Callous Mike

Among the many kinds of emails I receive from readers is the assumption that I live in a blue liberal paradise in New York City. Typically, these emails will come from readers living in states like Texas or Alabama who feel alienated from neighbors who talk unabashedly about seceding or openly refer to Obama as “that nigger president.” Thankfully, I’m not exposed to that nonsense living in Brooklyn and working in Manhattan.

Nonetheless, New York City is not a liberal panacea and Mayor Mike Bloomberg's administration is no champion of the poor. On May 9th, the Associated Press reported that city officials are charging homeless families for living in shelters. Hat tip to my Facebook buddy Terri DiMatteo for posting about this. According to the AP:

“The policy applies only to shelter residents who have income from jobs.

They could be expected to pay up to half their earnings.

Some shelter residents say the new rule will ruin their chances of saving enough money to get an apartment.

One single mother living in a Manhattan shelter tells The New York Times [NYT] she got a letter saying she had to give up $336 of the $800 she makes each month as a cashier.

The city says it is only charging people who can afford to pay.

About 2,000 families are expected to be covered by the new rule.”

One obvious flaw with this punitive measure is that it’s a disincentive to remain employed. As it is a working mother may be reluctant to leave her kids alone in a shelter to earn a pay-check. Now the Bloomberg administration is penalizing her for it!

I know many liberals in New York City who support Bloomberg. Whenever I talk to them I’m struck by how clueless they are. Bloomberg’s urbane and he’s been a pioneer in the information economy professionals like them have thrived in and still do even after Wall Street’s meltdown last fall. Also, Bloomberg supports the liberal position with respect to guns, abortion and the environment and the concerns of people living in shelters is not on their radar screen.

Bloomberg is certainly an improvement over his predecessor, Rudy Giuliani. He’s been forward thinking with respect to the environment and transforming New York City to combat global warming. In many ways Bloomberg is an effective technocrat. But this isn’t the first time his administration has been callous towards the most vulnerable in our society. Sadly, he appears poised for a third term coronation this November without a vigorous challenge or critique of his record.

Bloomberg is already spending millions on advertising while candidates such as Comptroller William Thompson are restricted in order to remain compliant with the Campaign Finance Board and receive matching funds. And Bloomberg continues to coast without worrying about serving the needs of wage earners and tenants who can’t afford to live here.

Does anyone care that New York City’s mayor is allowed to be a commissar for plutocrats in a gilded age? Is there anyone who can mount an effective challenge and at least compel Bloomberg to be cognizant of city residents who don't thrive in his world? Will the fact that the working poor living in shelters are being penalized while Bloomberg caters to the rich during the worst economic climate since the Great Depression even be an issue this campaign?

New York's New World

For my home state, Governor David Paterson's budget is a window into the future. Simply put, we are witnessing what happens when New York State ceases to be the financial capital of the world. At the moment the world doesn't really have one as the global economy sorts through massive wreckage. Truthfully, the era of financial centers concentrated in western port cities such as New York or London is a relic.

This had long been been predicted because information technology makes it possible to outsource back office functions remotely and utilize cheap labor. Why pay for New York City real estate and labor when a trader can just as easily play with other people's money from a computer in Dubai? However, until the recent economic catastrophe Wall Street stubbornly hung onto its symbolic trappings as the center of the universe.

As a result, Albany could count on revenues generated from Wall Street to finance union pensions, government services, medicaid spending, corporate welfare, our prison industrial complex and so forth. The financial services industry also generated millions of jobs in our region from stock brokers to janitors. Hence, Wall Street's titans were able to leverage their influence with power brokers such as New York State's senior Senator Charles Schumer.

As many of you know, the New York Times recently profiled the intimate relationship between Wall Street and Schumer. Liberals are justifiably outraged at Schumer's enthusiastic pandering to Wall Street's desire for excessive deregulation and lax oversight in exchange for campaign donations for himself and his party. Instead of a Democrat standing up for working people we elected an enabler of our economic meltdown.

In fairness to Schumer, any New York senator would have to some degree catered to this industry's interests just as Joe Biden championed the banks and credit card industry while representing Delaware. All politics is local as Tip O'Neill used to say and even Wall Street enemy Eliot Spitzer raked in contributions from the financial sector during his 2006 campaign for Governor. That's where the action was that created jobs for New Yorkers and filled the state's coffers.

However, Schumer's excessive pandering to Wall Street has facilitated a calamity for the working people in New York he claims to represent and helped wreck the global economy with it. Figures such as Clinton Treasury Secretary and Wall Street powerhouse Robert Rubin were never Obi-Wan Kenobi.

Today New York is confronted with a $1.7 billion 2008 shortfall and a projected 2009-10 deficit of $13.7 billion while Governor Paterson promotes an "obesity tax." Important government services such as healthcare, education and emergency first responders will take a hit. And New York's Mass Transit Authority ("MTA") with its chronic incompetence in good and bad times will impose painful rate hikes and service cuts in 2009 to make up for its own steep revenue shortfall. As always the working stiffs are hit the hardest.

The pain is no fun and hardships abound for New Yorkers as our manufacturing industry was sucking wind well before Lehman Brothers collapsed, AIG was bailed out and Bernard L. Madoff became a household name. Like all New Yorkers I'm feeling the pain too but thankfully still have a job.

Yet even during this challenging period an opportunity exists. Necessity is a mother to invention and New York needs to reinvent itself. Just as oil is a dangerous narcotic that has arrested the development of petro states the financial services sector and manufacturing industry have undermined New York's ability to retool for the 21st century. Such innovation requires leadership and vision.

Whatever critique one may have with the specifics of Paterson's hardship budget he is at least showing leadership by not ducking the tough choices. Personally though I am dismayed by Paterson's unwillingness to more fairly distribute the pain. He should worry less about taxing millionaires and instead embrace New York's Working Families Party approach of shared sacrifice.

My question though is what sort of people does Paterson listen to as the corporate private sector vies for his favor in New York's new world? Alas, Paterson's consideration of Caroline Kennedy to replace Hillary Clinton in the Senate because of her ability to raise millions from friends such as billionaire Mayor Mike Bloomberg is not encouraging.

Eliot Spitzer Takes On New York's Nomenklatura

Is New York’s Eliot Spitzer for real? Is it possible my home state elected a governor who knows what he means and means what he says? Politicians promising reform and boasting about their prowess as culture breakers is nothing new. Spitzer’s predecessor, George Pataki also promised to reform Albany’s corrupt culture and he proceeded to embrace it. Mario Cuomo didn’t embrace Albany’s inside game like Pataki but he didn’t confront it either.

To this point, Spitzer reinforces my belief that the Democratic Party’s best hopes for the future reside in state capitals where governors are tackling vital issues such as healthcare, global warming and public corruption. Brian Schweitzer of Montana is a sterling example of this new breed. Smart, innovative, tough and unafraid of picking fights with entrenched power to advance progressive ideals. They present quite a contrast to Washington Democrats who even after defeating Republicans convincingly this past November, govern as if they’re afraid of their own shadow.

In only the second month of the Spitzer Era, his administration is on a collision course with Albany’s nomenklatura. The spectacle is fascinating to watch. For readers not familiar with New York State politics, Washington D.C. is a beacon of rectitude compared to Albany.

New York State Comptroller, Alan Hevesi was forced to resign shortly after being re-elected because of scandal. Hevesi pled guilty to a minor felony charge for using state employees as drivers for his ailing wife. Click here and here to read more about Alan Hevesi and the scandal that forced him from office.

As you can discern from the links I provided, Hevesi’s fall from grace was hardly the worst scandal in the world. We’ve seen far worse in New York. Indeed, I rather admired Hevesi’s career both as Mayor Rudi Guilani’s fiscal watchdog when he was New York City Comptroller and his recent stint in Albany. Hevesi also courageously opposed the death penalty as an Assemblyman from Queens. I supported Hevesi’s failed efforts to become the Democratic Party’s nominee for Governor in 1998 and Mayor of New York City in 2001.

Nevertheless, what Hevesi did was wrong and Spitzer opted to withdraw his endorsement of the Comptroller prior to Election Day. Afterwards, there was speculation Spitzer would not encourage Hevesi’s prosecution. To his credit, Spitzer helped push Hevesi out. Spitzer's critics believed he should've publicly pressured Hevesi to resign before the election.

According to New York State’s constitution, Hevesi’s successor must be approved by the state legislature. Spitzer’s fellow Democrats controls the Assembly and have far superior numbers than the Republican controlled Senate. Hence, Spitzer had to deal with Assembly Majority Leader Sheldon Silver.

Silver is the embodiment of Albany’s establishment and for over a decade has wielded power as one of “three men in a room” governing New York State. The caucus led by Silver has seen governors preaching reform come and go, as they remained entrenched. Their districts are gerrymandered to their favor as special interests curry their favor. This is not a group easily intimidated by a new governor’s high approval ratings, even if he is a member of their own party.

Spitzer and Silver agreed that a new comptroller would be selected from a list of qualified candidates put forward by an independent screening committee. The Assembly favored one of their own, Thomas P. DiNapoli and went along with Spitzer’s plan because they believed he would be among the finalists. He wasn’t and the Assembly opted to renege on the agreement.

DiNapoli, a Democrat is well liked among legislators from both parties because of his work to help bail out financially strapped Nassau County. His efforts garnered appreciation from suburban Republicans as well as Democrats and represent the consensus choice inside Albany’s clubhouse.

Spitzer has responded with characteristic bluntness. While promoting his new budget in Syracuse, he denounced local Assemblyman and fellow Democrat Bill Magnarelli:

“Bill Magnarelli is one of those unfortunate Assembly members who just raises his hand when he’s told to do so, and didn’t even bother to stand up and say, ‘Whose interests am I representing?’"

Governor Spitzer also canceled an introductory lunch with Assembly Democrats next Monday, as well as a $10,000 a plate fundraiser for the Democratic Assembly Campaign Committee. Escalating the conflict even further, Spitzer’s aides have let it be known he would criticize the votes of Assembly Democrats in swing districts where Republicans could make inroads.

One can’t help but admire Spitzer’s pugnacious tenacity on behalf of principle. He used the same approach as State Attorney General when he prosecuted corrupt brokerage houses on Wall Street ripping off the middle class. Spitzer’s unwavering pursuit of corruption propelled him to the governor’s mansion. However, being governor is far different then serving as the king of your own fiefdom as New York’s top lawyer.

Governing is about achievement. Achievement requires consensus. New York’s legislature appropriates funds and their cooperation will be required to pass budgets on time and enact Spitzer’s agenda for health care reform, education investment and restructuring New York’s finances.

Also, Spitzer’s budget calls for unpopular cuts with New York’s hospitals and making the tough calls can’t help but diminish his popularity. Albany’s nomenklatura will likely play a game of rope-a-dope and wait for Spitzer’s popularity to dissipate so they can cut deals from strength. Gridlock appears unavoidable unless Spitzer adopts a more conciliatory tone.

Spitzer however appears determined to make an omelet by breaking eggs. Can he pull it off? William Cunningham who served former Governors Hugh Carey and Mario Cuomo and most recently Mayor Mike Bloomberg, compared Spitzer’s style with former New York Governor Theodore Roosevelt:

“Roosevelt came in saying he was going to be a reform governor. He immediately got into a fight with Senator Platt, the head of the Republicans, a powerful political boss in the state. History remembers Teddy Roosevelt. You have to be a knucklehead like me to remember Boss Platt."

Perhaps we New Yorkers have a ringside seat to history. Hopefully, we’ll also have a better state when Spitzer leaves office.