Friday, January 3, 2014

Tale of Two Cities

The New Yorker - The Last Straw ~ Adrian Tomine
We've had our turn poking fun at former New York City Mayor Michael Bloomberg's nanny state impulses: cigarettes, sugar, salt, trans fats and most recently, 32-ounce Big Gulp sodas. While thoughtfully predicated on long-term health care implications and costs, these impulses were nonetheless political overreaches and infringements on individual liberty and freedom. The soda ban was ultimately blocked by a New York State Supreme Court judge, who called it "arbitrary and capricious."

On more serious matters like restoring security and safety after 9/11, reducing violent crime, attracting business and tourism, and managing the city's finances, Bloomberg's record was peerless. Think Detroit, Chicago . . .

Bloomberg's successor, Mayor Bill de Blasio, was sworn into office on January 1 and wasted no time tilting at Obama's windmills, chiefly reducing "inequality." And how does de Blasio propose to do that? Lessening regulation, and implementing pro-business growth and jobs policies? No, he plans to redistribute wealth by increasing the already 50 percent marginal tax rate paid by New Yorkers with incomes over $100,000. So, this is a middle class tax that will sow divisive resentments between taxpayers and beneficiaries of entitlements, and polarize his constituency.

Is there evidence anywhere that redistributing wealth in the form of education programs and broader entitlements leads to future equality? Does it reinforce the real factors that increase the odds of success like being married before having children, maintaining strong families, completing higher education (not pre-K), and having a disciplined work ethic? Does it ignore the simple truth that life is hard, even adversarial, and that one's choices, character, effort and luck are variables we all must deal with, and even then there are no guarantees?

A mandate for de Blasio's progressive policies has been inferred by the fact he won the election over his GOP opponent Joe Lhota by a large margin, 73 percent to 23 percent. What's not as widely reported is that voter turnout was only 24 percent. In other words, fewer than one in four of the city's 4.3 million registered voters actually bothered to vote. The last time turnout was over 50 percent was when 57 percent of registered voters threw out Mayor Dinkins and elected Rudy Giuliani who began New York City's historic turnaround of the last 21 years. New Yorkers have short memories. Leadership and policies do matter.

Investment tip? Buy Florida and Texas real estate.

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