DeBlasio and Cuomo Administration Fiscal Policies: A Review

Have you seen all those ads from candidates for Governor?  I can’t seem to avoid them.  You turn the channel and you run into another one.  I’m here to tell you that if you are just a regular person living their life, what is said on the commercials doesn’t matter.  What matters is:

  1. Who paid for them?
  2. What, during the real campaign that takes place in secret, were they promised in exchange?
  3. How and when will you be made even worse off to pay for this?

I’m not in a position to answer those questions about the future.  The deals are secret, and stay under Omerta for eternity.  What we can do is see who the DeBlasio and Cuomo Administrations, with help from the state legislature and NYC council (always eager to cash in the future of the serfs) did in the past. At least to the extent that Comptrollers Stringer and DiNapoli didn’t completely fudge the data they reported to the Census Bureau, also in exchange for consideration, this post will attempt to find out.

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The DeBlasio and Cuomo Administrations: A Review

A public chief executive has three jobs: policy, management, and leadership. With leadership being using one’s influence as a public figure, in competition with celebrities and marketing influencers, to change what people voluntarily do on their own, rather than what the government forces them to do or does for them.  For state and local government, the key policy is the budget — who is made to pay how much, and what it is spent on, compared with the past and compared with other places.  Management determines how much in services and benefits people actually get for that spending.

Mayor Bill DeBlasio and Governor Andrew Cuomo spent much of their tenures feuding.  They would have you believe it was over policy and ideological differences.  I believe their primary ideology is careerism, the advancement of their own careers to higher office, and this made them rivals — and the rest of us and our futures pawns.  Perhaps that’s why both “President” DeBlasio and “President” Cuomo left office widely despised.  

But what did they actually do?  Even as we just had an election for Mayor, and are currently having an election for Governor, the media doesn’t seem to be talking about it, other than issues of the moment such as bail reform.

Most people can’t do it, but one ought to separate what the pols do from the broader situation. DeBlasio and Cuomo didn’t cause the opioid epidemic, the surge in homelessness, or the COVID-19 pandemic, or in Cuomo’s case, the long-term economic decline of Upstate New York.  But they didn’t cause the economic boom and soaring federal debt that allowed them to pander to every special interest group without completely screwing anyone else except transit riders and the later-born (until the future) either.  With regard to the budget, I’ve created some charts that make a fair and perhaps telling comparison.  This post will briefly describe what I plan to do, with additional posts making the comparisons to follow.

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Corruption:  Another Case of Capone on Tax Evasion?

Shockingly, yet another (in this case former) member of the New York State legislature did something that someone thinks is wrong.

https://www.cityandstateny.com/politics/2022/04/lt-gov-brian-benjamin-arrested/365522/

Lt. Gov. Brian Benjamin has joined the ranks of New York politicians arrested for alleged corruption…Prosecutors say Benjamin, while still serving as a state senator representing Harlem, was involved in a bribery conspiracy that involved using state money to indirectly benefit his unsuccessful 2021 campaign for New York City comptroller.

“This is a simple story of corruption,” U.S. Attorney Damian Williams of the Southern District of New York, which oversees federal prosecutions in Manhattan, said at a Tuesday press conference. “Taxpayer money for campaign contributions … That’s bribery plain and simple.”

Ahh, so that’s why Benjamin is in trouble.  It isn’t because New Yorkers ended up paying more and getting less because insiders were self-dealing at their expense.  It’s because the alleged corruption was plain and simple, unlike the barely disguised and complicated corruption that is par for the course.  You’d think he’d be more skillful.

The federal charge represents a turning point for Benjamin, who has been accused of numerous ethical misdeeds over the years – none of which involved a criminal charge up to today.

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Transportation and Energy: Two Things That Could Be Done But Won’t Be

Notice how all that talk of global warming and energy independence goes away once price of gasoline goes up?  The real policy, and the real values, may be found when scarce resources are being allocated, not when politicians are just talking — or pretending unlimited money can just be borrowed and never paid back.  The policy is to discourage conservation, alternative energy, and domestic fossil fuel production and make energy imports more affordable – by cutting the gas tax.  And to defer the cost of this, along with the cost of everything else, to a point in the future when today’s Generation Greed decisionmakers won’t be around anymore.  

Ignore global warming if you want.  The economic and national security consequences on our dependence on the global fossil fuels market has reared its head repeatedly for five decades and is now coming home to roost again, as the autocrats and dictators who control those resources (and hold our ever-growing debts) hold them over our heads.

https://larrylittlefield.wordpress.com/2022/02/28/america-on-its-knees-thanks-to-generation-greed-mcmansions-and-suvs

In addition to what is being done, there is what is not being done.  I already pointed out that anyone could cut the cost of gasoline per passenger in half almost immediately by carpooling.   This post is about two more things that could be done in the intermediate term, but probably won’t be.  Using some of the increasingly less valuable central business district office space for bicycle and e-bike parking.  And expanding the rail system into a national conveyer belt, with platoons of self-driving flatcars with containers on top, powered by electricity from a third rail, circulating between intermodal terminals.  Where trucks could pick them up and drop them off without having to drive long distances, solving a labor shortage and job quality issue in addition to an energy issue.  These could be self-funding private initiatives with a little public help (or even just no excess bureaucratic hassle and tax burden), but that means there would be no special interest group cashing in.  Therefore, there is no interest.

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Home Health Care and Local Government — A Growing Burden on NYC’s Serfs

Not long ago, I read about therapists getting arrested for stealing from programs for developmentally disadvantaged children, overbilling and not providing the services for which they had been paid.

https://www.audacy.com/1010wins/news/local/9-nyc-therapists-stole-usd3-3m-from-child-development-program

While I can’t find it now, I distinctly remember one of the articles saying that the crew had paused their scheme for a while in 2014, after another group had been caught doing the same thing.  Were the federal authorities really going to do something about this?  (They don’t have to worry about the state authorities, as NY state politicians are pro-fraud at the expense of the serfs, in exchange for political support).  After a year or two, the scammers decided the answer was no and resumed their criminal activities.

Meanwhile, the federal government was also investigating home health agencies for defrauding Medicaid.  The investigation took place in 2020, and ended late that year.

https://www.justice.gov/usao-sdny/pr/10-defendants-arrested-home-health-aide-fraud-scheme

“Money that’s earmarked for Medicaid-approved services, and fraudulently paid out to those who don’t render these services, is a crime that’s ultimately paid for by taxpayers themselves. In this case, as we allege, there were even patients involved in the kickback scheme who were willing to play along with the no-show scam in order to earn a few extra bucks. With a nearly $5 billion increase in managed long-term care plan spending recorded over a recent six-year period, the money paid out to those charged today is no drop in the bucket.”

So, was there a pause in New York City’s stunning home health care boom?  And did that pause subsequently end?

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Private Employment By State and Metro Area:  NYC Is Still in the Cellar, and It May Be About to Rain

The Bureau of Labor Statistics released re-benchmarked Current Employment Survey data last week, and the data shows that New York City is still trailing the rest of the country in recovering jobs lost during the COVID-19 shutdowns.  Only Hawaii is hurting as much, not surprising given that state’s dependence on the tourism industry.  The annual rebenchmarking process corrects the past employment data that was reported each month, based on the actual unemployment tax records of businesses.  Large-scale revisions are released each March.  Last year I found that New York City had lost more private jobs during 2020, the year of the COVID-19 shutdowns, than any other metro of significant size and (for those states without them) any state other than Hawaii.

And this year I find that NYC lags in recovering those lost jobs, with only Hawaii faring worse.  But NYC still has more private sector jobs than it had in any year prior to 2015, and there is a new positive trend in the Downstate Suburbs.

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America’s Debts 2021: Z1 Data from the Federal Reserve and Related Commentary

Last Thursday the Federal Reserve released its 2021 Z1 data on, among other things, America’s debts.  There is some good news.  Sort of.  For those who are not average workers, not paying rent, not hoping to buy a house, and not hoping to invest their savings for retirement and have it be worth more than what they put in years later when they retire, rather than less.  Total U.S. credit market debt, after having soared from 330.3% of total U.S. GDP in 2019 to 374.6% of U.S. GDP in 2020, a shocking increase, then plunged to 361.1% of GDP in 2021.  It is still higher by 30.8% compared with 2019, and by 192.6% of GDP compared with 1980, before the “buy now and hope someone else will be stuck paying later” era began.  But the 13.5% decrease in debt as a percent of GDP is still the largest since at least 1953.

How was this accomplished?  Did Americans, American businesses, and American governments suddenly start reducing their debts by a massive amount?  Uh – no.  In straight dollars total credit market debt increased 6.1%, financial debt increased 5.8%, non-financial debt increased 6.2%, household/non-profit debt increased 7.3%, corporate debt increased 5.2%, other business debt increased 3.6%, state and local government debt increased 1.9%, and U.S. government debt increased 7.2%.   But in straight dollars, nominal GDP increased by 10.1%, even more, in part due to an expected snap back from COVID-19 shutdowns, but also in part due to soaring inflation.  The Economist magazine said years (decades?) ago that Generation Greed had run up so much debt that the choice was to inflate it away, default it away, or face stagnation for decades as it is paid back.  That was back when total U.S. debts were far lower than today.

https://www.economist.com/special-report/2010/06/26/in-a-hole

https://www.economist.com/buttonwoods-notebook/2013/05/22/can-it-be-inflated-away

No one is prepared to admit that today the goal is inflate away debts (and the buying power of wages and ordinary people’s savings).  Then again, would anyone have predicted 10 years ago, or 20 years ago, or 40 years ago that the Federal Funds rate (controlled by the Federal Reserve) would be at 0.08% at a time when inflation has soared to its highest level since 1982?

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America on Its Knees Thanks to Generation Greed, McMansions and SUVs

One reason for the war in Ukraine, and perhaps many others to come, is the perception on the part of autocrats that the United States is a nation in decline.  They are right, and it isn’t something that has happened in the last year.  It is something that has happened in the last 40 years.  Four decades of cashing in the future to make things easier in the present, four decades of making those generations born before 1958 the priority compared with those born after.  As a result the United States is deep in debt, and dependent on others to keep lending us more and more money to buy things we can no longer make ourselves and, given falling average pay, can no longer afford.  And the U.S. and its allies are collectively dependent on fossil fuels under the control of autocrats.

That’s why the U.S. has been bogged down in the Middle East for two generations.  And it is why economic sanctions against Russia are so weak.   A stronger country would be telling Russia and, if needed, China, you want to overthrow democratic regimes?  Fine.  You are cut off from the rest of us economically until that stops, and we’ll figure out a way to make things work.  But apparently, we can’t do that.  Sending someone else’s children off to fight and perhaps get killed or crippled in a war?  Maybe.  Gasoline at $5.00 a gallon?  Interest rates at 5 percent?  Please Mr. Putin and Mr. Xi, Al Qaeda and Isis, we surrender!

The theory of sanctions is that the U.S. can wage an economic war in order to avoid the catastrophe of a military war, without surrendering.  But the last time an American leader called for economic sacrifice – when Jimmy Carter said that conservation and the pursuit of alternative energy was the moral equivalent of war — he was turned out of office.  

Carter, who had fought in WWII, was out of step with the generations that have dominated this country politically and economically, in their own short-term self-interest, ever since his administration.  When George W. Bush, in the wake of 9/11, said that Americans should show their patriotism by borrowing money, cashing in savings, and going shopping – that was more like it.

In this post I’ll give examples of what a more capable country waging the moral equivalent of war might actually do.  And what individual Americans, if they wanted to, could do themselves.

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Medicaid by State and Age Group in FY 2019:  Curiouser and Curiouser

The Centers for Medicare and Medicaid no longer provides state-level data on Medicaid expenditures and beneficiaries by age group, but it does provide state-level data on enrollment, expenditures, and expenditure per enrollee by “basis of eligibility.”  Spending per enrollee isn’t as good as spending per beneficiary in analyzing how much is being charged by the health care industry, because expenditure per enrollee is affected by the number of people enrolled who do not currently require expensive care.  And basis of eligibility is not as good as more detailed age groups, but it at least does provide separate data for children (under 18), non-disabled adults (18 to 64), seniors (65 and over), and disabled adults and children.  

When I looked at the per enrollee New York State data for FY 2019, however, I found it was reported to be far below the level of 2018, and even below the U.S. average for children and non-disabled adults.

Why?

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Medicaid By State in 2020:  At Least Some of the Data Is Back

I once wrote a post on how New York’s Medicaid spending, by age and by type of service, compared with the national average and nearby states, every couple of years.  The “State Datamart” that allowed crosstabulations of the number of Medicaid beneficiaries and expenditures, by age and by type of service, disappeared after FY 2012, after fewer and fewer states had been included for several years.  That data had allowed expenditures per beneficiary, by age group and by service type, to be calculated for each state, and the number of beneficiaries in each age group to be compared with the total population in that age group, and the population in poverty in that age group, by state.

Today there is a different set of data that has been posted, and I plan to tabulate what is available and write a couple of posts.  The PDF report is here.

And the data is at http.//macpac.gov/macstats.

It isn’t what I was once able to get, but it is more than I’ve been able to find for many years.  A quick comparison of total Medicaid expenditures in 2020, as a percent of the personal income of residents of each state, and what it cost those residents in state and local taxes, follows.

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