Thursday, December 09, 2010

Bloomberg Touts Economic Revival Plan, Small Business Calls for a Saliva Test

As Crain's is reporting, Mike Bloomberg-with his sights set on making a national name for himself in the run up to the 2012 election-is touting NYC's economic development policies as a recipe for the nation: "In a lengthy speech in front of business leaders Wednesday morning, Mayor Michael Bloomberg called on elected officials in Washington to stop “finger pointing, blame games and endless attacks” and to instead adopt some of the strategies he contends have helped fuel New York City's economic rebound."

This is, in our view, a lot to swallow. In the first place, NYC's economy is in some ways sui generis-and there should be at least some analysis as to the impact that the federal bank bailout had on the city's more robust rebound. In addition, we have seen a decent Wall Street recovery that has produced jobs locally but has done little nationally to mitigate the mostly jobless economic upturn over the past year.

In this context, there is a good argument that can be made that NYC's economic recovery-as it is-has occurred in spite of, and not because of, the policies touted by the mayor. But one thing is certain, the city's small business sector has yet to recover-and has actually been devastated by Bloomberg economic development policies-as we have shown here and here.

In fact, Bloomberg's touting his own horn has as much substance and reliability as those tout sheets at the race track. The reality that the mayor elides-and one that is underscored by Ray Keating's Small Business Survival Index-is that New York (the state that is) ranks 49th out of 50th as a place that it is good to do business in. And, as bad as NY State is, NYC is even worse.

As the Index points out: "The ‘Small Business Survival Index’ gets at the public policy costs and trends that affect – directly or indirectly – entrepreneurship and small businesses. These measures should matter to everyone because small businesses, of course, drive innovation, economic growth and job creation. If we want to get our economy back on a solid, robust growth track, then we need pro-entrepreneurpolicies at the federal, state and local levels.”

And its focus is on government policies that restrain entrepreneurship. As the report emphasizes: "For good measure, a massive expansion in federal spending and unprecedented government interference and micromanaging in the marketplace were billed as saving or stimulating our economy. However, these measures have only created more uncertainty, diverted resources away from the private sector, and raised the threat of still higher taxes down the road. Similar decisions at the state and local levels of government to raise taxes, increase regulation and expand the size and reach of government only add to the nation’s overall economic woes."

Bloomberg, however, operates in a somewhat alternative universe-as Crain's points out: "The mayor called for “common-sense solutions that are straightforward and relatively cost free” and said that creating conditions for innovation would be key the nation's comeback. “Government is not an innocent bystander in the marketplace, and it should not pretend to be,” he said. “In the face of the current economic weakness, government must act: decisively, responsibly and immediately.” Mr. Bloomberg presented six ways to tackle unemployment and spur job creation. He called for building confidence, promoting trade, improving regulation, cutting business taxes, investing in job training and reforming immigration laws."

Nothing we can see here on the size and scope of government-and the regulatory demiurge that devolves from it. That, as the Marxists say, is no accident. Because, as we have demonstrated, the mayor has been in many ways the reincarnation of John Lindsay-increasing both the size of government with all of its attendant pension costs; as well as rising taxes and fees to cover the expansion. Some role model.

In his speech, the mayor calls for some mythical middle ground: "He said his administration's job-creation strategies have led New York City to recover from the downturn more quickly than the state and nation. And he insisted government must chart a “middle way” to economic growth that can be embraced across the political spectrum." But he did little to soberly evaluate where the supposed two extremes lie in this calculus-and how his own approach would, not only be successful, but politically palatable as well.

In fact, what he did offer borders on caricature-as the NY Times reports: "He emphasized a set of relatively inexpensive solutions for the nation’s economic problems, dismissing what he described as the flawed, overly simplified dogmas of the left and the right. “Despite what ideologues on the left believe,” Mr. Bloomberg said, “government cannot tax and spend its way back to prosperity, especially when that spending is driven by pork barrel politics. Despite what ideologues on the right believe, government should not stand aside and wait for the business cycle to run its natural course. That would be intolerable.”

This-much like the mayor himself-is divorced from our current political reality. The counter-revolution that has motivated the defeat of the Democrats in the past election cycle was a backlash against the, "tax and spend" policies that sought to use government to reverse the economic downturn.

Unlike what the mayor's cute little rhetorical pas de du tries to imply, the conservative reaction isn't any dogmatic theory operating in a vacuum-and Bloomberg's efforts here are reminiscent of the president's disingenuous use of straw men. And for someone who has dramatically expanded the size of government on the backs of tax payers and businesses, it is also a patently dishonest attempt to place himself in the middle when he actually bats comfortably from the left side of the plate.

In addition, if small business is the backbone of the economy-and the foundation of the country's economic growth as well-than Mike Bloomberg is no exemplar that can used as a national role model. Put simply, he has jackbooted the city's small business sector and, as a result, it is on life supports-with store vacancies, bankruptcies and foreclosures at a record high. Go to any of the city's commercial shopping areas and you will discover what Congressman Anthony Weiner found out-vacant stores (Austin Street in Forest Hills has 11 storefronts shuttered according to CM Koslowitz who chairs the council's Economic Development Committee)

In the midst of all this misery, Middle Way Mike, is Scarlett Lettering local restaurants, menu labeling the city's fast food joints, and posterizing the city's bodegas with grotesque anti-tobacco signs-after raising the cigarette tax (a business tax when we last looked) by a historic record 1800%! His Department of Consumer Affairs boasts about its record fine collections, while the NYC DEP jacks up water rates-fees that hurt both residents and businesses.

Bloomberg's economic development and fiscal policies aren't middle way, they are middle finger-especially to the immigrant entrepreneurs that he is constantly putting at risk while touting all of the wonders of more open borders. Apparently, Bloomberg's love for immigrants isn't all inclusive-and may not extend beyond lawn mowing and chauffeuring. He had the immigrant wholesalers in the Bronx Terminal Market evicted, is looking to eject the immigrant workers over at Willets Point, and plunked a huge retail mall down into the middle of immigrant entrepreneur rich Flushing-all in the name of mega development that aggrandizes some of his rich real estate friends.

If, as the mayor said in his speech, "The city’s economy has grown twice as fast as the country’s and eight times as fast as the rest of New York," then this is a tale of two cities that offers little to guide the rest of the country. And if the growth of government is a persistent drag on entrepreneurial activity and innovation-as Ray Keating posits-than Mike Bloomberg is strictly a, do as I say, not as I do, role model.

But, as we have said, "Run Mike run!" We encourage Mike to spend all of his money on this quixotic national adventure-and should he really become serious, all that we ask is that he step down from his mayoral perch and go for it. It would make for some serious high comedy that would be great entertainment for all of us who have failed to be enamored by the mayor's greatness.