NYC
07/23/2010 05:12 am ET | Updated May 25, 2011

Four Years on Room Eight

It's been four years since I first started posting on this site, and I might as well continue the tradition with another retrospective. First, I'd like to thank Ben and Gur for providing me with a website to post essays on the public policy non-decisions no one wants to talk about, with the capacity to attach spreadsheets with the facts no one wants to see. Creating such a site was beyond my capability, and I appreciate their free web hosting and technical support.

Writing on this blog has been, in a sense, my final howl against the moon in frustration with the generations in power for selling out the future of my state and community, to hide from everyone else the cost of enormous resources transferred to those working the system. The recession, as recessions do, has just started to reveal to everyone else what has happened. Four years ago, in another election year for Governor, I posted a series of data analyses showing how New York State, and different parts of New York State, compared with other states and the national average, with essays that identified problems with state and local government and the state in general, and made a series of proposals. This year I'll probably continue to post data as it become available, in case there is anyone out there who is interested in the actual facts, but I don't think I'll talk much about what should happen next. Because between then and now I've learned something: things are so rotten to the core that nothing will change prior to a collapse. Consider it my New York City education.

My teacher was the United Federation of Teachers, the New York State Association of School Boards, and the Campaign for Fiscal Equity Lawsuit. Or should I say, that was the last straw. Beginning in my former job as a regional economist at the NYC Department of City Planning, and using data from the Governments Division of the U.S. Census Bureau, I had shown that the NYC schools were (compared with other places) underfunded and understaffed, and NYC teachers were underpaid (to help pay for the rich pensions of their predecessors who had cashed in and moved out). New York's high taxes were the result of high debts and pension costs (falling back then, soaring to infinity now) from the past, sky high Medicaid spending in New York City, with much of the excess for the benefit of senior citizens and the hospital industry, and sky high public school spending in the rest of the state. After publishing this information in a series of forums, while working for the city and later on my own, I provided lots of data to the Campaign for Fiscal Equity lawsuit.

Personally, I had been affected by school funding decisions in the mid-1990s recession, two fiscal crises ago, to slash state school aid to New York City (where aid and spending were already low) to get through a tough budget year, while increasing aid to the high spending schools in the rest of the state. The already bad NYC schools were set back a decade, unable (except for the few who got special deals in special schools) to offer an education comparable in quality to what my wife and I had received 40 years in the far from affluent communities of Levittown and Yonkers. We enrolled out children in Catholic school. Friends left the city.

In the end, however, the result of the Campaign for Fiscal Equity lawsuit, and perhaps its intent, was not fiscal equity. To limit opposition, aid and spending in the rest of the state was increased as much or more than in New York City. Local government employment in the rest of the state is up by 130,000 over 20 years despite stagnant population, with the schools accounting for the majority, while local government employment in New York City is down despite growing population. The increase in city school spending mostly went to retirement benefits, and was paid for primarily by higher city taxes. And then, a deal was cut to drastically increase those retirement benefits, retroactively, in 2008 when the current recession was already under way. The result will be the quality of the city's schools will be knocked back not to the mid-1990s, but to the 1970s. At much higher tax levels.

The United Federation of Teachers got the limited number of its dues payers who matter to Florida years earlier and the New York State Association of School Boards got more friends and relatives on the payroll - with pensions and other retirement benefits to be earned after five years of work. As for the city's children, wait two more years to see what they got.

Of course, even with the added state aid local governments and school boards in the rest of the state cannot afford those pensions. So the state legislature has a plan. Let them borrow from the pension plans by deferring payment now, and instead pay vastly more later. And when they can't pay that, have the state pay instead - using taxes collected in part in New York City, where the schools will have already been destroyed by the local cost of funding its own, separate pension system. Sheldon Silver will be all in favor as part of a deal to help his constituents. Most of whom now live in Florida, or will soon be dead and gone.

The lesson: you will never get a decent level of public services and benefits in New York City, no matter how much you pay. No decent schools in New York City. No Second Avenue Subway. No Social Security for younger generations, who were told in 1983 that by paying a higher regressive sales tax throughout their careers and accepting a later retirement age, the program would be "saved" for them. You put in more, and then deals are cut to divert most of the money elsewhere, generally to the generations in charge, not only at a time when more is available, but permanently. That leads to devastation in recession.

The deal cutters know that as long as the cost is deferred, they can impose any level of future harm to the majority of New Yorkers, and future New Yorkers, because they aren't paying attention - and because the political system is rigged in a way that they can't do anything about. And they cut deals with each other to their mutual benefit, agreeing that they now have a legally enforceable contract that someone else will have to pay for later. So that harm can later be described as "situations beyond our control." Somehow those who will be sacrificed are parties to the "contract," without even knowing it had been signed.

During this era another public service I care about, the transit system (where I worked in two stints from 1986 to 1988 and 2001 to 2004), was also being destroyed by a series of future- wrecking deals. Pensions were retroactively enhanced, though not as much as the Transit Workers Union wanted (or went on strike for). Labor abuses proliferated, once again primarily in the part of the MTA OUTSIDE New York City. The cost of capital contracts soared, meaning that for others the revenues from MTA capital contracts soared. Tax-based funding was cut, by the city and the state, so money could be diverted elsewhere. And the fare was cut sharply, not only relative to transit costs and overall inflation but also in nominal dollars, due to a series of discounts. "Everybody wins," with money borrowed and costs deferred to pay for it all. The rest is catastrophe, which will be ongoing for one or two decades and (given the demands of an aging population) may be permanent. Because once again the state legislature and its fellow travelers have a plan - borrow more and/or cut capital maintenance and improvement projects, since the damage from those cuts may not show up until those who matter are gone. And to make sure debts and pensions get paid (but not that disaster is diverted), impose a cost that fall exclusive on workers, not the retired or the investor class.

These are just two examples of a host of similar deals. What could be done to oppose the destruction of my community? I wrote and circulated reports, wrote letters to the editor, and even left my job - and the public sector - to run a Don Quixote campaign against the state legislature. With no effect. I have been writing on Room Eight since. And in the past four years, while future wrecking deals have continued, I have learned what has been going on in our other institutions.

While the state legislature and various Mayors and Governors, not to mention the Congress, have been cutting deals to benefit those working the system at the expense of our collective future, millions of Americans have been so driven by "I want for me now" thinking that they sold out their own future, through spending financed by unpayable debts. And the executives that sit on each other's boards have been raiding the coffers of the firms they oversee, wrecking the future of those firms as well. Given what people have been doing in their own lives, and in the private sector, how could one expect anything other than the same behavior with regard to our collective future? And what share of those now under age 50 had parents who were present throughout their childhoods, even if their marriages weren't the joyride they might have felt entitled to, and put those children first? Or were even around to begin with? Given the attitude of the majority of the generations now in power toward their responsibilities toward their own children, how reasonable was it to expect any of them to be bothered with future generations in general?

Generation Greed has thus been followed by Generation Apathy. In the past few months, I've been asked several times if I would consider running against the state legislature again. My response is as followed: my family sacrificed enough for me to run the first time, it is probably too late and to be honest was probably was back in 2004, and "what about you?" Let's just say no one asked "what about you" has said "yes, I'll do it." Yes, I'll probably lose or have to leave my job and have trouble finding another one. Yes I'll run even though I probably will not even get on the ballot and get to speak my piece, because of the way the system is rigged. Yes I'll run even though if I do get on the ballot, I'll be ignored by the media and harassed by the minions of the incumbents. Yes I'll do this because someone has to try. No, that's not what they say.

I've also commented on New York Times editorials demanding that people "throw the bums out" in the legislature, which follow decades of the Times giving publicity to perpetual incumbents while ignoring challengers, asking the members of the Editorial Board themselves to give up their jobs and run against the legislature. And I've asked the Times, News etc to at least produce announcements of the political calendar to run for office well before the fact, and guides about how to get on the ballot, for the benefit of members of the general public that might want to run. No response. For those interested, I believe you can start collecting signatures for party primaries on June 8 and have about a month to collect those you need. But if you just start to think about this after reading this now, it is probably too late.

So what will we have? Not much change in the legislature, no matter how much people can't stand them, because the obstacles to removing them are enough that those same people can't be bothered to overcome them. And probably a battle of careerists for Governor, one of which will be identified a savior - like Eliot Spitzer back in 2006. Perhaps this time they'll promise a "better" deal consisting of vastly diminished public services and benefits in exchange for the highest state and local tax burden in the U.S. (as a share of income, sorry rich New Jersey). Rather than ongoing deterioration of public services and benefits in exchange for even higher taxes, permanently higher taxes, which is what the legislature would prefer. Thanks a lot. They'll be against "spending," without saying on whom or why. They'll be against "special interests," without pointing to those who have had the most special deals. They'll be against "corruption," without talking about the fact that most of the damage has been done by deals and non-decisions that were perfectly legal, and that benefitted hundreds of thousands of selfish, thoughtless people, not just the state legislators they kept in office.

And then, the state legislature will offer a deal. Keep all the vested interests vested, and we'll help you defer total disaster by selling out the future even more (making it even worse) while allowing you a few symbolic victories to enhance your career. Spitzer, backed by all the same folks who now back Cuomo, took the deal, but said too many unsayable things along the way, and was subsequently exposed as a man with an unappealing personal life. Cuomo will be offered the same deal. Lazio will shoot for a different deal, the mid-1990s deal: let us pretend that all the money is going to Blacks, Latinos, immigrants and those living in older central cities, and concentrate all the sacrifices on those people, but protect all the vested interests that really matter, to Republicans and Democrats alike.

The only way a Governor could stand up to this is to let the disaster occur by refusing to defer costs and advance revenues anymore. Let everyone feel it. And then hope for a gradual turnaround over 10 or 20 years, after the parasites are swept aside and the vested interests are de-vested. Then, younger generations might believe they have a reason to come or stay here, and new businesses without special tax deals might believe they have a reason to open here. Would they? Or would the future be stolen again, just as it has from New York City? Would they just be fooled again?

In any event, I could write until my fingers fall off about what has been done, and what should be done. In the end, so what? Anything I would suggest would be considered "politically infeasible" due to "circumstances beyond our control" We are going to eventually see what is politically feasible, though I guarantee that no announcement will be made as to what the non-decision has actually been. There is so much that is unsayable, because so many would be offended to have their "right to rationalization" taken away.

Politically, we have seen the undoing of the Progressive era of a century ago, when Progressive Democrats wanted fair and efficient government to meet more human needs at the taxes people were prepared to pay. And Progressive Republicans, acknowledging there were needs the government had to meet, wanted fair and efficient government to limit its cost. In the era of Generation Greed, you have had unprincipled Democrats and Republicans cutting deals with those working the system to advance their own careers. Deals that pass the state legislature 212 to 0 after no debate, either in public or in the state capitol. While we are going back to the pre-Progressive era, however, we are doing so at much higher tax rates, leaving people with fewer resources to meet their own family's needs.

Personally, we are going to see a door close on my preferred way of life - happy living through modest living. Rather than get caught up in the ever-increasing "must haves" for a middle class life, according to advertisers, and life a material lifestyle at one point in one's life that will probably be unaffordable at another point, for oneself or one's children. Material consumption is a one-way ratchet - so easy to slide up that you soon barely notice the difference, so hard to shove down.

Part of the modest happy lifestyle is the substitution of less expensive shared goods and services for more expensive personal consumption. Public parks, not big private yards and pools. Public transit, not two or more cars. Public libraries, not your own personal library. Public television, not Cable TV. Public schools (well, we didn't really get much of that). Vacations in tents in state parks, not airplane trips to hotels or cruises in the Carribean. The shared amenities were wrecked in New York City in the 1970s, and are about to be re-wrecked. The rest of the state will follow.

And why? Because of an era in which people felt entitled to put less in and suck more out. Because of an era in which those with the highest salaries worked the system to get even higher salaries. Because of an era in which those with the most secure and comfortable retirement demanded even more retirement in exchange for even less work. All while refusing to acknowledge that want they felt entitled to, what they felt they desperately needed, could never be had by all indefinitely, and could only be had by themselves at the expense of others and the future. Or others in the future.

Why did they do it? Why do they do it? And they stupid, incapable of empathy or even enlightened self-interest? Did they put a gun to their own heads, running up their sense of entitlement and desperately seeking a way to fund it? Perhaps, I guess, that's what most people, or at least most people who worked the system to gain control of our soon to collapse institutions, are really like.


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