Many on the Left are excited by our new Mayor Bill de Blasio. Yesterday in his first budget presentation as mayor he emphasized once again that he intends to govern as a "progressive." Here is Brent Budowsky in The Hill yesterday channeling the excitement:
[T]he left is lifted by the possibility that he could evolve into a modern-day Robert Kennedy or a New York City FDR, turning city government into a laboratory for big ideas put into action.
Well, forgive me, but I'm trying to get a handle on what the progressive program actually is and how it could possibly work, and I just can't figure it out. When I listen to the self-described progressives, I hear soaring rhetoric about fairness and the crisis of income inequality. But when I look at the actual programs proposed, every single one of them looks to do absolutely nothing about "fairness," absolutely nothing about income inequality, and instead constitutes a giveaway to one or another favored constituency, almost always labor unions that provide political support, and whose members are nearly all well into the top half of the income distribution.
Granted, I'm about the farthest thing from a progressive, but I'm trying to look at the world from their perspective. If you take their rhetoric at face value, the overriding problem of the world today is the unfairness of unequal distribution of economic goods by the capitalist system. In his victory speech after winning the election, de Blasio called income inequality "the defining challenge of our time." President Obama used the exact same phrase -- "defining challenge of our time" -- in talking about income inequality in his speech on December 4.
Well, if I were a progressive, and my overriding concern was income inequality, the first thing I would do is recognize that addressing this problem in a way that would meaningfully swing the numbers will take huge resources, and we have limited resources, so we must use every dollar effectively in order to have enough to address income inequality. I would also insist on getting accurate data on real income inequality so that I would have some metrics to know whether anything I did was working. For example, I would insist on correcting the fraudulent data currently used by the government by which nearly $1 trillion annually in in-kind handouts to low income people are excluded from income data, and the incomes of high earners are counted pre-tax even though they pay half or more of that income to the government already. And finally, I would apply whatever spending I could muster for curing income inequality to a program that actually raised the measured incomes of the poorest people.
Applying these principles to actual programs, the first thing I would notice as mayor of New York is that we are way overspending on unsustainable pensions and health benefits for employees -- over $17 billion in the budget put forth yesterday, almost 23% of the entire $75 billion budget, and fully a third of the $52 billion portion funded by city taxes. The second thing I would notice is that we are spending about $20,000 to educate each public school child for a year, while the rest of the country does it for about half that. Those two things alone constitute about $15 billion of annual overspending of city taxpayer funds when the entire city tax system only raises about $52 billion. In other words, vast overspending on these major items -- all of which goes into the pockets of the union supporters of de Blasio -- crowds out more or less any hope of making a dent in income inequality. Overspending on Medicaid (by comparison with competitor states like California and Texas) is another several billion. I just can't think of how you can say that income inequality is your top priority when you let this kind of big money just slip away.
Nicole Gelinas of the Manhattan Institute has an op-ed in today's New York Post about de Blasio's budget presentation, headlined "Mayor goes minor-league," the theme of which is that he "missed the big picture." Yes, and then some. Not a mention of overspending on worker pensions or health benefits or public education. Instead he talked about things like another $35 million for snow removal and $3 million for an inspector general for the Police Department. OK, those things are a fraction of a tenth of a percent of the budget.
But de Blasio continued to show that he has no idea that resources are finite and you can't just throw money away on waste and expect to have anything left over for important things, let alone for massive projects like income inequality. So, for example, Bloomberg had proposed saving $59 million by closing surplus firehouses. That's appropriate and necessary -- fires in New York City are down by well over half since the early 90s according to Fire Department data here, but community opposition keeps all the firehouses open even with no fires to fight. Well, that's another $59 million that won't be addressing income inequality, and instead will go to the unionized firemen.
And how about two more de Blasio signature causes, hospitals and pre-K education. Long Island College Hospital continues to lose about $13 million per month, and is projected to lose over $200 million over the course of three years of ownership by SUNY. Granted this is state rather than city money. But remember, there are next to no patients in this hospital; the money just goes to de Blasio's SEIU healthcare union allies to do nothing. Universal pre-K similarly cannot possibly have any measurable effect on income inequality until the beneficiaries enter the labor force 20 years hence; but in the meantime the teachers union gets thousands of new dues-paying members.
If the actual agenda is to address income inequality, none of this makes any sense whatsoever. If the actual agenda is to pay off political supporters for putting you in office, then it makes sense. Or maybe a progressive can offer me an alternative explanation.