Larry Littlefield's blog
Since I've been asked to write for this blog, I've delivered a litany of (primarily) fiscal complaint, a series of objections to the ongoing and expanding advantages grabbed by powerful interests in Albany (and elsewhere) at the expense of the private sector working poor, the young, the future, and New York City's children. But I try not to make complaints unless I have what I believe are at least partial solutions. So for state government, and for the month of October, I'm going to provide some.
They won't make many people on the inside happy.
I once heard Tom Seaver, providing color commentary on a baseball game, describe some advice a pitching coach had once given him. “What’s the best pitch in baseball?” the coach asked. “The fastball,” he said. “What’s the second best pitch in baseball?” he asked again. “The fastball,” he once again answered his own question. His point, Seaver said, was not to forget the fastball. Major league pitchers know they need a good second pitch to succeed, so often they focus on their off-speed pitch, whether a curve, slider or change-up, to the exclusion or near exclusion of the fastball. And that’s a mistake, because it’s the fastball that makes the whole thing work.
As I wrote here, one of New York City’s biggest economic problems is a shortage of jobs accessible to the unskilled, and thus its low level of employment and labor force participation. In many ways, Upstate New York is the city’s mirror image. It has a lower poverty rate and a higher employment rate, but it has a shortage of high-paid jobs and jobs for young college graduates, the very economic base New York City – primarily Manhattan – has in abundance. Among those growing up Upstate, the average person completing their education probably has more of it than the national average. It is migration – the type of people who move out, and the type of people who don’t move in – that is responsible for the fact that the share of Upstate residents with college diplomas is lower than in the rest of the state. Upstate college graduates, and those with exceptional non-scholastic skills, tend to leave, and few arrive from elsewhere. That is the real problem in Upstate New York.
I paid a fairly substantial sum to read former State Senator Seymour P. Lachman’s Albany expose Three Men in a Room. The book is a good summary of what those of us who have been reading the newspapers for the past few years already know, with the added benefit of having a former insider confirm than the worst accusations of the outsiders are correct. For those who haven’t been following the descent of our state government into despotism, I recommended it; you in for a big surprise. Hopefully, after all the libraries have made their purchases, Mr. Lachman can convince his publisher to put out a cheap paperback edition, which his education contacts can substitute for existing textbooks in the New York City public schools, those that falsely assert that we live in a democracy. But before that happens, there are some things I’d like Mr. Lachman to add.
The Daily News recently ran a series of articles outing “no-bid” contracts at New York City’s Department of Education. As someone who spent nearly 20 years as a “provisional” public employee, I’m not surprised.
Whether the government is hiring public employees or companies, it faces what I call the “dilemma of discretion.” Allow public sector managers to hire and fire who they please, and the government runs the risk of having their brother-in-law – or the brother-in-law of a politico who is in a position to threaten them – hired. But bind that manager with all kinds of rules, such as a requirement to accept the lowest “responsible” bidder, to hire those who score highest on a civil service test, and to only fire an employee or contractor after a complicated series of steps, and you create a legalistic playground for those who seek to get paid to do a job without actually doing it. Thus the tendency of those trying to improve public services, as well as those trying to steal, to hire provisionals or “consultants,” which New York’s public agencies are stuffed with, and to enter into no-bid contracts.
As I mentioned here, the fact that there are many poor people in New York City is, in some ways, a phony issue. According to 2005 data from the Census Bureau, the New York Metropolitan Area as a whole had a poverty rate of 12.6%, below the national average of 13.3%. Poverty is high in New York City because it is the part of the metropolitan area where the poor are permitted to live; taking regional and national economic trends as a given, the more places for the poor to live a municipality provides, the more poverty it will have. A better focus for public policy is how well the poor live in New York City, and to what extent the city provides an environment their families to advance out of poverty, if not in this generation than in the next. In my view, the city is a worse place to be poor today than it was 50 years ago. That is the real issue.
I recently wrote a series of essays on what I consider to be phony or exaggerated economic issues in New York State. Now I’m going to write a series of essays on the real problems, as I see them. For New York City, perhaps the biggest problem is the low share of its adults who work, or look for work. The support of the non-working is a burden the working have to carry, and to the extent that burden is concentrated on those who live in their proximity, it is a particular burden in New York. But that liability is small compared with the impact of the absence of employment on the non-employed themselves. It is one of several ways New York’s poor are less well off now than in the 1950s – though, as we shall see, better off than in the mid-1990s.
The news broke earlier this week that the latest planning process for the redevelopment of Governors’ Island has been scrapped, and the agency charged with the redevelopment of the island would start over. Again.
The latest plans called for a variety of uses, including hotels, condos, conference centers, and an amusement park. Mayor Bloomberg’s earlier plan called for moving the CUNY campuses there, and using the existing campuses for public schools. Mayor Giuliani’s plan called for a casino. The next failed plan, which will no doubt provide positive publicity (and that is the point isn’t it?), will be the fourth. Under the circumstances, you may be interested in what I suggested, while working at the Department of City Planning, when the first plan was being cooked up – moving the United Nations and all related embassies to the island. That proposal may be read after clicking “read more."
American doesn’t love a loser, so today is not a day many people will be thanking Tom Suozzi for his work and his campaign. I was going to drop him a note, but I’m a blogger now, so what the hell, I’ll do it here.
Thank you for turning your back on the safe path of careerism, trading favors, waiting for the death or indictment of an incumbent, and occupying a seat. Instead you took on the corrupt and seemingly impregnable Nassau County Republican machine, made many of the hard short run decisions – higher taxes, reduced services, tougher labor negotiations – required to begin turning the situation around for the long run. Thanks even more for taking on the disgrace our state government, once one of the best in the nation, has become. That was even harder, because it required that you not only call out the other side, but also your own side and its supporters. It made a lot of enemies, which has cost you. But from my point of view, they include many of the right enemies. And thanks for running for Governor. You offered your service. The voters decided to choose otherwise. So be it. That isn’t anything for Tom Suozzi to feel bad about.
For a decade or more the status and needs of Upstate New York’s economy has been the number one issue in virtually every statewide political campaign. In 1994, Republican George Pataki unseated his predecessor as Governor, Democrat Mario Cuomo, in part by blaming Cuomo for Upstate’s economic decline. In 1998, Democrat Chuck Schumer unseated his predecessor as Senator, Republican Al D’Amato, by blaming the Republicans for failing to revive the Upstate economy; meanwhile, Governor Pataki criticized his opponent, New York City Council Speaker Peter Vallone, for not caring enough about Upstate New York. In 2000, future Senator Hillary Clinton scored points by “listening” to Upstate New York while her opponent, Republican Rick Lazio, committed a “gaffe” by claiming that Upstate New York was improving. And one of the few risks in George Pataki’s 2002 re-election campaign was potential Upstate resentment at his “unjustified” attention to New York City in the wake of a minor incident with a couple of airplanes. In this election, Eliot Spitzer compared Upstate to Appalachia, Tom Suozzi said upstate needs jobs, and John Faso is running in the tradition of candidates who believe lazy, undeserving New York City needs to be cut off to help hard working, deserving Upstate.
During the Pataki administration, New York City’s pleas from the business community for overall lower taxes, and from poverty advocates for more spending on the poor, have largely been ignored. Not so the whines of suburban New York about its high cost of living – high property taxes, high housing costs, and the lack of alternatives to multiple automobile ownership, all of which are pricing out the young. When our politicians talk about bringing down the high cost of living, however, their “solutions” have generally involved subsidizing the high costs with taxes collected elsewhere, rather than reducing those costs. Reducing taxes in the suburbs is difficult (but not impossible) because suburban living is expensive by design, and in some ways by choice. And unless and until suburbanites become willing to change their choices and bring the cost of living down, the high cost of suburban living will remain a phony issue.
The big story in New York real estate in recent weeks has been the potential sale, for a purported asking price of $5 billion, of Stuyvesant Town and Peter Cooper Village, two huge “middle class” housing developments on Manhattan’s East Side, by the Metropolitan Life Insurance Company, their developer and long time owner. Metlife had previously sold its other large New York City housing projects, such as Parkchester in the Bronx. Immediately, politicos have rallied to the side of the potentially embattled tenants of these developments, most of whom benefit from rent stabilization. The local council member has proposed a tenant buyout, which he says will be possible with union pension fund money, “socially conscious” investors, and city subsidies. If the existing tenants want to make a bid for the place, more power to them, although I advise that we are in a real estate bubble and any buyer will likely pay too much – one reason Metlife is selling. But if they want to put city pension fund money at risk, given that the city would be required to raise taxes and cut services to make up any losses, and to receive tax breaks, I say forget it. Since Stuytown and Peter Cooper village are large enough to be their own census tracts, we can use 2000 census data to find out some characteristics of those who live there. And like Waterside Plaza, another development that was granted a city tax subsidy in exchange for a continued great rent deal for the tenants, residents of these developments are MUCH better off than most of the rest of us.
Most New Yorkers would agree that poverty and inequality are bad, and the data confirms that both are far above average in New York City. Advocates for the poor report this constantly. Their solution: more money for their organizations, and more places for the poor to live.
As I wrote here, poverty and inequality may be explained by economic and social conditions and public policy at the national level. At the local level, however, the level of poverty is primarily a product of migration: who moves in (or is kept out), who moves out (or is pushed out), who is born and who dies off. Local changes in the poverty rate may have nothing to do with whether individuals are getting richer or poorer whatsoever. Even if the city succeeded in helping every poor person within its borders to advance out of poverty, its poverty rate would not go down if those formerly poor people moved out and were replaced by new poor people seeking to move up. When people advocate for more low-income housing in New York City, they are advocating for the opportunity for more low-income people to live here, and thus a higher poverty rate. Places with low poverty rates are generally affluent suburban jurisdictions that seek to exclude the poor, through zoning rules that keep the price of housing high (more on that in future essays). Thus, the city’s high poverty rate is an inevitable by product of its accessibility to the poor, something that is in other ways desirable.
The Manhattan Institute, the Public Policy Institute, and the New York Post continually moan about the extent to which New York State’s economy and population grow more slowly than the national average. The reason, they assert, is because New York’s state and local taxes are high, and the solution is to cut taxes on people like themselves until they are near or below the national average. Since New York has more pension obligations and debts than the national average, and the federal government covers a lower share of Medicaid and social services costs here, this would require spending on public services and benefits that were much lower than the national average. In other words, all public services in the state, or at least those outside certain affluent suburbs, would have to be funded like New York City’s schools.
Happy Labor Day. I began the day looking through the news, and seeing the usual round of Labor Day stories about the New York economy. There is no doubt New York State’s economy is not the strongest in the country. There is no doubt there are people in this state with economic problems. And there is no doubt that bad state and local government policies play a role in creating those problems.
And yet, hearing what is said in the media, by interest groups, and by elected and would-be elected officials, I find that the state’s problems are generally vastly exaggerated and misdiagnosed. Some of the purported problems are inherent conditions which cannot be remedied; others are the flip side of good things New Yorkers would be loath to give up. Some of the exaggerated problems are little more than a disingenuous excuse for more public money for interests that aren’t necessarily the most in need – a plea for the continuation, or even expansion, of policies that were bad to begin with. Meanwhile the state’s actual economic problems, as I see them, are generally not on the state government agenda, mainly because there isn’t an organized group giving campaign contributions that is interested in them. I’ll discuss the real problems, and my suggested solutions, in later essays (probably next week). First, however, I’ll go over what I see as phony or exaggerated problems: slow job and population growth in New York City, poverty and income inequality in New York City, the high cost of living in the Downstate Suburbs, and job losses and decline in Upstate New York.