Wall Street Endures

The Occupy Wall Street campaign is faltering, despite considerable public sympathy for the social issues which the protesters seek to publicize.

The pickets and other demonstrators focused on a seam of popular discontent at economic inequality in the United States, the difficulty people face in obtaining work, and the failure of wages to keep up with rising costs. The effects of the Great Recession, specifically people losing their jobs, their mortgaged homes and large portions of their 401(k)s, have left millions of Americans unhappy with their own economic situation and their prospects for the future.

Although there is widespread dissatisfaction with President Obama, the public holds Congress in even lower regard. Last month, according to a CBS News/New York Times poll, Congress registered a 9% approval rating, the worst in the legislative body's history since Americans were first surveyed on the subject in 1977. Although the President may have erred in reaching too far and, paradoxically, retreating too often, the Congressional followers of Rule 9-J, "Just Say No", have offered the American people next to nothing.

One improvement in civic discourse comes from the spread of C-Span and other programs dealing with public issues. We know more about our public officials than we did years ago. We can discern with they really mean, both from their choice of cliches and from their body language. When one strips the gibberish and the platitudes from the remarks of the lawmakers and the witnesses who testify before them, one can get a sense of what is actually going on in the minds of the players.

It is true that they speak in code; that is a convention of public discourse. If many of our representatives said in public what they actually believe, their careers would be terminated. We see how many entertainers, performers or talking hosts have lost their jobs because of words and phrases which are politically incorrect, or capable of offending any group of people, whether racial, religious, ideological or gender-linked. It was said to have started with Uncle Don back in the 1920's on WOR. In reality, this never happened, but it has been so widely told over the years that it has become part of our popular culture.

Speech can be offensive, and the characterization of a group because of the behavior of a small number of its members places an unwholesome and possibly dangerous strain on the fabric of a heterogeneous society. We now attempt to deal with this situation by defining certain abusive words as "hate speech" and penalizing the speaker.

As always, the responsible approach in marginal cases is to seek balance, with freedom exercised with responsibility. At my law school graduation, a quotation was read that I learned was coined by a professor in the 1930's and has been recited annually since that time. "You are ready to aid in the shaping and application of those wise restraints that make men free."

By substituting 'people' for the possibly suspect noun 'men', the sentence gains at least another century of useful life, unless another euphemism comes into fashion.

The unhappiness expressed by the demonstrators, pickets and campers at Zuccotti Park is by no means confined to one city, state, or region. It partly stems from the belief that government is too far removed from the people, or at least far from the people who are complaining. It is partly a reaction to the resentment expressed against the poor, the disabled and others who may receive public assistance or public (except military) employment. The distaste for public programs may (or may not) have some roots in ethnic or class antipathy.

Occupy Wall Street offers no particular solutions to the issues it raises. Making public services free or more easily available will increase the $15 trillion national debt and promote economic instability. Rich people have far more mobility than the poor, and can more easily move to tax havens. It is not uncommon, however to hear groups complaining but without practical solutions to the problems they address. Sometimes futility raises the intensity of the complaint.

We will watch closely as this grievance spreads or withers, along with the oncoming Presidential campaign. Our thought is that the race will be decided by the public judgments of millions of individuals, which will to some extent be intuitive and individually may be irrational, as to which candidate is a better person and which one will do a better job. Television brings the candidates closer to the people, and assuming that the candidates are roughly equivalent in ability and resources to deceive the public, something close to the truth may emerge from the welter of claims and denials. E pluribus unum, out of many one.

What happened on Wall Street is simply that people got tired of the act. Every Broadway show opens and closes; almost all politicians, as well as empires, rise and then decline. What begins as new and striking becomes familiar and eventually tiresome. This is particularly true when the participants are not particularly knowledgeable about what they are doing.

We predict that there will be other disturbances in the pre-election period, and that there will be an attempt to unify the left on a program, just as the Tea Party movement has to some extent organized the right. Time will tell which group gains strength, but one thing that any political movement needs is an agenda, which has not yet emerged from the left, while the right simply offers negativity.

Someone will be sworn in as President on Sunday, January 20, 2013. We hope the person will be able. You have probably never heard of him, but you should add Gary Johnson, the Republican former two-term governor of New Mexico, as a long-shot who should be considered, if these decisions were made on the merits rather than on media attention or scandal.

If Gary Johnson gets anywhere in 2012, remember that you read it first here.

Donkey, Elephant Play Chicken

Debt Ceiling Crisis Impends,

But Catastrophe Is Unlikely

Unless Sides Are Obstinate

The impending national debt crisis, now anticipated for August 2, nineteen days from today, is not taken extremely seriously by many Americans because of their lack of trust in our government and skepticism over the statements, particularly threats, made by public officials.

The risk, however, is more substantial than anxiety induced by the Doomsday prophet from California who predicted the world would end on May 21, 2011. The prognostication of fiscal disaster is about as credible as the firm budget pronouncement this spring by the administration that the City of New York would lay off the 4,100 most recently hired schoolteachers at the close of the school term on June 28. That forecast was repeated day after day in the tabloids, and may have induced some older teachers to retire, but it alarmed only the faintest of heart. This is New York.

In Washington, the widely publicized negotiations now taking place appear to have degenerated into a game of chicken, with each side maneuvering to place the blame for any loss of services or entitlements on the other. Part of the problem is that there are more than two interests at the table, the White House, and the Senate and House Democrats and Republicans. Each has an interest in the outcome, and their demands and requirements are not the same.

We believe that compromise is the obvious solution, with a package of measures disagreeable to all constituencies. That was the way the budget deal was worked out between the President and Congress that was announced April 8, which now seems like a long time ago.

We also observe that the President got credit (and poll points) for the budget agreement, even though it did not comply with the demands of what is called his core constituency. On the other hand, and we don't know exactly why this happened, Newt Gingrich ended up being widely blamed for the Federal government's partial shutdowns in 1995 and 1996. This came after his "Contract with America" campaign in 1994, which led to Republicans winning the House and Senate. "Uneasy lies the head that wears the crown."

Rule 20-E as it applies to politics is "Everything is personal." We don't know enough of the scheming within the Republican party intended to isolate the Speaker, but our sympathies are basically with people who are trying to put an arrangement together than with those trying to extract the maximum political gain from a potential Constitutional crisis by placing others and themselves at risk. Card games for high stakes have a romantic appeal to many Americans, but the nation's credit and standing in the world economy should not be jeopardized by elected officials who dislike government in general and would take advantage of any opportunity to weaken or discredit it.

What government's fiscal problems usually come down to is that people want more benefits for themselves and their businesses at lower costs than they are willing to pay. This is to be accomplished by slaying a devil named "waste", which often means what the other fellow is getting. When this combination of high rewards for low payments is found to be unattainable, as usually occurs, borrowing is the easiest way to postpone the reality of earning what you spend. This happens in households, in corporations, and in nations from Greece to other lands which are basically subsistence economies, often ruled by tyrants with large appetites.

We predict, without the gifts of a soothsayer, that impending disaster will be staved off, at least for a while, although we cannot foresee the machinations that will be relied upon to achieve that result. The immediate outcome of the dispute, however, will be diminution of the reputations of the squabbling parties, especially if they display excessive self-interest and righteousness in their public statements. In times of crisis, there is a tendency to support the President, especially when those trying to destroy him are unappealing and not particularly interested in the plight of the less fortunate.

We have no idea who the public will ultimately blame for whatever may or may not happen in the weeks to come. Much will depend on who the media choose to hold responsible. On one hand, a debt ceiling is like a rent stabilization level or earnings standard, which should resemble but not surpass inflation. On the other, if you really hate government, you want to take any occasion you can to keep it from functioning.

Ultimately, victory will go to those who are perceived as more moderate, which suggests the arbitration process in which both parties are coaxed into making their best and final offers, and the arbitrator must choose one of them, which is a powerful inducement to the parties to be reasonable, lest their offers be rejected.

To put it more simply, that is the equivalent in the home of having one child divide the cookie, or the slice of cake, and having the other then choose which slice he or she prefers. It promotes equality of sharing, which is accomplished on the basis of self-interest.

We watch the trains approach on the track, but unless politicians have become even more foolish than they have been, it is likely that a crash will be averted. Of course, in that situation, neither train will be able to get very far down the track, much less arrive at the next station on time.

NRA's Friendly Fire

Accustomed as we have become to various scenarios which involve corruption, cronyism, incompetence, foolishness and favoritism, we were nonetheless surprised to learn that last Thursday, a vote was taken by the House Judiciary which defeated an anti-terrorism initiative which we, in our naivete, believed would have been unobjectionable.

The proposal would give the Attorney General of the United States authority to deny the transfer of a firearm to someone who is on the government's Terrorism Watch List. It came as an amendment to H.R. 1800, offered by Representative Michael Quigley of Illinois. The amendment is only one sentence long, although it is a long sentence. Here it is, in full:

"ATTORNEY GENERAL AUTHORITY TO DENY TRANSFER OF FIREARMS TO TERRORISTS.

"The Attorney General may deny the transfer of a firearm if information obtained through the use of authorities under the Foreign Intelligence Surveillance Act of 1978 (50 U.S.C. 1801 et seq.) indicates that a prospective firearm transferee is or has been engaged in conduct constituting, in preparation for, in aid of, or related to terrorism, and the Attorney General has a reasonable belief that the prospective transferee may use a firearm in connection with terrorism."

The Quigley amendment was defeated by a party line vote, 11 Democrats in support, 21 Republicans in opposition. Congressman Peter King, Republican of New York State and chair of the House Committee on Homeland Security, has introduced similar legislation, also pending before the Judiciary Committee and not yet brought to a vote.

The quest for authority to deny a firearm to a potential terrorist began in the Bush administration, but such a bill was twice rejected by Congress, largely because of opposition by the National Rifle Association, one of the most powerful lobbies in the United States. The chair of the House Judiciary Committee is currently Representative Lamar Smith of Texas, a state where gun ownership by individuals is highly valued.

The House decision was noted that afternoon by Mayor Bloomberg in a press conference dealing with the arrest of two lone wolf terrorists in Queens. He said: "Let me just point out that even as the NYPD continues to do such great work in this area, today there was a vote in the U.S. House of Representatives on a measure that would have prevented people on the terrorist watch list from purchasing guns. I'm sorry to report that measure failed. Our Coalition of Mayors Against Illegal Guns has urged Congress to pass such restrictions, and last night's arrest is a perfect illustration why."

In an April 28th Associated Press article, Eileen Sullivan reported that last year, according to FBI figures, 247 people on the terror watch list "who were allowed to buy weapons did so after going through required background checks as required by federal law." Her article is a thorough analysis of the issue, citing both sides. It is well worth reading; you can find the article here.

Chris Brown, a reporter for Media Matters, a liberal media watchdog, wrote an article whose title asks a question that is easy to answer: "WILL THE NRA KEEP SUPPORTING THE LOOPHOLE LETTING PEOPLE ON TERROR WATCH BUY GUNS?" It is a good example of advocacy journalism. Click here to read Brown's piece, which has links of its own.

There are people out there who strongly oppose this bill, which seems so sensible to many others. Their position is expressed by the National Rifle Association, whose staff has prepared a brief stating their case. Although we disagree with them, we want you to have the opportunity to read their arguments, some based on Constitutional and libertarian principles, others more pragmatic. Click here to read the NRA brief. From a professional point of view, it is a competent piece of work. We recall that in The Merchant of Venice, by W.S., Antonio says: "The Devil can cite Scripture for his purpose."

Each side in this controversy refers to the other as "extremists". It was not, however, leftist radicals who killed 169 people at the Oklahoma City federal building on April 19, 1995, deliberately marking the second anniversary of the Branch Davidian fire in Waco, Texas, which killed 54 adults and 21 children. That is the day before Hitler's birthday, April 20, a date the teenaged Columbine murderers commemorated in 1999 by shooting to death twelve fellow students and one teacher and injuring 21 others. Six people died when Congresswoman Giffords was shot on January 8 while greeting constituents in her Arizona district.

The arguments made by the NRA parallel in some ways those of leftist organizations who defend terrorists by claiming that their Constitutional rights have been abridged at Guantanamo Bay and elsewhere by detention, interrogation, rendition and other practices intended to elicit information from those unwilling to supply it voluntarily. Like the NRA, these groups challenge the executive branch exercising its powers, and sometimes they prevail in the judicial branch, which is traditionally more sensitive to individual liberties than the branch whose elected leaders have historically felt a greater responsibility to keep Americans safe from harm, as, for example, when President Lincoln suspended the writ of habeas corpus during the War of the Rebellion, or the War Between the States, if you prefer the Southern version.

Back to the present, the NRA's challenge to executive authority is manifest in the legislative branch, where its influence is strong, due to its large membership scattered in swing states, and its effective lobbying and political action. President Obama and the Justice Department are regularly accused of violating the rights and desires of gun owners. The NRA website says: "On the Second Amendment, Don't Believe Obama". The far left, on the other hand, depends for sustenance on occasional judicial victories. New York Civic does not rush to take sides in these political-judicial disputes, the Federal issues involved being far above our pay grade, a phrase that went viral after Senator Obama was asked his views on abortion in 2008.

The Quigley amendment does not forbid possible terrorists from purchasing guns, it simply gives the Attorney General the right to prevent such a transaction if he has "a reasonable belief that the prospective transferee may use a firearm in connection with terrorism." Does that not appear sensible? Most transactions are likely to be approved, but there is value in the Justice Department knowing which potential terrorists are buying guns.

We did not anticipate the result in the Judiciary Committee, but we should have foreseen it considering the legislative history of this matter. We know that any form of restriction on the sale or use of firearms engenders fierce resistance by a spectrum ranging from hunters to survivalists, possibly including both Birchers and birthers. What we did not realize was that, even when the prevention of terrorists from taking the lives of Americans is at stake, the right to transfer firearms still takes precedence.

God bless America. His blessing may be necessary for its protection.

Terminated

Bin Laden Came to Timely End

Killer of Thousands Is Executed

By U.S., Home of Many Victims

Not to write about Osama bin Laden this week would be to ignore an event of historic importance.

He is directly responsible for the death of almost three thousand New Yorkers, a figure surpassed most notably by Hitler, who is primarily accountable for the tragedy of World War II. Mao Tse-Tung, Joseph Stalin, Idi Amin, Pol Pot, Slobodan Milosevic, Saddam Hussein, Hafez al-Assad, and various African genocidal tyrants were also mass murderers, but usually employed more primitive means than the Nazi fuhrer and the Wahhabi devotee.

Bin Laden was terminated with extreme prejudice by well-trained Americans who, we presume, followed the instructions they were given. The thought that he should have been taken alive is naive. Who would try him? On what authority? How would a sentence be carried out? How much attention would he get for years while the legal system took its protracted course? What would the International Court of Justice opine on the matter? And what consideration did the thousands of innocent civilians receive before he sent the hijacked airliners to crash into their offices?

It was clearly in the national interest to dispose of the matter on the spot, and the result was presumably dictated by the elected official who is commander-in-chief. There is a certain irony in a Nobel Peace Prize recipient personally involved in the murder of an unarmed captive, whether in the presence of his daughter or not. But think of how many lives would have been saved if Bin Laden had been stopped ten years ago, before 9-11, when President Clinton authorized the removal of Bin Laden from the planet after the bombing of the U.S. destroyer Cole on October 12, 2000 (perhaps a jab at Columbus Day). Clinton later said that his order was never carried out because the United States was unable to establish a military presence in Uzbekistan and because American intelligence and law enforcement agencies refused to confirm that bin Laden had authorized the bombing.

On the photo issue, I completely agree with the President. As he said, we do not spike the football after a touchdown, nor should we create an iconic image for Bin Laden's followers to venerate. The conspiracy theorists will never be satisfied, nor need they be, for the further they depart from reality, the less credible they become.

Burial at sea was also entirely appropriate. No remains, no relics, no tomb, no shrine. Life began in the sea, and it is not the worst place to decompose. As the fate of Luca Brasi, who killed far fewer people than Osama bin Laden, was poetically described by his colleagues, "He sleeps with the fishes." Besides, if he is going to meet the 72 virgins who Muslim theologians say await him in paradise, the North Arabian Sea will simply be a stop on his journey.

"With a good conscience our only sure reward, with history the final judge of our deeds" begins the last paragraph of Ted Sorensen's elegant inaugural address for John F. Kennedy. We cannot speak to bin Laden's conscience, or whether he has one, but we strongly believe history will judge him harshly, as a killer of innocents, not as a builder.

Osama bin Laden did not liberate anyone from tyranny. The Taliban regime in Afghanistan was harsh and oppressive, a medieval theocracy brutal to its own people. We predict that Bin Laden will be regarded over the years primarily as a mass murderer, who employed the ingenious method of hijacking jet planes whose tanks were filled with gasoline. He caused the death of thousands of innocents as part of a deluded conspiracy to re-establish the Caliphate and rule the world. The lesson of his life is how much harm one individual can do using modern technology.

Three years before 9-11, the bombing of American embassies in Tanzania and Kenya on August 7, 1998, with simultaneous explosions injuring thousands of people, primarily Africans, should have alerted the world to the menace of Bin Laden. In the two bombings 223 people were killed. Ironically, only twelve were Americans.

His battle with the world may come in part from sibling rivalry, he was the 17th of 54 progeny of his father, and if Mohammed bin Laden had not been killed in a plane crash in 1967, when Osama was 10 years old, there would have been more. The plane, a company-owned Beechcraft, was piloted by an American who misjudged the landing.

Osama's mother was reportedly looked down upon by her husband's 21 other wives (but no more than four at a time, pursuant to religious law.) She was of Syrian birth, while the other wives were Saudi Arabian. Who knows what effect his father's death or his mother's isolation had on Osama's personality, particularly his lack of regard for the lives of others?

It was also interesting to learn that, rather than wandering in the wilderness as Moses did, or moving at night from cave to cave to avoid detection, as many imagined, Osama was residing in comfort in a military town not far from Islamabad, with goats brought regularly for him and his entourage to consume.

Much more will be written about Bin Laden and his remarkable career. But if he had to bedescribed in one word on his non-existent tombstone, we suggest that "murderer" rather than "martyr" would be an appropriate appellation.

The world is better off without this sociopath, but much more must be done to assure that other mass killers, with even more powerful weapons, are not enabled through the apathy or ignorance of free countries, to pursue their destructive course. It has always been easier to destroy than to build, and as the years pass, weapons of mass destruction will be more dispersed. The combination of religious fanaticism and the capacity to destroy civilization present our planet with its greatest challenge since the extinction of our ancestors, the dinosaurs, sixty-five million years ago.

A Sea of Debt

Clouds Lie Ahead

For Years to Come,

But We Knew That



As the holidays approach, people are speaking broadly about the past year and what lies ahead for 2011.

There is a sense of wariness, if not pessimism, which colors our views of the future, at least as far as public issues are concerned. Individuals' personal outlooks vary widely, depending first on their own physical and mental health, then on personal economic issues, the most important being: are you employed, are you earning enough to support yourself and your family, and what is the likelihood of your remaining employed, or at least, marketable? In other years, issues of job satisfaction were more on people's minds, like am I doing what I really want to do? In these times, the focus is more on the availability of employment than the level of fulfillment it may provide.

The statistic of 9.8% employment is somewhat of an underestimate of the state of the economy. It does not count the underemployed, or the people who have given up looking for jobs and dropped out of the labor market. Unemployment remains high when the stock market and corporate profits are rising, so it is not as if a shrinking economy is to blame. It seems that America needs fewer workers than it used to, and that much of the unemployment is becoming structural, and therefore less likely to be cured when economic conditions improve.

Another concern of individuals is reflected in their belief that conditions will be more difficult for their children to deal with than they were for the parents. Upward social and economic mobility has been taken for granted in America for generations, particularly in immigrant communities. For the first time, many people are uncertain that the next generation will be able to get into the schools they did, or hold the jobs they have, or buy homes equivalent to those in which they live. This pressure is particularly acute on the middle class, or people who have good jobs in manufacturing, or on the lower levels of middle management. NAFTA and robotics may add to premonitory feelings of anxiety.

We don't think too much about issues like how the next generation, or the ones after that, will pay off the ever-increasing national debt, or pay the interest that accrues annually on the $13.56 trillion public debt of the Federal government (as of 9/30/10). As we write, the real time estimate of the US debt clock is $13 trillion 827 billion 777 million (rising at several million dollars a minute). Click here to see what the debt clock indicates at the moment you view this link.

We should also think of the balance of payments between imports and exports, under which the United States for years has paid more for the goods it imports than it has received from the goods it sells abroad. That is another trend that cannot continue indefinitely, yet it shows no sign of abating.

In the last few days, the controversy between President Obama and the Republican leadership in Congress appears to have led to a compromise, which is the only alternative to inaction, neither side having enough votes to pass anything.

However, both the Democratic and the Republican plans are supposed to be paid for by increasing the national debt. The parties differed widely as to which category of taxpayers should get relief, and the Democrats succeeded in winning a year’s extension of unemployment insurance, which seems increasingly necessary as the recession continues, but which does not result in increasing employment.

The sensible compromise, which appears to be on track, was intended to resolve those differences. However, the accommodation of the parties came at the expense of the future. If we believe that the growing debt will ever be repaid or substantially reduced, we have postponed the time when that might happen.

There are many other reasons to be concerned about the future. Nuclear proliferation is the most obvious and threatening. The mental stability of some leaders of states with weapons of mass destruction is questionable. However, the leaders are not suicidal. The problem is more severe when non-state actors acquire nuclear weapons, which is probably only a matter of time, as North Korea may place parts of its arsenal on sale – in mint condition and never used.

To us, these problems arise from the rapid advances in the physical sciences made in the last few centuries, rushing far ahead of the behavioral sciences. It has taken billions of years for our species to evolve into what it is now, and we cannot expect substantial change in the handful of generations that may remain before, as my mother used to say, "anything happens."

Enjoy the holidays. Rule 26-G: "Every day we live is a gift of God." We add: "Try to earn the gift by good works."

The Elephant Strikes Back

No Peace, No Prosperity.

Therefore, No Re-election

For 64 in House, 5 from NY



Though some contests are still unresolved, we have had the time to digest the results of Tuesday's election. Since so much has been written on the subject, we confine ourselves to a few relatively brief observations.

Nationally, the Republicans won rather convincingly, and though in New York State, they lost all six statewide races, they did pick up five Congressional seats and appear to have regained control of the State Senate. The five Democrats who lost were upstaters John Hall, Scott Murphy, Michael Arcuri and Matthew Zeller. Michael McMahon of Staten Island was the only Representative from New York City to be defeated. He had been elected in 2008 after his predecessor, Republican Vito Fossella, had personal problems.

There are two basic conditions that people historically have wanted their government to provide: peace and prosperity. The United States, at this time, has neither. It is therefore logical that people should vote for new leaders. The same desire for change that propelled Barack Obama into the Presidency in 2008 propelled his party out of power in the House of Representatives in 2010. Fortunately for the Democrats, only one-third of the Senators come up for election in each biennium.

That is the way most people voted, except where the lack of qualifications of particular candidates took priority. Witches, kooks, Scientologists, bat swingers and people who are vulgar with regard to the President were generally disfavored by the voters.

That the Democrats lost only six seats in the United States Senate is due to the peculiar qualities of the Republican primary winners in Delaware and Nevada. Sharron Angle and Christine O'Donnell were not ready for prime time, nor was Carl Paladino, and their shortcomings were well known by the voters. TV coverage will do that.

Apart from the desire for a new direction, public dislike of Congress, and general antagonism toward incumbents, demographics played a major role in the election. Middle America appeared to be pitted against the North Atlantic and Pacific coasts. Middle America won; there, more states are landlocked than on the oceans.

The pictures of a suffering Obama on the front page of Thursday's newspapers, particularly the Times, were extraordinary. You don't have to be devoted to the President to feel sorry for a leader in such obvious distress. The 64 Democratic members of Congress who lost their seats can't feel that well either. We wonder how many will find jobs as lobbyists.

Sadly, the ideas of compromise and bipartisanship in the 112th Congress are non-starters. Both parties will devote themselves to capturing the Presidency and winning the 2012 election. Over the next two year, they will attempt to kneecap each other. The only thing that may bring the parties together is a war, and that is too high a price to pay for political harmony.

As far as our own classically dysfunctional New York State is concerned, the problem is that the Republicans offered no well-regarded candidate for governor. That is in good part the fault of Governor Pataki, who during his twelve year incumbency, 1995-2006, did nothing to build his party or to recruit candidates for public office.

Ed Cox, who would have been a credible candidate to challenge Senator Clinton in 2006, could not win Pataki's support. He favored Jeanine Pirro, the Westchester County district attorney, who wanted to run for Attorney General. When the smoke cleared, Congressman Rick Lazio ran for the Senate and was defeated by over a million votes. Pirro ended up running for AG, and losing to Eliot Spitzer, but her candidacy was seriously damaged by the political maneuvering that preceded it.

It was the weakness of Lazio and the rage of the right that led to the 62-38 victory by Carl Paladino in the Republican primary, but it was the unsuitability of Paladino, as demonstrated by his intemperate remarks, which guaranteed the defeat of the rest of the Republican ticket, despite the ability and appeal of his running mates, neither of whom endorsed him.

Paladino lost to Cuomo by 1,134,228 votes, a margin of 27.1%. Dan Donovan, the Staten Island district attorney who ran for State Attorney General, lost to Senator Eric Schneiderman by 441,171 votes, or 11.1%. The Republican candidate for State Comptroller, Harry Wilson, who negotiated the General Motors rescue and was endorsed by almost all of the state's newspapers, came closest of all the challengers. He lost to incumbent Comptroller Tom DiNapoli by 96,291 votes, or 2.4%.

Wilson and Donovan's electoral weakness is that the Republicans had no boots on the ground, phone banks or get-out-the-vote operations, while the Democrats, assisted by public employee unions with whom they are allied, did. You can't spend all your money on television; there is still a retail aspect to politics. Meanwhile, for the Republicans, demographics in New York State are likely to continue to deteriorate, unless the GOP broadens its appeal..

Governor-elect Cuomo will face enormous problems, including a pending nine billion dollar budget deficit for the fiscal year beginning April 1, 2011. He would have a difficult task even if he were not surrounded by rivals and enemies. The last two governors failed dismally for different reasons. We hope this one has the ability, the bravery, and the cunning to change the way New York State manages its affairs, while coping with the enormous financial burden the state faces..

We wish him the very best, but as Governor, he will have to lead while dealing with elected officials, some of whom have serious integrity issues, while others have problematic judgment, and still others are pawns of the outside forces that finance their campaigns and the legislative leaders who give them directions. Andrew Cuomo will have a more difficult task than his father did when he was elected 28 years ago. It is common knowledge that New York State is in worse shape than it was in 1982. The new governor will have to make difficult choices; the first is finding the most competent people for the agencies and for his staff. That will be the first of many tests of his mettle. Here's hoping.





StarQuest #716 11.14.2010 1,013 words

Paterson Channels Polonius

Albany Skirmish

Over Borrowing

Day 78 without a state budget.

78 is the speed of some old records, in rpm, the atomic number of platinum, and the number of chromosomes in a dog's DNA (39 pairs). We have 23 pairs.

We have not written since last week about the state budget and the contortions now under way as the legislature and governor try to reach agreement. It is not clear how hard they are trying, but we believe they are making a serious effort to come to terms. Governor Paterson's threat to shut down state government alarms incumbents who do not want to be blamed for any of their constituent-contributors not receiving their paychecks.

In the last months, the courts have shot down the governor's planned furloughs and layoffs as part of the judiciary's ever-expanding sense of its own responsibilities (see Citizens United v. Federal Election Commission). It was a Federal judge who ruled, in Donohue v. Paterson, that the governor could not impose a four-day work week, pursuant to the next to last prohibition of Article I, Section 10 of the Constitution. For those of you who may not recall the section, we reprint its relevant first paragraph:

"No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any title of Nobility."

In the past, Speaker Sheldon Silver has won many political battles by delaying a decision until the last minute, and then making a proposal which could not be refused. He is the most proficient politician in the Albany swamp, and his skills should not be underestimated. Some of his strength comes from the fact that he is responsive to his base (the Democratic Assembly caucus) and tries to protect his members, although a few of them are felons.

Silver is responsible for two major appointments made by the governor: Lieutenant Governor Richard Ravitch and Chief Judge Jonathan Lippman of the Court of Appeals. Both men are competent. Judge Lippman persuaded a bare majority of the Court of Appeals to sustain the appointment of LG Ravitch, a decision that may well have been in the public interest, although it would probably not have been the correct answer in a law school examination.

The decision certainly blindsided Attorney General Cuomo, who took the opposite position, but he has recovered nicely. He awaits the opportunity to choose Judges of the Court of Appeals himself, and will use his wits to avoid being boxed in by nominating committees which substantially limit his power of appointment by minimizing the number of papabili from whom he must choose.

The story today was that Governor Paterson said he would rule out borrowing, which is in direct contrast with the Ravitch plan, which calls for two years of borrowing, limited by the imposition of strict fiscal controls by a financial control board. If Paterson sticks to his guns, more layoffs will be required.

We expect some sort of flim-flammery to be proposed, which means borrowing billions from somewhere without calling it that. Raiding the pension funds is one possible scheme, vaguely justifiable because it is the swelling pension funds which got us into this trouble in the first place. Any more state borrowing, however, will further increase the interest on the public debt, which must be paid before one begins to provide for vital services like police, fire and education.

Paterson's problem is somewhat mitigated by the fact that President Obama, Governor Schwarzenegger and many other public officials have the same difficulties. The national debt today is about thirteen trillion dollars, or $13,000,000,000,000. We left off the number of cents so as not to appear to exaggerate the number of zeroes (12).

The problem at all levels of government, in many countries around the world, is that public expenditures exceed revenues. This can lead to devaluation of the currency, which makes debt less burdensome, and at the same time destroys people's savings. New currency was issued in the Democratic People's Republic of Korea (Pyongyang), and resulting public dissatisfaction led to the execution (by the regime) of two officials held responsible for the decision, and the demotion of others.

Living in a more gracious and gentle system, our economic blunderers go off to academia and think-tanks of like-minded souls. They are replaced by others whose views are just different enough to convey a sense of change. The first TARP program was enacted under President George W. Bush and Treasury Secretary Hank Paulson, former chairman of Goldman Sachs.

When Mr. Bush was asked why he had approved such a substantial bailout in view of his generally conservative economic views (but not practices, he was a mega-spender), he replied in effect that he did not want to go down in history as being President of the United States when the economy collapsed completely. The shade of Hoover was in his mind, and that was an image he urgently desired to avoid, and for the most part successfully did, although the subprime crisis and market collapse took place in 2008, and led to the defeat of the McCain-Pain ticket.

Every cloud has a silver lining.