OT: Some really bad news for the local economy

[IthacaMatt]

There making record profits and did secure a pretty big contract earlier in the year. I am usually on the side of business but this seems like corporate greed all the way. Per the story they did lose out on a big contract recently in NJ to a rival but there still posting all time high profits and stock prices.

City and State just basically said they could be tax free if they stay here.

Super! Higher taxes for homeowners to keep corporate profits high.

You would think the cost of living here would be enough of an incentive. It's New Jersey where they're talking about moving this program to. It's not like it's cheaper to live in Jersey or the taxes are so much lower than "Free".

 

[IthacaMatt]

Your POV on Hispanics being more Republican than Democrat is not close to being accurate. They pretty much overwhelmingly supported Obama in the last election until they reached the ages of 45.After that is was a toss up. Don't let facts stand in the way of trying to make a point.

His point was that they SHOULD be Republicans, based on their social criteria, but the Republicans have basically declared war on Hispanic immigrants for the past 20 years. Really huge missed opportunity for the Republicans, IMO.

 

[wfschrec]

That is a lot of ground to cover. Since you used quotes it appears that this comes from some partisan publication. (I notice you did not reference the author – will you share it?) As you now, these types of rants (on both sides) are full of random facts laced with hyperbole. Nevertheless, let’s examine it.

First, let’s get the context correct. The recession is clearly on Bush/Greenspan, not Obama. If we can’t agree on that then it is hardly worth wasting each other’s breath. Most will concede this fact but they ignore the magnitude. It becomes. “Oh yeah, but the recovery is weak.” This recession was far worse than any other in the last 100 years save the Great Depression. It destroyed enormous amounts of household wealth and devastated the housing industry, one of the largest employers in the country. Let’s move on/


1. “Since Barack Obama took his first oath of office on January 20, 2009, our national debt has gone up 58%. The U.S. dollar has depreciated 6%.”

Yes, debt has gone up –so what? That is what happens in recessions and this one was far worse than all others except one. Under Bush the national debt outstanding rose 105%. Under Reagan it increased 128%. Surprising the author did not mention that.

The dollar is essentially unchanged. On December 31, 2008 it was at .7331 Euros and yesterday 7.273.

2. “With such a large slice of the population out of work and broke, 47 million Americans are now living on food stamps. That's 1/7th of our country!”

1/7th of the country equals 14%. The actual poverty rate is closer to 15%. The poverty rate was over 20% in the 1950’s and has dropped to the 11% to 15% range from then until today. During Reagan’s recession the poverty rate was almost exactly the same as today. This is the kind of disingenuous argument that is clearly meant to create controversy with absolutely no informational value and adding nothing to the national debate. It is pure nonsense.

3. “Meanwhile, the U.S. government lost its triple-A credit rating for the first time in history.”

Again, so what? Did the market care? No. There has been no effect on prices of US Treasuries due to the S&P downgrade. Why? Because it was a political judgment not an economic one.

4. “We're turning into a welfare state at exactly the time the government is going broke.”

We are not broke and the nature of our welfare programs has not changed since Bush’s drug prescription program.

5. “49% of American households get government handouts—even more than the 47% Mitt Romney so infamously cited. Never before in history have so many people depended on Uncle Sam for housing, food and health care. Many of these millions are truly needy and deserving. But half the country pays no federal taxes—that's a problem!”

I have no way of knowing how this calculation was made. What is a government handout? With respect to federal taxes the statement is, of course, grossly inaccurate – actually completely false. The author counts Medicare and SS on the one hand (spending) and then totally ignores payroll taxes on the other (taxes). How can anyone listen to this stuff?

6. “Obama has run up more debt than all other presidents combined, from George Washington to George W. Bush. The U.S. has now accumulated the biggest debt in world history and it is growing by $45,000 per second."

This one is a doozy. First of all, the same statements can be said for Bush and Reagan and many other presidents. These are just silly numbers. They do not take into account inflation and or the growth in population, war and peace, recessions etc. This is just ignorant.

7. “As he [Obama] took the oath of office, he inherited a recession that was already over a year old. In every other recession since the Great Depression, things have looked dramatically better within a year and a half.

All recessions are not created equal. This one was far worse – in fact, more double the average of all post war recessions. Every previous recovery has had a healthy recovery of the housing market with big employment gains. This recession had had none of that. In addition, 2 million government jobs were lost due to austerity measures. That has never happened in any previous recession. Is it any wonder the unemployment rate remains stubbornly high?

8. “A month after he got into office, Obama signed his trillion-dollar stimulus plan—a group of infrastructure projects designed to save the economy.

Obama's experiment didn't work because borrowing a trillion dollars out of the economy and putting it back into the same economy has a zero net effect.”

This is such an ignorant statement it is hard to know where to begin. Milton Friedman must be rolling over in his grave. I will just say that every study has shown that the stimulus was successful and screaming that it wasn’t does not make it so. It is reasonable to debate the degree to which the stimulus helped but not whether or not it did.

Reagan increased the national debt by 128%, arguably borrowing and spending his way to prosperity. Why is it that it is OK for Reagan but not Obama?

9. “How far into debt can a country go before it collapses? That's an interesting question because total United States debt has just hit 105% of GDP.

We're fast approaching the debt-to-GDP ratio that pushed Greece into bankruptcy.”

While I don’t want to do a Dick Cheney and say deficits don’t matter, degree, direction, trends and causes do matter greatly. Perhaps, the most important number to watch is the direction of the deficit-to-GDP ratio, which is falling sharply. This simply means the problem is starting to get under control.

We are not Greece. By the way, Japan has 2 ½ times the debt to GDP ratio as the US and has had for some time. No one is worrying about a Japanese default.

My question is what would the author have done? Apparently, he would have repeated the policy mistakes of the Great Depression. I will say that one thing I never hear is, "What would Bush do?"

Hate to break it to you but the value of the dollar is going down.

http://useconomy.about.com/b/2010/10/25/g-20-meeting-drive-stock-up-dollar-down.htm

"As the value of the dollar declines relative to other currencies, the prices of imports will rise. We have already seen an . On the other hand, it is lowering the price of U.S. exports, which should help economic growth. It also makes the U.S. stock market a good deal, which is one reason the Dow has broken above 11,000 lately. And, as long as China keeps buying Treasuries to keep the yuan low, mortgage interest rates will stay low."

That is why the market is up ... do you know what happens when China decides to cash in? It amazes me what people don't realize. Watch the Stansburry briefing ... not that crap on CNN.

 

[wfschrec]

Most people I know have no problem with immigration - very few Americans do - it is illegal immigration that bothers them. Many know someone waiting in line to get in or have had first hand experience with legal immigrants stories.

This is also not our first rodeo. We have heard all of this before. We passed Simpson Mazzoli in 1986 and thought we had addressed the issue with common sense and compassion only to witness millions of illegal immigrants swarm across our Southern border.

This is not an easy issue.

^^ This

 

[KellySyracuse]

Don't know much about this -what do you mean about designed for NYC but applied statewide?

Here is a great article that explains what I am referring to:

http://www.ppinys.org/reports/2004/letupstate.pdf

"Left to its own devices, for example, Upstate would never have a Medicaid program that is by far the most expensive in the country — helping to push property
taxes to the highest levels in the nation. Upstate wouldn’t have kept tolls on the Thruway after the early 1990s, when the last bonds were being paid off and
the late Sen. Daniel Patrick Moynihan was extracting $5 billion in federal funds to help remove the tolls. Upstate probably wouldn’t have laws (e.g., the Triborough
provision) giving public-employee unions such decisive leverage to drive up local government costs, and to block consolidation or privatization of services.

Upstate wouldn’t choose energy policies that push basic industrial electric rates about 17 percent above the national average — while a competitor like Ohio
has rates below the national average. It wouldn’t enact something like...law(s) on redeveloping brownfields, which was designed to fit property values in
New York City, but which has made brownfields redevelopment almost cost prohibitive in Upstate cities with undeveloped land nearby. It would not administer
“prevailing wage” laws in ways that impose urban wage levels on rural construction projects. It wouldn’t have state Labor Department rules requiring that
higher-wage steelworkers (rather than glaziers) install windows in public-works projects. It wouldn’t have runaway tort laws that keep car leases from Upstate
drivers, and impose unlimited liability on construction contractors."

 

[Crusty]

Here is a great article that explains what I am referring to:

http://www.ppinys.org/reports/2004/letupstate.pdf

"Left to its own devices, for example, Upstate would never have a Medicaid program that is by far the most expensive in the country — helping to push property
taxes to the highest levels in the nation. Upstate wouldn’t have kept tolls on the Thruway after the early 1990s, when the last bonds were being paid off and
the late Sen. Daniel Patrick Moynihan was extracting $5 billion in federal funds to help remove the tolls. Upstate probably wouldn’t have laws (e.g., the Triborough
provision) giving public-employee unions such decisive leverage to drive up local government costs, and to block consolidation or privatization of services.

Upstate wouldn’t choose energy policies that push basic industrial electric rates about 17 percent above the national average — while a competitor like Ohio
has rates below the national average. It wouldn’t enact something like...law(s) on redeveloping brownfields, which was designed to fit property values in
New York City, but which has made brownfields redevelopment almost cost prohibitive in Upstate cities with undeveloped land nearby. It would not administer
“prevailing wage” laws in ways that impose urban wage levels on rural construction projects. It wouldn’t have state Labor Department rules requiring that
higher-wage steelworkers (rather than glaziers) install windows in public-works projects. It wouldn’t have runaway tort laws that keep car leases from Upstate
drivers, and impose unlimited liability on construction contractors."

Thanks. Interesting article. I am learning a great deal researching this issue,

I grew up in Utica and spent my career in NYC so I have always been an upstate kid in downstate. Hence, my interest in the topic.

Utica always played second fiddle to Syracuse with respect to development because anything Utica had, Syracuse had better. Even our college, Utica College, was part of SU back then. So, I try to pays attention to what is going on in Utica and to a lesser degree CNY.

The establishment of SUNY Tech has been about the only positive thing I have seen the state do for Oneida County since I was a kid! The nanotechnology center is actually happening and has added 1,500 jobs and is projected to add about 5,000 to 6,000 in the next few years. That aside I see nothing.

If you grow up in Utica, you come to believe that the main reason for the high property taxes is local and county corruption! I imagine that Syracuse must be similar. Of course, you have a larger point.

I am surprised to learn that New York State is one of the few states that requires a county government Medicaid contribution so your point and a valid one. I also see that these costs have been capped at 3% increase per year. While it doesn't help the costs currently on county budgets, at least these costs are constrained to a reasonable degree in the future.

New York State income tax rate are not the nominal problem. As I have stated before they are actually lower than NC. However, if NYS picked up 100% of Medicaid costs income taxes would have to rise.

It sounds to me as if costs of doing business (including property taxes) are the main issue. I would like to learn more.

What energy policies are you referring to that are the cause of high prices?

What exactly is the definition of brownfields? It seems to be a rather nebulous term used in academic and political circles with no concise definition. How do they figure in to the equation?

Isn't the union issue a Dem issue rather than a NYC issue? (And I agree with you with respect to those union related issues including government pension funds). This clearly does impact local property taxes but it is a local issue.

The one area that I think is difficult is the contractor liability issue. If we are talking about liability for inferior workmanship or materials, I can't see why contractors should get a walk. Perhaps, you are referring to something different?

Why are these issues an upstate/downstate deal? I can assure you downstaters are just as upset about property taxes as upstaters.

BTW Connecticut has not has county government since 1960. Certain government functions such as the courts are still organized around the old geographically boundaries but that's it. Counties are just another layer of bureaucracy

Thanks.