Our post last week on the correlation between NY's population loss and its high tax environment, stimulated an email exchange that we thought might prove enlightening. The three individuals who responded are all extremely well versed in the economic impact of government tax and regulatory policies: Erik Engquist from the Crain's Insider; E. J. McMahon, Senior Fellow for Tax and Budgetary Studies, at the Center for Civic Innovation at the Manhattan Institute, and Steve Malanga, also a Senior Fellow at the Manhattan Institute.
First up is Engquist:
"Rule Number One of statistics: correlation is not causation.
So your conclusion that "low taxes = population gain" requires more evidence and explanation than you and John Faso give. It also begs the question of whether population gain is always good. It is arguably proving to be unsustainable in places like Nevada, where an economy that relies so heavily on population growth has run into major difficulties (foreclosures, etc.), and where drinking water is not easy to supply. Such states's economic models present short-term and long-term conundrums.
I'm not saying New York doesn't have its problems. And I agree with Faso that NY shouldn't have to dole out business tax breaks one at a time. But to idealize the fastest-growing states is naïve. Florida, too, provides a cautionary tale.
Below are two excerpts from http://www.crainsnewyork.com/article/20101222/FREE/101229963:
According to U.S. Commerce Department data analyzed by the Fiscal Policy Institute, though, New York ranked 24th among states in per-capita income growth from 1999-2009, with a figure that was slightly higher than the national average. Among the 10 states whose populations grew the most, only Texas surpassed New York in that category. The fastest-growing state, Nevada, ranked 48th in per-capita income growth.
David Epstein, a professor of political science at Columbia University, says New York’s population growth is low because people are leaving upstate, even as New York City’s population edges upward. The tax burden upstate is largely from property taxes, but income taxes are lower than in the city.“The problem in upstate New York is not high taxes, it’s that it’s full of old, Rust Belt-type cities that are trying to reconfigure themselves for the new economy,” Mr. Epstein said. “It’s not a taxes issue. It’s a matter of economic planning and development.”
To which McMahon responded:
"Sure, "low taxes=population gain" is obviously a simplistic way of summing up the census results. However, your counter-arguments don't seem to prove anything in particular. For example, I'd suggest that NY owes its (slightly) better-than-average 1999-2009 per-capita personal income growth largely to a phenomenon that FPI usually bemoans: the income boom on Wall Street. Take that away, and we're much worse.
Like upstate New York, the states of Minnesota and Wisconsin are also "full of old, Rust Belt-type cities that are trying to reconfigure themselves for the new economy." But these states (which also have winter weather like upstate NY's) gained population during the past decade, while preliminary estimates would indicate the total upstate NY population was shrinking. Only sickly Michigan looks as bad as upstate NY.
Moreover, downstate NY's population growth masks a large and continuing out-migration flow to other states; these departing New Yorkers have been replaced largely by foreign immigrants and their US-born children. NY had the lowest rate of population growth in the northeast, which in turn was the slowest-growing region of the country. Are we supposed to believe this is entirely "a matter of economic planning and development"? (I'm not sure a Columbia pol-sci guy is the best authority on upstate NY's economy, in any case.)
I never heard anyone suggest we try to emulate the tourism-and-gambling driven economic model of Nevada, much less Florida. But we really might want to start wondering why NY's 2% net gain can't hold a candle to those of Indiana (6.6%) or Missouri (7%). Taxes aren't the whole story, but it seems apparent that taxes are a big part of it.
And finally Steve Malanga:
"Actually, there is a rich literature of peer-reviewed academic work that demonstrates over the years that states with high tax rates inevitably generate slower economic growth through outmigration of capital and then jobs. People follow. It is incumbent that policy makers [and reporters] be familiar with this economic work as the state debates its future.
The literature and the process it describes was perhaps best summed up by Nobel Prize Winner Joseph Stiglitz (hardly a conservative), in his textbook, Economics of the Public Sector , when he wrote:
“A community that increases the taxes it imposes on capital will find that it attracts few investors. If as a result of the tax on capital the productivity of workers is decreased, wages will be lowered. But then, in the long run, workers will emigrate. The workers who remain “will bear some part of the burden of the tax on capital. Their wages will be reduced as a result of the outflow of capital. Dramatic consequences may result if these considerations are ignored. Occasionally states have attempted to impose special taxes on particular industries. Some industries are especially ‘footloose.’ These industries will move out if higher taxes are imposed on them. They will shop for states and communities that offer the best deal.”
What is this literature that prompts such a declaration from Stiglitz? Some of the recent summaries of work on state taxes and economic activity includes:
“The Effect of Personal Income Tax Rates on Individual and Business Decisions - A Review of the Evidence” by Mark Rider, an April 2006 working paper published by the Andrew Young School of Policy Studies at Georgia State University. Conclusion: “In summary, there is a large body of evidence that high state PIT rates have a negative effect on business and individual decisions and thus slow the growth of state employment and personal income. Consequently, states must use care in setting PIT rates top make sure they are not out of line with those of their neighbors and competitor states.”
“Do State and Local Taxes Affect Relative State Growth?” by Zsolt Becsi, published by the Federal Reserve Bank of Atlanta in its Economic Review of March/April 2006. Key finding: “The study finds that relative marginal tax rates have a statistically significant negative relationship with relative state growth averaged for the period from 1961 to 1992.”
“Can State Taxes Redistribute Income?” by Martin Feldstein and Marian Vaillant Wrobel, Journal of Public Economics 68 (1998). Summary: “Since individuals can avoid unfavorable taxes by migrating to jurisdictions that offer more favorable tax conditions, a relatively unfavorable tax will cause gross wages to adjust until the resulting net wage is equal to that available elsewhere … The adjustment of gross wages to tax rates implies that a more progressive tax system raises the cost to firms of hiring more highly skilled employees and reduces the cost of lower skilled labor. A more progressive tax thus induces firms to hire fewer high skilled employees and to hire more low skilled employees.”
Local Revenue Hills: Evidence from Four U.S. Cities, by Andrew F. Haughwout, Robert P. Inman, Steven Craig, Thomas Luce, NBER Working Paper Series, 2003. Key finding: “Estimates of the effects of taxes on city employment levels for New York City and Philadelphia … show [their] local income and wage tax rates have significant negative effects on city employment levels. Cuts in these tax rates are likely to be an economically cost effective way to increase city jobs.”
The process of how this diminishment works is apparent in the recent study by EJ and Scott Moody of the National Establishment Time-Series which showed that NY lost the most jobs to outmigration of any state in a 15 year period, and also lost substantial jobs to an imbalance of new company births vs. deaths of firms and expansions vs. contractions."
While the experts might disagree on the degree of high tax causality that underlies the NY out migration, most will agree that the state's high tax structure, unwieldy overlapping governmental jurisdictions, and dysfunctional political culture have resulted in NY's current dismal economic and fiscal conditions. As we said last week-and we'll give ourselves the last word, while thanking our experts for the educational exchange:
"In order to be able to accomplish this drastic restructuring-and re-imagining-of New York's political culture, Cuomo's going to need lots of help. The "conservative" forces of the status quo, and their legislative allies, are going to have their long knives out-and they will be sharpened. The small business community-battered and bruised in this state-is ready to enlist in this battle for survival.
Monday, December 27, 2010
Bye Bye Bondy
The CityTime scandal continues to roil the waters with the resignation of NYC's real life Inspector Clouseau, Joel Bondy, as head of the Office of Payroll Mismanagement. The NY Times has the story: "The Bloomberg administration official responsible for overseeing a huge, troubled payroll and timekeeping project for New York City employees that is the focus of an $80 million federal corruption case said on Thursday that he was resigning. In a one-sentence letter to the board that oversees his agency, the official, Joel Bondy, said he was leaving as executive director of the Office of Payroll Administration effective Dec. 31. Last week, Mr. Bondy, who has not been charged, was suspended without pay. His biography was removed from the agency’s Web site early this week."
Scrubbing the website, however, will not be good enough to remove the ongoing stench of this corruption-and the uncovering of the people responsible for this colossal failure of oversight has really just begun. DP reports: "Mayor Bloomberg has struggled to explain how $80 million could have seemingly slipped through the cracks despite warnings from reporters like Gonzalez, from city Comptroller John Liu and even whistleblowers, but insists the city has "zero tolerance" for corruption.
So, in this context, the "zero tolerance" mantra is a fairly meaningless phrase, n'est pas? As the scandal continues to unfold, the question of tolerance is transcended by the more compelling concern about competence-as in the case of, what did they know, and when did they know it? Which brings us back to the last person who seems to have had some critical faculties in regards to this program-former OPA director Richard Valcich.
As you may recall, Valcich wrote the following to the crack consultants now accused of looting the CityTime program-as Juan Gonzales highlighted: "A certain level of professionalism and compliance with acceptable industry standard practices is expected of a contractor responsible for the execution of a $100m[illion]+ project," Valcich said. He further noted that SAIC had increased costs of some hardware by 400%. SAIC's "commitment to quality is almost non-existent and is reflected from the top down," Valcich wrote. He added the city had spent "approximately $35 million on CityTime and does not have a tangible system to show for it." A more damning assessment is hard to imagine - but in all the City Council oversight hearings about CityTime the past few years, no one at OPA or City Hall ever mentioned the Valcich letter."
But Valcich, as the Times reported, also had accused the consultant of trying to entice him with an illegal job offer: "In a disclosure that raised an additional question about SAIC’s conduct, a letter made available on Tuesday through a state Freedom of Information Law request suggests that in 2002, SAIC broached the idea of a job offer to the executive director of the payroll office at the time, Richard R. Valcich. In the letter, to an SAIC senior vice president, regarding a meeting they had had, Mr. Valcich wrote, “I do apologize if I seemed rude and abruptly” shortened “your discussion on a future postcity employment position with SAIC. In my capacity at the Office of Payroll Administration,” he added, “it is inappropriate to discuss any post employment with a company that I do business with such as SAIC.”
It's hard to believe that the diligent Valcich, who resigned in 2004, didn't pass this inappropriate inducement on to some city overseer-perhaps COIB or DOI. This is an avenue of investigation that deserves more further scrutiny-after all, zero tolerance is rendered moot when facts of a burgeoning scandal never penetrates the thick skulls of those who are supposed to be aware of these kinds of egregious behaviors. DOI is now trying to take belated credit for its investigatory work, but it may turn out that the agency was asleep at the switch when certain facts began to emerge that should have jump started a much earlier investigation.
All of which brings us to the curious editorial silence of the Times. After all, the NY Post weighed in on this right away-on December 17th-and the Daily News followed in similar fashion three days later. But the Times, in spite of all the good reporting it has done on this furor, remains mute. What could the paper be waiting for? Perhaps, they want to do their first editorial on the Duke lacrosse case before commenting on this Bloomberg scandal, who knows? But if Murdoch and Morticia can break the billionaire Code of Omerta, than Pinch should be able to as well-unless there's something we're not aware of that's forcing the Heir of Nepotism to seal his lips.
But we haven't heard the last of this juicy thievery-and what follows will all revolve around the failure of oversight. As the management failure here becomes clearer, it may just turn out that the real NYC Inspector Clouseau is not the hapless Joel Bondy, but none other than the city's chief khokhem , Mayor Mike Bloomberg
Scrubbing the website, however, will not be good enough to remove the ongoing stench of this corruption-and the uncovering of the people responsible for this colossal failure of oversight has really just begun. DP reports: "Mayor Bloomberg has struggled to explain how $80 million could have seemingly slipped through the cracks despite warnings from reporters like Gonzalez, from city Comptroller John Liu and even whistleblowers, but insists the city has "zero tolerance" for corruption.
So, in this context, the "zero tolerance" mantra is a fairly meaningless phrase, n'est pas? As the scandal continues to unfold, the question of tolerance is transcended by the more compelling concern about competence-as in the case of, what did they know, and when did they know it? Which brings us back to the last person who seems to have had some critical faculties in regards to this program-former OPA director Richard Valcich.
As you may recall, Valcich wrote the following to the crack consultants now accused of looting the CityTime program-as Juan Gonzales highlighted: "A certain level of professionalism and compliance with acceptable industry standard practices is expected of a contractor responsible for the execution of a $100m[illion]+ project," Valcich said. He further noted that SAIC had increased costs of some hardware by 400%. SAIC's "commitment to quality is almost non-existent and is reflected from the top down," Valcich wrote. He added the city had spent "approximately $35 million on CityTime and does not have a tangible system to show for it." A more damning assessment is hard to imagine - but in all the City Council oversight hearings about CityTime the past few years, no one at OPA or City Hall ever mentioned the Valcich letter."
But Valcich, as the Times reported, also had accused the consultant of trying to entice him with an illegal job offer: "In a disclosure that raised an additional question about SAIC’s conduct, a letter made available on Tuesday through a state Freedom of Information Law request suggests that in 2002, SAIC broached the idea of a job offer to the executive director of the payroll office at the time, Richard R. Valcich. In the letter, to an SAIC senior vice president, regarding a meeting they had had, Mr. Valcich wrote, “I do apologize if I seemed rude and abruptly” shortened “your discussion on a future postcity employment position with SAIC. In my capacity at the Office of Payroll Administration,” he added, “it is inappropriate to discuss any post employment with a company that I do business with such as SAIC.”
It's hard to believe that the diligent Valcich, who resigned in 2004, didn't pass this inappropriate inducement on to some city overseer-perhaps COIB or DOI. This is an avenue of investigation that deserves more further scrutiny-after all, zero tolerance is rendered moot when facts of a burgeoning scandal never penetrates the thick skulls of those who are supposed to be aware of these kinds of egregious behaviors. DOI is now trying to take belated credit for its investigatory work, but it may turn out that the agency was asleep at the switch when certain facts began to emerge that should have jump started a much earlier investigation.
All of which brings us to the curious editorial silence of the Times. After all, the NY Post weighed in on this right away-on December 17th-and the Daily News followed in similar fashion three days later. But the Times, in spite of all the good reporting it has done on this furor, remains mute. What could the paper be waiting for? Perhaps, they want to do their first editorial on the Duke lacrosse case before commenting on this Bloomberg scandal, who knows? But if Murdoch and Morticia can break the billionaire Code of Omerta, than Pinch should be able to as well-unless there's something we're not aware of that's forcing the Heir of Nepotism to seal his lips.
But we haven't heard the last of this juicy thievery-and what follows will all revolve around the failure of oversight. As the management failure here becomes clearer, it may just turn out that the real NYC Inspector Clouseau is not the hapless Joel Bondy, but none other than the city's chief khokhem , Mayor Mike Bloomberg
Thursday, December 23, 2010
Liu Cuts Through the Cant
The WSJ reports on Comptroller John Liu's caustic criticism of Mayor Bloomberg's handling of the CityTime scandal-and he isn't buying the mayor culpas: "Comptroller John Liu stepped up his criticism of Mayor Michael Bloomberg's financial stewardship in light of the burgeoning scandal surrounding New York City's long-delayed computerized payroll system, reproaching the mayor for suggesting there's little that can be done to prevent high-tech projects from ballooning over budget. In a letter to the mayor and in an interview with The Wall Street Journal, the comptroller outlined how he believes the Bloomberg administration has failed to do enough to safeguard the city's finances against wasteful spending and potential fraud. Information-technology projects, in particular, lack sufficient oversight, he said."
The comptroller's critique comes on top of more discoveries about the wayward life of Mark Mazer, CityTime's consultant extraordinaire: "The accused mastermind of an $80 million taxpayer ripoff was twice probed for fraud and sued for sexual harassment when he worked for the city, a Daily News investigation found. Despite his checkered history, Mark Mazer was hired as a highly paid consultant on the sprawling CityTime project - a job prosecutors said allowed him to orchestrate the massive scam."
And we know of a perfect illustration of the comptroller's point-the defrauders hired by EDC to weigh the environmental and traffic impacts of Willets Point/Van Wyck ramps. AKRF and its subcontractors-Eng Won Taub and URS-was hired without any competitive bidding and when they submitted a deficient ramp (AMR) report, Willets Point United and its own consultant Brian Ketcham blew it out of the water. Because of this, EDC and crew have been busy redoing the AMR to the tune of, as yet undocumented, tens of millions of dollars.
In our view, once the original report was sh*t canned, EDC should have put the revised AMR work out to bid-why reward the consultants for their shoddy work? But, because there are no controls or system of checks and balances any where in this administration-but especially at EDC-the agency has carte blanche to spend money with little actual accountability.
Clearly, the reputation of Mike Bloomberg as a shrewd fiscal manager is in tatters: "Last year, Mr. Bloomberg told voters he deserved a third four-year term because the city needed his financial acumen to help shepherd New Yorkers through the global economic crisis. Some of the mayor's critics have pointed to last week's federal charges as evidence that the mayor isn't living up to what he promised."
With the controversy swirling, Howard Wolfson was sent out to play defense: "Deputy Mayor Howard Wolfson said Mr. Bloomberg "takes accountability for anything" that happens in his administration. "I would put this mayor's record of fiscal responsibility over the last nine years with any chief executive in the country," he said. "The reason why we are not here in New York City in the same budget mess that they are in Albany is because this mayor has consistently safeguarded the city's finances."
Not really Howard. The reason the city is in better shape is because of the mayor's tax and regulate policies that-along with the trusty Wall Street economic engine-have created a better budget environment than Albany. And, as an aside, saying that one is doing better than Albany is not a robust defense Howard-and it elides the core issues of the scandal itself.
Absent all of the money lost and stolen, how would the current retrenchment of city services actually look today? Would we need to be cutting fire service? The final accounting is yet to be done, but were pleased that we finally have, in the person of the comptroller, a true fiscal watchdog in place to do this needed oversight work
The comptroller's critique comes on top of more discoveries about the wayward life of Mark Mazer, CityTime's consultant extraordinaire: "The accused mastermind of an $80 million taxpayer ripoff was twice probed for fraud and sued for sexual harassment when he worked for the city, a Daily News investigation found. Despite his checkered history, Mark Mazer was hired as a highly paid consultant on the sprawling CityTime project - a job prosecutors said allowed him to orchestrate the massive scam."
And we know of a perfect illustration of the comptroller's point-the defrauders hired by EDC to weigh the environmental and traffic impacts of Willets Point/Van Wyck ramps. AKRF and its subcontractors-Eng Won Taub and URS-was hired without any competitive bidding and when they submitted a deficient ramp (AMR) report, Willets Point United and its own consultant Brian Ketcham blew it out of the water. Because of this, EDC and crew have been busy redoing the AMR to the tune of, as yet undocumented, tens of millions of dollars.
In our view, once the original report was sh*t canned, EDC should have put the revised AMR work out to bid-why reward the consultants for their shoddy work? But, because there are no controls or system of checks and balances any where in this administration-but especially at EDC-the agency has carte blanche to spend money with little actual accountability.
Clearly, the reputation of Mike Bloomberg as a shrewd fiscal manager is in tatters: "Last year, Mr. Bloomberg told voters he deserved a third four-year term because the city needed his financial acumen to help shepherd New Yorkers through the global economic crisis. Some of the mayor's critics have pointed to last week's federal charges as evidence that the mayor isn't living up to what he promised."
With the controversy swirling, Howard Wolfson was sent out to play defense: "Deputy Mayor Howard Wolfson said Mr. Bloomberg "takes accountability for anything" that happens in his administration. "I would put this mayor's record of fiscal responsibility over the last nine years with any chief executive in the country," he said. "The reason why we are not here in New York City in the same budget mess that they are in Albany is because this mayor has consistently safeguarded the city's finances."
Not really Howard. The reason the city is in better shape is because of the mayor's tax and regulate policies that-along with the trusty Wall Street economic engine-have created a better budget environment than Albany. And, as an aside, saying that one is doing better than Albany is not a robust defense Howard-and it elides the core issues of the scandal itself.
Absent all of the money lost and stolen, how would the current retrenchment of city services actually look today? Would we need to be cutting fire service? The final accounting is yet to be done, but were pleased that we finally have, in the person of the comptroller, a true fiscal watchdog in place to do this needed oversight work
Cuomo, Taxes and Small Business
The news that NY State lost two congressional seats because of its proportional population loss, underscores the extent to which NY's high cost of living-and poor business climate-has encouraged a growing exodus to less onerous places to live and work. Dick Morris and Eileen McGaan make this point in today's NY Post: "High taxes kill states. There can be no better evidence than the 2010 Census. The states that lost House seats -- because they're shrinking, relative to the nation -- had taxes 27 percent higher than the ones that gained seats. Of the seven states that don't have a personal income tax, four (Texas, Florida, Nevada and Washington) account for eight of the 12 seats apportioned to the fastest-growing states."
And, with apologies to Charlie Rangel, it's not just the weather: "The states that gained seats ranked an average of 39th in taxes and had an average tax burden (weighted) of $1,788 -- 27 percent lower than the losing states. People vote with their feet and flee to low-tax states. It's not the climate; it's the taxes."
And, with apologies to Charlie Rangel, it's not just the weather: "The states that gained seats ranked an average of 39th in taxes and had an average tax burden (weighted) of $1,788 -- 27 percent lower than the losing states. People vote with their feet and flee to low-tax states. It's not the climate; it's the taxes."
Wednesday, December 22, 2010
Stallmart
The Courier Life papers has an article on the possible siting of a Walmonster at the expanded Gateway Mall in East New York-and hones in on the possible snag that the disposition of state property might create: "Several local lawmakers say they will hold a giant parcel of state-owned land hostage until they get a guarantee that Walmart won’t ever be allowed to lease space atop it. The 20-acre plot behind a shopping center off the Belt Parkway and Erskine Street is needed by Related Companies if it intends to bring in a Walmart the size of three football fields as the centerpiece of its planned Gateway II plaza.
Leading the charge is the local council member: "But that land won’t be available to Walmart, vowed one pol. “The governor should not sign off on this until they get an agreement that Walmart isn’t coming in,” said Councilman Charles Barron (D–East New York), one of the most outspoken opponents to the big box chain. “[Walmart] doesn’t have a contract with Gateway II, but they’re trying to sneak in behind the curtain. We don’t want the Walmart plantation in East New York.” Barron’s wife, Assemblywoman Inez Barron (D–East New York), is standing shoulder-to-shoulder with her husband in the fight against the Bentonville Behemoth, who they say would hurt the local economy."
Meanwhile, local opposition is mounting-with a community gathering scheduled right after Christmas at an East New York church. Assembly member Baron underscores the concerns of the opposition: "In communities across the country, Walmart stores devastate local businesses and destroy more jobs than they create..."
For its part, as NPR reports, Walmart is looking to penetrate previously neglected markets in urban areas: "Retailers have been following the growth of the suburbs for decades, setting up in shopping centers and big-box strip malls far outside the core of major American cities. Department stores that stayed in big-city downtowns have suffered. Others didn't stay — they closed up altogether. But a reversal of that trend is becoming apparent. Big-box retailers — companies that built their discount businesses out where land was cheap and space was plentiful — are now moving inward."
And Walmart is looking to design some smaller models to configure better into urban environments: "n Fairfax County, Va., a new Walmart opened a few weeks ago that's a kind of a middle ground in urban experimentation. It's on thickly congested Route 1, just outside Washington, D.C.'s Beltway. It's not in the heart of a city, but it is in a close-in suburban area with a real mix of incomes and ethnicities. Outside, the store is what you would expect. There is a big parking lot in front, and Chuck E. Cheese's occupies the space next door. But inside, this store is a Walmart on the cutting edge. Steven Restivo, Wal-Mart's director of community affairs, says this store is smaller than people are used to seeing in a Walmart — it's just 80,000 square feet."
Which raises the question: How low can they go? "That's less than half the size of some Walmart Supercenters. But it's still large compared with some of the company's future urban floor plans, which could run as small as 30,000 square feet." But to us, no matter how you slice Big Wally, it's still baloney-and the proliferation of smaller Little Wallies could do more damage to the economy of NYC neighborhoods.
Not everyone is buying Wal-mart-the slimmed down version or the super-sized model. And we'll give one DC critique the last word-hoping it is prophetic for NY: "Zein El-Amine is a part of the group called "Wal-Mart Free DC." He says this kind of development "shreds the fabric of the community," lowering wages and running small, independent stores out of business. Wal-Mart disputes these points. But El-Amine says when it comes to development, cities must "think outside of the big box."
Leading the charge is the local council member: "But that land won’t be available to Walmart, vowed one pol. “The governor should not sign off on this until they get an agreement that Walmart isn’t coming in,” said Councilman Charles Barron (D–East New York), one of the most outspoken opponents to the big box chain. “[Walmart] doesn’t have a contract with Gateway II, but they’re trying to sneak in behind the curtain. We don’t want the Walmart plantation in East New York.” Barron’s wife, Assemblywoman Inez Barron (D–East New York), is standing shoulder-to-shoulder with her husband in the fight against the Bentonville Behemoth, who they say would hurt the local economy."
Meanwhile, local opposition is mounting-with a community gathering scheduled right after Christmas at an East New York church. Assembly member Baron underscores the concerns of the opposition: "In communities across the country, Walmart stores devastate local businesses and destroy more jobs than they create..."
For its part, as NPR reports, Walmart is looking to penetrate previously neglected markets in urban areas: "Retailers have been following the growth of the suburbs for decades, setting up in shopping centers and big-box strip malls far outside the core of major American cities. Department stores that stayed in big-city downtowns have suffered. Others didn't stay — they closed up altogether. But a reversal of that trend is becoming apparent. Big-box retailers — companies that built their discount businesses out where land was cheap and space was plentiful — are now moving inward."
And Walmart is looking to design some smaller models to configure better into urban environments: "n Fairfax County, Va., a new Walmart opened a few weeks ago that's a kind of a middle ground in urban experimentation. It's on thickly congested Route 1, just outside Washington, D.C.'s Beltway. It's not in the heart of a city, but it is in a close-in suburban area with a real mix of incomes and ethnicities. Outside, the store is what you would expect. There is a big parking lot in front, and Chuck E. Cheese's occupies the space next door. But inside, this store is a Walmart on the cutting edge. Steven Restivo, Wal-Mart's director of community affairs, says this store is smaller than people are used to seeing in a Walmart — it's just 80,000 square feet."
Which raises the question: How low can they go? "That's less than half the size of some Walmart Supercenters. But it's still large compared with some of the company's future urban floor plans, which could run as small as 30,000 square feet." But to us, no matter how you slice Big Wally, it's still baloney-and the proliferation of smaller Little Wallies could do more damage to the economy of NYC neighborhoods.
Not everyone is buying Wal-mart-the slimmed down version or the super-sized model. And we'll give one DC critique the last word-hoping it is prophetic for NY: "Zein El-Amine is a part of the group called "Wal-Mart Free DC." He says this kind of development "shreds the fabric of the community," lowering wages and running small, independent stores out of business. Wal-Mart disputes these points. But El-Amine says when it comes to development, cities must "think outside of the big box."
Cuomo's Massive Challenge
We have been writing about the challenges that the new governor faces when he takes office next month-and no one does a better job at laying these out than EJ McMahon. Writing in the NY Post, McMahon highlights the public employee pension problem:
"Defenders of public employee pension systems often make the case that pension benefits are not all that generous. The outrageous cases you see on the news — Long Island police retiring in their 40s with pensions in excess of base pay, administrators “retiring” with six-figure pensions and then going back to work with another government agency, one ex-FDNY firefighter running marathons on his $86,000 “disability” pension — are the exceptions, they say.
"Defenders of public employee pension systems often make the case that pension benefits are not all that generous. The outrageous cases you see on the news — Long Island police retiring in their 40s with pensions in excess of base pay, administrators “retiring” with six-figure pensions and then going back to work with another government agency, one ex-FDNY firefighter running marathons on his $86,000 “disability” pension — are the exceptions, they say.
Unhappy Meal at the NY Times
We are quite used to the NY Times' support for almost any government action that is supposedly designed to make all of our lives healthier. The paper has never met a Bloomberg Nanny initiative that it didn't gush over-and there has never been any discouraging concern from the Times editorialists about the potential dangers of government intruding into this area of people's lives.
So, as if on cue, the paper opines about the McDonald Happy meal furor-but in a close reading of its latest salvo, it's hard to discern a clear position: "According to a recent consumer survey, 37 percent of kids rank McDonald’s as the top fast-food restaurant. This is nearly four times as many as those favoring the No. 2 chain, Subway. The key is heavy advertising to children — Happy Meals account for about 10 percent of McDonald’s ad spending— and, of course, the toys. A Happy Meal of cheeseburger with fries and soda packs 640 calories, more than half the U.S.D.A. daily allowance for a sedentary child aged 4 to 8, as well as about half the allotment of fat. McDonald’s has added healthier choices to its menu — things like milk and Apple Dippers with low-fat caramel dip. But a study at 44 McDonald’s outlets from the Center for Science in the Public Interest found that French fries were automatically put in the bag 93 percent of the time."
But before you start to get the erroneous idea that this is devolving into a paean to the McDonald's marketing genius, the Times points out the following: "The Happy Meal is up for some well-deserved scrutiny. Last week a mom from Sacramento filed a class-action suit supported by the center to make McDonald’s stop using toys as bait to lure children. Last month, the San Francisco Board of Supervisors passed a measure requiring that meals sold with toys meet a minimum standard of nutrition."
Is the suit meritorious? Not to us. Are the San Fransisco supervisors visionaries? More likely elitist busybodies. But the Times won't say what it's position is-which to us, given what we know of the paper's predilections, is pusillanimous. And we just love how the paper treats the CSPI as an unquestionable authority on all things fast food, when we know that the Center, and its maniacal director Michael Jacobsen, would ban all fast food if they could.
And what does this suit say that the Times finds so instructive? The Californian reports: "Monet Parham and her daughters had been getting along just fine with monthly visits to McDonald's, she said, until last summer's promotion for the movie "Shrek Forever After" encouraged kids to collect all of the toys. Parham's oldest daughter Maya, age 6, was particularly keen on getting the Fiona doll but really wanted them all. "I explained that the toys change every week," Parham said, to which her daughter suggested they go to the restaurant weekly. The real problem, she said, was her child's persistence. "This doesn't stop with one request," she said. "It's truly a litany of requests."
Unable to control her own brainwashed children, Parham did what any one in her situation would do-she sued: "Fed up, Parham became a plaintiff in the lawsuit filed Wednesday against Oak Brook, Ill.-based McDonald's by the Center for Science in the Public Interest. The group, which seeks class-action status for its case, is asking California to ban all marketing of Happy Meal toys."
Is this an improvement on Flip Wilson's old lament, "The devil made me do it?" But back to the issue of merit-which the Times elides while seeming to give the suit credibility: "Although Happy Meals probably aren't advisable as everyday fare, Dawn Jackson Blatner, a registered dietitian and spokeswoman for the American Dietetic Association, said that "Happy Meals have come a long way" in recent years. The problem is that most people don't order the healthy options, which "speaks to a much larger issue," she said. "It isn't about one meal, one snack, this one week of your year, it's the whole diet," she said. "It's going to take restaurants offering healthy options, parents choosing the healthy options. It's going to take a village — all of us working together."
But that's so hard-better to just take government action and ban the noxious advertising so parents won't have to do their jobs. The state is much better situated to get corrective action, anyway. The Times, for its part, remains uncommitted.
The mush continues until the editorials very end-leaving us wanting for a spicier and more forthright opinion: "Parents are responsible for their children’s diet. And they certainly could do a better job: almost 17 percent of American children are obese, three times as many as in the 1970s. But it would be easier for parents to do their job if they didn’t have to push back against the relentless tide of marketing aimed at their children."
And if we eliminate all advertising, oh well, parents do have a hard job being, you know, parents. But as negligent as some parents are, we prefer their inadequacies to all of the in loca parentis naggings of the anti-capitalists at the CSPI; and the hectors at the editorial board room of the NY Times, folks who somehow couldn't manage to spit out their true feelings about this unhappy meal situation.
So, as if on cue, the paper opines about the McDonald Happy meal furor-but in a close reading of its latest salvo, it's hard to discern a clear position: "According to a recent consumer survey, 37 percent of kids rank McDonald’s as the top fast-food restaurant. This is nearly four times as many as those favoring the No. 2 chain, Subway. The key is heavy advertising to children — Happy Meals account for about 10 percent of McDonald’s ad spending— and, of course, the toys. A Happy Meal of cheeseburger with fries and soda packs 640 calories, more than half the U.S.D.A. daily allowance for a sedentary child aged 4 to 8, as well as about half the allotment of fat. McDonald’s has added healthier choices to its menu — things like milk and Apple Dippers with low-fat caramel dip. But a study at 44 McDonald’s outlets from the Center for Science in the Public Interest found that French fries were automatically put in the bag 93 percent of the time."
But before you start to get the erroneous idea that this is devolving into a paean to the McDonald's marketing genius, the Times points out the following: "The Happy Meal is up for some well-deserved scrutiny. Last week a mom from Sacramento filed a class-action suit supported by the center to make McDonald’s stop using toys as bait to lure children. Last month, the San Francisco Board of Supervisors passed a measure requiring that meals sold with toys meet a minimum standard of nutrition."
Is the suit meritorious? Not to us. Are the San Fransisco supervisors visionaries? More likely elitist busybodies. But the Times won't say what it's position is-which to us, given what we know of the paper's predilections, is pusillanimous. And we just love how the paper treats the CSPI as an unquestionable authority on all things fast food, when we know that the Center, and its maniacal director Michael Jacobsen, would ban all fast food if they could.
And what does this suit say that the Times finds so instructive? The Californian reports: "Monet Parham and her daughters had been getting along just fine with monthly visits to McDonald's, she said, until last summer's promotion for the movie "Shrek Forever After" encouraged kids to collect all of the toys. Parham's oldest daughter Maya, age 6, was particularly keen on getting the Fiona doll but really wanted them all. "I explained that the toys change every week," Parham said, to which her daughter suggested they go to the restaurant weekly. The real problem, she said, was her child's persistence. "This doesn't stop with one request," she said. "It's truly a litany of requests."
Unable to control her own brainwashed children, Parham did what any one in her situation would do-she sued: "Fed up, Parham became a plaintiff in the lawsuit filed Wednesday against Oak Brook, Ill.-based McDonald's by the Center for Science in the Public Interest. The group, which seeks class-action status for its case, is asking California to ban all marketing of Happy Meal toys."
Is this an improvement on Flip Wilson's old lament, "The devil made me do it?" But back to the issue of merit-which the Times elides while seeming to give the suit credibility: "Although Happy Meals probably aren't advisable as everyday fare, Dawn Jackson Blatner, a registered dietitian and spokeswoman for the American Dietetic Association, said that "Happy Meals have come a long way" in recent years. The problem is that most people don't order the healthy options, which "speaks to a much larger issue," she said. "It isn't about one meal, one snack, this one week of your year, it's the whole diet," she said. "It's going to take restaurants offering healthy options, parents choosing the healthy options. It's going to take a village — all of us working together."
But that's so hard-better to just take government action and ban the noxious advertising so parents won't have to do their jobs. The state is much better situated to get corrective action, anyway. The Times, for its part, remains uncommitted.
The mush continues until the editorials very end-leaving us wanting for a spicier and more forthright opinion: "Parents are responsible for their children’s diet. And they certainly could do a better job: almost 17 percent of American children are obese, three times as many as in the 1970s. But it would be easier for parents to do their job if they didn’t have to push back against the relentless tide of marketing aimed at their children."
And if we eliminate all advertising, oh well, parents do have a hard job being, you know, parents. But as negligent as some parents are, we prefer their inadequacies to all of the in loca parentis naggings of the anti-capitalists at the CSPI; and the hectors at the editorial board room of the NY Times, folks who somehow couldn't manage to spit out their true feelings about this unhappy meal situation.
Tuesday, December 21, 2010
Mayor's Unwise Cracks
We have been commenting on the mayor's lame, "through the cracks," response to the CityTime scandal-and as more evidence piles up here, lameness is a rather too, well, lame characterization of the managerial nonfeasance at play in this fiasco. The NY Times has the latest: "Last week, federal prosecutors sketched out what they said was an $80 million scheme to defraud a giant information technology project to automate the payroll system for New York City employees. The participants in the fraud essentially stole the money for their own enrichment, billing the city for work they did not do, the prosecutors charged. But some city officials had huge concerns as far back as 2003 about the integrity of the project, whose costs have ballooned by hundreds of millions of dollars."
As it turns out, the city overseer back in 2003 was raising the alarm about the serious over-billing: "In a scathing letter made available on Monday through a state Freedom of Information Law request, the city official in charge of overseeing the project, known as CityTime, accused the company that designed CityTime, SAIC, of repeatedly delaying the project in order to get paid more, failing to hew to basic industry standards and rewriting contracts on its own. The official even predicted, sarcastically, that SAIC would try, in a year’s time, to charge the city “8,000 hours” for shoddy work."
So, what happened? Where did Richard Valchich's letter go? After all, he was the executive director of the Office of Payroll Administration: "The letter, dated Feb. 19, 2003, offers a devastating critique of the company, and raises questions about the city monitors of the project — the mayor’s and comptroller’s offices. And the consultants hired to ensure quality control, it appears, were doing very little of it."
But it wasn't until this year that anyone started to see a problem with what was going on-and it was Comptroller Liu who finally intervened: "A spokeswoman for the city comptroller, John C. Liu, whose audit this year highlighted some of the issues that eventually surfaced in the federal indictment, said Monday that the letter reinforced his concerns about SAIC. In September, Mr. Liu announced that he was withholding $32 million to SAIC until June, contingent on its full and timely completion of the CityTime project."
What was Bill Thompson doing when the scandal was brewing? Juan Gonzales follows up here: "A certain level of professionalism and compliance with acceptable industry standard practices is expected of a contractor responsible for the execution of a $100m[illion]+ project," Valcich said. He further noted that SAIC had increased costs of some hardware by 400%. SAIC's "commitment to quality is almost non-existent and is reflected from the top down," Valcich wrote. He added the city had spent "approximately $35 million on CityTime and does not have a tangible system to show for it." A more damning assessment is hard to imagine - but in all the City Council oversight hearings about CityTime the past few years, no one at OPA or City Hall ever mentioned the Valcich letter."
Perhaps it got lost in the Bermuda Triangle. But why did Valcich retire in 2004? Was this a natural act, or was he pushed out? After all, his replacement Joel Bondy was certainly not cut from the same cloth as Valchich: "SAIC spokeswoman Laura Luke acknowledged yesterday that the Valcich letter revealed "deficiencies" in the CityTime program. She insisted that her firm "worked closely with the city on assessing and fixing the problems." The company rolled out a new system in 2005 and the "city told us we were working well together," Luke said. One of the main things that happened was that Valcich resigned as director of OPA in 2004 and was replaced by Joel Bondy. Bondy was then a consultant on CityTime for Spherion Inc., the firm tasked to certify the quality of all CityTime contractors. Spherion paid Bondy $307,000 the year before he moved to OPA, payroll records show. Soon after Bondy arrived, the cost overruns on CityTime spiraled even higher."
As it turns out, the city overseer back in 2003 was raising the alarm about the serious over-billing: "In a scathing letter made available on Monday through a state Freedom of Information Law request, the city official in charge of overseeing the project, known as CityTime, accused the company that designed CityTime, SAIC, of repeatedly delaying the project in order to get paid more, failing to hew to basic industry standards and rewriting contracts on its own. The official even predicted, sarcastically, that SAIC would try, in a year’s time, to charge the city “8,000 hours” for shoddy work."
So, what happened? Where did Richard Valchich's letter go? After all, he was the executive director of the Office of Payroll Administration: "The letter, dated Feb. 19, 2003, offers a devastating critique of the company, and raises questions about the city monitors of the project — the mayor’s and comptroller’s offices. And the consultants hired to ensure quality control, it appears, were doing very little of it."
But it wasn't until this year that anyone started to see a problem with what was going on-and it was Comptroller Liu who finally intervened: "A spokeswoman for the city comptroller, John C. Liu, whose audit this year highlighted some of the issues that eventually surfaced in the federal indictment, said Monday that the letter reinforced his concerns about SAIC. In September, Mr. Liu announced that he was withholding $32 million to SAIC until June, contingent on its full and timely completion of the CityTime project."
What was Bill Thompson doing when the scandal was brewing? Juan Gonzales follows up here: "A certain level of professionalism and compliance with acceptable industry standard practices is expected of a contractor responsible for the execution of a $100m[illion]+ project," Valcich said. He further noted that SAIC had increased costs of some hardware by 400%. SAIC's "commitment to quality is almost non-existent and is reflected from the top down," Valcich wrote. He added the city had spent "approximately $35 million on CityTime and does not have a tangible system to show for it." A more damning assessment is hard to imagine - but in all the City Council oversight hearings about CityTime the past few years, no one at OPA or City Hall ever mentioned the Valcich letter."
Perhaps it got lost in the Bermuda Triangle. But why did Valcich retire in 2004? Was this a natural act, or was he pushed out? After all, his replacement Joel Bondy was certainly not cut from the same cloth as Valchich: "SAIC spokeswoman Laura Luke acknowledged yesterday that the Valcich letter revealed "deficiencies" in the CityTime program. She insisted that her firm "worked closely with the city on assessing and fixing the problems." The company rolled out a new system in 2005 and the "city told us we were working well together," Luke said. One of the main things that happened was that Valcich resigned as director of OPA in 2004 and was replaced by Joel Bondy. Bondy was then a consultant on CityTime for Spherion Inc., the firm tasked to certify the quality of all CityTime contractors. Spherion paid Bondy $307,000 the year before he moved to OPA, payroll records show. Soon after Bondy arrived, the cost overruns on CityTime spiraled even higher."
Walmart's Albor Day
Albor Ruiz has little love for the Walmonster-seeing the giant retailer as more Scrooge than Santa Claus: "It seems that even the largest retail business in the world is not immune to a public relations faux pas once in a while. A Walmart internal email - sent less than a month before Christmas - directed its 3,800 stores to hike prices on 1,800 types of toys to maximize profits. Hardly a way for the retail giant to win hearts and minds of New Yorkers. "The Christmas season has clearly brought out the Scrooge in Walmart. Jacking up prices on toys during the holidays is enough to make Santa cringe," said Public Advocate Bill de Blasio."
What a Fine Mess
We have been discussing the city council initiative to reduce the regulatory burden on the city's peddlers-right in the midst of the news that scores of scofflaw vendors are thumbing their noses at the city. What makes this even more egregious is the way in which the DOH is whacking restaurants big time-with nary a peep from the pity party.
The WSJ has the story: "While restaurants fought the city's new grading method, there is another aspect of the system that in some ways has created even more angst: the fines. Restaurant owners say they are racking up thousands of dollars in fines because the city Department of Health and Mental Hygiene is conducting more frequent inspections. So worries about being branded with the Scarlet C—the lowest grade for cleanliness and food-safety practices—have been displaced with frustrations over what some view as nothing more than a stealth tax."
So the Bloombergista regulatory regime continues to make life a living hell for the city eateries: "It's just a punitive system designed to get money, there's no other way to look at it,' said Rafael Mateo, chef and owner of Pata Negra. "I'm a small-business owner, I'm not a Tom Colicchio. So when you hit me with $2,000 in fines and send another inspector a few weeks later and I get another $1,000 in fines, what am I going to do?" Mr. Mateo said."
But at least business is good someplace: "Last year, the city collected $32.9 million, up from $27.8 million in the previous year and $17.3 million in fiscal year 2006. The figures don't include fines levied against food vendors." But, as we have seen, those vendor fines aren't being paid-try that if you own a restaurant. How fast can you say, "Hand over your license, sucker."
In the process, the ticket blitz has become an avalanche: "The number of violations issued has seen a similar rise. City officials issued 37,326 violations to food establishments in fiscal year 2010, up from 21,679 five years earlier. The increase in fines manifests itself every day in the form of a crowded, chaotic scene at the administrative tribunal where restaurant owners—or their paid expeditors—go to contest violations. "People get there before they open; it's like they're waiting for Shakespeare in the Park tickets, Mr. Mateo quipped."
But pity the poor peddler? The Bloomberg administration has declared war against the city's restaurants and green grocers, and we are struggling to hear the hue and cry: "The city's controversial grading system launched in late July. During inspections, food establishments are given violation points related to cleanliness and food-safety practices; the lower the score, the better the grade. But whereas inspections used to average once a year, now a majority of restaurants will receive at least three."
And those millions of dollars in fines means less folks employed as restaurants struggle to remain profitable-all the while we are increasing the payroll and pension costs of an army of added inspectors. To get an idea how clueless the city is, just listen to the DOH bureaucrat: "Daniel Kass, the department's deputy commissioner of environmental health, said the spike in money collected during the last fiscal year was due to an increase in inspections in anticipation of the new grading system...Mr. Kass said the department has hired 25 additional inspectors this year, with plans to hire another 25. Of charges that the city is taxing business owners, he said, "It's just not true, taxes are levied on everyone. These are fines or fees that are based entirely on the performance of a restaurant and it's in the power of every restaurant to avoid fines."
That is what is known as a bald faced lie: "But restaurant owners say the inspections are arbitrary, with different inspectors looking at different things. Owners scramble to address violations that sometimes aren't even checked by a second different inspector weeks later, they say." When the goal is revenue collection-and the inspector brigade is paid from the proceeds of the extortion-there is no avoiding the extortionists.
We'll give Rafael Mateo the last word on this Kafkaesque regulatory assault: "Mr. Mateo, the owner of Pata Negra, said he scrambled to fix his dishwasher and a sliding door after his first inspection, spending $600 to break a wall and attach a weight to the door so it would be self-closing. "I broke my brains out for two days," he said. Mr. Mateo paid his fines at the tribunal before the second inspector's visit. The second inspector paid no attention to the changes, he said, and found numerous other violations, including a cook wearing a bandana and having inadequate nutritional information on his bread. His next tribunal date is Jan. 3."
The WSJ has the story: "While restaurants fought the city's new grading method, there is another aspect of the system that in some ways has created even more angst: the fines. Restaurant owners say they are racking up thousands of dollars in fines because the city Department of Health and Mental Hygiene is conducting more frequent inspections. So worries about being branded with the Scarlet C—the lowest grade for cleanliness and food-safety practices—have been displaced with frustrations over what some view as nothing more than a stealth tax."
So the Bloombergista regulatory regime continues to make life a living hell for the city eateries: "It's just a punitive system designed to get money, there's no other way to look at it,' said Rafael Mateo, chef and owner of Pata Negra. "I'm a small-business owner, I'm not a Tom Colicchio. So when you hit me with $2,000 in fines and send another inspector a few weeks later and I get another $1,000 in fines, what am I going to do?" Mr. Mateo said."
But at least business is good someplace: "Last year, the city collected $32.9 million, up from $27.8 million in the previous year and $17.3 million in fiscal year 2006. The figures don't include fines levied against food vendors." But, as we have seen, those vendor fines aren't being paid-try that if you own a restaurant. How fast can you say, "Hand over your license, sucker."
In the process, the ticket blitz has become an avalanche: "The number of violations issued has seen a similar rise. City officials issued 37,326 violations to food establishments in fiscal year 2010, up from 21,679 five years earlier. The increase in fines manifests itself every day in the form of a crowded, chaotic scene at the administrative tribunal where restaurant owners—or their paid expeditors—go to contest violations. "People get there before they open; it's like they're waiting for Shakespeare in the Park tickets, Mr. Mateo quipped."
But pity the poor peddler? The Bloomberg administration has declared war against the city's restaurants and green grocers, and we are struggling to hear the hue and cry: "The city's controversial grading system launched in late July. During inspections, food establishments are given violation points related to cleanliness and food-safety practices; the lower the score, the better the grade. But whereas inspections used to average once a year, now a majority of restaurants will receive at least three."
And those millions of dollars in fines means less folks employed as restaurants struggle to remain profitable-all the while we are increasing the payroll and pension costs of an army of added inspectors. To get an idea how clueless the city is, just listen to the DOH bureaucrat: "Daniel Kass, the department's deputy commissioner of environmental health, said the spike in money collected during the last fiscal year was due to an increase in inspections in anticipation of the new grading system...Mr. Kass said the department has hired 25 additional inspectors this year, with plans to hire another 25. Of charges that the city is taxing business owners, he said, "It's just not true, taxes are levied on everyone. These are fines or fees that are based entirely on the performance of a restaurant and it's in the power of every restaurant to avoid fines."
That is what is known as a bald faced lie: "But restaurant owners say the inspections are arbitrary, with different inspectors looking at different things. Owners scramble to address violations that sometimes aren't even checked by a second different inspector weeks later, they say." When the goal is revenue collection-and the inspector brigade is paid from the proceeds of the extortion-there is no avoiding the extortionists.
We'll give Rafael Mateo the last word on this Kafkaesque regulatory assault: "Mr. Mateo, the owner of Pata Negra, said he scrambled to fix his dishwasher and a sliding door after his first inspection, spending $600 to break a wall and attach a weight to the door so it would be self-closing. "I broke my brains out for two days," he said. Mr. Mateo paid his fines at the tribunal before the second inspector's visit. The second inspector paid no attention to the changes, he said, and found numerous other violations, including a cook wearing a bandana and having inadequate nutritional information on his bread. His next tribunal date is Jan. 3."
Council Looks to Coddle Peddling Pests
The NY Post reported yesterday that there is an effort afoot at the city council to give scofflaw peddlers a break: "These guys know how to drive a bargain. The City Council is in talks with the savviest hagglers in town -- street peddlers -- in an effort to get them to pay their fines, The Post has learned. Legislation quietly introduced this month by Councilman Stephen Levin (D-Brooklyn) would lower the maximum penalties for non-health-related summonses to $250 to encourage the sidewalk food and merchandise vendors to pay up."
So, let's get this straight. The council would be rewarding vendors for snubbing their noses at the law? "As it is now, if you are getting multiple fines of $1,000, it's particularly onerous and very difficult to get out from underneath this debt," Levin said. "We want to have vendors licensed and know who they are and what they are up to."
But those two paired sentences above don't make much sense together-and we know what they are up to: not paying their fines. As far as onerous is concerned, what about the tax paying stores that these vendors set up shop right in front of? Talk about onerous! How's trying to compete against a vendor selling the same goods right in front of your store-but doing so absent all of the store's hefty overhead.
That's what is happening all over the city-as the picture above dramatically makes clear. What you see there is one of the city's vaunted "Green Cart," carts that have been licensed as an antidote to the lack of fresh produce in so-called underserved areas. The one in the picture-operating daily from 9 AM to 8 Pm between East 16th Street and Foster Avenue is less than one block away from a green grocer at 1521ewkirk Avenue. In similar fashion, two other carts merging into one giant one between Flatbush and Nostrand Aves, operates 20 hours a day just across the sidewalk in the same block.
And the city council wants to bail out the lawbreakers? Give us a break! And if you look carefully at the pictures, you'll see multiple violations in these over sized cannibals. But you will also notice the official, "Green Cart," umbrella. In this 70th precinct that was designated as an undeserved area, we are seeing green carts placed right in front of existing produce stores-as we predicted when the law was passed.
And when it was passed, we were told that there would be a review of the law's effectiveness-something that is now long past its sell by date. In spite of the hardships being experienced by food retailers, the city council is spending its precious political capital on making the plight of the nose thumbing vendors less onerous: "As The Post reported last month, many vendors say they have no intention of ever paying. Often, they let their licenses expire because of the debt and continue to operate using licenses of others. A related bill introduced by Levin will prevent compounding of unpaid fines that raises the cost of penalties the longer they go unpaid and can quickly leave a vendor deep in debt. Keeping fines from rising would hopefully get more vendors to pay up, he said. The bills, which are supported by the Urban Justice Center's Street Vendor Project, already have 15 co-sponsors and will be discussed in hearings next year, Levin said."
So, let's get this straight. The council would be rewarding vendors for snubbing their noses at the law? "As it is now, if you are getting multiple fines of $1,000, it's particularly onerous and very difficult to get out from underneath this debt," Levin said. "We want to have vendors licensed and know who they are and what they are up to."
But those two paired sentences above don't make much sense together-and we know what they are up to: not paying their fines. As far as onerous is concerned, what about the tax paying stores that these vendors set up shop right in front of? Talk about onerous! How's trying to compete against a vendor selling the same goods right in front of your store-but doing so absent all of the store's hefty overhead.
That's what is happening all over the city-as the picture above dramatically makes clear. What you see there is one of the city's vaunted "Green Cart," carts that have been licensed as an antidote to the lack of fresh produce in so-called underserved areas. The one in the picture-operating daily from 9 AM to 8 Pm between East 16th Street and Foster Avenue is less than one block away from a green grocer at 1521ewkirk Avenue. In similar fashion, two other carts merging into one giant one between Flatbush and Nostrand Aves, operates 20 hours a day just across the sidewalk in the same block.
And the city council wants to bail out the lawbreakers? Give us a break! And if you look carefully at the pictures, you'll see multiple violations in these over sized cannibals. But you will also notice the official, "Green Cart," umbrella. In this 70th precinct that was designated as an undeserved area, we are seeing green carts placed right in front of existing produce stores-as we predicted when the law was passed.
And when it was passed, we were told that there would be a review of the law's effectiveness-something that is now long past its sell by date. In spite of the hardships being experienced by food retailers, the city council is spending its precious political capital on making the plight of the nose thumbing vendors less onerous: "As The Post reported last month, many vendors say they have no intention of ever paying. Often, they let their licenses expire because of the debt and continue to operate using licenses of others. A related bill introduced by Levin will prevent compounding of unpaid fines that raises the cost of penalties the longer they go unpaid and can quickly leave a vendor deep in debt. Keeping fines from rising would hopefully get more vendors to pay up, he said. The bills, which are supported by the Urban Justice Center's Street Vendor Project, already have 15 co-sponsors and will be discussed in hearings next year, Levin said."
Monday, December 20, 2010
As of Wrong
The NY Daily News editorializes this morning, zoning in on the right of Wal-Mart being allowed to come into East New York-and totally misses the point of one major aspect of the controversy: "Speaker Christine Quinn says the Council will target Walmart at a hearing on Jan. 12 because, well, she and her colleagues just don't like the company's labor record and, in their view, it's a threat to mom-and-pop stores. Does that give the Council grounds to subject Walmart to an official pummeling? No way, no how. Like it or not, the retailer has the right under the zoning law to open an outlet on a tract of land next to the Belt Parkway in East New York."
It than goes on-we kid you not-to compare the Wal-Mart situation to the Ground Zero Mosque: "And to do so free and clear of official harassment. Just like any other properly constituted business, be it Tiffany's or a strip joint, it has the freedom to set up shop where the rules allow. Just like sponsors of another controversial project - the so-called Ground Zero mosque - had the ability to locate downtown without being hauled before a Council committee, let alone one eager to throw punches."
It than goes on-we kid you not-to compare the Wal-Mart situation to the Ground Zero Mosque: "And to do so free and clear of official harassment. Just like any other properly constituted business, be it Tiffany's or a strip joint, it has the freedom to set up shop where the rules allow. Just like sponsors of another controversial project - the so-called Ground Zero mosque - had the ability to locate downtown without being hauled before a Council committee, let alone one eager to throw punches."
Bloomberg Mayoralty Falling Through the Cracks
This CityTime scandal will we believe, prove to be the gift that keeps on giving-at least for those of us who didn't genuflect to the myth of Mike. We were definitely amused on Friday when the mayor opined that sometimes these kinds of things just slip through the cracks-the NY Post reports: "Somehow $80 million in alleged fraud just slipped through the cracks, Mayor Bloomberg said yesterday, when asked about the mind-blowing CityTime payroll scandal. "If you want to know how big projects have things that slip through the cracks, this is as good an example as you need," Bloomberg said on his weekly WABC radio show. His comments came on the heels of the arrest of six people charged with defrauding the massively over-budget CityTime project that was supposed to digitize worker time cards a decade ago."
Comptroller John Liu thought this was as funny as we did, and retorted that under this definition the Grand Canyon was also just a crack. All of which calls to mind one of our favorite lawyer jokes. A lawyer dies and goes to heaven. He complains to St. Peter that he is only fifty years old, and is too young to die. St, Peter looks down at his sheet of paper (perhaps a time sheet) and responds: "But it says here that you billed for eighty."
This is a gut wrenching scandal for the mayor because it goes to the heart of what should be Mike Bloomberg's strength-information systems. This is one area where he should have all the expertise in the world-but if he failed to give proper oversight to this initiative, what does that say of all his other claims to excellence?
In our view, CityTime will be the beginning of the end of the Bloomberg era of omnipotence. The critics, emboldened by this demystification of Mike will start to peck away at his legitimacy-and search for other areas to question his authority. The erosion appears to be inevitable-and will be advanced further as the details of how this scandal was allowed to fester become more fully known.
The NY Daily News begins this process yesterday, with a lengthy evaluation of the makings of the City Times scandal-it is not a pretty picture: "In March 2008, a veteran city consultant working on a complicated project called CityTime complained to the Department of Investigation. His letter had a bold title: "Fraudulent Timesheet submitted for time not worked. The complaint said "two senior level managers (Mr. Mark Mazer - consultant - and Mr. Scott Berger - consultant) sign weekly timesheets of [a senior manager] having full knowledge" the woman was absent or on vacation. As far as the whistleblower could tell, nothing happened."
Comptroller John Liu thought this was as funny as we did, and retorted that under this definition the Grand Canyon was also just a crack. All of which calls to mind one of our favorite lawyer jokes. A lawyer dies and goes to heaven. He complains to St. Peter that he is only fifty years old, and is too young to die. St, Peter looks down at his sheet of paper (perhaps a time sheet) and responds: "But it says here that you billed for eighty."
This is a gut wrenching scandal for the mayor because it goes to the heart of what should be Mike Bloomberg's strength-information systems. This is one area where he should have all the expertise in the world-but if he failed to give proper oversight to this initiative, what does that say of all his other claims to excellence?
In our view, CityTime will be the beginning of the end of the Bloomberg era of omnipotence. The critics, emboldened by this demystification of Mike will start to peck away at his legitimacy-and search for other areas to question his authority. The erosion appears to be inevitable-and will be advanced further as the details of how this scandal was allowed to fester become more fully known.
The NY Daily News begins this process yesterday, with a lengthy evaluation of the makings of the City Times scandal-it is not a pretty picture: "In March 2008, a veteran city consultant working on a complicated project called CityTime complained to the Department of Investigation. His letter had a bold title: "Fraudulent Timesheet submitted for time not worked. The complaint said "two senior level managers (Mr. Mark Mazer - consultant - and Mr. Scott Berger - consultant) sign weekly timesheets of [a senior manager] having full knowledge" the woman was absent or on vacation. As far as the whistleblower could tell, nothing happened."
Mayor Knucklehead
A few years ago, the NY Daily News gave CM Joel Rivera its prized Knucklehead Award for suggesting that NYC should look at the possibility of restricting the proliferation of fast food outlets in low income neighborhoods-places where the obesity rates are highest. At the time, we commented on the fact that Fiscal Mike Bloomberg had been presiding over a profligate city administration-yet the News managed to allow the mayor to skate his responsibility-never even suggesting a hint of Bloomerg's knucklehead culpability:
"The NY Daily News opined yesterday-citing the CBC's report-about the ballooning personnel costs that threaten the solvency of city government: "Numbers just published by the Citizens Budget Commission reveal that the price tag for the average city worker has soared to $107,000 a year. That breaks down to $69,124 in pay and $37,619 in health insurance and pension costs.
Both sides of the ledger have gone off the charts since 2000, rising faster than inflation - with the expense of benefits skyrocketing by an astonishing 182%. At a time when the city is going broke, Mayor Bloomberg is contemplating deep service cuts and taxpayers face big hikes, the figures are indefensible."
Absolutely, the situation is intolerable, but the News writes as if the current indefensible state of affairs has arrived through some form of immaculate conception: "New Yorkers have every right to expect that in these tough times the city's labor force will recognize that the public no longer has the wherewithal to foot the bills. Sacrifice - reasonable sacrifice - is in order."It was through whitewashes like this that Mike Bloomberg has been able to achieve some kind of iconic status as a superior manager and fiscal maven-and when reality began to intrude with dissonant information, it was deftly disregarded. This is why the CityTime scandal is such an eye opener-it punctures this mythical mayoral stature like nothing else could possibly do. After all, the mayor amassed his great wealth through innovations in information technology-exactly the purview of the entire CityTime outsourcing experiment.
Well, nine years later, the Daily News is finally giving up the sycophancy-in a Saturday editorial that will, however, be less read than one that should have been published in the more highly read Sunday edition: "Ten million filched here, ten million filched there - why, pretty soon you're into one of the biggest inside-job ripoffs in New York government history. Had to be tough to pull it off, no? Well, not exactly. Not when management of the civic enterprise - Michael Bloomberg, mayor - has taken a pass on any and all oversight of a hugely ambitious, high-tech overhaul of city personnel practices."
Yes, asleep at the wheel: "The work was assigned to the Office of Payroll Management, a hybrid agency overseen jointly by the mayor and controller. For the period in question, the latter was Bill Thompson. Then the question arose: Who should run the office? Who should be given responsibility for hiring computer experts and consultants to design and build such a complicated system? Forget the right answer. Without so much as a cursory interview, Bloomberg signed off on giving the job to a mope who had worked for the city's child protective agency, who had left that job to become a consultant to the payroll project, who set his sights on running the whole shebang - and who then hired a pal, another child protective agency mope, as a quality control consultant."
"The NY Daily News opined yesterday-citing the CBC's report-about the ballooning personnel costs that threaten the solvency of city government: "Numbers just published by the Citizens Budget Commission reveal that the price tag for the average city worker has soared to $107,000 a year. That breaks down to $69,124 in pay and $37,619 in health insurance and pension costs.
Both sides of the ledger have gone off the charts since 2000, rising faster than inflation - with the expense of benefits skyrocketing by an astonishing 182%. At a time when the city is going broke, Mayor Bloomberg is contemplating deep service cuts and taxpayers face big hikes, the figures are indefensible."
Absolutely, the situation is intolerable, but the News writes as if the current indefensible state of affairs has arrived through some form of immaculate conception: "New Yorkers have every right to expect that in these tough times the city's labor force will recognize that the public no longer has the wherewithal to foot the bills. Sacrifice - reasonable sacrifice - is in order."It was through whitewashes like this that Mike Bloomberg has been able to achieve some kind of iconic status as a superior manager and fiscal maven-and when reality began to intrude with dissonant information, it was deftly disregarded. This is why the CityTime scandal is such an eye opener-it punctures this mythical mayoral stature like nothing else could possibly do. After all, the mayor amassed his great wealth through innovations in information technology-exactly the purview of the entire CityTime outsourcing experiment.
Well, nine years later, the Daily News is finally giving up the sycophancy-in a Saturday editorial that will, however, be less read than one that should have been published in the more highly read Sunday edition: "Ten million filched here, ten million filched there - why, pretty soon you're into one of the biggest inside-job ripoffs in New York government history. Had to be tough to pull it off, no? Well, not exactly. Not when management of the civic enterprise - Michael Bloomberg, mayor - has taken a pass on any and all oversight of a hugely ambitious, high-tech overhaul of city personnel practices."
Yes, asleep at the wheel: "The work was assigned to the Office of Payroll Management, a hybrid agency overseen jointly by the mayor and controller. For the period in question, the latter was Bill Thompson. Then the question arose: Who should run the office? Who should be given responsibility for hiring computer experts and consultants to design and build such a complicated system? Forget the right answer. Without so much as a cursory interview, Bloomberg signed off on giving the job to a mope who had worked for the city's child protective agency, who had left that job to become a consultant to the payroll project, who set his sights on running the whole shebang - and who then hired a pal, another child protective agency mope, as a quality control consultant."
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