New York Progressives Officially Determine That All Wealth Comes From The Tooth Fairy

You undoubtedly know that, among all the states, New York has been hardest hit by the Covid-19 virus. New York is also home to a highly-educated and progressive-minded population. Surely then, New York has many important lessons to teach the rest of the country as to how to deal with a crisis like this.

It was on March 20 that our Governor Andrew Cuomo announced a strong version of a total business lockdown. As of that date there were fewer than 300 deaths attributed to the virus in the whole U.S., and less than half that number in New York. From the Wall Street Journal, March 20:

New York Gov. Andrew Cuomo [today] ordered all nonessential businesses to close and said residents should stay home as the state further clamps down on human activity to stem the spread of the new coronavirus.

Although economic statistics post-dating this order have not yet been released, it is clear that there has been a devastating effect on New York’s economy; exactly how devastating remains to be seen. But as to the effect of the lockdown on stemming the disease, it is very hard to find any positive effect at all. Instead, despite having one of the most draconian lockdown orders in the country, New York has ended up as the epicenter of the disease. With about 6% of the nation’s population, New York has more than 40% of the deaths (22,275 of 55,341 as of this evening). Many states with far less severe lockdowns have much lower death rates. No-lockdown South Dakota has a death rate of 13 per million population, barely more than 1% of New York’s rate of 1,135/million. Florida, a state with slightly more population than New York, has 1,074 deaths to our 22,275.

But let’s look at a couple of New York’s policies in detail. When it came time to forcibly shut things down, what exactly got deemed to be “nonessential” (and therefore shuttered) versus “essential” (and therefore able to continue)?

Consider, as an example, the construction industry. Which category does that industry fall under — essential, or non-essential? Or Is some of it essential and the rest not? At first, it looked like all construction was going to be deemed “non-essential.” But then on March 27, a week after the initial lockdown order, a publication called The Real Deal reported that, after getting “pressure” from “city officials and workers,” the State had decided to make exceptions for projects in the areas of “infrastructure, healthcare facilities, and affordable housing”:

The Empire State Development Corp. updated its guidelines Friday [March 27], saying only work on “roads, bridges, transit facilities, utilities, hospitals or health care facilities, affordable housing, and homeless shelters” will be considered essential. 

So what then are the big categories that got deemed “non-essential”? Again from The Real Deal:

[W]orkers on condo and commercial sites will need to stay home, unless there is emergency construction that needs to be done, i.e. work [to correct a situation] that would endanger the public if left unfinished.

I don’t know of any basis to say that there is any less risk of spread of the infection among workers on, say, a public housing project versus those on a new market-rate condo building. So the obvious line between “non-essential” and “essential” is that those things that are non-subsidized and fully-taxpaying are “non-essential,” while those things that are tax-exempt and/or publicly subsidized are “essential.” And we have made this decision as a result of “pressure” from “city officials and workers,” who clearly have political clout, whereas workers and developers in the private unsubsidized construction industry clearly do not have clout. Fortunately, here in New York, the things that pay the bills can be deemed “non-essential,” because the bills will just then be paid by the tooth fairy.

Getting back to Governor Cuomo’s big March 20 announcements, that is also the day when he announced a 90 day suspension of court eviction proceedings. So in other words, if you are a residential tenant, and you don’t pay your rent, there is absolutely nothing that your landlord can do about it until the suspension is lifted, presumably in July (unless it gets further extended). The question of whether you will owe the missing three months rent when July 1 rolls around somehow did not get addressed.

The announcement of the eviction suspension immediately drew calls from all the usual suspects to just do away with rent altogether for some period of time, like say for several months, or maybe forever. After all, housing is a human right. Among many such calls, here is one from something called The Action Network:

[M]illions of us will be unable to pay the rent on May 1st.  So if we can’t pay, let’s not pay, together! . . . In the weeks since Governor Cuomo declared a State of Emergency in New York, we’ve been calling on our state leaders to #CancelRent . . . . Our demands: . . . Cancel Rent for four months, or for the duration of the public health crisis – whichever is longer.

And don’t think that such demands come from just small numbers of crank activists. The calls have been promptly joined by prominent city and state politicians. For example, a state senator from Queens named Michael Gianaris (famous as the guy — even more so than AOC — who ran Amazon out of Long Island City) has proposed a bill in the state legislature that would give any residential tenant or small business 90 days of rent forgiveness. Senator Gianaris does not see any problem with the Fifth Amendment Takings Clause because, as every good progressive knows, some rights in the Bill of Rights are real and others don’t count. From the Daily News, April 8, quoting a letter of that date from Gianaris to the Governor:

“We must take serious action right away to keep our neighbors in their homes at this perilous time.” . . . Gianaris’ call mirrors a bill the lawmaker unveiled two weeks ago. The legislation would allow “any residential tenant or small business commercial tenant in the state that has lost income or has been forced to close their place of business” to have their rent suspended for 90 days. The measure would mean that renters or businesses would not owe anything during the three-month freeze, even when it is over.

And if the tenants don’t pay the rent, does the landlord still have to pay the property tax? No word on that yet from the good Senator Gianaris. But it doesn’t really matter, because in the end all the money comes from the tooth fairy, doesn’t it?

I actually think that the New York pols, from the Governor on down, are completely expecting the tooth fairy in this case to be another bailout (or two or three) from the feds’ infinite pile of loot. The more that appears a realistic prospect, the more it will incentivize more and more of their irresponsible behavior.