12 school enrollment from FY 2007 to FY 2019 that even offering additional years of education to those younger didn’t mean that more children were being served in total. Instead, school spending per child soared – mostly on pensions, retiree health care, and out of classroom assignments for teachers.
Even adjusted downward for the higher cost of living here, NYC school spending per student is now far above the U.S. average, or New Jersey, Massachusetts, Connecticut – anywhere other than the Rest of New York State. Adjusted for inflation it doubled from FY 1997, when it really was low, to FY 2017, and it has kept rising since.
Just comparing NYC with other parts of the Northeast, and skipping the cost of living adjustment, shows how high spending per student was by FY 2019– more than double the U.S. average – and how much it has risen. And yet as everyone who gets their information from local media knows, members of the United Federation of Teachers and others in the schools don’t owe the city’s children much of anything because the rest of us have cheated them out of $billions. Something no politicians had dared to question since then Governor Cuomo did, and was met with this propaganda campaign.
One part of this attack was that New York doesn’t tax $billionaires – its state income taxes and (other than for retired public employees, who are fully exempt) are too low.
Though higher than anywhere else, higher than in the past, and higher still per $1,000 of personal income when New York City’s local income tax is included. That is one argument that state politicians in the rest of the state make. The City of New York should receive less state aid and shoulder more state-imposed burdens, they believe, because the State of New York allows it to tax its own citizens (other than retired public employees) with an additional income tax. It should be noted that while California has a very high state income tax burden, it has low property taxes (at least for older long-time residents), and its overall tax burden is much closer to the U.S. average than New York’s.
The conflict between Cuomo and DeBlasio kicked off when DeBlasio wanted to raise the city income tax, and keep all the money, and Cuomo wanted to raise the state income tax, and redistribute some of the additional taxes collected in the city to the rest of the state. In any event, with more and more income concentrated in the hands of the 0.1%, who in reality were and are highly taxed, both city and state income tax revenues increased per $1,000 of the personal income of all city and state residents. The NYC increase was from $19.60 per $1,000 of city residents’ personal income in FY 2007 to $21.70 in FY 2019. As in the case of property taxes, where the DeBlasio Administration benefitted from soaring rents and housing prices on Millennials and immigrants new to the city, in the case of income taxes it benefitted from income at the top from the “everything bubble.” With the income from that bubble concentrated downstate, the state income tax revenue increase was smaller, from $38.11 per $1,000 of state residents’ personal income to $39.88.
One might say that while the DeBlasio’s biggest priority was increasing spending on the Untied Federation of Teachers, the Cuomo Administration’s biggest priority was having New York State follow the national trend of decreasing state corporate taxes.
New York State’s corporate income tax revenues, per $1,000 of state residents’ personal income, fell by half and approximately match the U.S. average. Manufacturing companies upstate, like retired public employees, don’t pay any taxes. Nice try, but the upstate economy continued to decline regardless.
In New York City, on the other hand, the tax burden on business remains uniquely high, thanks an additional local corporate business tax, and the additional unincorporated business tax. The latter applies to self-employment income in excess of $100,000. Beyond that level, gig economy workers are forced to pay the state personal income tax, the local personal income tax, the MTA payroll tax, and the unincorporated business tax. In a few years when $100,000 is only worth $50,000 in today’s money, even food delivery workers may be subject to all those taxes, and the shift to self-employment will nail workers at the state and local tax level as well as the federal level (via FICA). Although still very high, NYC’s local business income tax revenues fell by 42.4% FY 2007 to FY 2019, when measured per $1,000 of city residents’ personal income, from $17.03 to $9.80.
The 2007 figure was unusually high – city business tax revenues had been just $11.05 per $1,000 of personal income in FY 1989.
This is interesting. New York City sales tax revenues decreased from $15.11 per $1,000 of city residents’ personal income in FY 2007 to $12.20 per $1,000 of personal income in FY 2019. There were no sales tax cuts I can think of – I can only recall sales tax increases. There were no reductions in the sales tax base – none of that stupid Pataki/Giuliani stuff about no tax on clothing if you buy at certain times. And as much as some Baby Boomers might wish to believe that Millennials are poorer because they live too richly, as far as I know there is no sales tax exemption for smartphones, lattes and avocado toast. You can’t blame e-commerce either – this was the period when Amazon etc. started being forced to collect sales taxes, after having previously not done so. Moreover, the rising income of city residents was topped off by an incredible boom in tourists buying goods and services, swelling sales tax revenues.
The only explanation is that a rising share of New York City residents’ personal income is going somewhere other than taxable goods and services. Where?
Regardless of the propaganda you have heard, Millennials have been more likely to be in the labor force, and have saved far more of their incomes, than Baby Boomers and Gen Xers had at the same ages. For those older, ever rising health care costs, which are sales tax exempt, reduce money available to spend on other things. So, savings and health care, though a data error or intentional misreporting cannot be ruled out.
Even so, I think rising property taxes and housing costs are a better explanation. While the state and local tax burden was flat overall from FY 2007 to FY 2019, more of it was shifted to young workers and free-market renters in higher income and property taxes. And while soaring rents diverted spendable dollars at the time, overpaying for for-sale houses does so permanently. I had written years decades ago that the Northeastern housing bubble of the 1980s had led to stagnation for the small business consumer economy for most of the 1990s, as people spent a decade trying to get out from under inflated mortgage payments. Those at the back end of the Baby Boom, who overpaid after the large number of early boomers had bought most of the housing up, were most affected.
The urban housing bubble of the 2010s may have the same impact in NYC right now. More of the income of NYC residents is going to rent and mortgage payments, leaving less for spending on taxable goods and services.
Returning to the spending side of the ledger, the most costly parts of state and local government budgets are public schools, previously discussed, and Medicaid, overseen by the state government in New York. The Cuomo Administration tried various means to slow the growth of Medicaid expenditures, including a global cap that meant that if one part of the health care system scored increases in spending other parts would face cuts. As shown, it didn’t work. In theory, the gap between New York’s Medicaid spending and the U.S. average should have shrunk, as Obamacare enacted the sort of coverage expansions for other parts of the country that had already happened in New York. Instead, the gap in spending beneficiary between New York and the rest of the country remained huge.
One can see that public hospital expenditures did not soar in New York state, and remain lower per $1,000 of state residents’ personal income than they had been in FY 1989, during the Koch and Mario Cuomo Administrations. NY state public hospital expenditures edged up from $11.77 per $1,000 of state residents’ personal income in 2000 to $12.73 in 2007 to $13.37 in 2019, with a shift from state (mental) hospitals to local (general) hospitals. Most of New York’s public hospital expenditures is funded by Medicaid. The City of New York increased other subsidies to its Health and Hospital Corporation by $775 million (inflation-adjusted) from FY 2014 to FY 2019, but the Bloomberg Administration had cut it earlier. HHC was getting $240 million less in non-Medicaid city funding (after adjusted for inflation) in FY 2019 than it had been in FY 2007.
“Medical Vendor Payments,” spending on private and non-profit health care providers, has continued to soar, despite relatively low payments for well care and physicians in New York, and (from what I read) a freeze in reimbursement rates for hospitals that went on for more than a decade. For New York State, there was a 34.7% increase in Medical Vendor Payments spending per $1,000 of state residents’ personal income from $35.71 in FY 2007 to $48.09 if FY 2019. The U.S. average increased 44.1% from $22.72 to $32.72.
This is, therefore, a national trend, although NY’s Medicaid spending per beneficiary was already sky high to begin with. The Cuomo Administration started covering up the failed cap by taking spending from one fiscal year and booking it in the next, running up a huge off-the-books debt – just as the Lindsay and Beame Administration did in the run-up to the New York City’s near bankruptcy in the mid-1970s. Despite rising federal Medicaid aid, the increase in New York’s spending is a disproportionate burden on the state.
Much of the increase went to home health care employment in New York City, which was soaring exponentially before the federal government indicted a bunch of people for Medicaid fraud. After one year off to see if they were serious, the stunning increase resumed. In many years of the 2010s the home health care industry accounted for a quarter or more of New York City’s private sector job growth.
Some of this is accounted for by an aging population, and some of it is accounted for by a shift away from nursing homes, but even taking employment in all the senior-related industries together and dividing it by the population age 75 or older, NYC’s employment has soared.
It is far higher than the rest of the state by this measure, even though the same state government administers Medicaid in both places. This deal may be what offsets all the other ways the state disadvantaged New York City compared with the rest of the state during the Cuomo/DeBlasio years. NYC gets more Medicaid money in exchange for losing everything else.
The biggest story in New York, however, has been the massive cost of public employee pensions and other retirement benefits. New York City taxpayers have paid a higher share of their own personal income on public employee pension contributions over the years than have taxpayers anywhere else in the country. That includes taxpayers in the rest of New York State, whose pension system has its rules set by the same New York State legislature as the New York City pension system. Despite NYC residents having paid far more in over the decades, the New York City public employee pension system is one of the worst funded in the country while the New York State system, which covers local government workers outside NYC as well as state workers, is one of the best funded.
After the 1995, 2000 and (for teachers) 2008 retroactive pension increases, and all smaller pension increase and early retirement incentives in between, New York City’s taxpayer pension contributions soared from 0.5% of city residents’ personal income in FY 2000 to 2.2% in FY 2011. The pension deals, and much of the damage, pre-ceded the Cuomo and DeBlasio Administrations. In FY 2019 NYC taxpayers were still 2.0% of city residents’ personal income. But I suspect that the costs of past pension increases, which were described as costing nothing because the 2000 and 2007 asset price bubbles would supposedly pay for them, continues to be shifted to the future, thanks to the latest asset price bubble. When it deflates, city residents will have to pay even more, in higher taxes or reduced services.
The politicians and public unions will tell you that “normal” taxpayer pension costs for most workers are less than 6.0% of payroll for most workers, and any higher costs are because “Wall Street stole our money.” Then why were NYC taxpayer pension costs much higher a decade or two after the pension increases that “cost nothing” passed, and despite yet another asset price boom, the “everything bubble?” There was a small reduction in New York City taxpayer pension contributions as a percent of the public payroll from FY 2014 to FY 2019, as the Federal Reserve kept increase rates low and stock and bond prices soared. That probably means that some of the contributions that weren’t made then will have to be paid later.
Both Cuomo and DeBlasio had an opportunity to reverse some of the damage to New York’s taxpayers and service recipients from all those pension increases, by making the self-dealers who scored them give something back. Both wanted public union and contractor support, however, so instead they cut services, allowed infrastructure deterioration, deferred costs to cause even more harm later, and slashed the compensation of later-hired public employees.
In fact, Governor Cuomo and Mayor DeBlasio arranged for New York City taxpayers to carry most of the cost of the private sector pension increases for construction industry around the year 2000, in soaring costs for infrastructure projects. DeBlasio also had city taxpayers pick up the tab for the private school bus companies. Just as the federal government has picked up the tab for private pensions that became underfunded after benefits for Generation Greed workers were increased beyond what they had been promised when hired. All this will be paid for by later-born workers who don’t get pensions, have had their Social Security benefits cut, and will have those benefits cut further.
While the pensions of the uniformed employees are the most costly, pension and other benefit spending soared – as wages and salaries stagnated – in other city agencies too. That stagnation then became the justification for not doing as good a job.
Thanks to the soaring cost of benefits for the retired, the mean total compensation (including benefits) of state and local government workers in Downstate New York exceeded the mean compensation of private sector workers (including the self-employed) in the Finance, Insurance and Real Estate sectors in 2019 – was well as being 50%+ higher than for other private sector workers.
When it comes to social spending on non-seniors, in NYC it edged up from FY 2007 to 2019 per $1,000 of personal income, even as cash welfare benefits continued to fall. Elsewhere, everything fell. The failure to enact the reversable child tax credit at the federal level even as exemptions for dependents were eliminated from the tax code and senior spending soared shows who matters, and who doesn’t. In NYC, cash welfare payments fell from $2.82 per $1,000 of city residents’ personal income in FY 2007 to $2.38 in FY 2019. Nationwide, it’s down to $1.25.
When it comes to social services, however, you can’t say NYC’s homeless, substance abuse and mental health crisis is due to disproportionately low spending. NYC spending on social services was $13.37 per $1,000 of state residents’ personal income in FY 2019, more than triple the national average of $3.83 and far higher than the rest of NY state and surrounding states. That was up from $11.87 per $1,000 of personal income in FY 2007. Social services spending in the U.S. as a whole, the rest of the state, and surrounding states continued to fall $1,000 of personal income. Ever-increasing social problems probably forced the DeBlasio Administration to increase spending. With nationwide rush to grab more state tax revenues by legalizing potentially harmful and addictive substances and activities, expect more costs and more social problems on the street, regardless of how much is spent.
It may be Monday morning quarterbacking, but it’s worth pointing out that the DeBlasio Administration cut public health funding in the run up to the COVID-19 pandemic. When you want to run for President, mundane functions like these take a back seat to little special programs staffed by your political supporters.
Then again Governor Cuomo cut funding for the NY State Department of Labor, before hundreds of thousands of New Yorkers lost their jobs and then had to wait months for the unemployment insurance payments they were entitled to and had paid into for years or decades.
New York State’s higher education spending has always been relatively low, since more students attend private colleges and universities here. But it was cut per $1,000 of personal income from FY 2007 to FY 2019 under the Cuomo and DeBlasio Administrations, as the Millennials exited, while increasing elsewhere. Enrollment has been plunging further, so one wonders what will happen to SUNY and CUNY. My view – if the UFT and NYSUT didn’t fully own the state legislature, instead of (or in addition to) having high schools offer AP classes, we’d have community colleges offering the last two years of high school, complete with vocational training. But SUNY and CUNY weren’t going to give Cuomo and DeBlasio lots of campaign contributions to run for higher office, and won’t do so for the next set of fully owned pols either, so that’s moot.
It would seem the DeBlasio Administration didn’t “defund the police,” as New York City local government police expenditures were at $9.22 per $1,000 of city residents’ personal income in FY 2019, down from the peak of $10.57 in FY 2000 but about the same as the $9.47 in FY 2007 and the $9.19 in FY1 1989. In Census Bureau data, moreover, the City of New York reports police spending without pensions and other employee benefits. So what you are seeing in this chart is only half the total.
In reality, total spending on the police force has soared, here and elsewhere, as the police were defunded by the rich pension deals of the retired police.
While police spending remained high, there was a decrease in corrections expenditures in New York during the Cuomo and DeBlasio Administrations, as the number of people in state prisons and local jails decreased. NY state corrections expenditures fell from $3.32 per $1,000 of state residents’ personal income in FY 2007 to $2.29 in FY 2019, compared with $2.79 nationally. And New York City local corrections expenditures fell from $3.29 per $1,000 of city residents’ personal income in FY 2007 to $2.32 in FY 2019 – far lower than the $5.22 in the year 1989. But NYC is still above the U.S. average of $1.68 per $1,000 of personal income, and – as is the case for police – only about half the NYC corrections expenditures are included.
It’s outside my area of expertise, but with the debate over bail reform I’ve realized that despite all the cop shows, all the lawyer shows, all the judge shows, and all the CSI shows, most of us have no idea how the criminal justice system actually works. The police do an investigation, make an arrest, and a couple of months later there is a trial, after which someone is let go or sent to prison? Nope. I read the guy who drove his car into a bunch of pedestrians in Times Square five years ago is about to go on trial now. Part of that is the pandemic, but what happened back in 2017 when he was arrested?
Today we are told we have a choice between allowing the police to arrest those too poor to make bail and have them serve their entire sentence before a trial. Or allowing those with a long history of violent crime convictions to remain at large for years, committing additional crimes, before any trial takes place. Would someone please make a show about the criminal justice system that actually exists?
That said, New York’s state government judicial and legal expenditures, including the courts, district attorneys, the state attorney general, and public defenders, fell from $2.44 per $1,000 of personal income in FY 2007 to $2.06 in FY 2019. So, the Cuomo Administration did de-fund the courts to an extent, but there is still vastly more spent here than the U.S. average of $1.36. And it could be that this apparent decrease in spending was just another shift to rising pension and health benefit costs, tabulated separately, as for every other public service in New York.
There was a smaller decrease in local government judicial and legal expenditures, both in NYC and the rest of the state.
The most telling event of the Cuomo and DeBlasio administrations was when they each tried to claim that the other were responsible for the MTA, so they wouldn’t have to do anything or come up with any money to improve it. The transit system was the foundation of the Manhattan-driven economic boom that threw off all the tax revenues for the whole state, but after the 1980s it was both defunded and de-managed. Service and maintenance were cut even as Millennials chose transit in larger numbers, to the point where the future of the transit system has been permanently impaired. Governor Cuomo finally declared a “state of emergency” in mid-2017, after he had been in office for six years and DeBlasio had been in office for three.
Neither had noticed how much worse things were getting for ordinary New Yorkers, because like most members of the political/union class they drive everywhere and think mass transit (and bicycles) are for serfs.
Cuomo and DeBlasio inherited this situation, and as the chart shows. New York City’s mass transit spending fell from $20.54 per $1,000 of personal income in FY 1989, in the Koch/Mario Cuomo Administrations, to $15.02 per $1,000 of personal income in 2000, and stayed low for decades. Eventually, Governor Andrew Cuomo and Mayor DeBlasio did increase funding for the agency, compared with a low point in 2007. But not compared with many other years, and with regard to the state of the infrastructure, more spending now doesn’t make up for a couple of decades of past spending that wasn’t done. The hole is too big.
Moreover, New York City has gotten less and less for its transit capital dollars, something I’ll talk about in the next post. And much of the capital money that has been spent has been on real estate projects like the World Trade Center shopping mall or the post-disaster replacement of infrastructure that was already there. Meanwhile, the rest of the system continued to decay. That was the situation before the pandemic.
And long term, when it comes to capital construction expenditures, they have gone to the rest of New York State, not New York City. After a brief debt-driven burst for NYC late in the Bloomberg Administration, the Cuomo and DeBlasio Administrations shifted such expenditures to the rest of the state. And much of what was spent in NYC was on road projects such as the Staten Island Expressway widening, and transit projects that were really real estate projects.
Basically, Cuomo and DeBlasio, like other politicians of their generation, were only willing to spend on infrastructure when money could be borrowed, and thus no one really paid for it. So more and more public debt was incurred against the MTA and the state transportation trust fund until the maintenance of the city and state infrastructure stopped.
Governor Cuomo, however, did have the Port Authority keep borrowing.
Although the Bloomberg Administration ran up a lot of debt and didn’t do much for the transit system, it did invest in parks, recreation and culture, which the Giuliani Administration had disinvested in. But DeBlasio was more like Giuliani than Bloomberg or Koch with regard to the parks, recreation and culture, even though parks – along with mass transit – were the only public services that taxpaying childless young Millennial workers actually used. The parks became more important than ever during the pandemic, when people couldn’t socialize inside and could only gather outside. That’s when many people realized the public sector couldn’t be counted on, and moved away to places where they could get private outdoor space. NYC parks, recreation and culture expenditures fell from $2.22 per $1,000 of city residents’ personal income in FY 2007 to $2.07 in FY 2019 – well below the U.S. average.
The Cuomo Administration cut state parks expenditures from $0.57 per $1,000 of state residents’ personal income in FY 2007 to $0.50 in FY 2019. There had already been a big cut from $0.72 per $1,000 of personal income in 2000.
So how would I sum up the fiscal choices of the Cuomo and DeBlasio Administrations? As I noted in the first post in this series, I see both of them as primarily careerists, those whose primary goal was the advancement of their own career. That has three consequences.
First, each inherited policies from the past with regard to retroactive pension increases, inadequate pension funding, inadequate infrastructure investment and high public debts, that had made the future worse. Once one set of politicians increases their own popularity by advancing revenues, deferring costs, running up debts and neglecting basic infrastructure, so they could hand out lots of goodies to those on the inside without making everyone else pay the price up front, those to follow face a dilemma. If they impose sacrifices to turn this around, they’ll end up taking the blame for what their predecessors have done.
So, careerists such as Cuomo and DeBlasio instead seek to cash in the further future. And that’s what they did. That is also what each administration in New Jersey and Connecticut has done – kick the can down the road.
The most telling set of statements of their administrations concerned the collapse of subway service in New York City. After losing the battle with DeBlasio to evade responsibility for the MTA, Cuomo whined it wasn’t fair to him personally that he was being held responsible for the decline of the transit system – because his predecessor Governor Pataki had gotten away with it. That’s the only fairness they’re concerned with.
Second, sexy little new initiatives that they could be personally associated with has value to careerists like Cuomo and DeBlasio, whether the Buffalo $Billion, Thrive NYC, Moynihan Station, or universal pre-K. The ongoing task of providing the public services that everyone rely on does not. The city and state of New York end up with lots and lots of little initiatives, each with their own bureaucracies, while neglecting to provide quality public services even at high taxes.
Third, the organized, self-interested producers of public services matter most to careerists such as Cuomo and DeBlasio, because they offer money and political support in exchange. The consumers of public services matter less – they can be conned with culture war promises. The later-born and the poor don’t matter at all.
Now that we know where the money went, the next post will discuss management – how much we got for it.
bureau of economic analysiscensus bureau government finances dataeducation financehealth care spendinglocal government tax burdenmetropolitan transportation authoritynew york city budgetnew york city pensionsnew york electionsnew york state budgetnew york state legislature corruption, dean skelos, sheldon silverport authority of new york and new jerseystate tax burdenAndrew Cuomo Administration ReviewBill DeBlasio Administration Review
A public chief executive has three jobs: policy, management, and leadership. With leadership being using one’s influence as a public figure, in competition with celebrities and marketing influencers, to change what people voluntarily do on their own, rather than what the government forces them to do or does for them. For state and local government, the […]
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A public chief executive has three jobs: policy, management, and leadership. With leadership being using one’s influence as a public figure, in competition with celebrities and marketing influencers, to change what people voluntarily do on their own, rather than what the government forces them to do or does for them. For state and local government, the key policy is the budget — who is made to pay how much, and what it is spent on, compared with the past and compared with other places. Management determines how much in services and benefits people actually get for that spending.
Mayor Bill DeBlasio and Governor Andrew Cuomo spent much of their tenures feuding. They would have you believe it was over policy and ideological differences. I believe their primary ideology is careerism, the advancement of their own careers to higher office, and this made them rivals — and the rest of us and our futures pawns. Perhaps that’s why both “President” DeBlasio and “President” Cuomo left office widely despised.
But what did they actually do? Even as we just had an election for Mayor, and are currently having an election for Governor, the media doesn’t seem to be talking about it, other than issues of the moment such as bail reform.
Most people can’t do it, but one ought to separate what the pols do from the broader situation. DeBlasio and Cuomo didn’t cause the opioid epidemic, the surge in homelessness, or the COVID-19 pandemic, or in Cuomo’s case, the long-term economic decline of Upstate New York. But they didn’t cause the economic boom and soaring federal debt that allowed them to pander to every special interest group without completely screwing anyone else except transit riders and the later-born (until the future) either. With regard to the budget, I’ve created some charts that make a fair and perhaps telling comparison. This post will briefly describe what I plan to do, with additional posts making the comparisons to follow.
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I’m going to present some Census Bureau government finances data on state and local government revenues and expenditures in FY 2019, before the pandemic and at the peak of an economic expansion that was the biggest boom in NYC compared with the rest of the country since the 1920s.
It was driven by college educated Millennials, members of a relatively large generation, deciding that New York City and a few other places were the places they had to be, because they were the only places left in this country where they could “get a life.” Businesses moved in to take advantage of the cheap labor, as median pay fell for lower education levels, even as rents soared. Young workers paid lots of taxes, received little in public services, and were forced to crowd in with roommates to afford those soaring rents. They were the exploitables, and they were exploited.
This provided lots of money for Cuomo and DeBlasio to spend. Who got it?
Choosing the right years for comparison, and normalizing for inflation and income, is the key to understanding what has actually been done, rather than what has just happened. The pandemic, and the gusher of borrowed federal money that came with it (which we will pay for the rest of our lives), are not indicative of state and local government policy choices. Although it would seem that the disaster has allowed Generation Greed politicians at all levels to have an economic orgasm, providing an excuse to do on a massive scale what they had been doing at a lesser scale for decades — cash in the future.
The problem with FY 2020 to FY 2023 is that they are unusual and misleading years. It’s the same problem I had with the FY 2002 Census of Governments, which happened to measure New York City’s budget and public employment in the wake of 9/11. So instead, I’ll measure the actual choices of DeBlasio, Cuomo, the state legislature and city council circa FY 2019, before the pandemic. When they should have all the money they could ever ask for, a fortunate circumstance that made them less unpopular than they should have been.
How can FY2019 be compared with the past? It can only be compared with other peak bubble years. The Pataki and Bloomberg Administrations were in office at another economic peak in FY 2007; the Pataki and Giuliani Administrations were in office at the peak before in FY2000, and the Mario Cuomo and Koch Administrations in were in office in FY1989, another peak year. What about the Dinkins and Spitzer/Paterson Administrations? They didn’t have an economic upturn to spend the proceeds of, and perhaps that is why they were out after one term. With Paterson having to deal with “President” Spitzer’s interest group handouts just before a recession too.
With the exception of FY 2007, the other years — FY1989, FY2000 and FY2019 — are not Census of Governments years. In between the five-year Censuses, the Census Bureau conducts a survey and provides state-level estimates only of state and local government revenue, expenditure, and debt. Because the City of New York and Port Authority of New York and New Jersey are always in the survey, however, I can provide estimates for New York City (allocated PANYNJ data) and the Rest of New York State separately.
So, I’ve produced charts for revenues and expenditures for the four years for the U.S. average, New York City, the Rest of New York State, and nearby states — Connecticut, New Jersey, Massachusetts and Pennsylvania.
To adjust for the availability of income to support public revenues, expenditures and debt in different places, and the cost of living that tends to vary with it, I measure state and local government revenues, expenditures and debt per $1,000 of state (or NYC and Rest of State) residents’ personal income, as measured by the Bureau of Economic Analysis.
But remember, the various bubbles (junk bond/commercial real estate in the 1980s, dot.com in the 1990s; housing in the 2000s; and everything in the 2010s) temporary inflated New York’s total income during these years, allowing interest groups to grab more and have it “cost nothing.” When that extra income, generated by Wall Street in New York, disappears, that’s when we find out who actually is going to pay, and how. In looking at these years you are looking at the best of all possible worlds for NY city and state politicians. In a year or two or three, I won’t want to hear from members of that tribe and their supporters that whatever they will do to us as a consequence is “due to circumstances beyond our control.”
And hopefully they won’t have a President Trump nationally to blame for what they have in fact done here in New York.
As is my custom, I’m going to provide the spreadsheet with the majority charts I’m going to use up front, so people can see it and draw their own conclusions before getting my take on it.
Though I might add a couple more after thinking about things.
Since I have it, I’ll also use some per-student public school spending data, adjusted for inflation, for FY 2007 and FY 2019, as previously discussed in this post.
For New York City, the Downstate Suburbs, and New Jersey I adjust that data downward for the higher average wage/cost of living here — using a very generous adjustment that makes out per student spending look lower than it would be as others might present it.
I’ll use a chart or two from my long-term data on how much different state’s future has been sold out due to debts, public employee pension increases and underfunding, and inadequate infrastructure construction expenditures.
And I’ll use a few FY 2007 vs. FY 2019 charts from an analysis of the NYC budget, based on city budget documents, showing changes in inflation-adjusted spending by agency.
I could go back and replace the budgeted numbers with projected actuals from the latest city budget documents, to see how the pandemic and flood of federal money changed the city’s budget. But that got much harder to do under the DeBlasio Administration, with the “full agency cost” table only used for next year’s spending, and not presented for this year or prior years. And frankly, I’m a little burned out.
Someone else could download the spreadsheet from the post above, move the numbers around, and get the projected FY 2022 actual from this document to create a FY 2014 (Bloomberg’s last budget) to FY 2019 to FY 2022 (DeBlasio’s last) if they wanted to, by going agency by agency through this document.
Starting with the Department of Education on page 78. Of course, that would be much easier of OMB were to replicate the FY 2023 budget proposal on page 77 for the projected actual for FY 2022, and some past years, as was the case in the Bloomberg Administration — before the DeBlasio/Stringer/Cuomo/DiNapoli era of deception really got going. But we have long since passed peak transparency in this country, and I doubt that is ever going to happen.
Meanwhile, I’ll start with NYC and NY State fiscal policy, compared with the U.S. average and nearby states, and start dropping and describing charts, when I can.
