Conundrum

Mayor Runs the City Government

But Even He Cannot Print Money.

Nationwide Deficits Raise Public Debt,

Making it Harder to Balance Budgets

Writing about city government is, to a large extent, writing about the mayor. The City Charter provides for a strong mayor, in direct control of the executive branch and with power of appoint over much of the judiciary.

To estimate the relative authority of elected city officials crudely and arbitrarily, the mayor can be judged as having up to ninety per cent control of city government, the Speaker of the Council nine per cent and the rest of the council one per cent. We omit the five district attorneys, who are fast becoming lifers, and the comptroller and public advocate (formerly council president), who primarily devote themselves to becoming the next mayor. Those borough presidents who think of themselves as papabili ply their trade around the five boroughs; the others aim at spending their twelve years in dignity and comfort.

Having watched city government for over half a century (forty years as a participant and thirteen as a pensioner-observer), I can say that the seven men who have been mayor since 1954 varied widely in intelligence, integrity and industry. They were all elected, but different candidates appealed to different constituencies.

The sea change in city government came, not from a new mayor, but from an old mayor who changed his base. In the 1961 Democratic primary, Mayor Robert F. Wagner, regular turned reformer, decisively defeated State Comptroller Arthur Levitt, candidate of the Democratic county leaders. The political power of the Democratic organizations (Tammany Hall in Manhattan, the other four had no particular names) was sharply diminished, and in time the labor unions, particularly those comprised of city employees, succeeded the politicians as powers behind the throne.

The primacy of employee unions was established in January 1966, when a twelve-day transit strike that followed Mayor Lindsay's January 1 induction ended with surrender by the new administration, which was motivated by an economy collapsing in the absence of public transportation. This was the opposite of the events of January 20, 1981, when the Iranian ayatollahs freed 52 Americans the day Reagan succeeded Carter. In New York, the city was held hostage from the day that Lindsay succeeded Wagner, and no one knew when it would end.

The basic problem with employee dominance over management became apparent over the years. No entity can prosper if its CEO is selected by its employees rather than by its shareholders. The interests of taxpayers are basically widely divergent from the interest of employees. People who work for the city want to get all they can in salaries, benefits (which are no longer fringes but range up to a third of salaries), and pensions (which over the long run, are comparable to salaries). Benefit costs have grown substantially in the last few years for three reasons: 1) Lower rates of return in both equities and fixed income assets; 2) People are living longer; and 3) They are getting more and better medical care before they die.

This is also basically true on the federal and state level, as well as with regard to cities, counties and other nations. On the federal level, the imbalance in entitlements (social security, medicaid, medicare, employee pensions) is added to the the costs of numerous wars, which include weapons development, a field in which the United States appears to be the world leader, as has been demonstrated in periodic wars and other occasions requiring the use of force.

In cases, such as the United States government, the State of California and to a lesser extent New York State, the bicameral legislature is divided between political parties and the fiscal situation is even more complex. Former Governor Schwarzenegger was unable to resolve the problem in his seven years in office. His four referendum proposals were defeated by the voters in 2005, and he seems to have largely given up after that setback.

We do not know of any state or local government that is following a straight path to eliminate its deficit, although some are doing better at that task than others, like Indiana under Governor Mitch Daniels. The underlying financial issue is that people want more services than they are willing to pay for, and employees want more jobs, higher salaries and sweeter pensions than the state or city can afford to provide out of tax revenues.

The elected officials, dependent on labor union support in money and volunteers, are caught in a vise. They will give the employees everything they can, except for the fact that they are past the point where there is anything left to give. The usual outcome is layoffs, which reduce the delivery of services, cause additional unemployment, and impede economic recovery. The greatest burden falls on younger employees, who are in the stage of marrying and starting families. They are a particularly vulnerable population, and so are the middle aged (people over fifty are unlikely to get another job, certainly not a position at a comparable salary).

An aggravating factor with regard to employment is that, due to technology, it now takes fewer people to do the work society requires than it did years ago. Even if the economy were not in recession, there would be substantial unemployment. Economists know that and most people sense it. You can't cure ingenuity, nor should you try. Sadly, no one has figured a cure-all for joblessness. Public works create jobs, but even worthwhile projects exacerbate the debt problem since the government must eventually pay the cost of labor and materials, plus interest. Requiring union wages (union scale) results in far fewer jobs for the same government expenditure.

Various states have taken action to deal with budget shortfalls, with different degrees of effectiveness. In order to have impact, a new law, a labor agreement, or a change in retirement age or benefit terms must have continuing effect in order to reduce the structural budget deficit. The sale of a state asset for privatization is a one-shot revenue which cannot be repeated. Too often governments have relied on one-shots, like requiring a tax payment to be made in July of one year and June in the next, so the double payment will fall in one fiscal year. That may sound like an odd maneuver, but it has been done repeatedly as an artifice to balance state or city budgets.

What we have done in this column is to try to define the problem of chronic structural financial deficits and report early steps that have been attempted. We will discuss more comprehensive solutions in another article. Unfortunately, there is no magic bullet to resolve this problem, and any solution will require significant pain-sharing. For people who are used to gain-sharing, this would be a reversal of fortune.

Can these problems be resolved, or significantly alleviated, without the application of external force to recalcitrant elected officials, who seek to escape personal responsibility for any hardship that may be involved in attaining fiscal sanity? Time will tell.

Best Served Cold

Before Most of You Were Born,

Big Fish Swam in State Politics

NOTE: A few of you already know most of this history, but the majority will pick up some information which is no longer widely disseminated in 2011. It helps us to know what happened years ago, and how history sometimes repeats itself and sometimes does not. The dispositive rule in some cases is 25-W: What goes around, comes around, or, put more briefly and crudely, 15-P: Payback is a bitch.



New York City politics has changed considerably in the last half century. For one thing, the characters are of diminished stature. For another, more have been unseated by prosecutors than by electoral rivals.

Perhaps the most important mayoral election in the post-World War II period came in 1961. There was a full-dress, take no prisoners contest between the five Democratic county leaders, and the reform wing of the Democratic Party, whose candidate for Mayor was the two-term incumbent, Robert F. Wagner. Mayor Wagner was the son of the illustrious senator from New York, who as a committee chair, gave his name to the National Labor Relations Act (the Wagner Act) and played a pivotal role in the passage of the Social Security Act, adopted in 1935 in Franklin D. Roosevelt's first term. The Social Security Act of 1965, passed under President Lyndon B. Johnson, created the Medicare and Medicaid programs.

Manhattan Borough President Wagner was first elected mayor in 1953, with the support of two Democratic county leaders, Carmine DeSapio of Manhattan and Congressman Charles Buckley of the Bronx. The other three leaders, in Brooklyn, Queens and Richmond, supported the incumbent mayor, Vincent R. Impellitteri, candidate of the Lucchese family, for re-election. Impy lost, by a 2-1 margin.

In 1957 all five leaders supported Wagner for re-election, which he won easily over the New York City postmaster, but by 1961, he had fallen out with DeSapio in particular over a Senate nomination, and had sorely disappointed the other four by not appointing their followers to jobs and judgeships.

The five counties united with a slate for the top three offices in city government. The respected State Comptroller, Arthur Levitt, a Brooklynite, ran for mayor; State Senator (and later Queens District Attorney) Thomas Mackell ran for City Council President, and Joseph DiFede of the Bronx vied for comptroller. The ticket followed the time-honored tradition of recognizing three boroughs and the three most prominent ethnic groups of the era: the Jews, Italians and Irish.

Mayor Wagner, who lived in the Yorkville section of Manhattan and whose ancestry was German and Irish, responded to DeSapio's challenge by building his own ticket, relying on career civil servants, although they did have political ties. For Comptroller, he chose city Budget Director Abe Beame of Brooklyn, and for Council President, Deputy Mayor and former Sanitation Commissioner Paul Screvane of Queens. As luck would have it, the Wagner slate covered three major boroughs and the same three ethnic groups as the DeSapio ticket represented.

The reformers' campaign featured Eleanor Roosevelt and former Governor and Senator Herbert H. Lehman, who attacked DeSapio and his fellow leaders as bosses. DeSapio was also a crook, and was convicted and served two years in Federal prison for bribery of Mayor John Lindsay's Water Commissioner.

In 1992, Mayor Ed Koch, who had defeated DeSapio three times in races for Greenwich Village district leader, said: "He is a crook, but I like him... He always gets the most applause when he is introduced at Democratic dinners."

In 1955, at the peak of his power, DeSapio was on the cover of Time magazine, was appointed Secretary of State of New York State by his governor, Averell Harriman, and was pushing Harriman, whose family owned the Union Pacific railroad, for President of the United States in 1956. In supporting Harriman for governor, DeSapio pushed aside Congressman Franklin D. Roosevelt, Jr., whose mother took the slight with extreme prejudice to DeSapio.

Why, we ask, were those political figures who strode the state a half century ago, so much more memorable than what we have today? The Republican Party has descended into nominating nonentities for governor, such as Pierre Rinfret in 1990 and Carl Paladino in 2010, who dragged down their running mates. The Democratic Party had an unfortunate seizure during the Spitzer and Patterson years, and now appears to be on the road to recovery.

The weakness of governors has led to the relative empowerment of the state legislature, called by the Brennan Center for Justice the "most dysfunctional" in the United States. That was in 2004, before a parade of felons and misdemeanants brought the Senate and Assembly into even further disrepute.

The political history of New York State is not taught, except at the college level. We believe it is important for people to know what went on in the middle of the twentieth century. Were things better then? There was more corruption in the old days, but less of it was discovered. We don't know that for a certainty, but it is a rule of human nature that people in general and politicians in particular are attracted to money. It requires constant effort to clean out the Augean stables. There is an ebb and flow of wrongdoing. We believe that, in 2011, integrity, even if it is not liked, is more likely to be respected.

The United States Attorneys for the Eastern, Southern and Northern Districts of New York State are doing the job that many local district attorneys have not carried out. Their latest trophy, Brooklyn Senator Carl Kruger's taped phone calls, appear to justify the thousands of hours of listening. There is no reason to believe that Kruger and Assemblyman William Boyland, whose prosecutions follow the cases of Bruno, Seminerio, McLaughlin, Gordon, Velella, Hevesi, et al., are the last alleged thieves in Albany. Former Senator Pedro Espada, Kruger, and Boyland are awaiting trial, and have pleaded not guilty. This is sometimes, but not always, a prelude to plea bargaining by the defendant, but it is difficult to see how a bargain can be reached without requiring jail time.

The Age of Andrew

Cuomo Would Pick Ticket,

Seeks Pledges for Reform

By Henry J. Stern
May 21, 2010

Although Andrew Cuomo has not yet announced his candidacy for governor, he has already moved to shape the Democratic ticket and secure commitments from candidates for the Legislature to support his program.

His activity is described in a comprehensive article in today's Times by Nicholas Confessore, appearing on pA20, headed BEHIND SCENES, CUOMO TRIES TO INFLUENCE WHO WILL BE HIS SUCCESSOR. Confessore's lede:

"He has yet to announce his own long-anticipated candidacy for governor, but that has not stopped Attorney General Andrew M. Cuomo from trying to shape the race to succeed him.

"In the weeks leading to the state Democratic convention next week, aides and allies of Mr. Cuomo have moved quietly and methodically to bolster Kathleen M. Rice, Nassau County district attorney and the candidate widely believed to be Mr. Cuomo's preferred successor.

"They have sought to delay or foil endorsements of one of her Democratic rivals, State Senator Eric T. Schneiderman, by two powerful labor unions, and to persuade another, Sean Coffey, to run instead for State Comptroller. When rural Democratic leaders assembled in Niagara Falls this month for a straw poll, Mr. Cuomo's allies also sought to blunt the momentum of Eric R. Dinallo, the former state insurance superintendent, by asking party officials to consider switching their votes to other candidates."

While the candidate for governor traditionally chooses his lieutenant governor (even though the lieutenant governor is chosen separately in the party primary) the Cuomo forces' attempt to select the rest of the ticket raises other issues.

The first is the attempt to secure a balanced ticket, geographically and ethnically. Mr. Cuomo is of Italian ancestry, as are Mr. Dinallo and State Comptroller Thomas P. DiNapoli. Mr. Dinallo and Mr. DiNapoli add nothing in the way of diversity, although Mr. Dinallo's wife is of Puerto Rican descent.

The lesson of diversity was learned in the 1970 state election, when the Democratic ticket consisted of former Supreme Court Justice Arthur J. Goldberg for governor, Basil A. Paterson (David's father) for lieutenant governor, Comptroller Arthur Levitt for re-election and Adam Walinsky, a former aide to Senator Robert F. Kennedy, for attorney general. The Democratic candidate for the United States Senate that year was Congressman Richard Ottinger, who had defeated Ted Sorensen in the Democratic primary. The Democratic ticket that year was derided as "four Jews and" a derogatory term for Mr. Paterson. They all lost, except for Mr. Levitt.

A more threatening possibility is that by dictating the choice of his party for Comptroller and Attorney General, Mr. Cuomo is assuring himself that these officials, once elected, will be indebted to him and act favorably in matters in which he has an interest. The Comptroller, for example, is the state's chief fiscal officer. He certifies the budget and performs many other duties under the State Constitution. He is also the sole trustee of the state employees' pension funds, which now exceed $129 billion. The position provides many opportunities for personal enrichment, which some comptrollers have used for their own advantage.

The current Comptroller, Mr. Napoli, was chosen by the legislature to replace the fallen Alan Hevesi, who had just been re-elected. His principal sponsor was Assembly
Speaker Sheldon Silver, who was determined to choose the new comptroller from among the Democratic legislators, just as Assemblyman Oliver Koppell had been chosen to succeed Attorney General Robert Abrams and Senator Carl McCall had succeeded Comptroller Ned Regan after their resignations.

The Attorney General, who has the ability to prosecute public as well as private corruption, is a powerful public figure. The last two AGs, Eliot Spitzer and Andrew Cuomo, both found the office a path to the governorship. Each gained a solid public reputation, in part because of cases they brought against Wall Street. It is obviously helpful to the governor to have a friendly attorney general, preferably one who he has helped install into office.

Not all attorneys general are elected officials. Although 43 are elected, five (WY, NJ, NH, HI and AK Alaska, not Arkansas, which is AS) are appointed by the governor.
In Maine, the legislature elects the AG by a secret ballot at a joint session of both houses. In Tennessee, the State Supreme Court appoints the AG for an eight-year term. The issue frequently arises as to whether the state attorney general is the governors lawyer, the people's lawyer, or as in some cases, an ambitious advocate out for himself. In the Federal system, as we know, the President appoints the Attorney General, who serves at his pleasure.

The last AG to be summarily dismissed was Elliot Lee Richardson, who was removed at the order of President Nixon in the Saturday Night Massacre of October 20, 1973 for refusing to fire Archibald Cox as the Watergate Special Prosecutor. He was succeeded by his deputy, William Ruckelshaus, who also refused to fire Cox and was promptly dismissed by Nixon. Next in line was the Solicitor General, Robert Bork, who obliged the President by dismissing Cox. I have long believed that Borks action in following Nixon's order to fire Cox was one reason he was not confirmed by the Senate when he was nominated for the Supreme Court in 1987 by President Reagan.

Andrew Cuomo's actions to direct the choice of other elected officials indicates a predilection for a strong governorship. That would be a direct contrast with the situation under Governor Paterson. The current governor, however, did not have the sanction of election by the public, which his successor will presumably enjoy.

The real issue next year will be whether Governor Cuomo or Speaker Silver (if they are both elected) will be the alpha male of New York State government. We read in Wednesday's Times on pA21 in a story by Danny Hakim that five lawyers from Weitz and Luxenberg, the Speaker's law firm, had contributed $236,698 to Kathleen Rice, who is assumed to be Cuomo's choice for attorney general - Irish, a woman, suburban, tough on crime, elected DA.

That works to the detriment of Senator Eric Schneiderman, the candidate of the left wing of the Democratic Party. From a purely practical point of view, however, and without making a judgment on the merits, Cuomo needs Schneiderman like a lochenkopf. Four oth er candidates have attracted little support despite their vigorous efforts.

It is, of course, possible that Cuomo and Silver will co-exist in peace, at least for two years. We will see how the Speaker's home district is redrawn after the decennial census results are published in 2011.. That will depend in part on who draws the lines, and whether personal considerations are involved in the process.

CUOMO WILL SEEK PROGRAM COMMITMENTS FROM CANDIDATES PRIOR TO DECIDING WHETHER HE WILL SUPPORT THEM

The Cuomo initiative is reported at the bottom of p4 of the Daily News in a story by Kenneth Lovett, their Albany bureau chief. The headline: CUOMO'S TELLING HOPEFULS; GET WITH MY PROGRAM & ILL HELP YOU. The lede:

"If you want Andrew Cuomo's backing, you gotta have his back.

"The state attorney general, who plans to announce his run for governor soon, will ask candidates who want his support to sign a pledge to stick to his agenda, the Daily News has learned.

"Cuomo is developing a 'citizens pledge' that will detail reform ideas he wants enacted if he is elected, a source close to him said.

"The Democrat will travel to all 62 counties during the campaign asking for citizens and candidates from all parties to sign the pledge."

To us, this is a good idea. New York Uprising, a group founded in March by former Mayor Ed Koch, Dick Dadey, executive director of Citizens Union, and this blogger for New York Civic, is circulating pledges to candidates for state office, asking for their commitment to a reform agenda on redistricting, conflicts of interests, financial statements and transparency. Mr. Cuomo responded to us specifically promising his support for those goals.

It makes enormous sense for a candidate to seek commitments on these important issues before endorsing anyone. The proof will come in what specifically the candidates are asked to do, and how and by whom they will be held to the pledges they make.

There is one other problem. The News story is attributed to an anonymous source. This means that there is still plausible deniability if the candidate changes his mind. We rely on the integrity of the source and the candidate.

Andrew Cuomo has an opportunity to turn the shambles that is Albany in a new direction. Eliot Spitzer had that opportunity, and completely blew it, even before the scandal..

We wish for the best for New York State, but experience limits our optimism. Perhaps the strong leadership which has been missing for many years will make a difference. But strength has its own weakness, which we hope the new governor will avoid.

CORRECTIONS

Senator Byron Dorgan comes from North Dakota, not Indiana. We knew that.

Queens Assemblywoman Ann-Margaret Carrozza had a residence in Glen Head in Nassau County, not Great Neck. We did not know that. After 14 years in the Assembly, Ms. Carrozza is not a candidate for re-election..

CRAIN'S INSIDER HAS AN ITEM ON REDISTRICTING.

"Former Mayor Ed Koch read the speculation in the Insider that if his nonpartisan-redistricting effort falls short, it will at least dissuade the Legislature from a scandalous redrawing of districts. So Koch enlisted his former parks commissioner, Henry Stern, to assert that anything less than independent redistricting is unacceptable. 'It was necessary to march around Jericho seven times before its walls tumbled,' Stern writes. 'Someday the Legislature's wall of self-perpetuation will collapse into rubble.' Says Koch, the leader of New York Uprising, 'We're so far ahead of where we thought we would be.'"

P.S.:You can find blogger Gary Tilzer's interesting True News by linking here.

StarQuest #671 05.21.2010 1654wds