The Zeitgeist with Howard Barbanel

     

The NY State Capitol Building in Albany, Thomas Edison and his light bulb and the new CFL bulbs (right).

The Ever Burgeoning NY State Budget

One of the reasons why life in New York is so expensive and why government is so dysfunctional is the never ending spending and the constant increases in the budgets at just about every possible governmental level.

Let’s take a look at our state budget as an example. When Mario Cuomo became governor in 1983 the state budget was $42 billion. When he left office in 1995 the budget grew to $60 billion. George Pataki got off to a decent start by actually cutting spending and the size of the budget through 1998 but by ’99 the budget surged and kept growing each year of his 12 year reign to end at $81 billion in 2007. Now you might think with the economy collapsing and the world seeming to cave in after ’07 that the budget would have seen some kind of a decrease, but you would be mistaken. Thanks to Obama stimulus money and the “Millionaire’s Tax” on those earning over $200,000, the budget was able to grow.

During the Eliot Spitzer-David Paterson years from 2008-2011 the budget grew each year, settling in at $85 billion in 2011. The 2011 budget had cuts over 2010 (which was more like $87 billion) but by the time Andrew Cuomo took office we were still at $85 billion. While the 2012 budget is pretty much flat with ’11, projections are for the numbers to reach $90 billion by 2015.

In a masterful “redistribution of the wealth” which would make the Occupy Wall Street and Obama people proud, thanks to a $2 billion tax increase on individuals earning over $1 million and couples earning over $2 million a year (granted, there are only 30,000 of these folks, but these are the people who make jobs and investment happen) about $690 million of that figure will be funneled back to the middle class as tax cuts, some $250 million of the $2 billion is being allocated to reduce the hated MTA tax on small businesses (those firms doing more than $1.2 million a year will still be forking over the dough) and non-profits and $140 million on some business tax cuts, upstate flood relief and an expensive youth jobs program. The remaining billion raised from the wealthy will go into school aid (not to bring down any of our residential or commercial property taxes, why would anyone want to do that?) and more Medicaid spending.

The State Operating Funds Budget, adjusted for inflation, excluding Medicaid (which is a whole different albatross mandated heavily by the Federal government) shot up by 43 percent under Mario Cuomo, 35 percent under George Pataki and only five percent during the Spitzer-Paterson years.

According to E.J. McMahon at the Manhattan Institute’s Empire Center for New York State Policy “the growth in the state budget will never be tamed unless and until Cuomo and the Legislature address the structural drivers of growth, which include public employee pensions and benefits, costly capital contracting guidelines and the nation’s most bloated Medicaid program.” A great percentage of state spending are transfers to local governments and school districts and unless budgetary restraint and reform is implemented across all local levels, there will be never ending upward pressure from localities for ever more milk from the public teat.

Hardly anywhere in any level of government in New York do we see any kind of surgical cutting of budgets to a point where spending declines in real dollars by appreciable amounts. It is taken as a matter of faith (or fate) that budgets will increase every year. Democrats, generally feel that tax rates aren’t high enough, especially on anyone earning above six figures and “redistributing the wealth” is not seen as a permutation of Marxism but as some right and entitlement by Liberal legislators who’ve appointed themselves as arbiters of how much money anyone with a modicum of success in life ought to be able to retain. This kind of hostile environment towards success and basic unfairness to those who’ve worked hard and accomplished something (and let’s not get started on all the prohibitive “death taxes” that hit your heirs when you pass from this earth) only serves to continue to feed the ever growing populations of Florida, Texas, Arizona and other sunny tax-free climes. New York: Known as a successful exporter of successful people and builder of other states’ economies by sending forth our well-to-do into their midst.

Seeing The Light 

Last week as part of a $1 trillion spending bill, Congress gave a one year reprieve to the Edison-invented incandescent light bulb. Back in 2007, the Democrat Congress passed a bill that would have banned these bulbs as of New Year’s Day 2012. The new Compact Fluorescent Bulbs (CFL’s) are about five times as expensive as old-time incandescents and although CFL’s consume a lot less electricity, a lot of folks really dislike the light they give off and more importantly, are wary over the fact that CFL’s, while purporting to help the environment, actually contain a highly toxic and dangerous substance – mercury – which if you drop and shatter a CFL, your home becomes a biohazard – especially with children around.

The outright ban on incandescent bulbs is as unreasonable as a ban on alcohol. Let people decide for themselves how to light all or part of their homes and let the free marketplace decide as different formats compete for consumers’ spending. If the CFL is destiny, the incandescent will go the way of the VCR or the 8-Track player, but just like a lot of us like to cook with gas (or even barbeque with charcoal) instead of nuking food, we ought as responsible adults to be able to decide what to put into our bedside lamps by ourselves. Banning these bulbs is like banning candles and is just plain silly. Let’s push for a permanent repeal on the incandescent bulb ban.

The Zeitgeist with Howard Barbanel

        

Fewer emails on the Blackberry is a good thing (left). Barbara Parkins (left), Sharon Tate (center) and Patty Duke in "Valley of the Dolls" and an ode to the departed Three Martini Lunch.

Tech Liberation

I am reveling in a nearly unparalleled feeling of elation and liberation. No, I haven’t won the Mega Millions lottery – it’s almost as big though – for the first time in years I am blissfully unencumbered by nearly 200 nonsensical emails a day across various digital platforms, but, most especially they’re not on my Blackberry.

Yes, tech fans, I’m still using a Blackberry instead of one of those light-speed-fast Star Trek-like Tricorders that are called iPhones or Androids. In the tech word, I’m a semi-Luddite, still preferring a real tactile keyboard (no matter how miniature and no matter that I need to use by thumbs).

Back to the liberation – this week I finally closed-down an email address I’d been using since 1995 or something. This email address was in the hands of nearly everyone on the known planet, including spammers and purveyors of nearly every kind of product or service, including Nigerian “bankers” and Chinese “businessmen.” Yes, I had multiple spam filters on this account and without them the email count would have been stratospheric.

Because this was my very first email address and it was from a former business that I invested 18 years of my life in, I was loathe to let it go, thinking that who-knows-who from who-knows-where and who-knows-when will always be able to find me there. However, I’m happy to report that in the 72 hours since the closure of this email account, the only thing I’ve been missing (and not tearfully) are the endless silly emails that set my Blackberry’s red light blinking every two minutes.

For key contacts from those days and that industry, I just sent-out an email blast informing folks of the new email address. Part of the Blackberry liberation has been from the compulsion to check it as often as I’d been and the drudgery of having to highlight and delete 5-10 emails at a time. I’m convinced that the battery life of the device has been extended greatly, which in a roundabout way, will help make the Earth a greener place.

We live in a 24/7/365 digital age where people demand constant contact and instantaneous replies. I’m of the bridge generation that started working in the late 70s when we didn’t have computers, emails, faxes or even FedEx – a correcting typewriter was considered the epitome of high-tech. If you had an answering machine (tapes, naturally) you were in the same big league as Jim Rockford – but, still, folks didn’t expect you to get back to them in nanoseconds, they were just relieved to be able to leave you any kind of a message at all.

Nearly everything came and went by “snail mail” in those days. Something really urgent could be sent by hand courier across town but generally not across the country or across the world anytime quickly. Naturally, the U.S. Postal Service is reeling from diminished demand when you can email an entire financial presentation of umpteen pages, charts and graphs in the blink of an eye and it can be read even in the palm of your hand.

There was, however, a civility to those days, a pace of working and living that in retrospect seemed a bit less frantic. It was OK to wait a few days for things. It was OK to come home at night and not keep working. It was OK to read or play cards on the LIRR. It was OK to actually take more than 15 minutes for lunch. Now we’re increasingly becoming digitized cyborg-humans, attached viscerally to our instant communication devices. Even in our social interactions, today most folks prefer to send text messages rather than call. If you can’t keep up, then you’re knocked off the grid and become irrelevant.

The other night on the Fox Movie Channel they ran the 1960s classic “Valley of the Dolls” with Susan Hayward, Patty Duke and Sharon Tate (she of the Charles Manson murders fame). The film takes place in that 60s faded color photo where in offices people could say with a straight face and unapologetically that someone was not in, they didn’t know when they’d be back or how they could be reached. Somehow life went on. I’m assuming that by the year 2020, we’ll all have communication and computer transponders surgically implanted in our brains (as was prophesized in another great 60s film, “The President’s Analyst” starring James Coburn) they’ll call it the “iBrain” or something like that and all you’ll have to do is just think it and your message will be sent across the neural net. Kind of makes you yearn for the days of Don Draper and the multi-martini lunch.

The Zeitgeist with Howard Barbanel

 New York Governor Andrew Cuomo, Enchanter Par-Excellance.

This was an editorial I wrote that appeared in the December 9, 2011 issue of The South Shore Standard:

Sleight of Hand

The late Harry Houdini was considered the greatest magician of the 20^th Century. Among other practitioners of the black arts who achieved widespread fame are David Copperfield, Doug Henning and Las Vegas staples, Penn and Teller. The chief talents of a great magician are illusion, manipulation, theatricality and bold escapes from seemingly impossible situations. Some magicians don’t know when to stop overreaching and end up pushing the envelope a bit too far as was the unfortunate case with Mr. Houdini.

In New York we have a Governor who believes himself to be possessed of magical powers, and to a certain degree, he probably does. Andrew Cuomo manages to successfully cast spells over ultra-liberal Democrats like Assembly Speaker Sheldon Silver while at the same time completely hypnotizing Republicans like our State Senator and Senate Majority Leader Dean Skelos.

Mr. Cuomo’s latest act of enchantment has been the closed-door, backroom deal to put $2 billion of new taxes on New York’s wealthy while simultaneously throwing a few hundred bucks at New Yorkers earning under $200K.

On December 31^st, the 2009 “Millionaires Tax,” a surcharge imposed on top of already high state income taxes, was due to expire. This surcharge primarily effected those earning over $200,000 a year, shooting state tax rates as high as 8.97 percent for the very rich and even at 7.85 percent for the moderately well-off (those over $300K). While campaigning for office, Mr. Cuomo pledged no new taxes (as did Mr. Skelos and the Senate Republicans) so instead of renewing the “Millionaires Tax,” Mr. Cuomo hit on a plan to completely revamp state income tax rates entirely, technically allowing the 2009 surcharge to expire on December 31^st while “presto!,” creating a whole new set of tax rates for January 1^st. These rates are in fact lower than the pre-2009 rates for most wage earners. Tax rates would have uniformly been 6.85 percent for everyone without the new tax deal. Now, some New Yorkers (those earning under $150K) will see their rates drop to 6.45 percent, with the rates rising to 6.85 percent for those couples earning up to $2 million and individuals up to $1 million threshold.

The bad news for couples making more than $2 mil (and individuals earning north of $1 million) is that their tax rate will now be 8.82 percent – magically marginally lower than the 8.97 percent they’re paying now but significantly higher than the 6.85 percent rate had December 31^st come and gone and no new tax code been put forth and no renewal of the “Millionaires Tax” gone into effect. The Alchemy of this arrangement is that a tax rate hike of 22.34 percent is being passed off as some kind of a tax cut on the expiring “Millionaires Tax” rate, which was meant to be temporary (for just two years) and – “shazaam!,” making the much higher rate permanent.

While cutting anyone’s taxes is a good thing and we do applaud the partial reduction of the much-hated MTA Payroll Tax (whose revenues will be replaced to the MTA out of the state’s general fund in another act of fiscal wizardry), what’s really happening here is that Mr. Cuomo is actually permanently and institutionally raising taxes by $2 billion and doing so by singling out what in effect is a minority group – the 30,000 New Yorkers who as couples earn more than $2 million or as singles earn more than $1 million a year. This dovetails nicely with the Democratic Party’s (and the President’s) agenda of fomenting class warfare, vilifying the well-to-do, scapegoating them and marking them for special treatment.

What is Mr. Cuomo going to do with this extra $2 billion? Why, spend it, of course, on a whole host of feel-good pork barrel programs like $50 million to help inner city youths to get jobs, $1 billion in infrastructure projects, millions and millions for health care (which makes the powerful health care workers unions happy) and education (which makes the powerful teachers unions happy) instead of cutting spending. So, instead of using the $2 billion in new taxes to plug the enormous deficits, Mr. Cuomo is spending it and spreading it around to buy votes from Democratic and Republican legislators.

In the last legislative session, the Senate Republicans were so spellbound that they practically fell all over themselves to prove how reasonable and bi-partisan they can be – allowing Mr. Cuomo to conjure no end of legislation virtually unopposed, giving Cuomo the Younger virtually everything he wanted. Now, the state Republicans are doing more horse trading and “go-along, get-along” politics instead of standing up (like the Republicans in Congress) for core conservative and responsible fiscal policies. Unless Republicans in New York substantively and forcefully differentiate themselves from business as usual, they’ll not have a realistic chance at attaining majority status and control of the state government. They need to offer a clear alternative to tax and spend liberalism. New York Republicans ought to be fighting for a five percent flat tax for everyone, regardless of income level, as a first step towards real tax reform.

On October 17^th of this year Mr. Cuomo said “You are kidding yourself if you think you can be one of the highest-taxed states in the nation, have a reputation for being anti-business – and have a rosy economic future.” Giving most taxpayers a few hundred bucks back a year (a $300 reduction is only $5.77 a week more in someone’s paycheck) is no panacea to make New York a more attractive place economically. Likewise, institutionalizing a tax rate of nearly nine percent for the wealthy on top of capital gains taxes, inheritance taxes, real estate taxes, corporate taxes, sales taxes and more will only drive more and more movers and shakers – the people who create businesses and jobs – away to Sunbelt states like Florida, Texas and Arizona. The premise of raising $2 billion from the very wealthy is fundamentally flawed as these people flee both the oppressive New York tax regime and/or find clever ways around it, so that Mr. Cuomo’s supposed additional $2 billion in taxes may be a sleight of hand as a lot of this money may never materialize and we’ll only be left with the $2 billion in pork barrel spending and an ever deeper budgetary black hole.