Category: News and Opinion

Okay; so I have been keeping my readers up to date, as I move towards a run for city council later this year; so here is the latest. Last month, I secured an EIN number from the IRS, and on February 5th, 2009, I clocked and filed my campaign committee with the NYC Board of Elections in Manhattan; then I mailed notarized copies of said papers to the State Board of Elections in Albany the very same day. Next, I opened up my campaign account with a commercial bank, on Saturday 7th, February, 2009. This account is now close to one thousand dollars after 3 weeks (not good at all/LOL). I must admit that fundraising has been rather disappointing so far. I am assuming it is the current state of the economy. In fact, I am hoping that’s what it is and not that my candidacy is failing to attract money/rofl. If it continues at this rate I will have to start hitting up my rich white friends soon/lmao.  

I've probably written about this before, but in case you missed it, the place without a pension disaster is the City of San Francisco. And the reason it doesn't have a pension disaster is that all pension changes in that city are subject to a public referendum, and have been for 120 years, as descrbed here. So the irrevocable pension heists of the past 12 years didn't occur there, because the sort that occured in New York and many other places could not stand up to public scrutiny. Not when people understand that their taxes would soar and their public services would be devastated as a result, as ours will be. Not when people are allowed to compare the retirement benefits they would possibly be forced to pay for, and the retirement deal public employees are willing to pay for by shopping at the place where they work. They could only go through as unannounced deals in the dark, which is what we have here in New York. I'll bet those New York City public employees who actually live here would be embarassed to confront their neighbors with the consequences of their demand.

It generally doesn’t make sense to talk about budgets until the actual spending and revenues have been recorded and verified, let alone before the budget has even been passed. But it sounds to me like we are about to get $1 trillion in new taxes without univeral health insurance. Just a “downpayment” for universal health insurance. Today’s seniors will get plenty of Medicare, although tomorrow’s seniors — today’s young and middle aged — probalby will not. Public employees get unlimited coverage, for free in NYC. But everyone else gets a downpayment. Kind of like all those “downpayments” on the Second Avenue Subway, used as an excuse to borrow more money the generations in charge wouldn’t be around to pay back.

That’s not good enough.

There will be three Special Elections for City Council on Tuesday and I’m willing to guess that very few voters who are not active in politics are even aware of them.

For the past three years I’ve tried to call attention to the inequities in the tax code at the expense of younger generations. But it seems no one who matters really cares about younger generations. There are, however, also tax inequities among older generations. And to see what those inequities are, one merely needs to fire up the Turbo Tax and compare the New York state and local income tax liability for two fictional couples, the Goldrakers and the Schlubs.

The Goldrakers are former New York City school teachers who happened to turn 55 right when the pension plan was changed by state legislation, allowing them to retire with a full pension at that age, rather than age 62, without contributing an extra dime. With an average salary of $110,000, if overtime/summer school/after school are included, they are now entitled to $110,000 in combined pension income per year, and health insurance without charge. They took the deal (along with how many others and at what cost no one has said). The less affluent Schlubs, an administrative office worker and a store clerk, were pushed into retirement at age 60 in 2007, in the early phase of the recession. Though not entitled to pensions, the Schlubs had diligently saved $500,000 for retirement on their modest salaries, subsequently reduced to just $360,000 by investment losses. Forced to pay $15,000 to continue their modest health insurance in 2008, they withdrew $60,000 to live on that year.

I've been asked by an acquaintance in Boston to comment on the plan by the Governor of Massachusetts to solve the state's transportation problems. And since the issues are the same here and there, I thought I’d post and expand on my response on Room Eight as well. My general sense is that the Governor, like all politicians it seems, is unwilling to state the simple fact that the generations now in charge have demanded and received a better deal for themselves, getting more out and putting less in, at the expense of a future that has now arrived. And the damage is so great that they cannot bring themselves (and others who control our public and private institutions) to impose the sacrifices needed to put things back on a firmer (though diminished) foundation. Even as they are forced to hand out sacrifices and ripoffs, whereas prior politicians handed out special favors, deals and handouts, today’s politicians keep deferring costs and sucking up future revenues, creating more and more problems for the future. At least Deval Patrick is sort of willing to say so. Massachusetts is a state with a declining and aging population, whose leaders are deeply worried that young people — many educated there — choose to move away. Frankly, why wouldn’t they? The only question is where can you go?

The New York State legislature is frequently called dysfunctional, but that assumes its function is to make the people of the state better off. In fact, the goal of the state's Republicans has been to force most New Yorkers to accept less in public services and benefits, and the goal of its Democrats has been to force them to pay more for it, particularly in the long run, all while rewarding insiders. And both have succeeded. For example, the Associated Press reports that, adjusting for lots of things, "New York's Medicaid program spends more on long-term health care than other states, but it delivers only average or slightly above average quality." The analysis was not complete because it did not adjust for power and a sense of entitlement, the factors most critical in Albany.

As regular readers of this department realize, I've not been a big fan of the Mayor, but both they and I might be hard pressed to say why.

In listening to the Mayor's potential opponents, I've yet to find many issues where I think they are right and the Mayor is wrong. My problem with mayoral_control_of_the_schools is not the idea but its implementation, which seems designed to thwart the accountability which is ostensibly its goal. At any rate, it is no surprise that the Mayor's opponents share The Mayor's desire not to diminish the powers of the Mayor's office, even as they seek to change its occupant. When it comes to who Bloomberg's opponents want to control our schools, the difference among the candidates are worth considerably less than a stick of gum.

As it turns out, our transit authority isn’t the only one going down the tubes, and for many of the same reasons that the future of the MTA, and those who depend on it, is troubled. A local NYC weatherman, MIT executive and fellow transit fan sends word of the financial condition of the MBTA up in Boston, as described in this Boston Globe article. If Pataki, Bruno and Silver haven’t been in change of Massachusetts, apparently people very much like them have been. Because they’ve done all the same things, with the same results. Rich, undeserved, enhanced, pensions, generally handed out by Democrats, proposed to be offset by lower pay and benefits for future employees. Massive debts run up by Republicans who claimed to cut taxes but in reality merely deferred them. Pandering to riders with cheap fares — leading to massive increases later. And money drained off to the automobile, in this case for the massive over-runs on the Big Dig (not mentioned in the article linked above but very important).

There are howls of protest over limits on pay and bonuses for companies receiving government bailout subsidies, with one version limiting guaranteed pay to $500,000 per year. The protest is that these top executives ought to receive whatever their talents command in the free market for labor, and if their pay were restricted at one company, they would simply move on to another, making the lower-paying company worse off. There is a free market for labor in the United States, but those who have been gaining a larger and larger share of national income and wealth over the past 25 years are precisely those who have used their power over institutions to exempt themselves from it.

In the case of the executives, what you have is a loosely operated cabal that works through a small number of pay consultants, hired by boards of directors precisely because they recommend higher pay. These boards of directors theoretically represent shareholders, but the elections for them are as rigged and undemocratic as those for the New York State Legislature. They are stuffed with cronies, executives sitting on each other’s boards and recommending increases in each other’s pay, knowing that the consultants will use the pay they approve as justification for more for themselves down the line. Not too many years ago it was argued that soaring executive pay, justified or not, was too small a share of overall company costs to materially affect shareholders, workers, and customers. Now, across a range of industries, that is no longer the case. As corrupt as government often is, there is a case for more intervention rather than less. Not just for corporations receiving bailouts. In fact, not just for corporations. What about unions and non-profit organizations?