Today’s Headlines

  • Maybe Cuomo Can Fix the Subway With His Inexhaustible Supply of Excuses (News, AMNY, Post)
  • Gelinas: Without a Working Subway, Kiss Rising Employment in South Bronx and Harlem Goodbye (Post)
  • Cuomo Points Finger at Senate’s Speed Cam Failure: “This Is All Political Fingerpointing” (SoP)
  • Jim Dwyer Breaks Down the Latest “Feints and Fakeouts” in the Speed Cam Saga (NYT)
  • Daily News: Flanagan Must Convene Session to Pass Speed Cam Bill Before It’s Too Late
  • SUV Driver Kills Valerie Razack, 63, in Crosswalk With the Walk Signal on Beach 73rd Street (News)
  • Xavier Ward Pleads Guilty to Hit-and-Run Killing of Adrian Blanc, Expected to Serve 6 Months (News)
  • Drunk Wrong-Way Driver Kills Passenger in Oncoming Vehicle on Belt Parkway (Post)
  • Parents of Luz Gonzalez Can’t Risk Border Crossing to Attend Daughter’s Funeral in Mexico (Bklyn Paper)
  • EDC Spending $7.5 Million on the Ferry Boats It Should Have Bought Before Launching (AMNY, NY1)
  • Alain Kaloyeros, Cuomo’s Economic Development Ringleader, Heading to Prison (NYT, PoliticoNews)

More headlines at Streetsblog USA

  • Larry Littlefield

    Every excuse except the truthful excuse: people are going to be made worse off because of 25 years of selling the future by their generation, and people in NYC are going to have to be made even worse off that average because that’s the way politics works in Albany.

    Upstate is going under and can no longer pay what it never paid even with the city was going under. The suburbs are the swing vote and feel they shouldn’t have to pay. The city’s representatives in the state legislature are appointed by special interests and don’t represent anyone else. Younger generations and immigrants, which the city is full of, are cash cows.

    The one thing they cannot do is tell the truth. The proposal I wrote up for New Jersey, in the post below, is actually something I came up with for the MTA, what is it, 15 years ago?

    https://larrylittlefield.wordpress.com/2017/12/03/will-new-jerseys-phil-murphy-be-the-first-to-tell-the-truth-about-generation-greed/

    It’s amazing that no matter how nasty these political tiffs get personally, there are some things that none of them dare say. Because they are all in on it together. If everybody (on the inside) is guilty, no one is guilty, because if anyone in the inside breaks Omertà, they might lose their place on the inside and have to get a real job.

    When I calculated it a few years ago, New Jersey had the fifth most sold out future among states, with New York sixth. But if New York City were a separate state, it would have had the most sold out future of all. It is being floated by NYC serfs being “used to” the highest tax burden out there, in exchange for iffy services, while paying high rents leading to high property tax revenue squeezing in two to a room, and squeezing onto overcrowded trains.

    https://larrylittlefield.wordpress.com/2015/06/24/sold-out-futures-a-state-by-state-ranking-based-on-the-census-of-governments/

  • Fool

    It is entertaining to watch Cuomo squirm between trying to avoid the political grenades of:
    -Raising taxes
    -Pissing off unions
    -Providing good government services

  • Larry Littlefield

    Everybody’s squirming. Because they are, in the end, careerists, and in the Generation Greed era the way to advance your career has been:

    1) You deserve to pay less in, but that doesn’t mean people like you should get less out, it’s those other people.

    2) You deserve to get more out, but that doesn’t mean people like you should pay less in, it’s those other people.

    And the compromise has been:

    3) Let’s pay less in and take more more out, at the expense of future people, including our own children, our country, and our community, and even our future selves if we don’t die off or at least sell our houses and move to Florida soon enough.

    Those who haven’t died or moved yet don’t want to hear that that they are going to be stuck with some of the consequences.

    In any event, since the deal back when prior generations actually paid for things was 50 percent city and 50 percent state, DeBlasio would be on firmer ground if he said he’s pony up if the OTHER unfair policies benefitting the rest of the state at the expense of the city were corrected. Or advocated for MTA bankruptcy and a refusal to pay moral obligation bonds and retiree health benefits later-born generations do not morally owe.

  • Joe R.

    I seriously think when the SHTF defaulting on bonds and refusing to pay for retiree health benefits (and possibly part of their pensions, also) is exactly what will happen. I liken the situation to one where a company maximizes profit by choosing the proper price for a product. Lower the price and you sell more units but eventually your profit drops as your margin on each unit is smaller. Raise the price and your margin is higher but you sell fewer units. There’s a sweet spot where profits are maximized.

    Now apply the same model to cities or states. In this case “profit” is taxes less the cost of services delivered. The services are the “product”. The thinking of Generation Greed politicians is to use this “profit” (i.e. the difference between taxes taken in and the cost of services delivered) to pay for things which weren’t fully funded in the past. Now here’s the problem. Eventually if people pay high taxes but don’t get much in services they move elsewhere (i.e. they no longer buy the product). So there’s a sweet spot where profit is maximized. NYS, NYC in particular, is already charging way too much in terms of taxes for what it’s offering. People are just a little slow to catch on to that fact. However, eventually there will be an exodus. When it happens, the choice will be paying for either basic services like garbage collection or paying for past deals. The money won’t be there for both.

    When the above happens, the first thing we’ll likely do is default on bonds. That’s probably the most politically expedient thing to do. Many bond holders are wealthy people who will still be wealthy even if they lost everything they invested in bonds. So a default is even fair in a manner of speaking as you’ll mostly be taking from the 1% what they should have paid in taxes but didn’t.

    The next things to go will be the retiree health benefits of municipal workers, along with part of their pensions. This will obviously be a fight but again the choice is paying for these things or paying for basic services. Again, there is some moral ground for cutting pensions especially because in many cases pensions were raised without public input, and without a funding mechanism in place. In the end pensions would probably be reduced to whatever was promised when the worker originally signed on. This is fair as far as I’m concerned. They’re getting what they were originally promised but nothing more. The hard part will be taking back any excess which was already paid. You can deduct something from pensions but not so much that the person is in poverty. For example, suppose you have a teacher getting a $75,000 who only would have gotten $40,000 according to their original contract. Moreover, suppose they were already getting this pension for 15 years. That means they were paid an excess of $525,000. Maybe you can deduct $10,000 a year from their current pension of $40,000 but probably not much more given the cost of living. Therefore, you’ll never get back the entire excess paid but if they live long enough at least maybe you’ll get back half. If they have any substantial estate after they pass on then perhaps NYC can get the remainder but I wouldn’t bank on that. So the bottom line is we may not be able to recoup everything.

    Anyway, that’s how I see it playing out. From a moral standpoint I have zero issues with it. We’re basically undoing deals which never should have been made in the first place. Pensions shouldn’t have been increased without a funding mechanism. People should have paid enough in taxes to cover what was spent on municipal services/projects benefitting them. If we try to ask future generations to pay an exorbitant amount in taxes to cover these past deals they will vote with their feet and move away. So one way or another, it’s not happening. The sooner today’s politicians catch on to this fact, the better.

  • Larry Littlefield

    “NYS, NYC in particular, is already charging way too much in terms of taxes for what it’s offering. People are just a little slow to catch on to that fact. However, eventually there will be an exodus.”

    The difference between now and the 1970s is that there are fewer places to flee to, because the same future selling took place elsewhere. The details may be different — fewer pension increases, more underfunding of the pensions public workers were promised to start with, less debt, even worse infrastructure — but Generation Greed is Generation Greed everywhere. Dallas, Houston and Fort Worth are all booming — and going broke due to pension crises.

    There is another solution, and it involves real estate. Tell the truth about how much younger generations are screwed, in the sort of “Generation Greed surcharge” I suggest, and there is a good chance they won’t buy it until the price is so low it offsets the other disadvantages. Instead of being ridiculously high, as it is now in NYC.

    Needless to say, since Generation Greed wants to sell and a high price and move to Florida, that isn’t what they want. And it’s why you have a federal policy of forcing millennials to bid up the price of owner-occupied housing until they are paying 50 percent of their income for debts. Instead of having housing prices plunge until they are only paying 15 or 20 percent.

    https://larrylittlefield.wordpress.com/2017/12/09/fannies-mae-and-freddie-macs-stealth-economic-war-on-the-millennials/

    During NYC’s history, New Yorkers have always been ripped off by the political/union class and the real estate industry to an extent. This may be the moment when the combination is the worst. At least in the 1970s, NY real estate was cheap.

  • Larry Littlefield

    A third solution is high inflation, which reduces the value of fixed debts and pension benefits in a “real sense.” New York City recovered from the 1970s not for the reasons everyone uses, but because the CPI doubled from 1970 to 1980, cutting the the real cost (and value) of the Lindsay pensions and debts in half.

    Generation Greed was a beneficiary of the high inflation of the 1970s, given its point in life at the time. And it is a beneficiary of low inflation now.

  • Joe R.

    Of all three solutions, I think the second one is the best. All the more so because it basically just involves real estate prices returning to their historical norms (i.e. for most of history real estate prices tracked inflation). Right now my mom’s house is probably worth around $700K. My parents paid $52K for it in 1978. If the price had tracked inflation, it would now be worth around $250K. If houses in NYC were $250K, give or take $100K depending upon area and size, then they would be affordable to the younger generations. Generation Greed bid up housing prices to ridiculous levels by a combination of constraining supply via zoning and flipping/renting houses just to make a quick buck. Those things can be fixed.

    Another part of the fix should involve forgiving all student loans over 10 years old, whether public or private. Again, this is fair because college costs have risen far faster than inflation, necessitating a huge debt to graduate in the first place. Prior generations didn’t have this problem. Indeed, the baby boom generation even enjoyed free tuition at CUNY.

  • Larry Littlefield

    People aren’t going to face up to the need for radical solutions what might de-vest vested interests until there is no choice, or things collapse on their own.

    The question at the top of this post is how to pay for ongoing normal replacement in the next few MTA capital plans while also paying for ongoing normal replacement in the PAST few capital plans, which Generation Greed didn’t pay for. This is under discussion in New York — the overhang of paying for pension benefits for past AND current public workers is under discussion elsewhere, under Omertà here.

    Up next and not being talked about now — who is made worse off in what ways when the federal debt held by the public is up to 100 percent of GDP due to the Trump tax cuts, interest rates are soaring, and so is the public cost of custodial care for seniors (nursing homes, home health care, personal care) as Generation Greed exhausts the last of its resources (and ours) and hits deep old age?

    https://larrylittlefield.wordpress.com/2014/08/13/generation-greed-and-the-family/

  • Joe R.

    The entire thing about deep old age is going to be the biggest problem. Sure, Generation Greed will see to it that they have publicly funded custodial care until the end. But I fear our generation (and those younger) will be put on the Soylent Green bus once they’re no longer of any use to society. The funds just won’t be there for any other alternative.

  • Larry Littlefield

    The Social Security and Medicare “trust funds” are set to be exhausted about the time I’m 70, and there never was a Medicaid for seniors trust fund.

    But back on topic, the reduction in actual cash money spending on infrastructure as money is shifted to seniors, as the most affluent and educated generations in U.S. history reached that phase of life, isn’t just the future at this point. It’s also the recent past.

    So what do the pols do? Nothing, other than try to convince people they have nothing to do with the subway.

    People in their working years use the subway most, and most people in their working years residing in NYC skew younger. This situation shows their real status.

  • com63

    Contributing factor to Belt Parkway crash death could have been lack of seat belt use for backseat passenger. If you are in a cab or uber, you aren’t immune to the laws of physics.

  • Joe R.

    Not sure there’s much that can be done at this point. Here’s an interesting read on the subject:

    https://www.heritage.org/social-security/report/misleading-the-public-how-the-social-security-trust-fund-really-works

    Since that article was written the date the trust fund runs out has been pushed back to 2034. My guess is it’ll happen even sooner as robotic labor reduces the amount of payroll taxes. So you and I are left in a quandary. I had originally planned to start collecting at age 70 to maximize benefits. Now I might as well start at age 62 given that I’ll only be collecting benefits until perhaps my late 60s.

    The only two solutions aren’t politically possible. Cutting benefits more than they have already been cut will undermine support for Social Security. Raising taxes to pay for these already lower benefits would be an equally hard sell. By putting off dealing with the problem, we’ve essentially made it unsolvable. Just like the problems with the subway, the schools, pretty much everything else. The only glimmer of hope on the horizon is that robotic labor comes online sooner rather than later. That will at least make it possible to cut the costs of delivering most municipal services while the bulk of tax revenue is being spent on past labor.

  • Larry Littlefield

    Can’t say we weren’t warned. Just that we didn’t want to hear while the party was going on.

    Generation Greed, followed by Generation Apathy. Those who lived more modestly and were happy with that will be better able to cope, but will not be unaffected.

    At this point, it’s a race between the benefits of technology and and the deficiencies of politics.

  • J. Geoff Rove

    Wow, the comments are like an admirers circle of Koch/Mercer puppets. Cuomo appoints the MTA board and Executive. Got a beef, light up Joe Lhota and Byford.