Thursday, October 30, 2008

Help is on the Way: God Help Us!

The mayor-trying to demonstrate a proactive stance on the economy, as well as a bit of feigned empathy at the same time-is announcing his Five Point Plan to help out. According to the Washington Post: "To help New Yorkers weather the economic downturn, Mayor Michael Bloomberg plans to relax tax deadlines for some property owners, launch a public awareness campaign about debt and create a special Web site for laid-off financial workers as part of a package of immediate steps to ease the burden."

The mayor is alleging, at least according to NY1, that this effort is partially aimed at helping the city's small businesses: "The five point plan intends to keep New Yorkers working, strengthen small business, make sure home ownership remains the American dream..." Yada, yada yada.
What a load.

And the NY Daily News also tells us that the administration is looking for ways to help the little guys who have been impacted by the economic meltdown: "They may be small, but from boutiques and bodegas to salons and storefronts, New York's mom-and-pop businesses are in some big-time pain. Wall Street turmoil is trickling down to borough streets, where the city's 220,000 small businesses are increasingly short on free-spending customers and loans to keep them afloat."

So what's the big response? As the News points out: "Small Business Services Commissioner Rob Walsh said he's been pounding the pavement trying to listen to pressured entrepreneurs. Last week, Walsh said he walked around six different Brooklyn neighborhoods asking business owners how the city can help. Today, the city is expected to launch an initiative to help mom-and-pops - New York's other big engine of job generation besides shrinking Wall Street. City Hall supports a $700 million small business stimulus package that Sen. Chuck Schumer (D-N.Y.) is championing. It calls for increased funding for federal loan guarantees and an expansion of the U.S. Small Business Administration."

Now we're not knee jerk fans of Ronald Reagan, but we're reminded of his admonition about not believing the following: "We're from the government, and we're here to help you." If the mayor really wanted to help small businesses and homeowners, he could begin by simply reducing the cost of living and doing business in NYC. We remember vividly how the Bloomberg property tax increase sent homeowners packing in 2003; an exodus that was only stemmed when the irrational housing bubble took off.

The exodus wasn't limited to homeowners. As the Times reported earlier this year, minority supermarket owners have begun the out migration because of the city's out of control costs: "In one corner of southeast Queens, four supermarkets have closed in the last two years. Over a similar period in East Harlem, six small supermarkets have closed, and two more are on the brink, local officials said...The supermarket closings — not confined to poor neighborhoods — result from rising rents and slim profit margins, among other causes."

It's not only the rents, it's the city's commercial real estate tax-increased by 20% under the mayor's impetus-regulatory blitzes and a bottle law that turns stores into waste dumps. Add to this the cost of light, heat and power, and the absurd workman's comp laws-not to mention the slip and fall lawyers who target the markets-and you get one lousy business environment for a sector, small business, that's touted as the city's other economic engine.

So if the mayor and his small business guru want to help, they have a sure fire way to proceed: simply lower the costs of doing business. But wait, there's a problem with doing that because it would lower the revenues that the city claims it needs for "vital services." Which reminds us of how the mayor approached the cigarette black market,

Back in 2003 when the mayor went on his tax hike binge, he raised the cigarette tax by over 1800%! At the time we complained, pointing out that the city's bodegas, green grocers and news dealers, would lose over $250 million a year to a black market driven by illegal sales from Indian retailers. The mayor's response? He called it a "minor economic issue."

But fast forward to 2008, and we find Mayor Mike suing the very same Indians: "Officials estimate that untaxed cigarette sales by the eight dealers have cut city revenues by nearly $195 million a year, an amount the city can ill afford during a financial crisis." Oh, so now we see, it's an issue only when the city's revenues are threatened.

New Yorkers are living in the most hostile business climate in America. The mayor's faux concerns about the little guy are really disingenuous because they divert attention away from the real source of the problem: the man in the mirror.