December 27, 2004

It's Like Some Kind of Bad Joke

READERS OF THE New York Daily News will find themselves either horrified or snickering at the tabloid's latest "exclusive" report, which informs us that New York is getting "dramatically shortchanged" in the annual appropriations game.

Well, perhaps "shortchanged" isn't the correct word to use, but as both The Rant and the Daily News are family publications, we shan't mention the more precise terms which some might prefer. We shall, however, note the downright hysterical tone which the Daily News uses in its story. Indeed, the newspaper uses words like "robbery," "outrage" and "ripped off" to describe the fact New York didn't get everything it wanted this year. It goes on to complain that New York sends $11 billion more to Washington than it gives back this year, and -- worst of all! -- this "injustice" was perpetrated by "hicks (and) yokels."

This is like some kind of bad joke.

We do not disagree with the Daily News' main contention: in the aggregate, New York has long been used as a piggy bank for Washington. It has also long been used as a piggy bank for Albany, and we wait breathlessly for the Daily News' expose on Upstate New York's Fiscal Treachery. But, that said, a closer look at the numbers shows that perhaps the Daily News ought have kept quiet about the whole thing. And quite frankly, New York was a fiscal cesspit for so long that the paper's outrage boggles the mind.

For instance, we do seem to recall that only federal loans kept the city from going broke in the mid-Seventies. These federal loans were to the tune of $2.3 billion per annum, or roughly $10 billion in today's dollars. These were needed because New York was, well, a wretched, corrupt, inefficient, badly-run hellhole.

Oh, yes it was.

We quote from Robert Hargreaves' "Superpower: A Portrait of America in the 1970s" to make our point. Mr Hargreaves' work is a useful resource for our long-standing thesis that almost everything which happened in the Seventies was bad, and his section on New York helps confirm it.

Mr Hargreaves writes:

By combining the old commissions into ten federal-style administrations, (Mayor John) Lindsay attempted to streamline the rickety machinery of government. But according to his critics, the main result of the reforms has been to add one more layer to an already unwieldy administration, so that the city now employs over 413,000 workers, an increase of more than a quarter since Lindsay took office.

Whether the city is any more efficient now is a moot point. "Genghis Khan conquered Asia with an army only half the size of New York City's civil service," one of Lindsay's opponents has said. And in 1972, New York state auditors reported that what they termed "underutilization of employee time" was widespread in the city. Welfare employees, they reported, waste about two-thirds of their time, while the productivity of water-meter readers was less than half that of workers doing similar jobs in private industry; this cost the city about $2 million a year more than it should have done. New Yorkers pay per capita half as much again for police protection as the average American and two thirds more for their garbage collection .... it now costs more to collect a ton of New York garbage than it does to mine a ton of Kentucky coal.

We could go on. For in his book, Mr Hargreaves wrote sixteen pages about New York's innumerable failings when it came to matters of Government, as well as its civic corruption and its criminality.

Now, readers will reasonably point out that Mr Hargreaves was writing in the Seventies, and things have changed much since then. Mayor Rudy Giuliani's impressive reforms, especially in terms of crime, did not merely make New York livable again -- they made the city a desirable place to live, even to outsiders. Later, Mayor Michael Bloomberg also oversaw major reforms, such as his Initiatives Outlawing Fun. No longer would New York face widespread national mockery for its failings, such as in the famous Saturday Night Live skit which encouraged tourists to read pamphlets such as "So You've Been Shot."

Yet one thing hasn't changed: New York continues to suck money from the domestic fisc like nobody's business. You see, as the writer Steven Malanga elegantly noted in the City Journal some time back, the reason New York sends more cash to Washington than it gets back is purely defense-related. Take out defense cash, and the true picture is revealed.

Mr Malanga writes:

New York perpetually has what is known as a “balance of payments” deficit with Washington, because the city sends far more in taxes to the federal government than it receives in federal spending. Over the years, New York politicians have argued that the federal government should redress that imbalance by funneling ever more money to the city for domestic programs. But the argument has mostly been a loser down in Washington, because—despite the overall balance-of-payments deficit—New York already gets more than its share of most domestic programs.

For example, New York receives an astounding $1,285 per capita from Washington in Medicaid spending, compared with a national average of just $425 per capita, and average payments in big cities like Chicago and Los Angeles of just $514 and $468, respectively. The city also receives about twice the national average on spending per capita for food stamps, and four times the average on welfare. In all of these categories, New York also receives substantially more per capita than other large cities. For years, in fact, the city ranked first in average domestic spending on the late Senator Patrick Moynihan’s well-known studies.

Federal officials and representatives who oversee these and other programs know this, which is one reason why the balance of payments argument never gets any traction in Washington and why, on some programs, like Medicaid, it’s likely New York will receive less of the federal pie over time, not more.

What actually causes the city’s payments deficit with Washington is the fact that the Defense Department spends so little money here in the city—an average of just $75 per capita, compared with defense spending of about $835 per capita nationwide ...

This is just a portion of Mr Malanga's devastating analysis, and he goes on to address New York's unwillingness to accept cash inflows which are defense-related. Perhaps the Daily News ought have considered this before it condemned the "hicks" and "yokels" who balked at serving up New York's demands on a silver platter.

It is this last point, however, in which we shamefully take pleasure. As a proud Midwesterner, we admit we are downright gleeful watching certain New Yorkers wail about getting the shaft from those duplicitous and untrustworthy types in Kansas and Indiana and Tennessee.

Yes, in terms of sheer regionalism, it is indeed quite sweet to watch those same New Yorkers -- who sneer at and mock their less sophisticated and urbane brethren -- squawk when they think Flyover Country has been taking them for a ride. What, one wonders, will happen when they discover it is something folks in Flyover Country have become quite good at over the years, and in more ways than they can imagine?

Posted by Benjamin Kepple at December 27, 2004 12:18 AM | TrackBack