big government

Separated at birth?

NYS and CA may be separated by a continent but otherwise appear to be joined at the hip.

The July/August 2012 issue of Imprimis has an article, Economic Lessons from American History, which includes this interesting story, under the heading "Governments Are Terrible Investors":

...History is littered with government investment disasters...consider the Erie Railway. In order to get political support for building the Erie Canal, Governor DeWitt Clinton promised the New York counties that bordered Pennsylvania (known as the “Southern Tier”) an “avenue” of their own once the canal was completed. The canal was an enormous success, but as such it affected the state’s politics. A group of politicians from along its pathway, the so-called Canal Ring, soon dominated state government. They were not keen on helping to build what would necessarily be competition.
 

A canal through the mountainous terrain of the Southern Tier was impossible, and by the 1830s, railroads were the hot new transportation technology. But only with the utmost effort did Southern Tier politicians induce the Legislature to grant a charter for a railroad to run from the Hudson River to Lake Erie through their counties. And the charter almost guaranteed economic failure: It required the railroad to run wholly within New York State. As a result, it could not have its eastern terminus in New Jersey, opposite New York City, but had to end instead in the town of Piermont, 20 miles to the north. It was also forbidden to run to Buffalo, where the Erie Canal entered Lake Erie, terminating instead in Dunkirk, a town 20 miles south. Thus it would run 483 miles between two towns of no importance and through sparsely settled lands in between—not unlike the current proposed California high-speed rail project, the first segment of which would run between Fresno and Bakersfield and cost $9 billion...
And why, you may ask, is CA repeating a historic NYS mistake?  Firstly, Governor Moonbeam probably doesn't know much NYS history, and you know what they say about the link between ignorance of history and doom.  But more importantly, there's this:
 
 
Both CA and NYS are in bad shape despite all the happy talk coming out of Albany and Sacramento. Why?  Taxes, regulations, and...union penetration.
 
Nationally, the percentage of workers who are members of a union is around 11% or so; in NYS, that figure hovers around 25%, while in CA, it's around 17%.
 
When you combine a high total tax burden (imposed by governement), onerous regulations (imposed by government), and union influence (on government), it isn't any wonder that businesses and productive individuals leave or choose not to establish themselves in NYS and CA—with the predictable result that those states are floundering financially.
 
And why is it that some people think that more government is the solution?
 

Can anyone say "Cloward-Piven strategy"?

From Blaise at Government Gone Wild.  Take a look at the ads that appear on TCAT buses if you doubt that dependency is being touted as the route to take (since we're generally driving when we see the ads on the backs of TCAT buses urging everyone to sign up for food stamps and we take Prof. Jacobson's advice seriously about not snapping photos whilst driving, if anybody else can shoot a photo to us at oneofnineinfo@gmail.com we'll put it up):

A Tale of Two Cities

No, it's not Paris and London, it's Salamanca, NY and...Salamanca, NY.  I can personally attest to the city's "shabbiness."  At Townhall, h/t Patricia at the NYS Moms group of As a Mom (over there in the right sidebar):

...shabbiness blankets what could be a quaint town bounded by a river, a New York state park and a national forest. Garish “Nation-owned” cigarette outlets and gas stations produce a city drawn by Norman Rockwell but touched-up by Jackson Pollock.

“I had a professor who once said, ‘Simple way to understand the importance of private property: Have you ever washed a rental car?’ ” says political science professor Lara Brown. Salamanca, she says, “strikes precisely at the issue. When you don't own, most people don't care.”

[....] “[The citizens of Salamanca and the Seneca Nation] are now paying for the past mistakes and incompetence of the federal government.”

Their plight is compounded by the all-too-familiar pattern of many towns and cities in the Northeast: Over several decades, the Rust Belt’s state and local governments have failed to enact job-sustaining tax policies and, more important, have failed to invest in the infrastructure needed to compete with other regions of the country.

The result, in Salamanca as elsewhere, is sweeping, perhaps irreversible, economic and social devastation.

Well.  We've blogged here numerous times on these very topics—the importance of private property, the ultimate destructiveness of big government, the negative impact of state and local tax policies unfriendly to both business and individuals (most recently here, here, and here)...and here it all is, in microcosm, in one small city in NYS.

Read the whole thing.  The comments are worth reading, too—one commenter called New York "The Vampire State."  Wish I'd thought of it.

Government Gone Wild

Meet my new best bud, Blaise...Blaise Ingoglia.  Dis guy seems real familiar to me—half da guys I grew up wit were "Blaise," and da otha half were Dennis, Pat, or Tom.  But I digress.

Report: Barbara Lifton town hall in Newfield, Part 6

Sixth in a series

Part 1 on taxes is here

Part 2 on the economy and economic policy is here.

Part 3 on the NYS budget is here.

Part 4 on education is here.

Part 5 on lobbying and campaign contributions is here.
 
Governor Cuomo said, “You can never solve a problem if you refuse to acknowledge it.”  After listening to Assemblywoman Lifton, at her town meeting, she obviously is not heeding his words.

Hatred of Wall Street

Ms. Lifton decries the fact that corporations are sitting on $2 trillion in cash that could help invigorate the economy.  She ignores the fact that the same thing happened during the Great Depression; corporations had very uneven spending during the 1930’s BECAUSE OF Roosevelt’s tax policies and his anti-business attitude.  Could the same thing be happening today?  Is government the problem, not the solution?

Ms. Lifton loves taxes and states that taxes on Wall Street are major contributors to the state budget revenues.  However, she also states that she would tax away bonuses of Wall Street firms that needed to be bailed out. She ignores that many of these Wall Street firms have paid back their bailouts.   Isn’t this killing the goose that lays the golden egg?   

How about the General Motors bailout?  GM paid back the original bailout with more bailout borrowing.  And what about “Cash for Clunkers” and a $7,500 rebate on overpriced GM cars?  Does the latter count as a bail out of GM and its unions?

Think about Wall Street bonuses from a personal standpoint.  Wouldn’t we all want a boss that recognizes our accomplishments and lavishes bonuses on us in recognition of our work?  We may think they are extravagant – I do – but I also think a major league pitcher with a losing record and a 4.0 ERA is not worth $3 million.  But Wall Street, the Major Leagues and the Baseball Players Union have their own opinion.

Report: Barbara Lifton town hall in Newfield, Part 5

Fifth in a series

Part 1 on taxes is here

Part 2 on the economy and economic policy is here.

Part 3 on the NYS budget is here.

Part 4 on education is here.

Governor Cuomo said, “You can never solve a problem if you refuse to acknowledge it.”  After listening to Assemblywoman Lifton, at her town meeting, she obviously is not heeding his words.

Lobbying & Campaign Contributions

Assemblywoman Lifton vehemently DECRIES the lobbying influence of corporations but, amazingly, FLATLY DENIES that unions are major campaign givers and lobbyists.   

In 2010, 5 of the top 10 campaign donors were unions, as were 12 of the top 20.  The largest union donor was AFSCME, which gave over $43 million and the top 5 unions gave almost $150 million.  Not bad for donations that did not exist, according to Ms. Lifton.  And all of them were Democratic supporters.  Check out: http://www.opensecrets.org/orgs/list.php

She also says that her political contributions come in small donations.  But in the recent campaign, her largest donor was Vote/Cope, a branch of the NYS United Teachers Union in the Hudson Valley.

So, her stance on lobbying & campaign contributions would seem to be that it is okay for unions but not for corporations. 

I am sure she has heard of the 1st Amendment.  Liberals seem to believe strongly in the 1st Amendment, when they are doing the talking.  When the opposition speaks, they are a bit more flexible about it.

Report: Barbara Lifton town hall in Newfield, Part 4

Fourth in a series

Part 1 on taxes is here

Part 2 on the economy and economic policy is here.

Part 3 on the NYS budget is here.

Governor Cuomo said, “You can never solve a problem if you refuse to acknowledge it.”  After listening to Assemblywoman Lifton, at her town meeting, she obviously is not heeding his words.

Education:

Before the current recession, there was great concern about the "Brain Drain"; college graduates were leaving NY for states where there were jobs.  The "Brain Drainapparently continues as Governor Cuomo has said, “New York has no future as the tax capital of the nation.  Our young people will not stay.”  Ms. Lifton’s economic strategy is to produce more, higher-level, college-degreed graduates. (Apparently, NY taxpayers need to fill a shortage in other states where jobs are growing.)

She also asserted that NYS employers were dying for college graduates as well as holders of advanced degrees.  (Other than a few specific areas, where does she get this idea?) 

Ms. Lifton lists energy costs and health care as the things driving up school budgets, but fails to mention teacher salaries and pension benefits as a primary cause (or that they are any cause at all). But every article on school budget increases mentions pension costs as a primary cause of school budget increases.  This definitely qualifies as not acknowledging a problem.

She says that private colleges get Bundy Aid to help aid the poor.  However, Bundy Aid is a flat payment to private colleges, per graduate.    Colleges also get Bundy Aid for out-of-state residents who graduate.  During the recent campaign debates, she said that it was important that NY taxpayers also subsidize foreign students in our colleges.  (There seems to be no end to the wonderful things she can do with other people’s money!) 

Report: Barbara Lifton town hall in Newfield, Part 3

Third in a series

Part 1 on taxes is here

Part 2 on the economy and economic policy is here.

Governor Cuomo said, “You can never solve a problem if you refuse to acknowledge it.”  After listening to Assemblywoman Lifton, at her town meeting, she obviously is not heeding his words.

New York State’s Budget:

Governor Cuomo wants to shift the way budget cuts are viewed.  He says a cut is how much spending changed between the latest enacted budget and the new one, not how much the anticipated increase was cut. 

Assemblywoman Lifton speaks only of the cuts to the anticipated budget and not the actual increase or decrease.  She said that they (the legislature?) have cut $19 billion in the past few years and the Governor’s budget cuts an additional $9 billion.  Based on her numbers, over the past 3 years the anticipated increase was $31 billion; that’s an anticipated increase of 25%!  “They” cut $19 billion, so she wants credit for a $19 billion decrease and ignores the $12 billion increase!  This is a failure to acknowledge the problem.  (Of course, she thinks letting taxes go up when the current tax schedule expires on December 31st won’t be a tax increase, either.)

She goes on, at length, about individual cuts to departments in the Governor’s budget.  Of course, she never mentions the actual changes (which may not even be cuts) – only the anticipated cuts.

Report: Barbara Lifton town hall in Newfield, Part 2

Second in a series

Part 1 on taxes is here.

Governor Cuomo said, “You can never solve a problem if you refuse to acknowledge it”.  After listening to Assemblywoman Lifton, at her town meeting, she obviously is not heeding his words.

The economy:

Those who sat through Assemblywoman Lifton’s town hall meeting in Newfield would have to say that she does not acknowledge a problem with the New York economy.  Oh, she gives lip service to the unemployed.  But when asked to what she attributes the economic crisis and loss of jobs in upstate NY, she says, “It’s the recession”.  She does not seem to believe there is a crisis deeper than the recession in Upstate New York.

Governor Cuomo says that NYS is, “Functionally bankrupt."  Assemblywoman Lifton quotes studies that show what a positive business atmosphere there is in New York.        

Economic policy:

Assemblywoman Lifton speaks lovingly of Franklin Roosevelt, his steps during the Depression and her recent readings in economic history.  But has she ever heard of the 1920-21 Depression, which lasted about 1 ½ years?

1920 had the worst single year drop in the U.S. economy in its entire economic history.  But by the summer of 1921, the economy started improving dramatically.  What had the government done?  President Harding cut the federal budget and the Federal Reserve raised interest rates.  (Take that, Keynsian economists!)

Her model is the Great Depression, which lasted well over a decade, and she ignores the model that lasted 1 ½ years, since it was, “An inconvenient truth.”

By the way, Ms. Lifton speaks of her latest readings on Herbert Hoover as President of the U.S.  Perhaps she should read about his work as Secretary of Commerce during the 1920-21 Depression.  Hoover was preparing massive federal intervention in 1921, but the economy got better before he could intervene! Whew!  Cut that one close!

Report: Barbara Lifton town hall in Newfield, 2-22-11

First in a series:

Governor Cuomo said, “You can never solve a problem if you refuse to acknowledge it”.  After listening to Assemblywoman Lifton, at her town meeting, she obviously is not heeding his words.

Taxes:

Here are some recent news and quotes on taxes, from Democrats!

In a recent visit to the Ithaca Brewing Company, Senator Schumer said, “By cutting taxes for these small businesses, we can help grow the economy and put more New Yorkers back to work in stable, good-paying jobs.”

Senator Gillibrand has a proposal to expand, simplify and make permanent a research and development TAX CREDIT.  (A tax cut by another name.)

Governor Cuomo has said, “New York has no future as the tax capital of the nation.”  

Assemblywoman Lifton isn’t listening to her fellow Democrats.  She believes that high taxes help drive the economy, not hinder it.  She said that we need to keep on supporting the private sector by keeping the public sector intact.  Huh? Intact?  No changes?  Who in the private sector believes an intact public sector is supportive? This goes beyond failing to acknowledge a problem and joins Alice in Wonderland.

Assemblywoman Lifton also believes that the wealthy do not make decisions based on taxes.  She was asked about the hedge fund manager issue last summer; (the legislature wanted to tax hedge fund managers and then backed off when there was a danger of many hedge funds moving operations to Connecticut).  She believes that the legislature “blinked” and that the hedge funds would not have moved. (In essence, the rest of the liberal-dominated Assembly was wrong.) She then discusses the federal capital gains tax as if it was an issue with the hedge funds managers, while the real issue was double taxation by both states of those hedge fund managers living in Connecticut.

Assemblywoman Lifton decries the tax breaks for the wealthy, using a publication from the Center for Working Families. Check out their web site, http://www.cwfny.org/; it’s not exactly a paragon of unbiased thinking.  

Ms. Lifton quotes their calculations of how much these tax breaks are costing.  Is it logical to believe that, if the highest taxed state increased its current rate by 50%, at least some and maybe most of the wealthy would not migrate out? (Think Tom Golisano, etc.)

State taxes are not an issue to Ms. Lifton.  She believes the problem is only local property taxes and she mentions how taxpayers react more strongly to their property tax bills than to their state tax bills.  Let’s compare apples to apples; how would taxpayers react if they did not have state taxes deducted from every paycheck and they had to come up with their entire state tax bill at one time – as they do with property taxes.  

She also ignores the total tax burden of fees, surcharges, permits and corporate taxes (which are actually paid by the consumer).

The current tax law on the wealthy will expire on December 31st and taxes on the wealthy will increase. Assemblywoman Lifton does not believe this is a tax increase.

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