Monday, December 14, 2009

Effecting Political Change in New York

We have commented on the nascent effort to challenge the growing political power of the Working Families Party-and observed that any such effort needs to transcend a real estate and landlord paternity. But there's another necessary ingredient to this challenge-and to really being able to alter the political landscape in the state.

That ingredient is an accurate diagnosis of what it is that actually ails New York's body politics; because the diagnosis is the key to devising the curative strategy. Ray Keating's article in the NY Post last week, gives us a solid start in the right direction. Keating dramatizes the state's abysmal economic climate, and by doing so underscores where a movement for change needs to start.

Keating begins with this sober analysis: "It's no secret what drives innovation, economic growth and job creation forward: It's entrepreneurs and investors taking risks and starting up, investing in and building businesses. New York policymakers often talk a good game about all this -- but over the years they've worked hard to make the state one of the most inhospitable places in the nation to invest and do business. Just consider what state lawmakers did this year. Facing huge budget deficits and a grim economy, they recklessly jacked up government spending and imposed big tax hikes -- including higher tax rates on upper-income individuals who tend to be business owners and investors and a new payroll tax on businesses to feed the MTA."

This inhospitable climate for business has a ripple effect throughout the state-and really makes it difficult for New York's real working families constituency to have the quality of life that they deserve-because the funds needed to feed Leviathan don't all come from the wealthy, not by any means: "The state, for example, imposes the sixth-highest personal-income-tax rate, the fifth-highest individual capital-gains-tax rate, the seventh-highest property-tax burden, the second-highest gas tax and the fourth-highest diesel tax. New York's corporate-income and capital-gains taxes are also weighty, as are its consumption-based taxes."

So every one must pony up-and the cost of living and the cost of doing business are inextricably linked to the political culture in the state that has nurtured the growing government apparatus. The result has been dramatic-with tens of thousands of middle income and high wage earners voting with their feet. But this is the culture that the WFP nurtures and extols in its permanent class warfare.

However, in order to change the political dynamic that allows the WFP to wag the Democratic dog and snare an out sized political role, change must be generated-not from an elite top down base-but from the bottom up. REBNY, meet Saul Alinsky.

As we have pointed out before: "There is a groundswell of opposition to WFP policies that is ready to be mobilized. By it needs to get out of the suites and into the streets. The power of the Tea Party movement has devolved from its anti-elitism and genuine grass roots base. It is this vein that needs to be tapped-one that is genuinely populist and small business oriented as well."

And the real estate folks will find some political common ground-along with a degree of ideological compatibility-in this kind of grass roots movement. Compatibility doesn't mean lock step though. There is a deep suspicion of elites that will animate this kind of effort, but if some of the elites who are most dissatisfied with the status quo see the wisdom of allying with the folks, than they will see some real changes that will also accrue to their own benefit. Their real challenge will be letting go; and ceding control to more populist elements.

The rewards, however, can be substantial-as Keating's litany of costly government mandates makes clear: "Entrepreneurs face especially high costs in New York City and its surrounding suburbs. The city piles on with added personal-income, corporate-income, unincorporated-income and capital-gains taxes, for example. And Nassau, Suffolk and Westchester counties impose some of the highest property-tax burdens in the nation. Add all of this up, and New York's policies scream at entrepreneurs and investors to build businesses and create jobs somewhere else -- almost anywhere else."

And what's the result of these policies? The exodus that we alluded to: "As it turns out, New York's biggest export in recent decades has been people. In terms of net domestic migration (that is, movement of people between the states, excluding births, deaths and international migration), from 2000 to 2008, New York ranked as the nation's top exporter of people, registering a loss of 1.6 million. People both follow and create economic opportunity. It should be no surprise, given New York's dismal business climate, that so many are seeking and creating opportunities elsewhere."

So, in order to challenge the WFP, any change agent needs to develop a competing narrative that deconstructs the big government, high tax mantra that animates the WFP and its labor allies. But importantly, the narrative needs a political base in order to be effectively activated. If this happens, change is definitely possible.

We'll give Keating the last word on this possibility: "But this "climate" is not beyond human control -- it's created by bad decisions made by elected officials. And if they won't change their ways, the public can change them."