by | BLOG, COVID, ECONOMY, FREEDOM, GOVERNMENT, NEW YORK, POLITICS
As a lifelong New Yorker and fan of Jerry Seinfeld, I really wanted to like CNN’s article,“Jerry Seinfeld is right about New York’s future.” The more I read it however, the more delusional it became until it was outright laughable. The author, Jeffery Sachs, attempts to explain why New York will not fail and he’s right that the city has had tough times before. He’s correct that there will be a day of reckoning. But he is utterly incorrect that this reckoning is “between the superrich and the rest.”
Sachs has decided to lay the blame of the current state of New York City on the feet of the highest income earners, outright suggesting that the rich have gotten richer on the backs of those experiencing financial desperation and hunger due to the pandemic. It’s not the elected officials. It’s not the rioters. It’s not the bungled COVID-19 responses. It’s the billionaires. You can’t make this up:
“NYC has more billionaires than any other city in the world — 111 in 2019. They like NYC, like the rest of us. They depend on NYC for their vast fortunes. And many have enjoyed astounding windfalls of wealth this year as frontline workers around them have died or faced eviction. The true challenge for New York City is not technology or even the pandemic. It is basic decency. A city survives and thrives as a living breathing social organism, one that acts together for the common good. The billionaires must be the ones paying higher taxes to keep the City’s schools, hospitals, public transport and social services running as NYC picks itself up from the crisis.”
What Jeffery Sach either fails to realize or purposefully omits is that the billionaires are already paying far in excess of any rational share of taxes to keep the City’s schools, hospitals, public transport and social services running as NYC picks itself up from the crisis. Highest income earners pay the top rates, including 8.82% in state income taxes along with an extra 3.876% in NYC income taxes. Add to that the 40.8% marginal federal income tax rate — and billionaires pay an income tax rate of over 53%! That’s 119 people paying 53% of their taxes for $8.5 million people and justice warriors want them to pay more? It’s not like these billionaires are using more services.
What’s really going on is that Jeffery Sachs is helping to shape the narrative that billionaires need to pay (more of) their fair share. Is it any coincidence that a new “Make Billionaires Pay” campaign by progressive lawmakers and activists is being debated right now in New York as some sort of a budget justice initiative? They want to add a new form of capital gains tax on those exceeding $1 billion in assets.
A fundamental principle of our American heritage and history says that you don’t take something from somebody just because they have it. That is the approach of a crook. When Willie Sutton was asked why he robbed banks, he famously replied, “because that’s where the money is.” Of course it’s a joke, but it seems like de Blasio didn’t get the joke. Crooks do that, not civil society. As Walter Williams said, “If one person has a right to something he did not earn, it means that another person does not have a right to something he did earn.”
Rather than cutting spending and government services, these fiscally ignorant crusaders take the easy way out and blame the very people who provide the vast majority of the income NYC receives–and then subsequently squanders through bad policy and abysmal leadership. But they aren’t satisfied. They want more. And unlike Jerry Seinfeld, that’s just not funny.
by | BLOG, COVID, ECONOMY, EDUCATION, FREEDOM, GOVERNMENT, NEW YORK, POLITICS
The NYC public schools are now supposed to begin opening on September 29, but unions continue to be apprehensive about in-person instruction. De Blasio already delayed school opening twice this year after ongoing threats of a teacher strike, citing “concerns raised by our labor partners.” On the other hand NYC charter and private schools have a variety of re-opening options other than virtual: from fully in-person to hybrid to outdoor classrooms. The contrast in competency is astounding.
The schools have been fully closed for six months because of COVID, and it’s not like educators didn’t know that their singular task of providing education to children would resume in the fall. Nor are NYC public schools the only education system to face COVID. Virtually the entire country has had to come up with plans to safely re-open schools, and yet NYC public schools continue to be unprepared and incompetent.
De Blasio has proven incapable of negotiating with the unions, and in doing so, he has let down students and parents. This inability to effectively execute a plan to help students learn is perhaps the strongest argument to date as to why charter and private schools should really be the models we move towards in order to provide quality 21st century learning to our children.
by | BLOG, COVID, ECONOMY, POLITICS
I was annoyed to read an article as ridiculous as Alan Blinder’s “Will Congress Ever Break the Covid Relief Standoff?” in which Blinder puts the blame on Senate Republicans. In fact, the entire premise of the article is that “Senate Republicans resist passing a new bill, even though it’s needed and politically expedient.” But this is simply untrue, and shows the great lengths to which Blinder omits key facts in order to advance the narrative that the Republicans are at fault.
A few days ago, Senate Democrats declined to consider a $500 billion COVID package put forth by Senate Republicans. 52 Republicans (all except Rand Paul) voted to advance the bill, but without one single Democrat vote, the measure died. According to the rules of the Senate, having a majority that included nearly 100% of the Republicans isn’t enough to pass the bill; by invoking cloture (requiring 50 votes to override) they prevented the bill from even being debated. But did Blinder mention this at all in his article? Absolutely not. Instead, he describes how the Senate Republicans “resisted” passing a new bill, because not caving to the $3 trillion relief package offered by the Democrats is somehow an act of resistence.
Blinder continues this ridiculous idea, saying “progress has been blocked” by McConnell. How? The Democrat $3 trillion relief package version (the Heroes Act) contained “items that Republican abhor,” and this somehow makes it the Republican’s fault? And yet, in the very same paragraph, Blinder describes how the Heroes Act itself “was just an opening bid, which House Democrats never expected Senate Republicans to embrace.” This brings to mind two questions: 1) why are the Democrats crafting a bill that they willfully acknowledge they didn’t expect to pass; and 2) why are the Democrats given a free pass to craft a bill (they don’t expect to pass) at the high end of the spending spectrum, but when the Republicans craft a bill at the low end of the spending spectrum, it’s considered a “political stunt.”
Blaming Republicans for causing problems (resisting) because their bill, which the Democrats described as “emaciated,” did not have the right kind of Democrat spending, is outrageous. Such nonsensical hypocrisy and patent lies should not be tolerated.
by | ARTICLES, BLOG, COVID, HYPOCRISY, MEDIA, QUICKLY NOTED
This article from the WSJ is a must-read reflecting how the media reported on the pandemic:
“Has there been in recent history a more tendentious, hysterical, data-denying and frankly disreputable exercise in misdirection than the way in which much of America’s media has covered the Covid-19 epidemic?
Perhaps we can forgive them the endless repetition of pandemic porn; the selectively culled stories of tragedy about otherwise completely healthy young people succumbing to the virus. While we know that the chances of someone under 30 being killed by Covid are very slim, we know too that news judgments have always favored the exceptional and horrific over the routine and unremarkable.
Perhaps we can even forgive them the rapidly shifting headlines—each one shouting with absolute certitude—about the basic facts of the virus and its context: its lethality and transmissibility, the merits of mask-wearing, or the effectiveness of this or that therapy. The science is evolving, and so too is the reporting.
But there are larger representations of this massive and complex story that we should mark as simply unforgivable.
First, the notion, implicit or at times explicit, in so much of the reporting, that the U.S. handling of the pandemic has been a globally unique failure. This is quickly ascribed to the ignorance and malevolence of the Clorox-injecting, quack-cure-peddling bozo in the White House.”
And this:
Even less forgivable is the naked, politically motivated selective use and manipulation of data to damage Republicans and favor Democrats. Typical of this is the steady stream of stories telling us what a great job New York and other (Democrat-controlled) Northeastern states have been doing in managing the spread of the virus, in contrast with the performance of other (Republican-led) states.”
And this:
“There are many reasons for differing rates of infection, death and economic performance, and it would be unwise at this stage to say anything about outcomes with absolute certainty.
But that is perhaps the greatest dishonesty of all: the media’s self-serving insistence that their narrow, partisan narrative of this complex and evolving phenomenon is the revealed and unchallengeable truth.”
The article is worth it to read in its entirety.
by | ARTICLES, BLOG, COVID, ECONOMY, FREEDOM, GOVERNMENT, NEW YORK, POLITICS
I am a long-term supporter of the Manhattan Institute and participate in their events and webcasts regularly. Heather MacDonald, Steve Malanga, and Nicole Gelinas are three of my favorite people. But Michael Hendrix seriously dropped the ball as moderator of the discussion on “Planning for the City’s Reopening” several weeks ago. Given the current pandemic and civil unrest, exploring how business can reopen is a laudable topic; however, the actual discussion was immensely disappointing. He allowed it to simply ignore the real reasons for the problems the City now faces with regard to “reopening”.
For instance, during the question on how we were going to reopen the city, much of the conversation had to do with needing to do more with affordable housing, and needing more help from the city government. He of course knows that this has nothing to do with the “reopening”. The problem long preceded COVID, and doesn’t need the government to fix it. Government actions – zoning, land use, overburdening businesses and building regulations leading to ridiculously high costs – are the cause of lack of affordable housing, and without reversing those actual issues, there is no solution.
Additionally, the “racial crisis” was a significant topic. He ignored any response regarding whether this was true and/or meaningful since the City has been run by extraordinarily liberal, non-racist leaders for generations, including full representation of the minority community. Can racial bias then really be a thing in New York City? Also in every single major city in which there has been extensive looting and rioting, the cities have been in the hands of minorities and liberals for the past 50 years. Yet he as the moderator didn’t even allow for this perspective to come up.
Furthermore, there was absolutely no discussion about the rioters and looters destroying businesses; the conversation only focused on police brutality. Though police brutality may be a problem, is it really a factor in the reopening after COVID? For a panel exploring the city and businesses, it was egregious that he virtually ignored the very real problem: businesses that have been destroyed by looters and rioters are being ignored by law enforcement, making businesses hesitant to invest in reopening and insurers hesitant in providing insurance at affordable rates.
Another topic was education, but there was no mention about charter schools and how they fit into the equation of reopening, even though charter schools are the most successful educational endeavor in the city.
Likewise, another topic was insurance, which he allowed to proceed in a manner that just showed the economic ignorance of the panelists. Since the happening of a pandemic is not a quantifiable risk, it is not insurable. To insist that the government provide insurance, at a premium that can only be set politically, has many problems. What’s more, the ignorance of the position espoused – that the government should somehow make the insurers who did not provide or charge for such coverage pay for it anyway – should not have been allowed to go unanswered.
On a related note, there was talk about how the city may or may not be able to help because there is a budget crisis. But where was the mention that DeBlasio is the cause? There was already a budget crisis before the pandemic and the civil unrest, not because of it. And DeBlasio’s actions during the pandemic and protests will certainly inhibit the ability of the City to reopen.
Hendrix should have made sure that the discussion included the knowledge and competence that the people of the Manhattan Institute espouse. There is no question in my mind that Heather MacDonald, Steve Malanga, and Nicole Gelinas would have been very disappointed with the exchange.
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 | 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 | 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?
by | BLOG, BUSINESS, COVID, ECONOMY, FREEDOM, GOVERNMENT
The WSJ had a thoughtful opinion piece a couple of days ago. The author wanted to “quantify how many deaths were caused by delayed shutdown orders on a state-by-state basis”as a means to examine the efficacy of quick shutdown. Below are some key takeaways, and you can read the piece in full here.
“To normalize for an unambiguous comparison of deaths between states at the midpoint of an epidemic, we counted deaths per million population for a fixed 21-day period, measured from when the death rate first hit 1 per million—e.g.,‒three deaths in Iowa or 19 in New York state. A state’s “days to shutdown” was the time after a state crossed the 1 per million threshold until it ordered businesses shut down.
We ran a simple one-variable correlation of deaths per million and days to shutdown, which ranged from minus-10 days (some states shut down before any sign of Covid-19) to 35 days for South Dakota, one of seven states with limited or no shutdown. The correlation coefficient was 5.5%—so low that the engineers I used to employ would have summarized it as “no correlation” and moved on to find the real cause of the problem. (The trendline sloped downward—states that delayed more tended to have lower death rates—but that’s also a meaningless result due to the low correlation coefficient.)
No conclusions can be drawn about the states that sheltered quickly, because their death rates ran the full gamut, from 20 per million in Oregon to 360 in New York. This wide variation means that other variables—like population density or subway use—were more important. Our correlation coefficient for per-capita death rates vs. the population density was 44%. That suggests New York City might have benefited from its shutdown—but blindly copying New York’s policies in places with low Covid-19 death rates, such as my native Wisconsin, doesn’t make sense.”
The author then went on to examine Sweden’s policies (less restrictive than ours) and integrated those into his analysis:
“How did the Swedes do? They suffered 80 deaths per million 21 days after crossing the 1 per million threshold level. With 10 million people, Sweden’s death rate‒without a shutdown and massive unemployment‒is lower than that of the seven hardest-hit U.S. states—Massachusetts, Rhode Island, Louisiana, Connecticut, Michigan, New Jersey and New York—all of which, except Louisiana, shut down in three days or less.
We should cheer for Sweden to succeed, not ghoulishly bash them. They may prove that many aspects of the U.S. shutdown were mistakes—ineffective but economically devastating—and point the way to correcting them.”
Only time will tell what methodologies worked and what didn’t, but this is an important conversation to have, especially since the economy continues to worsen.
by | BLOG, BUSINESS, COVID, ECONOMY, GOVERNMENT
It might not be so crazy after all for relatively young people who are going broke and having their lives torn out from under them to try to get back to normal in as careful a way as possible: going to gyms, salons, and other businesses. Might it be reasonable for some people to try it out to see if it can help with the infection rate? Can we trust people to be careful?
Some businesses such as FedEx, supermarkets, and medical practices are open and more are starting to or trying to open up, and yet they are not getting a lot of business because people are afraid, or told they need to be afraid. But why not open up and if people are willing to take the risk and practice social distancing and mask-wearing, we should let them.
The economy is horrific the way it is, and it just cannot remain like this. Many people’s lives are now devastated. For many, we have probably passed the point where the cure is worse than the disease.
We know by now that the virus does pose a risk of death, but we also know that in the vast majority of situations, the virus is more mild than it is lethal – especially for certain cohorts. People are well-educated enough to be able to make an informed decision as to what level of socializing they want to engage in for themselves. We should let them make that choice and start to get back to the business of doing business.
