Tuesday Morning Ponderings

• Understandably, many on the left have questioned why GM’s Rich Wagoner was tossed underneath the bus while financial sector executives are permitted to carry on. Yet I wonder if the Obama administration has instead achieved the equivalent of Godfather like leverage with recipients of TARP money: they know he’s making them an offer that can’t be refused. I hope so because up until now the financial sector has been like bank robbers threatening to drop more bags of nitroglycerin on the economy.

• I remain convinced that among the reforms needed is comprehensive anti-trust legislation to break up mega-sized financial institutions and empower local community banks. Is it too much to hope that congressional conservatives and liberals opposed to the TARP money will eventually collaborate on such reforms? There is a crying need for it and the country would likely support it.

• Today’s G-20 summit (which is really about thirty nations) is perhaps the most important international gathering since FDR, Churchill and Stalin met at Yalta in February 1945. Six decades ago the post-war world was being shaped with America as the preeminent power in an emerging cold war competition. Today’s geopolitics is multi-polar and President Obama must navigate in an arena in which America’s leverage and credibility are severely diminished. Nonetheless, the global economy as well as challenges such as global warming and terrorism can’t be effectively addressed without American cooperation. My hunch is that President Obama will excel in this arena requiring high caliber statesmanship.

• Is today’s special election in New York State’s congressional 20th district a bellwether? Typically, voters in the New York 20th are Republicans. Nonetheless, Democrat Kirsten Gillibrand prevailed in 2006 and her appointment as Hillary Clinton’s replacement has resulted in today’s spirited contest between Democrat Scott Murphy and Republican State Assembly leader Jim Tedisco. The Obama administration has enlarged the importance of the race by putting its political muscle behind Murphy. If Murphy loses Republicans will claim the country is turning against the administration’s ambitious agenda. If Murphy prevails, Democrats will hopefully be emboldened to push ahead on progressive initiatives such as health care. Turn out in special elections are always mysterious so this race is hard to predict.
  

• New York State Governor David Paterson and Senate Majority Leader Malcolm Smith are so hapless, that Sheldon Silver has emerged as Albany’s dominant power center. Silver, the longtime Assembly leader and adversary of transparent open government has easily rolled both Paterson and the novice Smith in budget negotiations. Appropriately, today’s New York Times has an article entitled, “Albany’s Big 3 Is Cut to One.” As I and many reform minded New Yorkers feared, the window of opportunity to reform Albany’s government ended with Spitzer’s resignation last year. What a shame.

Malcom Smith's MTA Folly

While the country obsesses over AIG bonuses and false populists in Washington feign outrage, a moment of truth for New Yorkers is soon upon us. After years of rampant cronyism and grotesque mismanagement, the Mass Transit Authority (“MTA”) is poised to stick it to struggling New Yorkers with an obscene fare hike to make up for their $1.2 billion budget deficit. Even before the current economic crisis, the MTA chronically illustrated state government at its worst. Now with New York City residents either out of work or living paycheck to paycheck, subway fares are poised to increase to $2.50 per ride combined with massive service cuts.

Governor David Paterson’s stewardship has largely been feckless but at least he’s tried to lead credibly on this issue. The same can be said of Assembly leader Sheldon Silver whom I typically despise. A commission chaired by former MTA Chairman Richard Ravitch recently proposed a reasonable payroll tax and tolls with respect to the East River and Harlem River bridges to spread the pain fairly. Two of the “three men in a room,” Paterson and Silver, signed onto Ravitch’s plan as did the most zealous subway riders advocacy group, the Straphangers Campaign.

The third member of the Albany governing triumvirate however, Senate Majority Leader Malcolm Smith, has not contributed to facilitating a credible resolution to the crisis. Instead he initially proposed a plan that was rightly lambasted by the New York Daily News earlier this week. Today, the New York Daily News is reporting that Smith is poised to delay a comprehensive bailout for the MTA and focus on the state budget. Smith self-righteously proclaims,

"If we can get everything done, I am sure we will, but there's 19 million people that are concerned about that budget,"

Hence, the MTA is only days away from imposing their draconian “doomsday” budget and New York City residents will reap the economic whirlwind. I don’t dispute the importance of the state’s overall budget. But that doesn’t excuse Smith’s grotesque failure of leadership. Especially when you have a proposed solution by the Ravitch Commission that spreads the pain judiciously.

Although I applaud Senator Smith's recent efforts to to make the legislative process in Albany more transparent, his callous disregard for New York City residents is unacceptable. Click here to contact Senator Smith’s office and urge him to adopt the Ravitch proposal immediately.

As Albany Turns

Click here to review this video from New York 1 of Democratic Governor Eliot Spitzer, Republican State Senate leader Joseph Bruno and Democratic Assembly leader Sheldon Siliver. For years the cliche about backroom dealings in Albany have been described as "three men in a room." This appears to be governing by three angry men in a room.

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.

The New Breeze From Albany

Understandably much of our nation’s focus regarding politics is on Washington as Democrats take control and the Bush Administration continues to prosecute their failed war in Iraq. Will Democrats take a stand or remain subservient? How will Democrats utilize their power for oversight and investigation? And numerous personalities inside the beltway from both parties are already jostling for position in the 2008 presidential election.

Just as important however are the newly elected Democratic governors and state legislators across the nation. In recent years state capitals have outflanked Washington regarding important issues such as global warming, minimum wage and health care. The New York Times reports today that state capitals are also outflanking Washington regarding changes to ethics and lobbying reform.

As a New Yorker I’m especially enthusiastic about incoming governor Eliot Spitzer (click here to read the text of Spitzer's inaugural address). In terms of corruption and pay to play politics, Albany has made Washington D.C. look like a beacon of rectitude in comparison. Another negative of Albany's culture has been governance by “three men in a room” as outgoing Governor George Pataki, Democratic Assembly Speaker Sheldon Silver and the Senate’s Republican Majority Leader Joseph Bruno made all the important policy decisions. Joining them in their room for a decade was a cabal of special interests and lobbyists while the public was ripped off.

Presently, both parties are back on their heels in Albany regarding ethics as Democratic State Comptroller Alan Hevesi resigned after pleading to a felony and the Republican’s Joseph Bruno recently revealed federal authorities were investigating his outside consulting work. Spitzer to his credit pushed political ally Alan Hevesi out the door after election-day and appears ready to spend his political capital on an ambitious reform agenda.

Today Spitzer signed five executive orders pertaining to procurement and the agencies his office has unilateral control over. He’s also imposing on his staff strict guidelines regarding bans on gifts and prohibiting any part of the executive branch from lobbying his office two years after they leave their posts.

The real challenge of course will be how much and how fast he can push Albany’s lethargic state legislature to accept in reforming state government as a whole. At the moment Spitzer dwarfs representatives from both parties but his popularity will inevitably decline as he makes tough calls regarding Albany's budget deficit.

In spite of the political challenges confronting Spitzer, one can feel a new breeze blowing from the state capital. Blair Horner, the legislative director of the New York Public Interest Research Group told the New York Times,

“He has talked about redistricting reform, he’s talked about campaign finance reform, he’s talked about ending pay to play and he’s talked overall about a transparent and accountable state government. If he accomplishes all of that, that’s probably more reform that we’ve seen in New York for the last 200 years.”

The previous Democratic governor Mario Cuomo talked a good game and his rhetorical gifts made him the darling of the national Democratic Party for years. Truthfully, Cuomo didn’t accomplish much as governor and the record suggests his greatest impact was constructing prisons that served the jail industrial complex. George Pataki defeated Mario Cuomo in 1994 partly by claiming to be a reformer and proceeded to govern as a lethargic corporatist. Let’s hope Spitzer turns out to be the real deal.