Monday, May 11, 2009

Free In Last

Steve Malanga spotlights the dubious distinction earned by New York State-dead last in a "freedom" study conducted by George Mason University: "A new study by the Mercatus Center at George Mason University, Freedom in the 50 States, is the most comprehensive effort to date to rank the states on how their public policies influence “individual freedom in the economic, social and personal spheres.” It includes dozens of variables, from social and personal freedoms (such as parents’ right to educate their own children) to regulatory freedom (such as the degree of occupational licensing requirements) to fiscal liberty (as measured, for instance, by states’ debt burdens, which represent a constraint on future generations). Finishing dead last in the study’s freedom index is New York State."

For those who represent businesses in New York, this doesn't come as any great shock; and for us, it underscores what we have been saying in our critique of those, like the Working Families Party and the Drum Major Institute, who promote higher taxes as some perverse idea of what constitutes "fairness." "New York earns that dubious distinction “by a wide margin,” the study reports. Businesses operating in the state won’t be astonished to hear that its economic freedom is poor, thanks to a tentacular bureaucratic regulatory regime, a civil justice system that favors plaintiffs over defendants, and high taxes and crushing per-capita government debt."

And Malanga goes on to dramatize the kind of impact that these policies have, not just on New York State, but also on those others that keep us company at the bottom of the university's ratings ladder: "What are the consequences of New Yorkers’ lack of freedom? The best way to judge is to look at the collective condition of the states with the worst rankings. Joining New York at the bottom of the index is New Jersey, in 49th place, followed by Rhode Island and California. Together, New York, New Jersey, and California face some $65 billion in budget deficits in 2009, amounting to more than two-thirds of the budget gaps faced by all 50 states. These states’ stratospheric spending and taxes have stifled economic growth and left them scarily unprepared for the economic downturn."

Malanga also highlights that our state's ranking includes a low score for personal freedom-and cites confiscatory eminent domain laws as one example. Clearly, this situation is, or should be, a clarion call for reform; and in our view, this reform needs to come from both parties. If it only comes from the Republicans who are out of power, it will mean that the impulse will be shot lived-especially since the state's demographics shift is making it more difficult for Republican rule to be anything but evanescent.

Here's how Malanga sees the need: "Rather, New York suffers from the vise grip that Albany’s politicians have on life in general. Reform, therefore, won’t be as simple as cutting a tax or eliminating a regulation. New York needs fundamental change that makes the state democratic again, and it needs reform candidates willing to push for that change."

With this kind of change needed, the only way it can occur in any meaningful sense, is if it comes from the top. Which is a clear indication that the incumbent CEO needs to find something else to do before our political climate can be cleansed.