Tuesday, June 30, 2009


Clyde Haberman takes aim this morning against the city's new effort to get in your face for your own good health-the mandate that diseased lungs be postered on the point-of-sale at retail outlets where cigarettes are sold: "Before too long, you may be forced to stare at a photo of blackened lungs, oozing decay, every time you go to the bodega for a quart of milk. We’re trying to figure out where under the heading of quality of life to file this bit of news."

And Haberman is wondering just where all of this in your face do-goodism will stop-if at all: "In that case, how about taking this approach even further? Why stop with cigarettes? Why not require pictures of morbidly obese people at candy counters, to show what too many Snickers bars can do? Or photos of clogged arteries at fast-food restaurants, to discourage orders of double cheeseburgers? To promote safe sex, graphic examples of Kaposi’s sarcoma could be placed by condom racks. Displays of horribly diseased livers in liquor stores ought to deter people from drinking to excess."

Of course, you will say, that's just Haberman being his usual sardonic self. You don't really believes that the kinds of things that he suggests will ever enter into the non-diseased minds of the public health set? Do you? But this kind of thinking is part of a classic slippery slope; because the appetite for healthy intervention is indeed a voracious one.

But, as we have been saying, the concern by the Bloombergistas over the health of New Yorkers doesn't extend to the health of the very same stores that the city will soon festoon with grisly pictures of blackened lungs. With more for-rent signs sprouting up-something that Haberman has also noticed-it would be nice if we could get a bit more expansive in what we consider to be in the health interest of New Yorkers.

But, unfortunately, Mike Bloomberg has no real concern for the retailers whose livelihoods he is challenging while fervently engaged in lengthening the life span of his reluctant subjects. Here's the Haberman critique last month of the Bloomberg five borough economic fiasco that he calls a plan: "If your neighborhood is anything like mine, the streets are dotted with empty stores, victims in many cases of rapacious landlords who, with City Hall’s tacit blessing, jacked up rents to unsustainable levels. Only the bottom fell out of the economy. Those vacant storefronts, with their sad “space available” signs in the windows, are a dispiriting blight."

Still, with all of the empty store fronts, brought on in part be the Bloomberg small business myopia, there is an opportunity: a huge and expanding urban canvas upon which the Department of Health can-graffiti like-decorate with all of its avuncular health messages; all the while covering up the chronic economic malaise that the mayor ignores in his public relations snow job into a third term.

The End of Mayoral Control; Or, Where the Wild Things Are

As we approach the predicted chaos that Mike Bloomberg is envisioning if the reauthorization of mayoral control isn't approved before the end of the day, all we can do is chuckle-after all, chaos isn't something that we should be frightened of; especially if it is being predicted by the solipsistic Mr. Bloomberg or the self serving Randi ("It's only about the kids") Weinberg. We have been treated to an endless drumbeat of doomsday rhetoric from those quarters-not to mention the flacks over at the tab editorial pages-and it will be interesting to see whether Armageddon will actually come-as John Sampson plays his role, with the mayor cast as Delilah.

But, at least for the short term we will be treated to the visage of an angry and helpless billionaire mayor; and no matter that this delicious sighting devolves from silliness in Albany, it is certainly a sight for these sore eyes. Here's the NY Post's lamentations this morning: "Mayor Bloomberg's legal authority to run the city's school system could expire tonight after Senate Democratic leader John Sampson hardened his position against quick passage of mayoral-control legislation. "We said we are dealing with noncontroversial bills . . . Mayoral control is a controversial issue [among Senate Democrats] -- and we would like some input," Sampson said."

Things are so bad that Bloomberg is actually-Can you believe it?-counseling participatory democracy, and taking to the streets: "Earlier yesterday, a frustrated Bloomberg said he wanted to give the public the phone numbers and home addresses of senators who are failing to do the state's business. "We'll give you the numbers of the senators, assuming everybody promises to call them at 3 in the morning," Bloomberg quipped. "I can do one better," the mayor added. "We should give you their addresses so you can stand outside their houses. That would really make a dent."

But the frustration that Bloomberg feels, is something that is self-inflicted; since it was his courtiers who led the senate coup and threw that chamber into the chaos that he now laments. And now the courtiers, turned into court jesters, are casting stones at Sampson and their other Democratic colleagues-a classic case of misdirection: "Republicans wasted no time blasting the Democrats' position. "It makes absolutely no sense. It's obstructing, it's irresponsible," Senator Frank Padavan, a Queens Republican who is the sponsor of the bill, said. "Maybe he's using these 1.1 million kids as a pawn in his grab for power," Senator Andrew Lanza, a Staten Island Republican, said of Sampson."

All of which allows the governor to enact the role of the monsters in "Where the Wild Things Are."


Until Max said stop! Now, since we know it won't be Paterson playing Max in this sequel (in spite of Bill Hammond's kudos to the sudden burst of testosterone), the only question remaining is, Who will? The chaotic situation can't continue to stall governance forever. But, in the meanwhile, we can all be entertained by the stymied Mad Michael, his comedic courtiers, and his dyspeptic flacks. Gridlock has never been so much fun to watch.

Veni, Vedi, Ricci

It gives us some great deal of pleasure to see that SCOTUS has ruled in favor of firefighter Frank Ricci in the now famous New Have case. What's interesting to us, is what Justice Kennedy has written here on the issue of disparate impacts: "The City’s actions would violate the disparate-treatment prohibition of Title VII absent some valid defense. All the evidence demonstrates that the City chose not to certify the examination results because of the statistical disparity based on race—i.e., how minority candidates had performed when compared to white candidates. As the District Court put it, the City rejected the test results because “too many whites and not enough minorities would be promoted were the lists to be certified.”

What this means is that New Haven never argued that the test was unfair, only that the results weren't what they hoped for. Which, if this is going to be a criteria for sh*t canning a test, means that municipalities will have to continue to test until they get the "right" results.

Having represented firefighters in the past, we know just how important their public safety efforts are-and how complicated and dangerous as well. If the test was constructed fairly, and in a race neutral way-as Kennedy feels it was-than to jettison the results, or modify the test to make it more accommodating somehow to the examinationally challenged, is a direct threat to, not only fairness and a level playing field, but to the public safety as well.

As Justice Kennedy points out: "If an employer cannot rescore a test based on the candidates’ race, §2000e–2(l), then it follows a fortiori that it may not take the greater step of discarding the test altogether to achieve a more desirable racial distribution of promotion-eligible candidates—absent a strong basis in evidence that the test was deficient and that discarding the results is necessary to avoid violating the disparate impact provision. Restricting an employer’s ability to discard test results (and thereby discriminate against qualified candidates on the basis of their race) also is in keeping with Title VII’s express protection of bona fide promotional examinations."

But, as one commenter over at the Atlantic points out, the racialists want to do just that-keep up the testing in hopes of achieving the "scientifically desirable" results: "Maybe I bring my scientist-filter into everything, but it reminds me of validating scientific results. If you run an experiment and get consistent results that weren't what your model predicted, it's integral to the scientific process to comb through your experiment (and have others do the same) to make sure there weren't outside factors influencing the experiment. You want to make sure you have the most correct data possible before drawing conclusions. So in this case, if the city comes up with a different test that gets the same results on the same group of people, then great - no worries about bias, and it really was merit-based. And if not, they've discovered a flaw in their system that was invalidating their results.""

But the "model" predicted race neutrality; and that doesn't mean that more minorities will score high enough to be promoted, only that the test in question was fair. To some folks, however, the mere fact that minorities scored lower than other applicants means that the test, ipso facto, was unfair-and needed to be thrown out.

As the lawyer for Ricci pointed out to the District Court, being a firefighter isn't the same as being a sanitation worker-there are real skills and safety issues that need be given proper deference. And, as Stuart Taylor has written, throwing out the test has real world consequences for those who did score higher: "The disparate-impact dynamic has the benefit of expanding opportunities for preferred minorities. But it also has great costs. It is unjust to high-scoring white and Asian workers; it has greatly eroded the anti-discrimination principle; and it downgrades incentives for students and workers to study and learn -- both in school and in rigorous test-preparation courses such as the one that helped some New Haven firefighters improve their skills and do well on the test."

So, by all means, expand opportunities and training for those who want to become firefighters. Give those who have been excluded, for whatever reason, a boost up in this way. Just don't water down a test that determines who will be racing up that ladder should, God forbid, someone you love is threatened with a horrible death.

Getting Buschwacked

We have commented previously on the ominous trend to consolidation in the beer industry-a trend that will lead to the shuttering of local businesses and higher beer prices for consumers. Another window into this trend can be seen from the following article in the WSJ: "Anheuser-Busch InBev NV is studying the idea of consolidating its network of independent U.S. beer distributors, perhaps by owning many more distributors itself, according to an analyst report that represents a potential blow for the beer titan's roughly 600 distributors."

What this means is that eventually, if nothing intervenes to stop it, all of the country's beer distribution will be in the hands of foreign entities; and the three-tiered system will become moribund. What this means in New York is that hundreds of independent, non-franchise wholesalers-along with the dwindling cohort of franchise wholesalers-will be made extinct.

Decisions on marketing and beer pricing will be made in Belgium-and the consolidated sclerosis of a distribution system will suck the consumer parched dry; with cost savings winging their way right out of the country. As the WSJ points out: "The report is the first serious indication that the brewer based in Leuven, Belgium, intends to put the squeeze on its distribution network to improve its own profitability. Potentially billions of dollars currently flowing to distributors could be at stake. InBev has reduced costs at Anheuser since acquiring the company for $52 billion last fall. But its distributors so far mostly have been spared the knife."

So, with independents looking to NY State for some statutory protections-while franchise wholesalers fight them tooth and nail-it appears that both sides are fighting a war of attrition while the common enemy waits to literally pick up the pieces. New York needs to act promptly to counteract the monopolistic, anti-consumer, trends that threaten to force the state's beer consumers to drown their sorrows in higher beer prices.

Monday, June 29, 2009

Handwriting on the Capitol Wall?

The Times has an interesting analysis of demographic trends in NY State, trends that bode well for future Democratic control over the state senate: "Albany gridlock got you down? Well, worry no longer, the end is in sight — the State Senate should be back in business by 2013. An analysis of population shifts since this decade began suggests that Democrats are poised to gain as many as six seats when legislative districts are reapportioned after the 2010 census. That would give them an ample margin to untangle the 31-to-31 tie that has stalemated the Senate for three weeks."

Which certainly explains just why the Republicans made their move to grab a leadership position when they did-it was now or never. They need to have a shot at controlling the reapportionment process next year if they're gonna have any hope of maintaining a shot at relevance: "Redistricting is more abstract art than exact science, though, and Dr. Beveridge’s analysis is subject to several caveats — the most vital being which party controls the Senate after the 2010 election. After the 2000 census, the Republican majority was able to minimize the impact of population losses in its upstate base in two ways, both of which survived legal challenges."

In other words, creative carving is their last bastion of hope; and it might explain why our friend Pedro also decided to roll the Republican dice. In a senate where the Dems have a greater margin of seats, it's unlikely that his colleagues would be inclined to support his leadership ambitions. Perhaps he saw the current short term play as being in his best interests-with the inside straight possibility that, as King Gerrymander, he might ride the wave a while longer.

That, of course, doesn't change the current molasses metrics; and, as we have said elsewhere today, it probably doesn't bode well for NY's tax payers-unless a new sighted Democratic standard bearer rides into town on a centrist horse. So, in the long run, the Republican play isn't the way to bet; but for Espada and the Republican coup leaders, the insight of John Maynard Keynes was probably their underlying motivation. As the economist famously said: "In the long run, we're all dead.”

Taxing Our Patience?

There has been a great deal of teeth gnashing over the continuing gridlock up in Albany; but isn't it time we looked at the bright side of all this wrangling? Let's start with that famous quote on the danger that legislatures often pose-and the one in Albany never fails to do: "No man’s life, liberty, or property are safe while the Legislature is in session” is a classic political phrase that popularly began with a New York court decision in 1866. The phrase has been applied to the legislatures of other states as well."

Which brings us to the Wall Street Journal editorial on the dangers that legislative overreach can cause-particularly in the area of taxation: "A decade ago all three states were among America's most prosperous. California was the unrivaled technology center of the globe. New York was its financial capital. New Jersey is the third wealthiest state in the nation after Connecticut and Massachusetts. All three are now suffering from devastating budget deficits as the bills for years of tax-and-spend governance come due."

All this as a result of a capricious disregard of just what undergirds the prosperity of any local economy: "These states have been models of "progressive" policies that are supposed to create wealth: high tax rates on the rich, lots of government "investments," heavy unionization and a large government role in health care...Has all this public sector "investment" translated into jobs? Not quite. California had the nation's third highest jobless rate in May (11.5%). New Jersey and New York had below average unemployment rates in May compared to the national average of 9.4%, but one reason is that so many discouraged workers have left those states. From 1998-2007, which included two booms on Wall Street, New York and New Jersey ranked 36th and 31st in job creation. From 2000 to 2007, the New Jersey Business & Industry Association calculates that nine out of 10 new Garden State jobs were in the government."

So the, "soak the rich" philosophy, best epitomized by the platform of the Working Families Party and the missives of the Drum Major Institute, hastens the kind of economic retardation that, while it erodes the tax base all over, is particularly hard on local small businesses-as one recent study highlights: "Consistent with the growing tax burden on small-business owners, as well as the growing body of evidence linking higher tax burden with limited entrepreneurial growth and higher closure rates, this study has found that tax problems constitute an important reason for bankruptcy filings for a sizable number of entrepreneurs."

So perhaps all is not lost when legislative gridlock paralyzes the state capitol-and if this had happened in March instead of June a whole host of new taxes wouldn't have been concocted in order to stick knives in the local economies all over the state; and let's not forget that the job killing Quinnberg sales tax hike is also in limbo as the legislature continues to squabble. We're happy to see stalemate, even if it affords the governor to pretend that he's looking out for the public interest.

Unfortunately for New York's tax payers, however, this stalemate will eventually be resolved. And the WSJ's mordant analysis is way too accurate for any real debunking: "So goes the real-life experience of progressive governance, with heavy tax burdens financing huge welfare states, and state capitals dominated by public-employee unions. Formerly rich states, they are now known for job losses, booming deficits and debt, wage stagnation, out-migration and laughing-stock legislatures."

Will Bloomberg Lose Control?

As the deadline looms to re-authorize mayoral control of the NYC schools, it doesn't appear that the state senate will be able to convene to even consider the extension. As the NY Daily News reports, even if the senators manage to get their act together, the prospects for Mike Bloomberg's pet project appear quite dim: "The extension of mayoral control over the schools is no slam dunk even if warring senators break their stalemate, the Daily News has learned. The law expires Tuesday and a number of Senate Democrats are leery of passing the Assembly's mayoral control bill without making changes. "They don't like the idea that's it's being stuffed down their throats," a Democratic aide said."

And let's not forget, that Bloomberg has railed against even the smallest changes to the assembly-backed version of re-authorization: "The Assembly bill, which leaves the basic tenets of the current mayoral control law in place, has enough support from a handful of Democrats and all 30 Republicans to pass. Paterson warned of "chaos" if the law expires, and Bloomberg called the Senate's inaction "Albany at its worst."

We kinda liked the self-serving comments of Randi Weingarten on the senate's inaction: "City teachers union President Randi Weingarten said letting the law lapse gives kids "a terrible lesson about the rule of law. We're also suggesting that chaos and instability is a good thing." Hey Randi, was the overturning of the popular will on term limits the kind of, "rule of law," lesson you had in mind? We're guessing that, as long as there's a strong leader and stability reigns supreme, we are in good shape.

But you also have to get a chuckle out of the Chicken Littles over at the NY Post, with another one of their sky is falling predictions over the possible demise of mayoral control: "Time is running short. At midnight tomorrow, an extraordinarily successful experiment could begin to unravel. That would be a tragedy." But then again, how do you tell the difference between a Post editorial and a news article on this subject. Fair and balanced? Not.

Which brings us to the, "what happens next?" scenario. As the NY Times points out, everyone's been forced to game plan the, sky is falling, unthinkable here: "Quiz: Which impending crisis, in the words of Mayor Michael R. Bloomberg, threatens to bring rioters into the streets and turn City Hall into the Kremlin? A swine flu pandemic? More cutbacks to the city’s labor force? Not quite. In Mr. Bloomberg’s view, doomsday will be on its way if the Senate fails to renew mayoral control of city schools by Tuesday, when the 2002 law authorizing it expires."

So what's a poor billionaire mayor to do? "But exactly how the operation of the nation’s largest school system would change — aside from, perhaps, the return of old Board of Education stationery — remains a question." But if this is the crisis that Bloomberg believes, we may find out how the city's chief executive acquits himself under duress. Truman or Carter, is there an, "under/over," on this?

But just maybe, this isn't quite like, let's say, the Berlin Airlift or the Iranian Hostage Crisis. If so, the mayor may become victim of his own hyperbole: "Mr. Bloomberg has not announced any contingency plans, perhaps trying to hasten action upstate. But he has portrayed the possibility of losing control of the schools as nothing short of a catastrophe. “If the Senate passes something that differs by one word or more,” he warned on Thursday, “it is saying to the city: ‘We want to resurrect the Soviet Union. We want to bring back chaos.’ ” In February, he said, “I think that there’d be riots in the streets.”

But alternatives are being thought about-and let's not overlook the ambition of the five borough presidents, who would get to appoint a member if the old BOE was resurrected: "Reverting to the old law would give more influence to the borough presidents, who would control five of the seven seats on the board. The mayor would be able to name only two board members, but would probably be able to persuade at least two borough presidents to appoint members favorable to the mayor’s policies."

But aren't the prospects her fun to imagine; with the imperious Michael being thwarted in his goal of world conquest. Should he find himself stymied, will his self-control be as evanescent as his lost control over school governance?

Friday, June 26, 2009

Related's Revolutionary Guard

The Bronx News Network has some very good coverage of Tuesday's Kingsbridge Armory hearing-particularly concerning the goonish actions of the Negative Workforce crew: "The evening started out with a bang as about a hundred or so construction union guys, mostly from Positive Workforce, a big supporter of the Armory's designated developer, the Related Companies, literally bum rushed past cops and security guards into the dining room and installed themselves as a backdrop to all the night's speakers.Several attendees were startled by their aggressiveness, others felt intimidated. Their message throughout the night was clear: build at the Armory now."

Lacking any real community support, Related-kind of like the ayatollahs in Iran-are utilizing paid intimidators-who, by the way, aren't union folks at all-to threaten their regime's opponents. And, as BNN explains, they have gotten an assist from the CB itself: "The hearing began with a round of "special" speakers (I think because they were disabled, they were allowed to speak first) from Co-op City who praised the project because of its apparent similarities to the Bay Plaza mall, which they think added to their part of the Bronx. It seemed kind of random."

On the contrary, there was method to the supposed randomness; and the speakers, disabled or not, had no special role to play in Tuesday's hearing-aside from acting to dilute the opposition's objections. But BNN did highlight the fact that almost all of the speakers-aside from the goon squad-were opposed to Related's project in one form or another: "Related's presentation was followed by essentially three kinds of public testimony: KARA representatives (lots of them, they dominated the hearing, no question) who told Board members to vote no on the project unless Related signed a Community Benefits Agreement, which would include union protections, living wage job requirements (which Related says is a non-starter) and free or affordable recreation space; representatives from Morton Williams who were adamantly opposed to the supermarket idea for obvious reasons; and construction workers from Positive Workforce who supported the project wholeheartedly."

We still maintain that the entire episode was illegal; since the lockout prevented a legitimate public hearing from taking place. But kudos to BNN for accurately depicting the questionable community board tactics as well as the chaotic nature of the hearing.

Budding Empire

We have commented on the anti-competitive nature of the beer distribution system in NY State; and, in particular, the fact that one of the world's largest brewers Anheuser-Busch/Inbev operates a branch distributor in three NYC countires-Manhattan, the Bronx, and Queens. In effect, in these three boroughs we have, courtesy of the territorial monoploy contracts that franchise wholesalers have maintained, a foreign company dictating to the locally owned independent wholesalers and their retail customers.

The arguments by the franchise wholesalers against a beer distribution bill (A-5001) sponsored by the Empire State Beer Distributors-the association of the independents-is that the legislation would disrupt the three-tiered distribution system that has been designed to protect local franchises against the predations of out-of-state brewers.

But if these brewers start to absorb the locally owned companies, how sacred is the three tiered system? And why should NY State go out of its way to protect a system that is being undermined from within? And, according to Beer Business Daily, this is what's about to happen on a very large scale: "There are ill-winds blowing from Europe. In a shocking revelation from across the pond, London-based UBS beverage analyst Melissa Earlam (via UBS analyst Kaumil Gajrawala in the U.S.) writes in a note to investors early today that AB InBev may be looking into shipping beer "direct" through expanding company-owned branches, to retailers in certain markets in the United States, up to 50% of its volume. This revelation was delivered to UBS analysts and investors last week in Belgium by ABI chief Carlos Brito and other top execs."

So now, if this trend continues and is mimicked by the other multi-national brewers, as we believe it will since AB has always been the industry leader, we will see the elimination of both franchise as well as independent wholesalers in New York. As BBD reports:

"While there is a "wide variance in application of regulation on alcohol on a State by State basis," writes Mel, "some States allow brewers to own wholesalers. ABI is currently reviewing the potential for direct distribution in the US. A-B already has 13 company-owned distribution companies, and 7% of its volume is done through direct distribution, though this ownership is more accidental than due to a deliberate strategy." It turns out that A-B's "accidental" strategy of buying up branches provided the number crunchers in Belgium with enough fodder to move forward. Melissa writes that when InBev purchased A-B in summer 2008, "ABI had thought that 20% direct distribution was possible in the US market. ABI now believes in theory 50% of volumes could ultimately be sold through direct distribution (not necessarily in 50% of States - some States such as California could do 100% and other States zero)."

If this comes to pass-and other brewer stakes already exist in some local franchises-then we will be looking at a monopolistic distribution system run exclusively for the benefit of multi-national conglomerates. It thus appears to us, that franchise wholesalers may have more in common with the independents than they would, perhaps, like to believe.

Myth of Mayoral Efficiency

With the city enveloped in an editorial fog-a compliant echo chamber that has elevated Mike Bloomberg into iconic status based on little more than the fact that he hangs in the same elite circles as the do our publishing magnates, it was refreshing to read the following report (counter-intuitive to the scions, no doubt) on the shenanigans over at the DOB: "Buildings Department inspectors are poorly trained, inspections are frequently slipshod and fines are routinely laughed off as "the cost of doing business." Those are the findings of a $4 million study released yesterday by the troubled city agency at the end of a five-year building boom that led to record numbers of construction deaths."

Can it possibly be true? After almost eight year of the most capable managerial oversight, we find that a critical city agency is overrun by stumble bums? Fraid so: "Inspectors are currently not uniformly equipped to judge the acceptability of common unsafe conditions," the study concluded. "They rely primarily on their own varying level of training, experience and degree of tolerance on nonconforming issues." The report faulted the department for having "no standard training procedure" for critical field inspections and said procedures are so lax it's often impossible to to determine whether architects' plans conform to city code."

Watch out for the falling cranes! Yet, in spite of some grave issues of competency and inattention on the part of the beatified incumbent, we are rapidly approaching an election that appears to have all of the suspense of a Laker-Knicks game; with the editorialists making lapdogs look like Rottweilers.

Even today, the NY Post uses an editorial column to savage Bill Thompson on the issue of mayoral control. To borrow Joseph Welch's comments to Joe McCarthy, we'd like to ask the Post: "Have You No Sense of Decency?" Where are the editorials on the mayor's failure to stem the tide of bigger government? Where are the snide comments about a phony five borough economic plan, one that somehow fails to mention that Bloomberg's economic policies have escorted 300 local supermarkets right out of town? And where are the countervailing voices on school governance, ones that might point out that the city's of Rochester and Buffalo have experienced as much "success" as New York even without a mayoral control system; underscoring, perhaps, that the evaluating metrics have been eroded.

But the sense of decency is missing-and its absence dramatizes the most indecent aspect of the Bloomberg victory lap; the obscene use of a private fortune to drown out any potential for a real public debate. My God, we even had to watch and listen to a Bloomberg ad during the NBA draft! And that one told us that the mayor was creating jobs for small business. Talk about disinformation!

So, let Adam Brodsky examine the statements of Bill Thompson with a careful Talmudic sense of rectitude. But let's not make any mistake about what's happening here. The editorialists have created such an echo chamber that certain political truths have become its first victim. Mike Blomberg is getting the kind of kid gloves treatment that would embarrass even an ayatollah; and this is happening in the great bastion of liberal thinking, no less.

Armory Hearing Questions

The first hearing on the redevelopment of the Kinsbridge Armory was held on Tuesday-and if this meeting is any indication, the land use process is going to be a contentious one. As NY I reports: "Developers and local business owners gathered at a meeting Wednesday night in the Bronx to discuss the plan to turn the Kingsbridge Armory, empty for 20 years, into a massive shopping center... It was a heated debate Wednesday as to what kind of development should be built inside of the old Kingsbridge Armory. The Related Companies, a construction firm, is proposing a massive shopping mall. At Community Board 7's public hearing, Related tried to gain support of the crowd."

Huh? Related's crowd pleasing efforts consisted of apparently hiring a squad of hired goons who goosed stepped chanting into the Lehman College gathering menacing onlookers in the process. Making matters worse, the sixty or seventy member contingent of the non-union Positive Work Force, took up seating that should have been available to the community-but wasn't. As a result, scores of community residents were locked out of the meeting; and, with an apparent violation of the NYS open meetings law, the community board's hearing should be all rights be considered null and void.

The fact is that a public meeting must be held in a venue that is able to accommodate the public that is interested in coming to either simply hear, or to testify about the proposed project. With Tuesday's lock out, however, Community Board #7 didn't hold a valid public meeting; and in our view, will need to hold an additional public gathering before the scheduled July, 14th vote on the redevelopment project (something that area elected officials should insist upon).

The lockout was just the beginning of the problems that the Board is facing. The agenda for the hearing raises serious questions over the impartiality of the review process. In our over twenty five years of participation in community board reviews, we have never seen a pre-hearing schedule set up to purposefully undermine the opponents of a project.

But that's what the board did-bringing in some folks from Co-op City to tell the gathering that there was nothing to fear from the proposed mall. Why? Because they too had a mall in their community and, despite early misgivings, the mall was built and the world didn't come to an end. Here were people with absolutely no connection to the Kingsbridge community-and with no knowledge of the developer's proposed plans-brought in to pre-rebutt opposition arguments; and allowed to do so for an open ended period, while opponents were rigidly restricted to a three minute time frame.

Meanwhile the hundreds of opponents-as well as the locked-out residents and workers-were treated as if they were interlopers by the biased process servers. Surely, the motives and actions of the district manager and the Board's chair need to be investigated. There is enough untoward activities being examined in the borough, to raise serious suspicions about how-and why-the Board is proceeding as it is. There's an old saying that just might be applicable here: "He who pays the piper calls the tune."

Still, we all need to be cognizant of the fact that despite the Board's questionable actions, its decisions are purely advisory; and, as we saw in the case of the Brush Avenue BJs, the city council can and does override a local board if it feels that a project isn't in the public interest. And this one, with its millions of dollars of tax subsidies that will destroy two Morton Williams Supermarkets if it includes a big box food use, clearly is not.

As NYI points out: "The Kingsbridge Armory is larger than Madison Square Garden, meaning that plenty of stores can be put inside the nearly 100 year old building. But workers from local grocery stores are worried over the possibility of a 60,000 square foot supermarket at the Armory. 'With the subsidies that they are receiving from the city and the state, subsidies that we pay in taxes, we never get subsidies.' Said Morton Sloan, president of Morton Williams Supermarkets. 'We pay the taxes for the subsidies of the competition that will turn around and hurt us.'"

So, while the community board machinations are vexing, it is the votees of the local council members that will tell the story when all is said and done in this land use review. And, while we are confident that the council will stand up for local business, we still feel strongly that all of the actions of this community board need to be thoroughly scrutinized. Its behavior on Tuesday was a disgrace to the very idea of a fair and impartial review process.

And as far as Related and this development is concerned, we'll give local community activists the final word: "The Armory project calls the question: What type of development serves New Yorkers best? Will it be one based on the privatized, deregulated, unrestrained and now bankrupt model that brought on our current recession? Or can we do better? Can we meet the community’s need for good jobs that pay a living wage — the bedrock of healthy families and communities? This is what Community Board 7 must decide within the next 30 days. While Community Board 7 deliberates, our job is to hold them accountable. We need to speak out and let our voices be heard."

Thursday, June 25, 2009

The Russians are Coming,The Russians are Coming

That master of historical allusion is at it again-this time Mike Bloomberg is comparing any dilution of mayoral control of the schools to the return of the old Soviet Union (via Liz): "Using some of his toughest language yet, Mayor Bloomberg demanded that the gridlocked Senate pass the Assembly's mayoral control bill or risk throwing the entire system into "chaos", the DN's Frank Lombardi reports. “If the Senate passes something that differs by one word or more it is saying to the city: We want to resurrect the Soviet Union, we want to bring back chaos.” Bloomberg fumed."

That's what we like about Mike, he's always ready with an inapt analogy for our edification. In fact, there's so much wrong with this one, that we don't even know where to begin. Well, to start, the old Soviets were are corrupt bunch of thugs, but chaos hardly describes their dictatorial rein. Which underscores the thin ice that Bloomberg I is skating on-there's more to his particular governing style that resembles the autocratic than the hapless old BOE.

What's amusing, is that he has started to believe the editorial echo chamber: "You want to see a school system in disarray? A good example would be the Albany Senate - nobody in charge and they can’t function. And that’s exactly what happened before when nobody was in charge of (the) school system. And once you get somebody in charge, you might not agree with every decision, but it’s pretty hard to disagree with the results.”

Well, we were no fans of the old system-and our knowledge was gleaned first hand from five years of teaching elementary school-but to imply that the old system was totally dysfunctional is a bit too much for us. And, as far as the "results" are concerned, we believe that the entire examination process is watered down; providing misleading progress reports for an eager bunch of self servers.

So we hope that Senator Sampson calls the mayor's bluff; and a poison pill is just the kind of medicine that an unaccountable mayor needs to swallow in order to instill humility where only hubris has ever been evinced. Let's see if the senate Dems have the cojones for this.

Dead Man Walking

The struggle over control of the state senate has apparently caused a fatal schism between the governor and his allies in the legislature. As the NY Times reports: "While the governor does not have the unilateral authority to order state troopers to round up truant senators and force them to come back to the Capitol, he can go to court and ask for an order compelling senators into session. If such an order is issued and they refuse, Mr. Paterson said, the State Police could be called in. The stalemate in Albany has not reached that point yet, but the situation on Wednesday continued as a back-and-forth of political shots. After Mr. Paterson issued his ultimatum, Senator Kevin S. Parker, a Brooklyn Democrat, criticized the governor and complained that he had not done more to defend fellow Democrats in their leadership struggle with Senate Republicans."

But Parker went on to further challenge Paterson in strong language: "He’s a coward,” Mr. Parker said. “His idle threats about holding our paychecks and those other things, which he certainly has no authority to do under either the Constitution or any other law, is mean-spirited and without basis.” Mr. Parker then took a shot at Mr. Paterson’s low job-approval ratings: “He will not be returning as governor, I’m fairly sure.”

So, it looks as if the governor's going to try to take a page out of Harry Truman's book-and run against the, "do-nothing," legislature. Only problem that we see, is that it's hard to be the "do nothing governor" running against the "do nothing legislature." The Paterson persona doesn't come close to that of the feisty Truman; and we don't believe this kind of testosterone display-so late in the game-will prompt a wave of electoral support for Paterson.

So the senate will return today to, do what? Calls for pay garnishing and criminal probes notwithstanding, it's unlikely that a quick resolution of this mess will be soon at hand. Paterson's desperate display of executive power is, however, too little, too late.

Sign of Bad Economic Times; or "Minor Economic Issue?"

Yesterday, as the NY Daily News reports, the city 's Board of Health passed a regulation requiring stores to post large anti-smoking signs: "The health department wants to serve up something new at your corner bodega - a fresh slice of blackened lung. The grisly image is one of several new anti-smoking ads - as big as 3 feet by 3 feet - that new Health Commissioner Thomas Farley wants to post at the cash registers of every store in the city that sells cigarettes."

Once again, the city goes after the legitimate cigarette retailers-regulating rather than legislating-while allowing the black market to flourish. As we told the News: "The signs are counterproductive to the viability of these businesses," said Richard Lipsky, spokesman for the Neighborhood Retail Alliance, who said many shopkeepers are paid to display cigarette ads. "The profitability of these stores is going to be eroded." Others said a 3-foot-square sign would be difficult to accommodate, especially in a space as small as a newsstand."

Since the mayor passed the largest percentage tax increase in the city's history-the 1800% hike in the cigarette tax in 2002-60% of all tobacco sales have suffered a forced migration to the black market or Internet; a $250 million loss to area bodegas, newsstands and green grocers. Mike Bloomberg, deriding the concerns of small shopkeepers, called the loss, "a minor economic issue." And the mayor has done little to aggressively interdict the illegal sellers-preferring to crackdown on the legal store owners.

As Robert George pointed out at the time: "Bloomberg earlier this year raised the city tax on a pack of cigarettes by $1.50. That means the average pack of cigarettes in New York City costs about $7.00 (the state had raised its own tax on the not-yet-illegal substance last year). Yet, two months ago, the association that represents bodega (Puerto Rican deli) owners, protested on the steps of city hall to say that the cigarette tax was killing their business. Bloomberg stunningly responded to the protests, "I just find it inconceivable that you could equate people's lives — particularly children that buy cigarettes in bodegas — with a minor economic issue…Let's get serious!"

And these store owners are now suffering the worst effects of-not only the recession-but of the city's anti-small business policies; and we are experiencing the the highest levels of bankruptcies and store evictions in the city's history. On Monday, over 60 small business and advocacy groups will be gathering at city hall to promote a Robert Jackson-sponsored bill that would mitigate evictions through mandatory arbitration. But, as far as we can see, the Bloombergistas remain tone deaf.

And, if the mayor's five borough economic plan ads is examined, a total psychotic break; since, under the mayor's less than watchful eye, stores are dropping like flies-with for rent signs becoming ubiquitous all over the neighborhoods of the city. But tobacco is fair game, no matter how much the ubber-regulators may hurt the local merchants. And the state has chimed in with an exorbitant increase in tobacco registration fees.

The health of New Yorkers is an important target for policy makers; but so is the health of small stores. Taking away bodega ad space for another warning sign is just another example of the idée fixe of Mike Bloomberg and his regulatory crusaders. Pretty soon, we're gonna have ten foot anti-smoking signs plastered all over the windows of the proliferating legions of empty store fronts.

Wednesday, June 24, 2009

Get My Shawl

In Mame, the musical that the late David Lipsky had the privilege of doing the press for, there's a great line that Auntie Mame-wonderfully played by the recently deceased Bea Arthur-utters: "Get my shawl," she tells her nephew, "I feel the winds of change blowing." The line came to mind, while we were reading the Op-Ed from Rudy Giuliani in today's NY Times.

The editorial, signalling perhaps that the hapless incumbent governor should be looking over both of his shoulders, focuses directly at the dysfunction in Albany-calling for a constitutional convention to address the serious, and endemic, state problems: "NEW YORK STATE government is not working. This has been true for some time. But the paralysis and confusion that has overtaken the capital demonstrates the need to confront this dysfunction directly and take decisive steps to solve it once and for all. That’s why I’m calling on Albany to convene a state constitutional convention."

There's an old saying, that power abhors a vacuum, and the existence of a power vacuum in the state capitol is one of the most undeniable facts of political life in New York today. The more that this is made manifest, the more attractive the Rudy persona becomes-and some of his prescriptions for change will certainly resonate strongly among fed-up voters.

The economic focus of the former mayor is one that we are particularly enamored with: "There are more New Yorkers unemployed than at any time in 33 years, and the poverty rate is rising. Our combined state and local tax burden is the highest in the nation after New Jersey. Our business tax climate is rated the second worst in the country. And in the face of the worst recession in a quarter-century, the State Legislature decided to increase spending by 9 percent while increasing taxes and fees by $8 billion. No wonder a recent poll showed that more than 20 percent of New Yorkers are thinking of leaving the state in search of lower taxes and fewer government mandates."

We have been posting on this very theme for months now-and have watched with dismay as more taxes and fees have been added on; saddling New York business with the kind of burden that is simply intolerable in the current economic climate. That is why his call for a supermajority clause for any tax increase was music to our ears: "Too often increasing taxes is the first impulse for Albany legislators. Requiring a supermajority for tax increases would provide a powerful check on those who still think we can tax and spend our way out of economic problems. A supermajority would protect already over-burdened citizens and attract businesses, improving our long-term competitiveness."

The city and the state have been governed for too long by tax and spend forces that have grown the size of government, and made the state a very poor place to conduct business. We're certainly not ready to endorse the potential candidacy of someone whom we have fought some fierce battles with in the past; but we're happy that Rudy has laid out some agenda items that others would also be wise to adopt as we go into the next election cycle.

Showtime at the Armory: Supermarket in the Eye of the Storm

The battle over the redevelopment of the Kingsbridge Armory gets going in full force tonight as CB# 7 holds its first land use hearing on the application of the Related Cos. to convert the facility into a retail mall. As the Observer reports: "It’s probably safe to assume that the faculty dining room at the Bronx’s Lehman College will be packed the evening of June 24 with a lot of people wanting a lot of things from the Related Companies. The prolific developer is coming before Community Board 7 to discuss its planned development of the behemoth Kingsbridge Armory, a whale of a 92-year-old, 588,000-square-foot building just beyond Manhattan. The city has been trying to develop the building for years, and now Related, led by Stephen Ross, is preparing to convert it into a $323 million shopping center, complete with cinemas, a fitness center and to-be-determined retailers."

And some battle it will be-with neighborhood coalitions, union workers, small business representatives, and supermarket owners all scheduled to come out to protest aspects of the proposed plan; with the expected fight over wages looking like a real contentious issue: "The central issue that’s emerged: Union and community groups are demanding retailers that pay a “livable wage.” Related is balking, saying that such a requirement would force it to scrap the project, leaving the site vacant."

And then there's the supermarket issue. We testified yesterday at a city council hearing on, "fresh food in NYC neighborhoods," and made the following points: "In 2008, the Department of City Planning conducted a study that determined that a supermarket gap existed in NYC. As the department’s report stated; “There is enormous capacity for new supermarkets throughout the city. NYC has the potential to capture approximately $1 billion in lost grocery sales to suburbs. The loss in sales is enough to support more than 100 new neighborhood grocery stores and supermarkets.”
Absent from the analysis, however, is the fact that-over the past eight or nine years-the city has lost over 300 local supermarkets. So, if indeed there is a gap, than the gap has come as a result of the loss of existing markets. But instead of addressing the disappearance factor-the underlying causes of store closings-City Planning devised an elaborate plan for incentivizing new market penetration in areas it considers to be underserved."

Which gets to the heart of what's at stake in tonight's official launch of the Armory ULURP. The plan by Related to place a 60,000 sq. ft. suburban-style store in the Armory would lead to the loss of at least four local supermarkets-the average when stores of this size are parachuted into city neighborhoods. Which is why, as the Observer points out: "Nearby supermarket chain Morton Williams is also pressuring local electeds to have Related rule out a grocery store within the armory."

This is a good trade off? Not in our view. In fact, even in the city's own incentive plan, new store size is capped at 30,000 sq. ft.-half the size of the one that Related proposes. The city recognizes neighborhood ecology in its plan; while Related proposes an outsized market that, while it may create an oasis at the Armory, will likely create retail deserts everywhere else. And, if successful, they will do so with $17 million of the tax payers' money.

It simply makes no sense to promote supermarkets in the city if, at the same time, planners are encouraging large suburban style markets and/or food selling box stores. In the reported aim of staunching the outflow of city shoppers, the likely alternative result will be the cannibalization of existing supermarkets-hastening their demise.

So the Armory fight pits the city against itself. It can't say it wants to promote supermarkets in the neighborhoods-using public health as the rationale-while, at the same time, promoting the kinds of developments that will contribute to the exact opposite effect. The fight over the supermarket at Kingsbridge puts this issue forward with great clarity; and, from what we're hearing, the Bronx council delegation-including Maria Baez, the local member from the area, understand what's a stake.

We're encouraged so far with the support that Morton Williams is getting in this life and death struggle for the soul of the neighborhood's economic viability. It's beginning to look a lot like another similar fight; and we'll give the Observer the last word: "But it’s worth noting that before Related’s victory at the Bronx Terminal Market, the firm suffered a rare loss on a land-use project in the borough a year earlier, under circumstances similar to those today. Related wanted to put a 130,000-square-foot BJ’s along Brush Avenue, only to see it voted down in a key City Council subcommittee."

Needed: Public Advocate for the Tabs

In our post this morning on the disgraceful cutting of the Public Advocate's budget, we derided the NY Post's snide clamoring-piling on while, simultaneously, shamelessly shilling for Deep Pockets Bloomberg. We did, however, miss the expected choral agreement from the equally supine NY Daily News.

And the paper didn't disappoint: "When last heard from, Public Advocate Betsy Gotbaum ... er ... when was Betsy Gotbaum last heard from? Oh, right. She was a witness in the Brooke Astor trial. Now, she is worked up that Mayor Bloomberg and Council Speaker Christine Quinn pushed through a budget that cuts public advocate funding from $2.8 million to $1.7 million. She charges political evildoing, revenge for opposing extended term limits. If only her office were consequential enough to merit payback. It ain't. It's like an appendix, useless but prone every now and then to flaring up with press releases. Long ago, it should have been excised."

Well, you know, the News may be right if our local editorialists did their job-kind of like what the paper's Mike Goodwin is doing to the president-holding the powerful more accountable. Instead we get editorial after editorial; with the News playing, "can you top that," with the Post-in the effort to see who can climb inside the mayor's shorts first.

So, we do need the PA more than ever when the news climate resembles Pravda's control of public information in the old Soviet Union. But, perhaps, the Advocate's role can be redefined, and the office's renewed focus can be on holding the press barons accountable for their dereliction of duty.

Paterson on the Griddlelock

With the so called special legislative session degenerating into a middle school food fight-and polling indicating a total collapse in support for the state's legislators-it is David Paterson, and he alone, who will reap this particular whirlwind. Why, because no one knows any of the other players in this tragicomedy-aside from their own senator who, of course, they think should be re-elected: "But voters say 48 - 27 percent that their state senator deserves to be reelected in 2010. Democrats back their individual state senator 56 - 19 percent, while Republicans are less supportive, 41 - 36 percent. Independent voters back their incumbent 47 - 31 percent."

So it's left to the governor to bear the brunt of the public scorn-and his role is far from that of simple scapegoat. In the run up to this farce, Paterson has so diminished his own stature that he reminds us of the hapless substitute teacher, trying in vain to quiet an unruly group of eighth graders. The need for an intervention from the principal became more compelling yesterday as the children literally began to climb the walls-escalating the name calling to another level.

As the NY Daily News reports-with a "Girls Gone Wild"-style headline: "How low will they go? The Capitol's dysfunction sunk to amazing new depths Tuesday as warring senators held dueling sessions in the same room at the same time - and accomplished absolutely nothing. Gov. Paterson's effort to break the leadership stalemate with a special Senate session only furthered the confusion when Democrats accused the governor of not sending legislation on time. "Keystone comedy," said Sen. Carl Kruger (D-Brooklyn)."

The NY Times underscores the sophomoric theme: "The two sides, like feuding junior high schoolers refusing to acknowledge each other, began holding separate legislative sessions at the same time. Side by side, the parties, each asserting that it rightfully controls the Senate, talked and sometimes shouted over one another, gaveling through votes that are certain to be disputed. There were two Senate presidents, two gavels, two sets of bills being voted on."

In most major controversies, the press lists all of the winners and losers; but in the legislative stalemate, as Bill Hammond points out, there are only losers: "Instead of doing the people's urgent business, the senators staged the political equivalent of a professional wrestling match - only a lot less dignified. They bellowed, they pointed fingers, they turned their backs on one another, they stalked out of the ring and took a bunch of phony votes that decided nothing."

Hammond does make one exception in his losers gallery: "But it's the senators who bear the ultimate blame, because they could not put aside their political infighting long enough to pass a few noncontroversial measures necessary to keep the state running. Instead, they birthed a legal mess that just might tie up the courts for years. Come to think of it, there were winners yesterday. The lawyers."

He did leave out, however, the real winner in all this; the stealth governor-in-waiting: Andrew Cuomo. Cuomo is just waiting to pick up the pieces when the mess is finally resolved-even if only on an interim basis. Maybe he is the principal that this school for scoundrels really needs.

Checks and Imbalances

Isn't it bad enough that the mayor and the council speaker have been locked in a four year embrace that makes a mockery of the idea of checks and balances? Apparently not, since the two sides of city hall have collapsed on each other with the knifing of the public advocate's budget for the upcoming fiscal year. As the NY Times reports: "The five men vying to succeed Betsy Gotbaum as the city’s next public advocate showed up together at City Hall Friday to demonstrate solidarity with Ms. Gotbaum over a critical issue: the viability of the office."

Now we know that the all but invisible tenure of Ms. Gotbaum has got a lot of folks thinking-well, so what? But the larger point here is that the office of the Public Advocate has the potential to serve as a bully pulpit; and the need for a countervailing voice, if not force, is all the more compelling when we are facing the possibility of another four years of political pas de deux by Quinnberg.

As Mark Green, putative front runner to replace Gotbaum, told the Times: "Mr. Green, for instance, talked at length about the history of the office, before boiling down his concerns to a basic question: “Here’s the question I would urge you and you and all of you in a position to simply ask the mayor and speaker: ‘Why has only the watchdog over City Hall been cut 40 percent?’ ”

But the NY Post, quite unintendedly ironic, demurs: "Public Advocate Betsy Gotbaum and her would-be successors took to the steps of City Hall yesterday to bemoan the 40 percent budget cut her office suffered at the hands of the City Council last week. O, woe is them...They all want the cut restored, because they're running for advocate, too. All the more reason to cut it again.
This time, completely."

The Post, which has been functioning as a key cog of the Bloomberg propaganda machine on the issue of school governance; sometimes running three promotional items a day, wants to eliminate, what?-any possibility of a discouraging word on the city hall range? Quite another nod to the new Supreme Leader, and a disgraceful shot at political dissent in the city.

Tuesday, June 23, 2009

Bloomberg's Pension Mischief

We have been arguing for some time that the argument for a third term for Mike Bloomberg-you know, a tough man for tough economic times-doesn't really hold up under even the slightest independent scrutiny. Bloomberg, imbued with an expansive government propensity-and lacking any real sympathy for the lower tax arguments that most people with a business background imbibed with their mother's milk-has raised cost that are, in the words of our national leader, "unsustainable."

Now, in a really incisive news report, the NY Times exposes the Myth of Mike; a man who has pensioned off the city's fiscal future: "Mayor Michael R. Bloomberg is sounding the alarm over New York City’s pension system these days, calling it “out of control.” Costs have ballooned, he says, threatening to bankrupt the city. Municipal unions and lawmakers in Albany created the crisis, he suggests, and left the city holding the bag. But interviews and budget records show that the Bloomberg administration itself is responsible for much of the growth in city pension costs over the last eight years, and has repeatedly missed opportunities to rein in the spending."

Having missed all of these opportunities is not the only black mark on the Bloomberg fiscal report card. At the same time that he was avoiding making any of the responsible decisions needed to make government more cost-effective, he was simultaneously-adding injury to insult to injury-raising the crippling local taxes that have been a major contributing factor in the city's economic meltdown.

All the while, like some out of work lottery winner, the mayor was thoughtlessly spending Wall Street cash-acting as if the spigot would never be turned off. Some of this-rather unintentionally-is captured by the Times in the following tepid mea culpa from one of the Bloomberg toadies: "Aides to the mayor defend his handling of pension costs. While acknowledging that Mr. Bloomberg has given significant raises, the aides say the weakened stock market has also driven up costs, because the city is forced to cover investment losses in the pension system."

But that, of course, doesn't explain the mayor's instinctive generosity over the years: "Mr. Bloomberg presents himself as a model of financial restraint who has stood up to special interests, like unions, in order to hold down city spending — a claim that is at the heart of his bid for a third term. But financial-watchdog groups say that rather than confronting the city’s pension problem, the mayor has made it worse over the last several years, negotiating costlier payouts for retirees in flush economic times that threaten to be crippling now that the city is in a recession. “You have a mayor who says that pension costs are unsustainable, that they will bankrupt the city, who has willfully increased the city’s pension liabilities,” said Nicole Gelinas, a senior fellow at the conservative-leaning Manhattan Institute who focuses on New York City’s finances."

Bloomberg came into office-unbought and unbossed, to use an old Kochism-with a great opportunity to lower the cost of government through creative reinvention. Instead we got John Vliet Bloomberg-a man that never saw a government program he either didn't like, or want to expand even further; a best friend to all city workers.

Ah, but now he sees the light, after only eight years in office, and is rushing to reinvent-not government-but his own image; and he's got the money to do just that. Here's the NY Post on the teacher pension deal reached yesterday: "The teachers union and Mayor Bloomberg announced a breakthrough deal last night on a pension-reform package that the mayor estimated would save the city $2 billion over 20 years. It was the first significant pension change won by Bloomberg since taking office in 2002 -- and followed a series in The Post that disclosed that some city workers, especially cops and firefighters, were routinely collecting six-figure retirement checks."

So, perhaps Mike Bloomberg-like some other clever pols in the past-is actually running to throw the bum out; making arguments about fiscal restraint that would be less discordant coming from a real mayoral challenger. Even the old excuse that Albany ate my homework, comes off not only lame, but inaccurate as well. As the Times points out: "Over the last seven years, public sector unions have successfully lobbied lawmakers to pass dozens of bills increasing their pension benefits. In most cases, aides to the mayor said, the city has vigorously opposed the measures, to no avail. “Unfortunately, the battle we’ve been fighting over pensions is how to keep them from getting even more generous and expensive,” said Edward Skyler, the deputy mayor who oversees labor negotiations. But the mayor has, in fact, supported legislation that makes pensions more lucrative. Coming into office after the Sept. 11 attack, he backed proposals to increase retirement pay for firefighters and police officers, who receive the city’s biggest pensions"

But all of this butt covering elides the main point-and masks Mike Bloomberg's gross culpability; a guilt that goes to the heart of the mayor's big government love affair: "The mayor’s biggest contribution to pension costs, however, are the raises he has negotiated for city workers." And in response, we get the following whopper from Pie in the Skylar: "Mr. Skyler said the administration has negotiated contracts that have improved productivity and attracted more qualified job candidates. As a result, the city has been able to improve services, he said. “We get our money’s worth,” he said."

This is all beyond laughable, and if any normal incumbent was making this argument, his poll numbers would be Paterson-like. The Times underscores Bloomberg's folly: "But records show that wage increases granted by the Bloomberg administration have outpaced the rate of inflation, and have sent labor costs surging. The Citizens Budget Commission, a municipal watchdog group, has called the raises “generous in both historical and comparative terms.” “It’s pretty simple: If you pay people more, their pensions get bigger,” said Charles M. Brecher, the research director at the commission. “And wages are negotiated by the mayor. This is his call.”

All of this could have been avoided if Mike Bloomberg had the political wisdom and the scones to tackle the municipal gravy train-something he alone, because of his great wealth and self-funded campaigns-could have done with relative impunity. As Fred Siegel tells the Times: "The mayor’s political independence — unlike most politicians, he takes no campaign donations — made him “perfectly situated to impose pension reforms, but he chose to not really even try,” Mr. Siegel said. “That’s the tragedy.”

So, as we go full steam into the upcoming election cycle, we are befogged by an
unprecedented spending storm; a magical mystification tour that is going unrebutted by the supposed challenger. As a result, we have reached a nadir in the city's history-real fiscal irresponsibility caused by an incumbent has thrown the city's financial and business situation into a tailspin but, like the proverbial tree in the forest, not many people are finding out about how it has fallen. Maybe this Times critique will usher in a new trend. For all of our sakes, let's hope so.

Monday, June 22, 2009

More Soda Addiction

Just when we thought that the dreaded soda tax was going to simply go away when Governor Paterson withdrew it from last spring's budget negotiations, we now see it reappear on the federal level-proposed to help fund the president's trillion dollar health care package: "Early work on the ambitious health care overhaul the Obama administration is seeking has exposed the kinds of in-house fights that typify just how hard it will be to get meaningful legislation this year. Case in point: A proposal to help bankroll universal health coverage with a dime-a-can increase in the price of soft drinks."

So when candidate Obama said that he wouldn't raise taxes on 95% of all Americans, he was leaving out all of the possible levies that will be needed for funding ObamaCare:

"The final price tag for that effort could top $1 trillion, with cuts to Medicare and Medicaid covering the rest of the cost.

The tax options include:

- Increasing the price of soda and other sugary drinks by 10 cents a can.

- Applying a potential 2 percent income tax increase to single taxpayers earning more than $200,000 a year and households earning more than $250,000.

- A new employer payroll tax could target 3 percent of employers' health care expenditures.

- Taxing employer-provided health insurance benefits above certain levels - a less likely option but one that still is in the running."

One trillion dollars for a health plan that could very well end up with this country having a single payer-Medicare-style-system that will, as Dr. Marc Siegel writes in the NY Post, cause chaos, mayhem, and a substandard system of care for all: "The bottom line, I think, is that primary-care physicians fear that near-mindless efforts to find cost savings -- the kind we've seen in existing government programs, and spreading to private plans -- will irrevocably damage our very ability to practice, to prevent and treat illness. We're told a "public option" will mean insurance for people who now don't pay -- but it seems to me, based on hard experience, that it will mean worse health care for everyone."

All of which makes the front page NY Times poll story, not only mendacious, but fantastical as well. The idea that 72% of Americans support a Medicare-like system is as fraudulent as the poll's methodology. And, one thing we can be sure of; if anything resembling the Obama plan is ever enacted, then the soda tax that is proposed will only be the beginning of a tax assault-one made necessary by the expanding public health care Leviathan.

Mayoral Control Mahyem

Mike Bloomberg is finally getting mad with the stalled state senate because the issue of mayoral control is in jeopardy. His own role in the political stalemate is, however, downplayed. As usual, Bloomberg fails to acknowledge his own culpability in the stalemate-and his resort to the kind of political monkeying around that he portrays as tawdry-and beneath his dignity.

As the NY Post reports: "A furious Mayor Bloomberg has declared war on Albany -- warning the Senate clowns and their ringmaster that he's sick of watching them play power games while the fate of the city's schoolkids hangs in the balance. "I find it inconceivable they won't do this," Bloomberg told The Post in an exclusive interview."

What the Sainted One fails to tell the Post in its "exclusive" press release, is that the current impasse is a direct result of a power grab by his own little class of senate sycophants-the same group that he spent so much money in an effort to insure continued Republican control over the body. And now he's angry? Perhaps, he's simply unhappy with what he has wrought.

But the coverage of the Bloomberg pique over the school issue, underscores once again just how the local press-absolutely obsessed and unhinged over mayoral control-simply doesn't cover the nuances of anything Bloomberg; particularly if these underlying factors cast the mayor in a less than flattering light. We are left to relying on Wayne Barrett for all of our unbiased reportage; and, as a result, the public-bombarded by Bloomberg's own paid messages-is shortchanged.

Small Busness and Bloomberg's Five Borough Plan

We have previously posted on the incremental progress encompassed in the city council's effort-along with the mayor's-to try to improve the business climate for the city's smallest entrepreneurs. A more robust response is needed, however, since the current economic crisis can't be solved by any incremental band aid approach. In addition, a greater recognition is also necessary concerning how municipal policy itself contributes to the retail crisis.

The salience of this observation was brought home last week at a City Hall press conference headed by the intrepid Council member Tony Avella: "Extortion is taking a heavy toll on businesses throughout the city as under-the-table fees spread unchecked, according to a report by the U.S.A. Latin Chamber of Commerce.Responding to the corruption, Mayoral Candidate Tony Avella joined nearly 70 business owners and advocates at city hall on Wednesday, calling for a federal investigation."

What the press conference underscored, was that Mom and Pop retailers are being victimized at every turn-whether it's unscrupulous landlords, or simply the high tax environment that sends so much business elsewhere. Which is, of course, one of the reasons why local supermarkets are disappearing before our very eyes-the subject of a City Council hearing tomorrow.

In the view of the city planners, however, it is the lack of selection-or simply the lack of sufficient number of markets-that is causing consumers to shop elsewhere. As the DCP report on the supermarket gap pointed out: "There is enormous capacity for new supermarkets throughout the city. NYC has the potential to capture approximately $1 billion in lost grocery sales to suburbs. The loss in sales is enough to support more than 100 new neighborhood grocery stores and supermarkets.”

This observation highlights the confusion so often made between causation and correlation. Many folks do leave the city to shop; and it is our belief, bolstered by considerable data, that they will continue to do so even if the city is able to subsidize some new supermarket development. The fact is that the city's strapped consumers are being forced out to less tax happy environs.

This was recognized by Rudy Giuliani when he first pioneered the elimination of the clothing sales tax for purchases under $110: "The overwhelming successes of these tax free weeks obviously sent a message to Albany that did not go unheeded," said Mayor Giuliani. "The removal of this regressive tax on items costing less than $110 will save New York City families hundreds of dollars each year, add approximately 13,200 jobs and boost the City's economy by $910 million. I commend Governor Pataki and the State Legislature for passing this important legislation."

And Giuliani went on to point out: "It will also do much to recover the $700 million per year New York City merchants lose to New Jersey because of this tax," the Mayor continues. "Working families with lower incomes that typically spend a large portion of their income - as much as 12 percent - on clothing and footwear will especially benefit from the removal of this burdensome tax."

High taxes=lost business; it's just that simple. And with another sales tax hike on the way-if the state senate can ever get its act together-more consumer emigration will certainly follow. Which means to us, that building new box stores and suburban style supermarkets will do less to staunch the efflux of city shoppers than it will cannibalize sales from NYC's neighborhood shopping strips.

Which brings us back to the Bloomberg recycled five borough economic plan. It is simply a distraction from the fact that Mike Bloomberg, in his eight years governing this city has raised taxes across the board and increased regulations, all the while he was simultaneously growing the municipal work force and the size of government along with it.

It is amazing, given the mayor's record, that any one with a feel for the full spectrum of city business could tout the mayor's fiscal acumen as a rationale for a usurped third term in office. The city's economic troubles have been exacerbated by anti-business public policies engineered by a billionaire mayor who lacks the policy sophistication to properly address the roots of the current crisis. It is a triumph of public relations that will, retrospectively, expose the city's voters for the rubes they are if the mayor is able to garner his well purchased third term.