by | BLOG, FREEDOM, GOVERNMENT, LAW
In the wake of the George Floyd tragedy, there have been calls to take over police stations and even defund police departments as solutions to perceived systemic racial inequality in law enforcement. Even if systemic racism is a real and serious problem, defunding the police is not in any way a fix. The key reason for this is: any systemic inequality and other systemic bias has been created by the very people who are now demonstrating, because they are responsible for putting in the people who created this problem into office.
Some people are protesting against policing that sends black people disproportionately to jail, claiming police are in more black communities to make arrests. Yet of course many of the 911 calls for police help come from within black communities. To a certain extent, there’s frustration against racism, but the protestors are not advocating for solutions, because they know there’s no simple fix; the liberal democrats and a large number of black leaders have been responsible for the entire political environment of every major city for the last several decades in which there have been protests. So here’s what they should advocate for:
Reform in the areas of qualified immunity, public service union protections, taxpayer funded lawsuit settlements, removing police from non-police activity, such as routine traffic violations and mental health issues, decriminalizing some behaviors and demilitarizing police will go a lot farther to solving issues instead of removing law enforcement altogether.
by | ARTICLES, BLOG, FREEDOM, LAW, POLITICS
I’ve been thinking a lot about the riots lately from my apartment in Manhattan, watching the looters come down my streets without a cop in sight. At first, I understood the protests to be about George Floyd and wanting appropriate action for the officers who were responsible for his death. So far, that has been handled correctly as the powers in charge have said the right things, and the perpetrators have been charged with murder. But now the tone has shifted; the assertion is that systemic police bias exists. However, the proposed fix has now become an outright assault on law enforcement, culminating in some cases in the takeover of police stations and the call for defunding of police units. That is neither okay nor actually productive.
One of the biggest problems with the systemic bias narrative is the fact that the overwhelming majority of cases of racist police brutality have occurred in cities where liberal Democrats, supported by significant involvement of black officials, have been running the system for roughly 50 years. In other words, if systemic racism exists, it exists within the realm of Democrat policies and leadership. Thus the majority of those protesting are–at the same time–the very people responsible for such a racist system in the first place.
A recent article in the WSJ reviewed the very idea of systemic police bias and found that statistics don’t bear out such a charge. “Crime and suspect behavior” on the other hand, are the factors that drive most actions taken by law enforcement. For instance, in 2019, African-Americans accounted for just under 25% of those fatally killed by police, which was a statistic relatively unchanged for the prior 4 years. Likewise, the Washington Post police database shows that in 2019, 9 unarmed blacks and 19 unarmed whites were killed by law enforcement, a number which had decreased since 2015. Furthermore the National Academy of Sciences published an important report in 2019 on the very topic of “officer characteristics and racial disparities in fatal officer-involved shootings” which concluded: “we did not find anti-Black or anti-Hispanic disparity.”
The problem is more police quality control than it is police bias. Very often, police unions use their power to represent a bad cop (as is their job), giving bad cops protection instead of accountability. In the case of George Floyd, the officer who knelt on his neck allegedly had a total of 18 misconduct reports in his file, and yet he was still allowed to hold a badge. But this isn’t a new thing. The Atlantic took pains back in 2014 to chronicle how police unions and arbitrators keep bad cops on the street. Yet they still exist largely unchecked today. Want true systemic reform? Tackle the issue of police unions.
In fact, there are other policy changes that can be done to ameliorate the situation. Starting with ending ludicrous public service union protections as mentioned above, we can also limit qualified immunity, make the offending police individual or department be responsible for lawsuit settlements, and end militarizing the police. Such items are the result of years and years of liberal and minority policies that have produced the broken system we see today. These areas of police reform will go a long way toward rebuilding public trust instead of removing law enforcement from the public altogether.
by | ARTICLES, BLOG, COVID, ECONOMY, GOVERNMENT, QUICKLY NOTED
Veronique de Rugy (one of my all time favorite people) and Tad DeHaven of the of the Mercatus Center have written a wonderful article about why there should not be state bailouts (pandemically-induced or otherwise) It is a great read here:
A key thing to note is about Veronique’s observation of why New York’s perennial claim that it sends more money to Washington than it gets back. The situation occurs because 1) the federal tax code is very progressive (thanks to NY and the other liberal states that insist on it) and New Yorkers have high incomes, and 2) NY receives relatively less money in the form of federal contracts and federal employee wages: (my note: this is logically caused by the fact that New York has made itself such a terrible place to do business -including sky-high costs and ridiculously burdensome regulation and taxes- that it can’t compete for these projects. Furthermore, the fact that New York taxpayers send more to Washington than they get back has nothing to do with why the government can’t balance its budget. The government is not the taxpayer. The states send no money to Washington – their earners do.
The states often argue that if corporations can get bailed out, states should as well. But note, that before there is ever a consideration of a corporate bailout, the corporation has taken dramatic steps to stem the problem, chopping costs, revising operations, and demonstrating that with the bailout funds the entity will again be viable. There is also a promise to repay the amounts with a significant return to the government.
But what about the states? There has been virtually no movement to reduce their budgets – in fact, NY continues to show that it is not only refusing to lay off personnel whose jobs are no longer viable, but they intend to go ahead with scheduled increases even to employees who are not working. No company would dream of requesting a bailout in those circumstances. And without serious and immediate cutbacks, how would the states ever have the capability to repay any bailout funds?
Many states have failed their fiduciary responsibilities to their citizens. If these lawmakers requesting bailouts are so concerned about their states, they should aim to reduce the size and scope of their governments, and the wildly out-of-control spending that created revenue shortfalls prior to the pandemic, instead of expecting others to subsidize their irresponsibility.
by | ARTICLES, BLOG, ECONOMY, GOVERNMENT, NEW YORK, TAXES
For years, I’ve been pounding the table about how public sector wages and compensations have steadily outpaced those found in the private sector. This is no more readily apparent than in New York where runaway budgets and deficits continuously fleece the taxpayer.
The private sector has several factors in place that help control runaway costs, chief among them being competition. The profit motive in the private sector keeps compensation at levels where economic factors limit them to their true market value, reflecting economically rational and fair compensation levels. On the other hand, there are no such competitive inhibitions in the public sector where politics and cronyism, rather than economics, create a fairy-tale negotiation for wages and benefits.
Here’s a tale of two states: New York and Florida. In New York, it is clear that public service unions are a significant reason why the cost of living is higher. In 2010, Florida’s population was 18.8 million while New York’s was 19.3 million. In the past ten years, New York experienced population stagnation (19.4m) while in Florida, the population grew to 21.8 million and continues to be one of the fastest growing states in the country. Yet crucially, over the same period, New York’s budget increased to $177 billion while Florida’s was a mere $93 billion, up from 70.4 billion in 2010. One could argue that New York does more for its people than Florida does, but the reality is that they just spend more money. Bloated public service payrolls and off-the-charts cost burdens of regulation are the main culprits. And that’s the problem.
I propose that the people of New York withdraw its authorization to its elected officials to enter into any contracts with public service unions that provide compensation, benefits, and terms in excess of those being paid for similar work and skills in the private sector. Furthermore, there should be a requirement that restricts any federal government employee from receiving a raise if it puts his compensation in excess of the benefits and wages paid for the same work in the private sector.
By “competing” per se with the private sector for compensation, the government can do its part to help keep its budget and deficits from getting any more out of control.
by | ARTICLES, BLOG, GOVERNMENT, NEW YORK, POLITICS, TAXES
New York’s state budget director, Robert F. Mujica, Jr., wrote an anemic, laughable Letter to the Editor (printed in the Wall Street Journal) trying to defend New York’s fiscal record in an effort to get a federal bailout. Those of us who live in New York couldn’t help but notice it was full of half-truths. For instance, Mr. Mujica boasted lowering income-tax rates, but neglected to include the fact that Florida doesn’t even have an income tax yet still manages to operate on a budget of $93 million vs NY’s $177 million — in a state with 2 million more people!
Furthermore, he talks about a 20% increase of private-sector jobs, but leaves out the fact that “private job growth in Florida has been about 60% higher than in New York from Jan 2010 to Jan 2020.”
Likewise, he claims that New Yorkers send $29 billion more in taxes to the federal government than it gets back, but fails to mention that the reason for this is New York’s tax code punishes high income earners by adding extra taxes, so much that some earners pay nearly 50% of their earnings in taxes! Nor does he mention that many wealthy New Yorkers have wised up to being fleeced over the last decade, making New York one of the top ten out-migration states in order for earners to try to keep their own income — some going to Florida, no less. This loss undoubtedly contributes to the $6 billion budget shortfall that existed before Coronavirus even hit, something that was also conveniently left out of his defense.
Finally, Mr. Mujica tries to suggest that the $29 billion New Yorkers send to the federal government somehow subsidizes Florida’s budget because Florida receives $30 billion more from the federal government than Floridians send. But he leaves out the fact that New York’s budget contains 35.9% of federal money compared to Florida’s 32.8%. With a budget of $177 billion, that’s $63 billion of spending from federal dollars compared to $30 billion in Florida. Who is more fiscally irresponsible?
If states like New York are not willing to take any of the economic risk going forward, they should not get any money. They have willfully chosen to engage in a prolonged economic lockdown in hopes that someone else pays for it. Florida was one of the last states to shut down and has begun opening up once again, understanding the need for economic recovery. If New York wants to continue to take the economic risk of staying closed while other localities choose to reopen, they should be the ones to pay for it.
by | BLOG, CONSTITUTION, FREEDOM, HEALTHCARE
Certificate of Need laws, otherwise known as CON laws, are laws required in many states and some federal jurisdictions before proposed acquisitions, expansions, or creations of healthcare facilities are allowed. They are also absolutely ridiculous and entirely based entirely on cronyism. CON laws are irresponsible, damaging to the economy, and a prime example of an assault on economic liberty. We have the right to life, liberty, and the pursuit of happiness and we are entitled to their protections by virtue of our Constitution. This economic right to earn a living –this pursuit of happiness–began to be eroded during the FDR era for reasons having to do with partisanship and policy; SCOTUS has subsequently not enforced it rationally. As economic liberty is no longer considered a primary liberty, we get laws such as CON laws that are ultimately unconstitutional. The original argument for CON laws was very specifically to make costs cheapers for the public by virtue of less competition. Instead, CON laws stifle competition by requiring regulatory permission for any new services and equipment within a given region. This is an egregious, suppressive scheme. These burdensome economic rules should be unconstitutional under federal (if not also state) constitutions.
The federal government isn’t supposed to restrict this pursuit of happiness. But once FDR began regulating economic rights, we have a situation where certain liberties are more equal than others . Now, 1st Amendment rights are subject to “strict scrutiny”; these are high, narrow standards used to evaluate the constitutionality of a law. In other words, there must be a damn good reason why such a law violates a 1st amendment right. But when it comes to economic rights, it’s not strict scrutiny, and so sometimes the states can get away impinging on your rights to earn a living by coming up with some ridiculous argument or restriction. For instance, say you are a florist and your state requires licensing in order to operate. Such a concept is ridiculous — what health and safety concerns supersede the right for a person to earn a living as a florist? And yet some court cases have ruled that this licensing is justifiable; one in particular argued successfully that someone could possibly be pricked by a thorn and therefore needs regulation and specialized training. And that’s the problem. You can come up with any conceivable basis for enacting some ridiculous regulation even if it’s unconstitutional.
CON laws are even more ridiculous than the aforementioned thorn-pricking argument, because they are entirely based on something that is economically incorrect — that by restricting competition (as CON laws do), you’ll make the competition cheaper. But that concept is fundamentally wrong.
Unfortunately getting these laws removed is difficult for several reasons. Most of the time, judges tend to defer to government agencies. But even more importantly, when we talk about healthcare as opposed to restaurants, many people believe (incorrectly) that healthcare is some special kind of market that operates differently than other markets do. However, this is simply untrue. Healthcare is just like any other market except that it operates within an extremely complicated incentive structure that was created by the government. Can you imagine a restaurant owner having to submit to a review panel any plans he had to build a restaurant or remodel an existing one? Then why do we tolerate such a thing within the healthcare sector?
Ultimately, CON laws are unconstitutional because of their inherent economic favoritism. There’s no reason why some liberties should be treated differently than economic liberty and the right to earn a living should not be considered as fundamental as other rights. CON laws and their cronyism should be eliminated.
by | BLOG, FREEDOM, MEDIA
Alan Dlugash is a member of the New York State Society of CPAs (NYSSCPAs) serving on the Individual Tax Committee (and a previous chair), and is currently also a member of the IRS Relations Committee. He has also served on the Society’s Task Force on Tax Simplification as well as on the Special Committee for Reform of the Tax System whose report had been widely circulated. Additionally, he is a member of the American Institute of CPAs (AICPA) and its Tax Division.
Mr. Dlugash has over 40 years of accounting and taxation experience and recently gave an interview to the Atlas Society talking about taxes, bailouts, and New York City. Here are some highlights.
On taxing the rich:
“The standard view of Robin Hood is that he stole from the rich to give to the poor. But that’s not really what happened. Robin Hood didn’t steal from the rich. He stole from the government, which was impoverishing the people with excessive and inappropriate taxes. He stole from tax collectors, not the rich. Robin Hood, read correctly, is a libertarian.
The rich are people who create things that people want to buy. The government, on the other hand, doesn’t do anything productive. It takes your money then redistributes it to special-interest groups.
Taxing wealthy people and giving it to poor people does not make people more equal. It does the exact opposite. High taxes mean less money reinvested in businesses, which means fewer jobs. Moreover the people who get the money transfers are less likely to risk those benefits, which keeps them dependent and relatively poor. The idea that we can tax the rich to solve our problems is just wrong. Taxing the rich is just a recipe for making everybody worse off.
There are many, many ways in which the tax code is ridiculously unfair, but because high earners are often the victims, no one cares. There hasn’t been an honest article written on taxes in the New York Times in 20 years.”
On bailouts:
“In 2008 – 2010, the need for the Treasury to get involved was legitimate. Once they determined that the economy wasn’t going to tank, however, and that the banking system wasn’t going to collapse, after the first week or ten days, that should have been the end of it. Their review showed that the banking system was safe.
But politics overruled logic. There were really only a handful of banks that were in trouble because of the mortgages that the banks were holding. Most of the banks were not in danger. They were able to quantify their situation. But the Treasury decided that they were going to force every bank to take a bailout as if it were failing. This way, people wouldn’t know which banks were in trouble but think that all the banks were in trouble instead. I don’t know what they were drinking, because it was the dumbest idea ever. And they lied. That was the other thing. The government forced the banks under threat of criminal prosecution. If anyone hasn’t read John Allison’s book, The Financial Crisis and the Free Market Cure, about his experience at BBT, then read it now.
To me, the ensuing Obama Stimulus was criminal. Either stupid or evil, I’m not sure which. Obama just called it a stimulus package, but it was nothing of the sort. A stimulus is a one-time deal. The money goes out and is spent, and the budget returns to what it was. The administrative state had grown so big, however, that nothing like a shovel-ready project was possible. What Obama did instead was increase welfare, increase teacher pay, lower the threshold for people to qualify for food stamps, and other things that would not disappear as a one-time stimulus outlay but rather remain in the budget, which created huge deficits during the rest of his Administration.
Now, with the coronavirus pandemic, things are going to get even worse. We’re in a horrific situation, because we do need to deal with the virus. And we will need to spend. The best we can hope for is that they decide on an amount to spend in that regard, then make a commitment that once the virus danger is over to cut the budget.
Without the virus problems, which are new and severe, most of the budget is Medicare, Medicaid, and Social Security. If those programs are not reformed, our budget deficits will be impossible, coronavirus or not. There will be a tipping point. For a long time people have said, “Yes, we have a massive deficit, but it hasn’t hurt us so far, so let’s keep spending.” They ignore Stein’s Law: “If something can’t go on forever, it won’t.”
Well, we will wake up one day, and the rest of the world will have decided not to buy our debt any more. Our ability to keep printing money will end. People will no longer be willing to buy our bonds. There will either be huge inflation, or we’ll be unable even to refinance our maturing bonds. When something like that happens, I don’t know how we will undo it. I think we need to practice fiscal restraint now. Deal with the virus, absolutely, but afterwards commit to cut entitlements.
And it isn’t just the responsibility of government. People have to stop electing irresponsible politicians, stop believing pie-in-the-sky promises. Government has never been the answer. It is individuals who will pay the consequences of these massive deficits, and individuals who need now to take responsibility for their own finances and their own well-being.”
The interview is worth to read in its entirety, which you can find here.
by | BLOG, BUSINESS, COVID, ECONOMY, GOVERNMENT
Charles Passy’s article in the WSJ was a veiled plea to save the culinary scene of New York City. With two specific outrageous proposals, Passy’s economic bias here is unbearable.
First, he describes how “bar and restaurant owners throughout the city say such claims are being denied at the present time because of policy exclusions, despite the businesses having paid thousands of dollars for their property and casualty insurance over the years.” As a result, Passy argues that insurance companies should be forced to cover things they never intended to cover (nor could it ever have been an insurable event).
Second, Passy endorses a “measure to prevent landlords of commercial properties from enforcing provisions that hold tenants, such as bar and restaurant owners, personally liable for rent should they be unable to pay because of the pandemic.” In other words, Passy wants to allow tenants to not be personally responsible for paying rents though they specifically agreed to it.
New York doesn’t have the right to pass such laws, giving money out and interfering in contractual relationships in which they are not a party. Not only is it illegal and immoral, but unconscionable. It is astounding that the WSJ would allow such an outrageous article.
by | ARTICLES, BLOG, HYPOCRISY
The New York Times continued its ludicrous partisan writing in its coverage of the Flynn affair, calling his position a “reckless gamble.” At the same time, note that the reason why Flynn was recently exonerated is not even mentioned! Of course, it was clear that there was no basis to start the questioning in the first place, which as a matter of law makes the “lie” irrelevant. Also, since at the time the prosecuting parties had all testified that there was no Flynn or Trump wrongdoing about Russia (the underlying crime being investigated), the “lie” could not possibly have been “material” – a factor necessary for the “lie” to have been a crime.
This was an intentional attempt to 1) create a lie, 2) threaten Flynn’s family to force him to admit to a crime, and 3), and have everyone from Schiff, Obama, etc. lie about it to the public to gain political advantage. For the NYT to completely omit any mention of the FBI’s ambush interview and its lack of protocol handling the Flynn case is journalistic malpractice.
by | BLOG, COVID, ECONOMY, GOVERNMENT
One of the burgeoning problems of opening the country back up is that many employers are struggling to properly restaff their businesses. It appears that many employees are refusing to go back to work because they prefer unemployment benefits. But workers are only entitled to these benefits if they cannot find work. They should legally lose the unemployment benefits if they refuse going back to work. Yet reporters covering this emerging situation seem ignorant of the concept.
I have been reading on far too many newspapers and websites regarding the inability of businesses (particularly restaurants) from all over the country unable to induce their employees to come back to work. The primary driver of this is the $600/week federal supplement to State unemployment insurance (“UI”) payments. This results, in many situations, in the employee being financially better off by being on unemployment than by working.
But this makes no sense. An employee is OBLIGATED to represent that he has no employment opportunity in order to get UI in the first place. Even asking his employer to not take him back is unethical, if not illegal. It is likewise unethical, if not illegal, for an employer to agree to such a request.
What were these writers thinking when they wrote these articles?
