Monday, October 19, 2009

No Mayor Culpas in a Third Term

Harry and Fred Siegal have made the point that the next four years are going to be really tough ones-and that candidates Bloomberg and Thompson are avoiding the task of being honest with the voters about what lies ahead:

"But as next month's mayoral election approaches, the city faces an economic downturn and a political reordering that augur badly for the future. Mayor Michael Bloomberg, a two-term incumbent running against Bill Thomson, a lackluster Democratic challenger all but disavowed by his own party, has already spent at least $70 million funding 336 times as many TV ads as his rival through late last month. Yet the incumbent can barely break 50% in the polls..."

"The standard explanation for Mr. Bloomberg's weakness is anger at his ham-handed repeal of the term-limits law he had once championed. But underlying that, there's a growing civic unease, a foreboding that's remained nameless while the candidates have sidestepped the city's economic problems."

In Saturday's NY Times, there appears to be a first glimpse that the mayor's people recognize that the Days of Wine and Roses have gone: "He swept onto the national stage with feats of social engineering, colossal works of public art and grand plans to remake the cityscape. But if Mayor Michael R. Bloomberg wins a third term, he will return to City Hall with a less lofty agenda: preventing New Yorkers from losing their jobs and their homes."

Of course, there will be no recognition from the Bloombergistas that the hole the city finds itself in is partly the result of the mayor's own digging. As the Siegels point out: "Under Mayor Bloomberg, city expenditures grew 40% faster than the rate of inflation even as he imposed record property-tax increases and the city's coffers overflowed with revenues culled from the booming stock and real-estate markets. To keep the politically powerful public-sector happy, Mr. Bloomberg bestowed raises two to three times the rate of inflation on the city's unionized workers. To keep politically wired developers happy, Mr. Bloomberg showered subsidies on economically dubious megaprojects including two new major league baseball stadiums and plans for a basketball arena in Brooklyn."

Still, NYC government is do for some very serious downsizing. As the Times tells us: "Congestion pricing? Try loan modifications. In a series of announcements over the next two weeks, his re-election campaign will outline plans to reduce the city’s unemployment rate, stem home foreclosures, prop up small businesses and clamp down on predatory banking, according to his advisers. Aides said the mayor is delivering precisely what he has promised — innovative responses to a deep recession — and they do not rule out sweeping changes when the city’s finances recover."

But, as we have seen with addiction intervention, the first step towards recovery is owning the problem-and we see no evidence that Bloomberg, a man of limited self reflection, will suddenly become more introspective. However, the failure to see just how much the mayor's own policies are themselves responsible for the city's problems-a huge government apparatus supported by an irresponsible tax structure looms large in this respect-will severely limit the city's ability to recover.

And it appears to us that Bloomberg-limited by a John Lindsay-like world view-is still missing the point; and is resorting to limp liberal bromides rather than robust economic recovery proposals: "Today, his campaign pledges include keeping 3,000 households from losing their homes to foreclosure and giving emergency grants to 1,000 distressed households. “Obviously, the extreme vulnerability of people at this moment is what was driving a lot of our thinking about policy,” said Andrea Batista Schlesinger, a policy adviser on the Bloomberg campaign. “How could it not?”

The fact that Schlesinger is being elevated here as a campaign tout underscores Bloomberg's own limitations-because Andrea has no clue how to do any kind of economic development that doesn't involve simply giving stuff away: How could it not, given who she is, and where she comes from?

But the Times goes on to make this rather interesting observation-one that impacts directly on our concerns about Willets Point: "So, too, is the city’s yawning budget deficit — $5 billion — which leaves the mayor little, if any, money to set aside for new programs. During marathon policy sessions at campaign headquarters, Mr. Bloomberg has repeatedly pressed his advisers to work within existing agency budgets. “How much will it cost?” he asks at the end of presentations."

And when it comes to Willets Point this is exactly the question we have been asking-Bloomberg must have been reading our mind: How much will it cost? As we said last month: "But EDC has established an off set price here-and if the numbers are added up they probably would exceed $700 million. Where does the city expect to come up with this cash from-at a time when it is evicting the businesses and putting thousands of workers on the unemployment line?"

But Team Bloomberg is ready to roll out all of the non sequitors in its arsenal-and will probably still look to drop hundreds of millions of dollars on the Willets boondoggle, money that could be put to better use elsewhere. Here's what they are cooking up:

"Ms. Batista Schlesinger, and her colleague Brian Mahanna said that did not mean the policy team was thinking small or for the short term. To help working-class New Yorkers save, they propose creating new, universally available bank accounts with no minimum balance or overdraft fees. Ten banks have agreed to offer them.

They will try to inject city dollars into neighborhood credit unions to increase the pool of money that the banks can lend, a measure that would require approval from the State Legislature. They plan to install credit unions in public housing complexes to broaden access to banking services, which remain scarce in poor neighborhoods. And they want to dispatch mobile financial counselors to the homes of the elderly and the disabled."

No, we're not making this up-it's right there in the NY Times, so we're sure that they really mean this. And are, "credit unions in public housing complexes," the reason we needed Mike Bloomberg for a bogarted third term? This is beyond farce.

Unable to recognize that the problem lies with his own limited world view, Mike Bloomberg continues along the same self destructive path that got us to this point. As the Siegels observe: "During the peak years of 2003 to mid-2008, wages outside of Manhattan were essentially stagnant for the middle class, while the costs of housing, electricity, water and phone service rose sharply under Mayor Bloomberg. A report by the liberal Center for the Urban Future, "Reviving the City of Aspiration," reports that a person can live in Houston for $50,000 a year at the same standard as he or she would in Manhattan with a $123,000 income. "Astonishingly," the report notes, more residents left the five boroughs for other locales in each of the five years between 2002 and 2006 "than in 1993, when the city," suffering from staggering job losses and high crime, "was in seemingly far worse shape."

Driven out by the rising costs of government, and a mayor who has no understanding of what needed to be done to reduce the size and scope of government-so immersed in a Wall Street driven perspective that was blind to the concerns of the shlubs in the city's neighborhoods, or the problems of small business owners: "We don't want to lose people who work on Wall Street," Mr. Bloomberg said recently, neatly summing up the dynamic in which high taxes on the rich pay for a padded public-sector work force while squeezing out entrepreneurs. "We need the tax base. Our teachers need to get paid."

So, if we do get the third term that Bloomberg has done so much to purchase, we will be in the enviable position of having a front row seat for the upcoming debacle. The mayor may well live to regret his decision to run again-and while doing so, unleashing such vitriol against an underfunded opponent. In our view, the Bloomberg retrospective will be colored by the observation that he might have been better served to gracefully exit when his legitimate term was up. But when you're this rich, it's hard to simply leave well enough alone.