Friday, 04 June 2010 00:00
1. Things this column might have been about: the crisis in Greece and how it affects Long Island; the possibility of a European credit crunch and how it affects Long Island; the “sovereign debt” crisis and how it affects Long Island; the large and growing structural imbalance in the residential housing market and how it affects Long Island ; the wicked-messed up commercial real estate market and how it all affects Long Island.
2. What the column is really about: politicians at all levels of government who don’t want to confront their constituents with choices that will have to be made, sooner or later.
3. Governor-Apparent Andrew Cuomo released a campaign platform that takes tax increases off the table. On anyone. It repeats warmed-over, won’t-solve-anything proposals like capping school tax increases and consolidating something or other.
4. Oh. My. Goodness.
5. Talk about rearranging the deck chairs on the Titanic. This kind of stuff is designed only to create the least controversy as possible until after the election.
6. The New York State budget deficit is projected to be $60.8 billion over the next five years. This year’s deficit could be the littlest of them all.
7. If we do this the way we always do things in New York (“let’s just get through this and something will turn up later”), if this isn’t done just right, it could be very bad for Long Island.
8. Last week, Business Insider released its Top Ten States Most Likely to Default. Starting from the most likeliest, they are: Illinois, California, Michigan, New York, New York City (bigger than most states), New Jersey, Nevada, Ohio, Massachusetts, Wisconsin.
9. Sudden, draconian cuts in public spending (what economists call “internal devaluation”) almost never have the intended results. It just isn’t that easy.
10. Earlier this year, Nevada laid off thousands of civil servants. As of the end of April, the state’s official unemployment was 13.7 percent (14.2 percent in Las Vegas), which means actual unemployment is somewhere around one in four. It’s 1932 in Nevada. In Las Vegas, which was the fastest-growing American city, housing prices are now down more than 50 percent in many neighborhoods.
11. In Latvia, austerity increased unemployment from 6 percent to 22 percent and many cost reductions didn’t pan out.
12. An economy must grow out of a recession. You don’t end a recession by creating a bigger recession. You don’t become more “competitive” by lowering the standard of living.
13. Points of diminishing returns and negative returns are very hard to detect, even when you’re trying to pay attention. Many of our leaders are not even paying attention.
14. We can take steps to fix things that are structurally broken, we can ride the wild wave and hope that things fix themselves, or we can just sort of pretend that we’ve fixed things so that we can act out of haste and panic a little later. 15. In April, Moody’s Investor Service, Fitch Ratings and Standard & Poor’s gave in to mounting pressure and finally recalibrated their ratings of state and local government debt. Low-risk public debt was aligned with the private debt market, and many local governments were given higher bond ratings. The agencies emphasized that the readjustments should not be viewed as an improvement in actual credit quality.
16. Even Erie County, which still has a state financial control board overseeing its budgets, was moved up two notches by Fitch’s and three by Moody’s.
17. I planned to write about this when some local official bragged about higher ratings, as if it had anything to do with them or how they conduct business. So many rushed forward with press releases that it took all the fun out of it. In fact, it made me very, very sad.
18. American taxpayers bailed out GE, and then GE paid no taxes for 2009, claiming their $10 billion profit was all made overseas. Fortune 500 companies cut 821,000 jobs as their total profits more than tripled to $391 billion. At least 25 hedge-fund managers earned over a billion dollars, and only pay 15 percent because it’s capital gains.
19. No tax increases ever, for anyone?
20. We’re just so past all this. Past the partisanship. Past being treated like children. Past the little games and the business-as-usual.
Michael Miller is a freelance writer, designer and strategic consultant who has worked in state and local government. Email: firstname.lastname@example.org