[IP] [Politics] more on ANY OPPOSING VIEWPOINTS djf Krugman
Begin forwarded message:
From: "Gordon C. Thomasson, Ph.D." <gthomas1@xxxxxxxxxxx>
Date: November 28, 2004 10:44:50 PM EST
To: dave@xxxxxxxxxx
Subject: Re: [IP] more on ANY OPPOSING VIEWPOINTS djf Krugman
Dave,
Subject: Re: [IP] more on ANY OPPOSING VIEWPOINTS djf Krugman
> I see both the state of NY and the state of CA and all of the
> largest urban areas therein as broke.
Governments tend to go broke when tax receipts decline faster than
spending slows. This situation is likely to reverse as economic growth
returns -- due to absorbtion of new technologies.
Mark Stahlman
New York City
Living in NY and being from CA ...
California would not have become "broke" (or elected/had reason--NOT
the
same thing as rationality--to elect the puppet-for-big-business
Arnold) if it
had repudiated ALL unpaid energy bills after the ENRON (and other
providers') scam/theft became known and indicted the officers of any
provider
who threatened to cut off power delivery in response, and immediately
sued
for recovery of all monies already paid, plus triple RICO damages. LA
County's municipal power, like a few areas in NY, free of the
conspiratorial
grid, is proof that the price-of-power-fixing was all a fraud.
Short-term economic
growth or decline and/or the absorption of new technologies is
irrelevant.
(Will Ken Lay ever see a day of jail, given GWB's "mandate" and all KL
knows about where the bodies are buried? Will we ever see what
industry
and Dick Cheney created in the White House and how? Or, more to the
point, will information on who all in the Bush administration
feloniously
"outed" ambassador Wilson's CIA wife (and targeted all those with whom
she worked overseas, both naive and innocently or as actual company
assets / agents) come out before the November 2004 election? ...
--anachronism intended!)
I not only live in New York but in Broome County, original but now
almost
all outsourced home of IBM (even if to other parts of NY). Since
1990, our
"Peace Dividend" has been a disproportionally high loss in
manufacturing
and other non-service jobs. (But don't panic, "assembling burgers"
is now,
we are told by some state Republicans, a manufacturing job.)
New York (and national) Republicans (a publican was a tax collector,
or more
precisely a tax-farmer, so what is a re-publican?) love to rant (and
get elected)
"when tax receipts decline faster than spending does", but they
all--obscenely
(and perhaps predictably--even those styled as "economists"), never
point out
to the overburdened public-they-pander-to the difference between fixed
costs
and other kinds of government spending. Governments cannot stop
plowing
streets, lighting dangerous intersections, maintaining health and
emergency
services or providing a host of other public services without risking
both court
liabilities ("the victim wouldn't have died if the street had been
plowed as it
had been for the previous 70+ years, your honor"), and enormous costs
shifted to individuals, local and county governments when state
government
no longer provides essential services. Of course cutbacks always come
first
in affluent neighborhoods and around powerful corporations, etc., never
on the poor ... NOT! [Not just a NY thing: after Prop 13 passed in
California in the early 1970s, I saw funding cut for swimming
pools--I'm
from South Central LA--but not for shuffleboard courts, a "demographic"
thing.]
The next time someone complains about spending, ask what percentage of
government spending is fixed cost. Sure, they'll complain that wages
and
benefits to government employees are too high, but unless they
outsource
essential jobs and services to India (To plow our streets? I seem to
recall a
mid-western state outsourcing its unemployment services, of all the
stupid
profit-, bribe-, and kickback-making decisions, which further destroys
our
local tax revenues, job markets, and economies.), who will perform the
essential services that are so much of the fixed cost of governments.
As it
is, nationwide many urban government employees cannot afford to live in
the community where they work. In NY, our whore-to-the-rich (oops,
excuse me, R-governor) has cut state taxes by cutting state payments
for
many services, transferring the cost for those to county and municipal
governments, but not cutting taxes anywhere near as much as funding
for services--then all we have to figure out is what he does with the
balance.
((Full Disclosure: as a Cornell Ph.D., since 1993 at our local
community
college, nominally part of the SUNY system, though NOT in salary or
benefits--let's forget national averages for people with comparable
training
and experience--I have been paid more than $10,000/year LESS than the
average New York high school teacher, with a decline in our real wages
every year. Yes, downstate teachers have higher rents, but upstate we
have higher energy and transportation costs. As public employees, NY's
fascist "Taylor Law" prevents striking or ANY OTHER effective job
action
(picketing with no threat behind it is a near-pointless exercise in
"free
speech") to try and get anything remotely resembling fair treatment.
Pennsylvania's toll booth operators have more real rights than ALL of
NY's public employees--whether toll booth operators, professors, M.D.s,
and after 9/11 the politically exploited/photo-opt'ed to/in death EMTs,
police, and firemen, combined. The state and county never meet their
obligations to each fund 1/3 of CC expenses either, the students--and
underpaid faculty & staff--have to make up the balance.))
While politicians blame taxes for industrial declines, our gridlocked
state
government (assembly is urban controlled/democratic majority, and
senate is rural controlled/republican majority, and with either R- or
D-governors) has failed to pass a state budget on time or anywhere
near the legally mandated and fiscally necessary deadlines for twenty
years. How does a school district, for example, plan its budget,
hiring, etc.
for a Fall semester when the state can't/won't pass a budget until
August
or September? What new business would want the same unpredictability
in taxes, etc. that results when they can go to a state where politics
and
economics are more rational? It's not the taxes but the anarchy in
Albany
that is most discouraging to serious new businesses. (Big old ones
already
own Albany, and receive more tax breaks than individuals, of course:
industrial development zones, energy cost subsidies and tax breaks,
etc.)
To go back to where this started, New York state tends "to go broke" in
large part, not just because of declining tax revenues over and against
government spending that result from politicians' irrationality, but
because
of increased debt-load that results from political
inefficiency/corruption.
Check out how every illegally late-passed state budget lowers NY
state's
already LOW bond-rating (and "investor confidence") and figure out what
THAT costs--in terms of interest as a slice of expenditures out of a
revenue pie, whether fixed, rising or declining--as year-after-year our
unpassed state budget delays translate DIRECTLY into higher interest
rates
to service our debt load on bond markets. (I won't allude to the links
between state Republicans and bond-brokering and issuing profit-making
institutions. I wouldn't want to offend the bankers who contribute to
the
party.)
Enough!
Gordon C. Thomasson, Ph.D.
World History Faculty
Broome Community College (SUNY)
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