The NYC mayoral race: how about "None of the above"?
- "He created jobs in all five boroughs."
- Getting two property tax rebates passed.
Did Bloomberg's policies encourage the creation of jobs? This applet at the Bureau of Labor Statistics website can detail New York City's unemployment rate: it was 7.6% in January 2002 (when Bloomberg entered office), peaked at 8.6% in early 2003, and didn't fall below 8% until January 2004. There has been an overall drop in the city's unemployment rate during Bloomberg's first term, and it's true he inherited a struggling economy like Bush did, but the difference ends there. Bush fought for tax cuts that have spurred the U.S. economy into sustained expansion. Bloomberg's initial tax-hike policies actually worsened New York's post-9/11 economic woes. The city's employment eventually improved from natural economic recovery and a partial reversal of the tax increases. Does a doctor brag about saving a limb that he had accidentally amputated in the first place?
Raising various taxes was Bloomberg's solution to the gigantic budget deficits he faced as soon as he was inaugurated, and it's been said that he raised taxes more than any other New York City mayor. A November 2002 Wall Street Journal op-ed (reproduced here at the Manhattan Institute) warned about what he was doing. It noted that David Dinkins' tax increases destroyed 300,000 jobs, while Rudy Giuliani achieved economic growth by refusing to raise taxes, "relentlessly cut[ting] costs," and trimming the city work force while squeezing every last drop of productivity from the rest. But Bloomberg refused to make the necessary cuts in city employment: "The truth, he will find, is that his refusal to lay off 20,000 from the public sector will cause 200,000 private-sector layoffs."
Whatever happened to the Mike Bloomberg that said in March 2002, helping Gov. Pataki's campaign, "We are so highly taxed already that if you raise taxes, you will drive jobs and people out of this city and the total tax revenues will probably decline. ... Doesn't anybody read history?"
On November 11, 2003, the New York Daily News observed that "New Yorkers pay the highest taxes in the nation - by far. On average, New York state residents pay $141 in state and local taxes for every $1,000 they earn, the most anywhere. The main culprits are local income taxes that are a whopping 72% above the national average." The burden also hit businesses. Those fortunate enough not to close permanently were still shaky from 2001's terrorist attacks and recession, and many elected to leave the city rather than pay higher taxes. These were primarily smaller and mid-size businesses, not big firms that were established in Manhattan to the point of being iconic.
The surge in property taxes certainly didn't help, driving more residents out of the city (especially up here to Westchester). In November 2002, New York City faced a projected $6 billion budget deficit for the July 2003-July 2004 fiscal year. Bloomberg and the City Council hammered out a deal: an 18.5% hike in the city's property tax rate with about $800 million in spending cuts. The compromise was that Bloomberg would not cut $50 million in "services" spending that the Council wanted to maintain. This brings us to the third claim I cited: how can Bloomberg dare to take credit for two property tax "rebates" (a mere $400 each, the first of which went out last September), when only a couple of years before he was a major party in raising property taxes?
Incredibly, Bloomberg had been seeking a 25% increase in the property tax rate, with $844 million in spending cuts. Yet he insisted there was no government waste. The Daily News quoted him: "I find it offensive, those that say, 'Oh, there's a lot of waste.' There isn't. I don't know of any programs where some people don't benefit." Of course someone will benefit from any government spending, even if it's completely wasteful like trying to grow fruit and berries in rural Alaskan villages. Clearly Bloomberg does not understand that it's "waste" even when someone gains, because everyone else is economically injured more than the benefits.
The New York Metro had a favorable article defending Bloomberg's various decisions. One big contention between Bloomberg and Albany is Medicare. Bloomberg has wanted to shift part of the city's Medicare costs to the state, claiming that NYC sends $11 billion more to the state treasury than it receives in state spending. Well, it's certainly unjust for New Yorkers to pay a higher share of state taxes just because they tend to have higher incomes. That last link (to the Gotham Gazette) talks about New York City "saving $425 million" in the next fiscal year, but forgetting that the state will lose $425 million. Remember another thing Bastiat said: "The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else."
Let's be honest and objective. Except for reversing tax increases that he initiated, Bloomberg's policies have had minimal effect on New York City's economic growth since he took office. The city recovered naturally along with the rest of the U.S., though it lagged behind the nation in things like unemployment. (That's not really too surprising, since the tax hikes made some people too expensive to employ. What a concept!) And Bloomberg got lucky with this year's tax revenues, which were not from tax increases, but increased tax revenues, mostly from the generally stronger performance of Wall Street firms. Their tax payments account for about one-third of the city's tax revenues.
Bloomberg's chances for re-election look very good: his approval ratings have been above 60% for the last while, and his Democratic opponents are too busy squabbling among each other. Virginia Fields destroyed her already slim chances with a scandal this July involving a doctored campaign photo (never publicly released, but leaked). It showed Fields at a rally, surrounded by people of various ethnicities; attempting to increase her appeal to all ethinic groups, someone put two Asians' faces over the faces of a Caucasian-looking man and woman. None of the four had any knowledge of the alteration, let alone gave consent. Then there was a twist: the "re-faced" man is a Latino, and an aide to Congressman Charlie Rangel -- who has endorsed Fields. The New York Post reported that "Rangel said he didn't recognize anyone in the [original] photo." Now, someone tell me how a Congressman doesn't recognize his own aide from a quite clear picture?
City Council Speaker Gifford Miller and Congressman Anthony Weiner just don't have the popularity to win the Democratic primary. The front-runner is still former Bronx Borough President Fernando Ferrer, a classic tax-and-spend-and-spend-some-more liberal. And let's be realistic: being Latino and emphasizing his humble roots, he has an immediate appeal to minorities that Miller and Weiner will never have. Ferrer's commercials promise he'll do something about minorities' high rates of school dropouts, but what does he have in mind, throwing more money at something that throwing money has never solved before? Similarly, his platform includes a promise to reduce class sizes, though recent studies have shown smaller class sizes have no benefit at all to student performance. (Consider that New York City has about 28 students per class, but just 14 students per teacher. [edited - thanks to ScottM for pointing out I had reversed them]. So what are the teachers doing half of the time?) Ferrer will nevertheless advocate hiring more teachers, as it will give him the very important backing of the teachers unions. More members mean more dues, and thus more money flowing into the unions' powerful coffers.
I don't live in the city and thus can't vote in the mayoral election, but I do work in Manhattan and pay a city income tax. For the privilege of a job in the city, I pay a tribute of over 2% of each paycheck to the city treasury. So while I'm keenly interested in city politics anyway, I have an economic interest too. My choice between Bloomberg and Ferrer would be...neither. Imagine a voter option to reject the entire ballot: "None of the above - give me some more choices!" This presents problems like having to start a new campaign, which means holding elections long before inauguration, but it helps alleviate the problem of voters feeling obligated to vote for major-party candidates, otherwise they "waste their votes."
How about Donald Trump for mayor? I can imagine how lean his city budgets would be, but I have an even better candidate.
He's one of the godfathers of supply-side economics. He knows that slashing taxes will bring such prosperity that the city has never seen. Small- and mid-size businesses would again be able to afford Manhattan offices. People would want to live in the city again (it would help to repeal rent stabilization laws).
Larry Kudlow -- he's my choice. One can dream.