Monday, March 17, 2008

What Governor Paterson Faces in New York

It is breath-taking to consider how different New York looks this morning compared to only a week ago. Back then, Eliot Spitzer was seemingly ensconced in the governorship and Bear Stearns was a financial house valued by the market at something on the order of $30 billion...[Today the whole company was sold for 10% of its value of last Friday]. Seven years ago our city was attacked by a barbaric enemy, who came down out of the skies and killed thousands, destroying in the process the buildings that symbolized our commercial and trading spirit...But within only a few years, our city has rebuilt if not ground zero then the physical space needed to conduct our commerce, all in one of the greatest building booms and surges of optimism in history....The New York Sun, 3/17/2008.

If you've followed the story closely, as many New Yorkers have, it's more breathtaking than the editors at the Sun have written in today's lead editorial. Despite this brilliant recovery, New York State is dominated by tax and spend liberals in both parties. With tax receipts plummeting with the crisis in financial services, budget deficits are climbing rapidly in Albany and threatened in New York despite Mayor Bloomberg's best efforts. In the Democrat Assembly and the Republican Senate, politicians are falling over themselves to spend more money that we don't have, holding out the promise of taxes, more taxes on a state already taxed more heavily than any other, including California.

What's worse, many giant projects felt necessary by state and regional authorities have become financial disasters. The transportation center near ground zero is a total flop. While the MTA has rebuilt the basic elements of the network that crisscrossed downtown Manhattan, including the lines that went directly under the World Trade Center, the "center" is an empty lot. The Second Avenue Subway, a project already three years and several billion dollars late, won't open until 2012. The Ratner socialism-for-the-rich Atlantic Yards project, which depends heavily on eminent domain and the destruction of several neighborhoods, can't find private financing.

And yet, despite regulatory and tax conditions that would drive most entrepreneurs out of state, as so many have left upstate and western New York in the last two decades, vast numbers of new small businesses have swum against the flood of regulations, bureaucratic entanglements, and monsterous tax rates to build new, stable neighborhoods across the city. Politicians and political investment have done none of this. They have only stood in the way, hands out for more tax money.

It was a surge in which Bear Stearns was an important part, both in terms of its business, which surged until the latest downturn, and in terms of philanthropy, where managing directors were expected to give at least 4% of their annual compensation to charity... Bear aficionados searching for epitaphs may find themselves flipping through Alan C. Greenberg's book, "Memos From the Chairman," which includes one prescient note dated March 13, 1979: "It certainly looks like we have a dynamic future in store as long as we remember the words of the famous philosopher Haimchinkel Malintz Anaynikal: 'thou will do well in commerce as long as thou does not believe thine own odor is perfume.'"...(After the Bear, cont'd)

Greenberg's conception never bothered private citizen Spitzer, Governor Paterson's predecessor. His preposterous hypocrisy, while not quite rivaling Caligula, is, sadly, representative of a whole political class in New York State, a class that has, with rare exceptions, like Mayor Bloomberg, stood fast on the principle that nothing so serves their constituents as taking money and property from everybody else, a time-honored tradition going back to Roscoe Conkling. Private citizen Spitzer crossed the line, but there are many just on the other side.

And one should not imagine that the failure of one private company, and the tottering of another (Citigroup), is proof that the thieves in Albany were right. These disasters are instead a disturbing, real demonstration of the foolishness of the politically driven business model in New York: nothing is so good as the financial services industry; nothing else is worth giving tax incentives to. Fact is, banks and brokerages are the foundation of the New York State. The political judgment that promoted this result bears unpleasant comparison to farmers who plant one crop year after year. When that crop fails, there's nothing left. This is already close to the case in western New York, where you can drive for a hundred miles in some directions and find only ghost towns.

There will be much backward looking, as there was after September 11, 2001, at how the collapses we've just seen could have happened. Our own instinct, in the case of Bear Stearns, is to look to whether it is possible to transmit true price signals with an unsound currency. But this is a time to remember that the resilience that is the hallmark of New York and to work at fashioning the right policy prescriptions in the months and years ahead...(After the Bear, NY Sun, cont'd)

A creative political administration in Albany is the one that will find some way to attract a more complex business mix to the state. This will involve tax policy, development ideas, and negotiations with major unions. It will involve, as the new Governor of New York said in his inaugural address, "taking actions that we are not used to taking."

A new administration is being assembled in Albany, and before long another will be assembled in Washington. Both of them will be all too tempted to tax the most producing capital and other gains. There is growing talk among the Democrats of protectionism. It is a good moment to study how the Great Depression came upon us. What is needed now is a renewed commitment to protecting the ability of and, importantly, the incentives for people to take risks, to make investments, to create jobs, and to make profits. Many governors and financial houses have come and gone, but those principles have produced the resilience that has made New York so great. (After the Bear, Editorial NY Sun, 3/17/08, cont'd)

The ideas prominently expressed in The New York Sun are not often taken seriously in New York City, the home, after all, of left-liberal journalism from television networks to The Times. But one hopes that Governor Paterson of New York does. He shows more signs of doing so than the sanctimonious liar who preceded him, and it's a good thing. A lot more than the future of one former star from Yale is at stake. The future of New York State stands on the brink. The new Governor of New York knows that. The time is fast coming for action. May God bless Governor Paterson's search for answers with good sense and a willingness to deal with what is, and not with what seems to be.


1 comment:

Anonymous said...

Don’t believe one optimistic word from any public figure about the economy or humanity in general. They are all part of the problem. Its like a game of Monopoly. In America, the richest 1% now hold 1/2 OF ALL UNITED STATES WEALTH. Unlike ‘lesser’ estimates, this includes all stocks, bonds, cash, and material assets held by America’s richest 1%. Even that filthy pig Oprah acknowledged that it was at about 50% in 2006. Naturally, she put her own ‘humanitarian’ spin on it. Calling attention to her own ‘good will’. WHAT A DISGUSTING HYPOCRITE SLOB. THE RICHEST 1% HAVE LITERALLY MADE WORLD PROSPERITY ABSOLUTELY IMPOSSIBLE. Don’t fall for any of their ‘humanitarian’ CRAP. ITS A SHAM. THESE PEOPLE ARE CAUSING THE SAME PROBLEMS THEY PRETEND TO CARE ABOUT. Ask any professor of economics. Money does not grow on trees. The government can’t just print up more on a whim. At any given time, there is a relative limit to the wealth within ANY economy of ANY size. So when too much wealth accumulates at the top, the middle class slip further into debt and the lower class further into poverty. A similar rule applies worldwide. The world’s richest 1% now own over 40% of ALL WORLD WEALTH. This is EVEN AFTER you account for all of this ‘good will’ ‘humanitarian’ BS from celebrities and executives. ITS A SHAM. As they get richer and richer, less wealth is left circulating beneath them. This is the single greatest underlying cause for the current US recession. The middle class can no longer afford to sustain their share of the economy. Their wealth has been gradually transfered to the richest 1%. One way or another, we suffer because of their incredible greed. We are talking about TRILLIONS of dollars which have been transfered FROM US TO THEM. All over a period of about 27 years. Thats Reaganomics for you. The wealth does not ‘trickle down’ as we were told it would. It just accumulates at the top. Shrinking the middle class and expanding the lower class. Causing a domino effect of socio-economic problems. But the rich will never stop. They just keep getting richer. Leaving even less of the pie for the other 99% of us to share. At the same time, they throw back a few tax deductible crumbs and call themselves ‘humanitarians’. Cashing in on the PR and getting even richer the following year. IT CAN’T WORK THIS WAY. Their bogus efforts to make the world a better place can not possibly succeed. Any 'humanitarian' progress made in one area will be lost in another. EVERY SINGLE TIME. IT ABSOLUTELY CAN NOT WORK THIS WAY. This is going to end just like a game of Monopoly. The current US recession will drag on for years and lead into the worst US depression of all time. The richest 1% will live like royalty while the rest of us fight over jobs, food, and gasoline. So don’t fall for any of this PR CRAP from Hollywood, Pro Sports, and Wall Street PIGS. ITS A SHAM. Remember: They are filthy rich EVEN AFTER their tax deductible contributions. Greedy pigs. Now, we are headed for the worst economic and cultural crisis of all time. Crime, poverty, and suicide will skyrocket. SEND A “THANK YOU” NOTE TO YOUR FAVORITE MILLIONAIRE. ITS THEIR FAULT. I’m not discounting other factors like China, sub-prime, or gas prices. But all of those factors combined still pale in comparison to that HUGE transfer of wealth to the rich. Anyway, those other factors are all related and further aggrivated because of GREED. If it weren’t for the OBSCENE distribution of wealth within our country, there never would have been such a market for sub-prime to begin with. Which by the way, was another trick whipped up by greedy bankers and executives. IT MAKES THEM RICHER. The credit industry has been ENDORSED by people like Oprah Winfrey, Ellen DeGenerous, Dr Phil, and many other celebrities. IT MAKES THEM RICHER. Now, there are commercial ties between nearly every industry and every public figure. IT MAKES THEM RICHER. So don’t fall for their ‘good will’ BS. ITS A LIE. If you fall for it, then you’re a fool. If you see any real difference between the moral character of a celebrity, politician, attorney, or executive, then you’re a fool. No offense fellow citizens. But we have been mislead by nearly every public figure. WAKE UP PEOPLE. THEIR GOAL IS TO WIN THE GAME. The 1% club will always say or do whatever it takes to get as rich as possible. Without the slightest regard for anything or anyone but themselves. Reaganomics. Their idea. Loans from China. Their idea. NAFTA. Their idea. Outsourcing. Their idea. Sub-prime. Their idea. High energy prices. Their idea. Obscene health care charges. Their idea. The commercial lobbyist. Their idea. The multi-million dollar lawsuit. Their idea. The multi-million dollar endorsement deal. Their idea. $200 cell phone bills. Their idea. $200 basketball shoes. Their idea. $30 late fees. Their idea. $30 NSF fees. Their idea. $20 DVDs. Their idea. Subliminal advertising. Their idea. Brainwash plots on TV. Their idea. Vioxx, and Celebrex. Their idea. The MASSIVE campaign to turn every American into a brainwashed, credit card, pharmaceutical, love-sick, celebrity junkie. Their idea. All of the above shrink the middle class, concentrate the world’s wealth and resources, create a dominoe effect of socio-economic problems, and wreak havok on society. All of which have been CREATED AND ENDORSED by celebrities, athletes, executives, entrepreneurs, attorneys, and politicians. IT MAKES THEM RICHER. So don’t fall for any of their ‘good will’ ‘humanitarian’ BS. ITS A SHAM. NOTHING BUT TAX DEDUCTIBLE PR CRAP. In many cases, the 'charitable' contribution is almost entirely offset. Not to mention the opportunity to plug their name, image, product, and 'good will' all at once. IT MAKES THEM RICHER. These filthy pigs even have the nerve to throw a fit and spin up a misleading defense with regard to 'federal tax revenue'. ITS A SHAM. THEY SCREWED UP THE EQUATION TO BEGIN WITH. If the middle and lower classes had a greater share of the pie, they could easily cover a greater share of the federal tax revenue. They are held down in many ways because of greed. Wages remain stagnant for millions because the executives, celebrities, athletes, attorneys, and entrepreneurs, are paid millions. They over-sell, over-charge, under-pay, outsource, cut jobs, and benefits to increase their bottom line. As their profits rise, so do the stock values. Which are owned primarily by the richest 5%. As more United States wealth rises to the top, the middle and lower classes inevitably suffer. This reduces the potential tax reveue drawn from those brackets. At the same time, it wreaks havok on middle and lower class communities and increases the need for financial aid. Not to mention the spike in crime because of it. There is a dominoe effect to consider. IT CAN'T WORK THIS WAY. But our leaders refuse to acknowledge this. Instead they come up with one trick after another to milk the system and screw the majority. These decisions are heavily influensed by the 1% club. Every year, billions of federal tax dollars are diverted behind the scenes back to the rich and their respective industries. Loans from China have been necessary to compensate in part, for the red ink and multi-trillion dollar transfer of wealth to the rich. At the same time, the feds have been pushing more financial burden onto the states who push them lower onto the cities. Again, the hardship is felt more by the majority and less by the 1% club. The rich prefer to live in exclusive areas or upper class communities. They get the best of everything. Reliable city services, new schools, freshly paved roads, upscale parks, ect. The middle and lower class communities get little or nothing without a local tax increase. Which, they usually can't afford. So the red ink flows followed by service cuts and lay-offs. All because of the OBSCENE distribution of bottom line wealth in this country. So when people forgive the rich for their incredible greed and then praise them for paying a greater share of the FEDERAL income taxes, its like nails on a chalk board. I can not accept any theory that our economy would suffer in any way with a more reasonable distribution of wealth. Afterall, it was more reasonable 30 years ago. Before Reaganomics came along. Before GREED became such an epidemic. Before we had an army of over-paid executives, bankers, celebrities, athletes, attorneys, investors, entrepreneurs, developers, and sold-out politicians to kiss their asses. As a nation, we were in much better shape. Strong middle class, free and clear assets, lower crime rate, more widespread prosperity, stable job market, lower deficit, ect. Our economy as a whole was much more stable and prosperous for the majority. WITHOUT LOANS FROM CHINA. Now, we have a more obscene distribution of bottom line wealth than ever before. We have a sold-out government, crumbling infrastructure, energy crisis, home forclosure epidemic, 13 figure national deficit, and 12 figure annual shortfall. The cost of living is higher than ever before. Most people can't even afford basic health care. ALL BECAUSE OF GREED. I really don't blame the 2nd -5th percentiles in general. No economy could ever function without some reasonable scale of personal wealth and income. But it can't be allowed to run wild like a mad dog. ALBERT EINSTEIN TRIED TO MAKE PEOPLE UNDERSTAND. UNBRIDLED CAPITALISM ABSOLUTELY CAN NOT WORK. TOP HEAVY ECONOMIES ALWAYS COLLAPSE. Bottom line: The richest 1% will soon tank the largest economy in the world. It will be like nothing we’ve ever seen before. The American dream will be shattered. and thats just the beginning. Greed will eventually tank every major economy in the world. Causing millions to suffer and die. Oprah, Angelina, Brad, Bono, and Bill are not part of the solution. They are part of the problem. THERE IS NO SUCH THING AS A MULTI-MILLIONAIRE HUMANITARIAN. EXTREME WEALTH MAKES WORLD PROSPERITY ABSOLUTELY IMPOSSIBLE. WITHOUT WORLD PROSPERITY, THERE WILL NEVER BE WORLD PEACE OR ANYTHING EVEN CLOSE. GREED KILLS. IT WILL BE OUR DOWNFALL. Of course, the rich will throw a fit and call me a madman.. Of course, they will jump to small minded conclusions about 'jealousy', 'envy', or 'socialism'. Of course, their ignorant fans will do the same. You have to expect that. But I speak the truth. If you don’t believe me, then copy this entry and run it by any professor of economics or socio-economics. Then tell a friend. Call the local radio station. Re-post this entry or put it in your own words. Be one of the first to predict the worst economic and cultural crisis of all time and explain its cause. WE ARE IN BIG TROUBLE.