Buried in an Avalanche of Regulations and Taxes

In yesterday's NY Daily News, Bill Hammond focused on the high cost of everything in New York-even breathing it seems: "I hate to break it to you, New Yorkers, but you're not as rich as you think. Your median family income of $56,000 looks decent on paper - ranking 19th in the country. But you're burning through those paychecks to cover some of the highest taxes, housing costs, energy bills, health premiums and grocery prices in the country. Factor in that sky-high cost of living, and New York's real income drops below $41,000. That's the lowest in the country, behind Mississippi at $45,000. And real income in the five boroughs ranks lower than Detroit's. That's right, New Yorkers. You're living in the poorest big city in America."

This, as might imagine, isn't simply some natural phenomenon-like a weather cycle thta brings inordinate rain to our soaked region. No, it all comes down to governmental structures at all levels here in the state of compassion-as Eamon Moynihan has so ably pointed out, it is our ruinous cost of living that is the culprit: "Moynihan points the finger of blame at government, but not in the way you might guess. He believes that state and local taxes in New York - which are, indeed, among the very heaviest in the country - account for only a fraction of the cost-of-living gap. He makes a compelling case that the real culprit is "excessive and poorly designed regulation." So, for example, we pay more for health insurance because the state requires all plans to cover chiropractic care. We pay more for electricity because the state requires utilities to use a certain amount of juice from "renewable" sources, like windmills and solar cells, that are more costly than traditional power plants."

And all these regulations-designed by well meaning legislators to protect our less enlightened selves, actually do more harm than good: "First, he demonstrates that New York's tax rates, by themselves, do not come close to accounting for the cost-of-living gap between New York and, say, Chicago. Then he dumps into evidence 58,000-plus pages of codes, rules and regulations imposed by New York State - enough to cover 7 yards of groaning shelf space. Generations of well-meaning or meddling politicians imposed those rules in the name of worthy causes such as protecting consumers or cleaning the environment. But they rarely bothered to conduct a serious cost-benefit analysis, and they almost never follow up to make sure their handiwork is having the desired effect."

And his analysis doesn't include the voluminous add-ons from the same mentality that imposes even more of these useless and onerous regs in NYC. At no time, says Moynihan, do our elected officials bother to conduct any coat benefit analysis-or do any follow up to see if the rules are actually accomplishing what they purport to do in the enabling legislation.

As he points out: "Every page carries costs that trickle down to consumers every time they buy groceries, pick up the dry cleaning or gas up the car. Of course, well-designed regulations are absolutely necessary to keep New Yorkers safe and healthy - as Moynihan readily acknowledges. What he wants to get rid of are the countless mandates that made no sense in the first place or outlived their usefulness long ago yet linger on the books."

So, what do we need? As we have said frequently in the past-particularly with the problem of disappearing supermarkets, a full review of the regulatory code s are needed: "Moynihan advocates that all future regulation should be subject to hard-nosed cost-benefit analysis before being foisted on the public. Perhaps even more importantly, however, he's pushing for a thorough, top-to-bottom review of the regulations already on the books."

What's missing? A concomitant review of the manner in which the rules are actually enforced-particularly in NYC where inspecting is similar to panning for gold; and where retailers are simply a target rich environment. When an 800 square foot bodega is forced to post around thirty different signs-each needing to be placed, "conspicuously," you begin to understand the overkill. And the inspection army will inevitably discover that any number of these signs aren't conspicuous enough for the scrupulous (money grubbing?) city overseer.

In the end, as Moynihan highlights, the ultimate victim is the guys and gals our pols are professing to protect-in the form of a higher cost of living and doing business that is driving so many enterprising folks right out of NYC and State.