Extortion–And Susan Collins

Well, Susan Collins was right–sorta. Trump did learn a lesson from the Impeachment whitewash that she and the other Republican Senators handed him.

The lesson? Extortion works and I can keep doing it.

Earlier this week, Trump tweeted:

I’m seeing Governor Cuomo today at The White House. He must understand that National Security far exceeds politics. New York must stop all of its unnecessary lawsuits & harrassment, start cleaning itself up, and lowering taxes. Build relationships, but don’t bring Fredo!

This, of course, is vintage Trump, displaying both his trademark ignorance of how government actually works and his mob-godfather behavior.

Letitia James, New York’s Attorney General responded to the obvious ignorance.

When you stop violating the rights and liberties of all New Yorkers, we will stand down. Until then, we have a duty and responsibility to defend the Constitution and the rule of law.

BTW, I file the lawsuits, not the Governor.

As commentators have noted, this new threat followed a more generalized version that Trump had included in his delusional, fact-free State of the Union speech. In that speech, he threatened reprisals against sanctuary cities and states (mischaracterizing, as usual, what sanctuary laws say and do–it really is amazing how impervious he has been to learning anything in the three years he’s held office).

It also followed a previous, petty retaliation against New York, described by a Daily Kos contributor:

When the Department of Homeland Security announced on Feb. 7 that residents of New York would no longer be allowed to participate in programs such as Global Entry that speed passengers through airport security, it seemed like an act of petty vengeance. But then … petty vengeance is Donald Trump’s middle name. He just spells it with a J. So the idea that Trump would make a move designed to irritate millions of New Yorkers because their state passed laws supporting immigrants seemed absolutely believable.

But as it turns out, Trump wasn’t acting out of pure retaliation. Not at all. On Thursday Trump fired off a tweet making it clear that the real purpose behind making New Yorkers go to the back of the line was extortion—to force the state into leaving his taxes, his company, and his friends alone.

After all, it worked so well in Ukraine.

For a more in-depth discussion of this latest, astonishingly brazen effort to obtain a personal quid pro quo–threatening to withhold money meant to protect the citizens of New York unless that state dropped its multiple investigations into his criminal activities–you really should visit (or revisit, if you have already seen it) this discussion on Morning Joe.

Once again, the word that comes to mind is chutzpah.

What I find so astonishing is not the criminal behavior itself–and make no mistake, it is criminal, although I’m sure that the blowback will be dismissed with Trump’s usual “it was a joke” disclaimer (this from a man who wouldn’t know humor if he encountered it)– but the chutzpah of tweeting it out for the whole world to see. All that was missing was “Nah nah nah–you can’t impeach me! I’m protected by the spineless, dishonest, unAmerican Republicans in Mitch McConnell’s Senate.”

Yes indeed, Senator Collins. He certainly learned a lesson…

Comments

The “But For” Test

When I was in City Hall, in the late 1970s, the use of tax abatements to lure employers to Indianapolis, or to blighted areas, was relatively new. Back then, applicants for those abatements were expected to demonstrate that “but for” the tax break, they wouldn’t make the move–that the incentive made the difference between an economically viable move and one that otherwise wouldn’t make economic sense.

I recall several quibbles about whether this or that business had actually met the “but for” test.

Over the years, of course, we’ve heard less and less about cities justifying the various incentives being doled out to entice employers, with the result that the whole country sometimes seems engaged in a zero-sum game (after all, when factory A moves from state B to state C, jobs may come to state C, but they’re lost to state B. Total economic activity rarely increases.) Incentives have come to look more and more like bribes; larger enterprises looking to move or expand pit “bidders” against each other to extract the largest concessions.

“Who will pay me the most to come?”

Those of us who have looked askance at the evolution of this competition have long believed that these enterprises would move to locations that made business sense without the incentives/bribes. And now we have evidence.

Remember when AOC and many others blocked the three billion dollars in subsidies that New York offered Amazon? Amazon is moving to New York anyway. Without the subsidies.

“The giant online retailer said it has signed a new lease for 335,000 square feet on the city’s west side in the new Hudson Yards neighborhood, where it will have more than 1,500 employees,” The Wall Street Journal reported. “Amazon is taking the space without any of the special tax credits and other inducements the company had been offered to build a new headquarters in the Queens neighborhood of Long Island City, the company said.”

“The new lease represents Amazon’s largest expansion in New York since it stunned the city by abandoning those earlier plans. Amazon pulled back after facing a backlash from some politicians and activists over the roughly $3 billion in financial incentives the city and state had extended to woo the company and the 25,000 new jobs it had pledged to create,” The Journal explained.

Clearly, a New York location made business sense for the company. That being the case, the massive subsidies it extracted during the competitive process were gravy–and taxpayers were supplying that gravy.

The politicians and activists who had blocked the original offer had argued that it was unnecessary. They were clearly correct. There is no way that Amazon could have passed a “but for” test.

The money being spent on these high-profile efforts could be used instead to grow local businesses–why not, for example, create a fund that would finance promising mom-and-pop startups that can’t get conventional financing? Or use that money to make local retail districts more attractive and accessible?

Bribing employers to relocate is not “economic development”–and as Amazon has just demonstrated, it’s usually not necessary.

Comments

Peter the Citizen and “Less Appealing” Indiana

On Wednesday, I shared portions of an analysis of TANF–welfare after “reform”–from Peter the Citizen, a conservative policy analyst who has deep experience with social welfare policies.

Among the many papers he has written on the subject is one I found particularly interesting, because it references poverty and welfare policy in my home state of Indiana–and because Peter’s analysis is consistent with my own understanding of conditions in the Hoosier state.

In this particular paper, Peter was responding to an article attributing the “success” of welfare reform to the fact that such reforms have made welfare “less appealing.” (I suspect that many recipients would be shocked to discover they were accepting help because they found it “appealing.”) His rejoinder is worth reproducing at some length.

TANF is best viewed on a state-by- state basis and digging deeper suggests that there are limits to Winship’s argument about making welfare “less appealing.” Some states have tried to focus on real “welfare reform” (to the extent they can given the limitations of TANF’s block grant structure and dysfunctional federal requirements), while others use it primarily as a slush fund and have adopted very harsh policies to push families off the welfare rolls. Using a simplistic pre-post approach, one can easily compare states over time based on the harshness of their policies. (Note: This is not the evaluation approach I prefer, but it seems to resonate with conservatives.)

Robert Doar, now at the American Enterprise Institute, says he ran a “model” TANF program in New York – both at the state level and in New York City. (Doar’s bio states: “Before joining the Bloomberg administration, he was commissioner of social services for the state of New York, where he helped to make the state a model for the implementation of welfare reform.”) Doar is proud of New York City’s track record in reducing poverty:

In America’s biggest cities, more and more Americans are now living in poverty. From 2000 to 2013, the poverty rate in America’s 20 largest cities grew by 36 percent, to an average of 22.7 percent. Nationally, the poverty rate has risen too, from 11.3 percent in 2000 to 14.8 percent in 2014.

But there’s one stand-out exception to this phenomenon: New York City.

Over the last decade, New York City’s poverty rate has defied national trends by declining. While New York once suffered one of the highest poverty rates among the country’s large cities, today it boasts one of the lowest…

Indeed, Doar presents data to show that between 2000 and 2013, the percent change in poverty in New York City was minus 0.9 percent – the lowest in the nation among major cities, followed by Los Angeles and San Diego (plus 3.6 and plus 7.5 percent, respectively). At the opposite end of the spectrum, with the largest increases, were Indianapolis (81.5 percent), Charlotte (67 percent), and Detroit (57.9 percent).

Notably, both New York and California (the states with the top three cities) have much more appealing TANF programs than Indiana, North Carolina, and Michigan (the states with the bottom three cities) and they have become relatively more appealing over time. New York and California didn’t eliminate the entitlement (an important component of “welfare reform” for conservatives), they don’t impose full family sanctions or enforce the federal 5-year time limit (California removes the adult’s needs after 48 months but children continue to receive benefits; New York simply continues assistance with state funds.) Both states have among the most generous benefits, paying over $700 a month for a family of three. In contrast, the states with the cities in the bottom three have lower benefits ($272 to $492 a month for a family of three), do impose full-family sanctions and do enforce the federal 5-year limit and two have shorter time limits (24 months in Indiana – for adults – and 48 months in Michigan – for the entire family).

While Indiana, North Carolina and Michigan were “less appealing” in 1996 (and 2000) than both California and New York, they have become much, much less appealing over time. For example, between 1996 and 2014, the TANF-to-poverty ratio (the ratio of families receiving cash assistance per 100 poor families with children) fell from 101 to 65 in California and from 79 to 40 in New York. The declines were much larger in Indiana (61 to 8), North Carolina (74 to 8), and Michigan (88 to 18).15 The maximum benefit for a family of three fell 23 percent in real terms in California and 10 percent in New York; compare that to Indiana (-34 percent), North Carolina (-34 percent), and Michigan (-30 percent). TANF is failing as a safety net everywhere, but much more so in some states than others.

I’ve written before about the United Way of Indiana’s description of ALICE families (Asset Limited, Income Constrained, Employed) and the huge gap between what those families need simply in order to survive and the public and private resources available to them.

There’s a lot of faux concern about “welfare dependency” expressed by people who are quite comfortable themselves. What those people worry about is “takers” getting too comfortable with those appealing “handouts”.

Peter the Citizen uses the term properly, to describe people who depend upon social welfare programs in order to survive.

There are many things policymakers could do to decrease that real-world dependency: raise the minimum wage, reinstitute Reagan-era tax brackets, eliminate the ACA in favor of “Medicare for All”…and jettison a self-satisfied ideology that equates poverty with a lack of moral fiber and “middle-class values.”

Comments

Good Cop/Bad Cop

The long-simmering tensions between police and the communities they serve have erupted in a series of protests and confrontations, triggered by events in Ferguson and New York. I’ve posted about this before, and I don’t intend to belabor the very different points of view expressed by the protestors and those sympathetic to them, on the one hand, and (some) citizens and police, on the other.

I will say that the officers who turned their backs on Mayor DeBlasio during the funeral of the two policemen shot by a mentally-deranged man in New York dishonored themselves and their colleagues, and disrespected the officers whose memorials should have been the focus of the day.

Fortunately, those childish displays are not typical of the men in blue, nor are the disheartening reports of police officers who belong to the KKK, who use disproportionate force, and who otherwise display “conduct unbecoming.” Many more officers are like Steve Anderson, Chief of Police in Nashville, Tennessee.

The Chief recently responded–point by point– to an email from a citizen critical of official restraint during peaceful demonstrations in Nashville. His response went viral. You really need to click the link and read the entire exchange, but here is a representative sample:

• “I just want myself and my family to feel that our city is safe, and right now we don’t feel that way.”

I have to admit, I am somewhat puzzled by this announcement. None of the demonstrators in this city have in any way exhibited any propensity for violence or indicated, even verbally, that they would harm anyone. I can understand how you may feel that your ideologies have been questioned but I am not aware of any occurrence that would give reason for someone to feel physically threatened.

• “I have a son who I have raised to respect police officers and other authority figures, but if he comes to me today and asks “Why are the police allowing this?” I wouldn’t have a good answer.”

It is somewhat perplexing when children are injected into the conversation as an attempt to bolster a position or as an attempt to thwart the position of another. While this is not the type of conversation I ordinarily engage in, here are some thoughts you may find useful as you talk with your son.

First, it is laudable that you are teaching your son respect for the police and other authority figures. However, a better lesson might be that it is the government the police serve that should be respected. The police are merely a representative of a government formed by the people for the people—for all people. Being respectful of the government would mean being respectful of all persons, no matter what their views.

Police officers like Chief Anderson–and there are many like him, fortunately– understand their constitutional and public safety duties, even if some of the citizens they serve do not.

Comments

More Horrors of Obamacare

Well, I see that the Star has a story quoting one of Governor Pence’s political appointees; said employee is predicting a huge increase in health insurance premiums, caused, of course, by the hated “Obamacare.”

The prediction is interesting in light of recent news from elsewhere. On July 17, Reuters reported  “Many New York state residents who buy health insurance next year will most likely see their premiums cut by half as President Barack Obama’s healthcare law creates subsidies that may increase the number of people in this market by the hundreds of thousands.”

News reports suggest that other states anticipate similar decreases. Evidently, officials in other states know something ours don’t.

Even if you are stuck in backward Indiana–even if you don’t live in New York, or one of the other states anticipating reduced premiums, you still may be one of the 8.5 million people who will get a check from their health insurance companies this summer. The checks are rebates required by the Affordable Care Act (aka Obamacare) from companies that failed to spend at least 80% of premiums received on actual medical care.  Insurance companies that fail to pay out 80% on claims are obliged to send the difference between what they did spend and 80% back to the policyholders.

Has there ever been such an outrageous assault on the American Way of Life?

But never fear, policyholders–the House GOP just took its 39th vote to repeal this affront to liberty, and to protect you from its horrors. In fact, protecting you from Obamacare is so important, they haven’t done anything else.

Comments