Friday, December 10, 2010

Mike's "Miracles"

We have been railing against Mayor Bloomberg's latest foray into myth making-this time trying to convince a national audience that his economic acumen has led NYC to recover at a better rate than the country's overall economy. As we commented, Greg David threw a splash of cold water on this exercise in hyperbole, and now the mayor's biographer, Joyce Purnick, adds her two cents: "And in New York because it is the home of Wall Street, larger factors are always at work. Though Bloomberg did not mention it in his speech, after the recession flattened the financial industry, federal stimulus programs restored Wall Street, expanding badly needed city tax revenues. And actions of the Federal Reserve to keep the dollar low have flooded the city with tourists and foreign investment."

So why is it surprising that, in the middle of attacking the dysfunction of Washington, the mayor failed to mention the fact that it was the federal government's actions that have more or less insulted the city from the worst impacts of the Great Recession? It's no surprise to us-we have seen the mayor do this kind of Lilly gilding before. After all, he spent the better part of two years before the last election trumpeting his educational miracle-one that was built on a fraudulent test score house of cards.

But what really galls us-and we have said this time and again-is that Bloomberg's crowing is a dishonest portrayal of how badly NYC's economy is doing if we remove Wall Street from the equation. And in trumpeting his middle way, the mayor intentionally obscures how his own big government high tax policies have crippled small businesses here-the supposed backbone of any economy.

As the NY Post editorializes this morning-reacting to the mayor's wandering-"Meanwhile, New York City is facing billions in red ink, planning big layoffs of teachers and other employees, negotiating critical union contracts and installing new leadership in the schools. Isn't that enough for Mike to worry about? We'd certainly say so."

But the Post, while chiding Bloomberg, is really pulling its punches. The mayor has spent and expanded in ways that have crippled the city's ability to encourage entrepreneurism. On the same editorial page, Ray Keating makes the point-calling NY State and NJ an anti-biz zone:

"New York and New Jersey are the worst states in America for starting up, building or running a business -- with the Garden State ekeing out a "victory" as No. 50. That grim news comes from the just-published "Small Business Survival Index 2010: Ranking the Policy Environment for Entrepreneurship Across the Nation," this year's version of an annual report I compile for the Small Business & Entrepreneurship Council. The Index ranks the states according to 38 government-imposed or government-related costs that impact entrepreneurship, investment and the economy. (We also rank the District of Columbia, which does worse overall than any of the states, but it's a special case.) The measures generally cover three major areas -- taxes, regulations and government spending. Alas, New York and New Jersey "excel" on just about every front..."

Everything Keating says about the state, applies to the city in spades: "They suffer from burdensome taxes across the board, including high personal income, individual capital gains, corporate income, corporate capital gains and property -- plus taxes on fuel and on inheritances. Along with those taxes, of course, go high levels of state and local government spending, and large numbers of state and local government employees."

Mike Bloomberg didn't create this harsh economic climate, but while he inherited all of its bad features, he did nothing in the past 9 years to remedy them-and the resulting epidemic of neighborhood store closings is strong evidence of his failure. His street level inspection army is, as we speak, out in force in the neighborhood restaurants, bodegas, supermarkets and nail salons-looking for the most minute infractions of the city code in order to buttress Mayor Mike's bloated, red ink bleeding, budget.

So the 8 by 10 glossies that he's presenting-in Potemkin Village-like fashion-to a gullible national audience obscure the harsher realities of his failure to boldly tackle the problems that NJ Governor Christie and NY Governor-Elect Cuomo have pledged to try to remedy. He didn't do so, because at heart he is a progressive of the old school that sees the expanding government as a positive force-and his tax increases to fuel that expansion have crippled the neighborhood shops that are now dropping like flies.

Even the so-called wonders of the mayor's educational reform-incremental betterment at best-have been built on the doubling of the DOE budget along with a huge increase in educators and their massive pension requirements. Who do you think is paying for this?-and has there ever been any cost benefit analysis of the gains?

In the context of the shortcomings of the mayor's fiscal policies, comes the way in which his economic development policies have exacerbated the problems for the city's economy. While championing climate change, the mayor has been busy building auto-dependent malls all over the city-with the concomitant box stores that drain the dollars from the neighborhood shopping strips and their independent Mom and Pop stores. The store vacancies in the neighborhood-and the loss of jobs and entrepreneurs there-is a direct result of the mayor's misguided, "five borough," economic strategy.

Into this equation, comes the news that Wal-Mart wants in here. And right on cue, with hammer and nail in hand, Mike Bloomberg rises as the champion of the rich and famous-at the further expense of the little small business engines that could, if they were allowed. WCBS radio has the story: "Unions, smaller retailers and some community groups are dead set against Wal-Marts opening within the five boroughs, but Mayor Bloomberg said the City will not stand in the way.“If you would do surveys in, for example, southeast Queens, people are going to Nassau County to shop at Wal-Mart. “If you do surveys in Lower Manhattan, they’re driving over to New Jersey,” Bloomberg said."

So busy is the mayor using those nails to hammer the small business coffin, that he misses the irony of his remarks. Yes, Mike, people are leaving to shop because you have made it expensive to do business here. And if he believes that building more box stores like Wal-Mart in town will stem the exodus, he simply has no idea what he's talking about. The box stores will continue to cannibalize the neighborhood stores, while the same complement of shoppers will leave for all of the reasons they are leaving today-lower taxes in New Jersey, and better ambiance and lower prices on Long Island where the cost if real estate is so much lower,

This is all part of what we call, "The Myth of Mike." Educational miracles and miraculous economic achievement are trumpeted like the old Soviet Five year plans-with as much factual base. The reality is so much harsher, and behind the glossy pictures are day old card board cut outs-grim reminders that the mayor's economic vision is astigmatic.