The destruction of New York is the logic of decades of history and long-forgotten pols addicted to outrageous spending and taxation.
Today’s successors of these big taxers are as myopic as the Bourbon kings who “learned nothing and forgot nothing.”
It didn’t start with the election of socialist/communist Mayor Zorain Mamdani, who followed in their footsteps and said the government should control “the means of production.”
Mamdani is the logical outcome of generations of New York City’s drift toward bigger and bigger government along with destroying the private sector. This leads the most productive citizens and businesses to head for the exits. It’s been going on for generations.
These problems happened as, little by little, the city’s Democrats trended radical left. Even some Republicans moved left. An example of the latter was liberal Republican mayor John Lindsay, elected in 1965 and the author of the city’s first income tax. He later turned Democrat. New York’s popular Republican governor, Nelson “Rocky” Rockefeller—elected four times from the late 1950s to the early 1970s—nearly spent the state into bankruptcy. It was all in the stars. Before winning the statehouse in 1958, a predecessor Republican governor, Thomas Dewey, told a young Rockefeller, “Nelson, I like you but I can’t afford you.” Dewey was prescient.
In some 15 years as governor, he quadrupled the state budget and quintupled the state debt, including substantial authority debt, practices continued by his successors, including governor Andrew Cuomo. “Rocky” raised taxes many times and initiated a state sales tax. These taxes accelerated the departure of industry, with New York state losing some 500,000 manufacturing jobs between 1969 and 1975.
In 1961, two-term New York City mayor Robert Wagner, who successfully sought a third term, faced the same overspending problems as today’s state and city leaders. Like today’s pols, he whined as the bills piled up. Wagner blamed the bankers selling city bonds.
Wagner—in a statement that could have been made by several succeeding mayors—said he was going ahead with this welfare program expansion: “I do not propose to permit our fiscal problem to set the limits of our commitments to meet the essential needs of the people of the city.” About a decade later, the spending bomb he lit blew up. Lindsay’s successor, Abe Beame, campaigned for mayor in 1973 as the man “who knew the buck.”
Yet a 1975 New York Magazine profile described his budgetary practices as “lies and a sham.” William Simon, US Treasury Secretary in his book, A Time for Truth, said New York governor Hugh Carey “ping ponged from position to position,” and demanded a federal bailout.
The city narrowly escaped bankruptcy in the mid-1970s only after, under the most extreme circumstances. The city elected a liberal Democratic, Ed Koch, as mayor. He had been a young leftist but by 1977, with the city skirting default, he adopted a pragmatic course.
Wrote Michael Goodwin, in his otherwise critical biography of the mayor, I, Koch , Koch “did
his part by controlling spending.” For a while, New York’s ruling class got the message. There were even some sensible mayors such as Giuliani and Bloomberg. Still, these mayors didn’t do what should have been done: Cut taxes and government. They didn’t drive out businesses that paid big taxes so the city was able to pay short term bills and pass budgets.
With the highest tax rates in the United States, the city and state leaders are short on cash but long on Trump-is-Satan theories. This has happened as some big taxpayers—the super wealthy who pay about half of the state’s budget—are leaving. Governor Hochul—a chronic over-spender in the Rockefeller tradition—told them Good Rittens a few years ago. Now she’s begging them to return. The city, which supposedly balances its budget each year, is calling for Albany to provide more money. Why?
The city’s budget practices have consistently received failing grades, according to the group Truth in Accounting (TIA). That’s another reason it’s running out of geld.
Part of the problem, says TIA CEO, Sheila Weinberg, is the same as under previous mayors: shady accounting.
New York City repeatedly receives a failing grade, TIA said, because it has made large financial promises to government employees without setting aside enough money to pay for them. The city’s pension plans are about 85 percent funded, but there is still about $39 billion in pension debt. The bigger problem is retiree health care. The city has promised some $110 billion in retiree health care benefits but has set aside only about $5 billion to pay for them.
New York City pays retiree health care on a pay-as-you-go basis. That means it covers the cost each year as retirees use the benefits instead of funding those promises in advance. This allows the city to claim it is balancing its annual budget, but the long-term debt continues to grow, she says.
These accounting scams are the same ones that got NYC in trouble back in the Wagner/Lindsay/Beame days. When will NYC stop getting an F in accounting and spending controls? When will it stop overtaxing and egging on people to hate the rich such as Mamdani staking out the second home of billionaire Kenneth Griffin, who is thinking twice about whether to go ahead with a $6 billion project on Park Avenue, a project that would generate thousands of jobs.
When? Impossible to say. But cities—even the richest of them—can go bust or go from great to pathetic fast. See Detroit and Newark, New Jersey.
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