Tuesday, October 20, 2009

Iceberg Right Ahead

Candidates Avoid
Budget Shortfall,
So Do Reporters

By Henry J. Stern
October 16, 2009

We attended Tuesday’s mayoral debate, and waited a few days to comment, in part to see what others would have to say.

On October 13, the day of the debate, our column, WHICH CANDIDATE CAN BEST HANDLE FISCAL SHORTFALL?, discussed what we thought was the most important issue facing the rivals in the debate to be held that evening.

It turns out that our views, expressed before the debate, are shared by at least two other respected observers of New York affairs.

In Wednesday’s Post, Fred Siegel’s op-ed, A WASTED DEBATE, made the point that both candidates skipped discussion of the city’s looming fiscal disaster. Nor did the four questioners from the press hone (sic, although you could also say ‘home’) in on the 800-pound gorilla.

On Thursday, Fred and his son, Harry Siegel, an editor at Politico, wrote a longer article on the subject in the Wall Street Journal, pA17, CAN BLOOMBERG’S ‘LUXURY’ CITY SURVIVE?

The omission of the issue of fiscal reality was noticed and discussed yesterday by Gary Tilzer, who blogs as True News. "A BROKEN DEBATE CAUSED BY CLUELESS REPORTERS. (Scroll down to October 14) A Spinning Fight on Talking Points, Absent a Serious Debate on the City’s Economic Crisis and How It Will {A}ffect Its Future and the Life of Every New Yorker." Tilzer was quite critical of the four questioning by the four reporters. He cited the late Tim Russert as a role model for moderators.

Many well-informed observers believe that after the election, there will be substantial, not cosmetic, reductions in the city’s capital and expense budgets. Voters will have to decide who can carry out these cuts in the most effective and humane manner. We believe that small wage cuts or freezes for many people are better than total unemployment for the younger members of the work force. No union leader so far has subscribed to this viewpoint, and conventional wisdom is that none will. We hope some do, it would alleviate but not resolve the economic crisis.

DIGRESSION: One phrase I remember from French class at JHS 52, Manhattan, is “sauve qui peut”, or “let him save himself who can”. (Movie buffs may recognize it as the title of a 1980 film by Jean-Luc Godard.) When the captain shouts the phrase, usually when the ship is in extremis, the crew is released from duty to the ship, and allowed to do whatever they can to save their own lives. That is more desperate than “Abandon Ship,” because when one goes into a lifeboat, one should still follow the Law of the Sea, which I was told when I was a little boy was “Women and Children First.” Any Former Naval Persons are invited to correct or amplify these recollections.

The relevance of the phrase to the city’s straits is that, if conditions get bad enough, each person, agency, or each bargaining group of employees, will do what they can to keep their jobs without regard to the similar plight facing others. If that panic strikes the city workforce, it will only make the financial outlook worse.

We do not yet know how the economy will fare in New York City’s FY 2010 (which began on 7/1/09). There is a striking contrast, at least to numerologists, between of the Dow butting 10,000 at the same time that unemployment exceeds 10 per cent. The fact is that many companies employ more workers than the minimum they need to function, but the extra employees are both consumers of the company’s products and spenders who put most of their wages back into the economy. I have long believed that if too many people spent money rationally the country would be threatened by depression, just like the non-spenders are. We need whimsical and flighty shoppers to keep the cash registers going, if only because business activity provides jobs, some in the United States as well as in China, Mexico and other places around the world.

There is a sickening contrast between multi-million dollar bonuses on Wall Street and widespread unemployment around the country (metaphorically on Main Street). Capitalism has to work for everybody, not just for the rich. The fact is that after the Lehman Brothers was allowed by Secretary Paulson to go under in September 2008, the Federal government threw billions of dollars into rescuing other large banks and corporations from a similar fate. Meanwhile, hundreds of smaller or regional banks have been closed because the bad loans they have made exceed their deposits. Fannie Mae and Freddie Mac received complete bailouts, and their principal officers were allowed to leave with multi-million dollar payouts. There is clearly enormous inequity in the way different institutions were treated, but there was similar inequity on the R.M.S. Titanic, with regard to who got into the lifeboats and who did not.

With eighteen days remaining until the mayoral election, there still is relatively little excitement about the race or the candidates. People are generally aware of the achievements of the Bloomberg administration, and most New Yorkers view them favorably. There is dissatisfaction on particular issues, e.g. schools and housing, but in none of these cases is there a vast gap between the candidates. There is also transactional discontent, expressed by people who have had unsatisfactory dealings with city agencies, or who are adversely affected by particular laws or regulations. This builds up over the years, like barnacles on a keel.

Bloomberg offers competence, which his commissioners have, in general, demonstrated. Thompson capitalizes on the desire for change, and appeals to people who are not satisfied with things they are. He said he would fire every commissioner, including Ray Kelly, so he could have his own team. He makes the point that Bloomberg got the law changed so that he could run for a third term. As it happened, the City Council changed the law, acting in its own interest. If he loses, Mayor Bloomberg will return to his foundation. The Councilmembers will have greater difficulty finding employment, there being no shortage in these hard times of community organizers. The Mayor countered that the Charter change only gives him the opportunity to run. If the voters want him out, they can vote for someone else on the ballot. The majority of the people will decide the election.

The media mostly considered the debate a draw. A draw can be interpreted as a victory for each candidate: for Thompson because he reached a wider audience than usual and held his own against his better known opponent; and for Bloomberg, because he remained temperate, did not yield on any points, and appeared to be reassuring and wise. From the point of view of attracting attention, Thompson got more because he is newer; from the point of view of a winner running out the clock, it was Bloomberg, because it is up to the challenger to strike a decisive blow, and that did not happen.

Some recent Mayoral races have really been no contests. Koch’s second and third terms, in 1981 and 85, Giuliani’s second term in 97, and Bloomberg’s second term in 05. Recent close races were Dinkins v. Giuliani, 89 and 93, and Bloomberg v. Green, in 2001. As previously stated, I am not a pollster or a soothsayer. At this point, the 2009 race is somewhere between a close contest and a runaway, but there are 18 days to go and anything can happen.

Enjoy the weekend. I hope the weather improves. It would be nice if the Yankees won the American League Championship Series. That would help to pay off the cost of building the new Yankee Stadium. Remember that, under the agreement with the City, Macombs Dam Park must be restored and the facilities there replaced.

Rule 33-S: “So it shall be written. So it shall be done.” If you know who said that, and on what occasion, e-mail us.

The title of this article, "Iceberg Right Ahead," was spoken at about 11:30 p.m. on April 14, 1912 by Frederick Fleet, a lookout on the R.M.S. Titanic. Mr. Fleet was a seaman for the White Star and later became a shoremaster-at-arms. He hanged himself in 1965 after his wife passed away.

StarQuest #607 10.16.2009 1377wds

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