Washington & Wall Street: Trouble Ahead for New York City

Washington & Wall Street: Trouble Ahead for New York City

“I have an activist’s desire to improve people’s lives.”

–Bill de Blasio

The term of New York City Mayor Michael Bloomberg ends in November 2013. Most New Yorkers are blissfully unaware of the fiscal and political train wreck that awaits them once Mayor Bloomberg steps off the stage. In discussions with members of the business community over the past several weeks, it is clear to this writer and Manhattan resident that the New York City of the past 12 years is not going to be the Gotham of the future.

Part of the reason that New York has seemed so peaceful over the past three terms of Mayor Bloomberg’s administration is that he has basically given the public unions everything they wanted. While New York Governor Andrew Cuomo has confronted the public sector unions over key issues like pension costs, Bloomberg has refused to confront the powerful teachers union. Sally Goldberg, writing in The New York Post, notes:

During Bloomberg’s three terms, pension costs have ballooned from $1.4 billion to $8.3 billion. The mayor argued that his successor will have a unique opportunity to extract concessions because all municipal unions are all operating under expired agreements.

Bloomberg is leaving his successor with the task of negotiating new contracts with most of the public sector unions in New York City. It is interesting to note that two great former New York governors, Franklin and Theodore Roosevelt, both opposed public sector unions because of the obvious public corruption and conflict of interest they represent. The public sector unions support the reelection campaigns of the very liberal politicians who set their pay. James Sherk of Heritage Foundation wrote in 2011 that “Public sector unions insist on laws that serve their interests–at the expense of the common good.”

The 12-year tenure of Michael Bloomberg provides a case in point. “Avoiding the hard choices is how Detroit went bankrupt,” the mayor declared in a speech earlier this year. Yet avoiding hard choices is precisely how Mayor Bloomberg has managed to direct the affairs of New York City and even increases services without significantly raising taxes. The efficient, pro-business façade maintained during the Bloomberg years is now about to disappear, revealing a local political equation that is unfamiliar to most residents and considerably to the left of even New York State’s liberal political center.

The Democratic front-runner for Mayor is Bill de Blasio, a socialist from Brooklyn, who lives in a $1.1 million row house in Park Slope. George Orwell reminds us in the classic book Animal Farm that some animals are more equal than others. De Blasio certainly fits that mold. He takes his political queues from the likes of Al Sharpton and Jesse Jackson. Keep in mind that De Blasio has never had a real job and is a professional politician who says that “fighting for equality” was his “life’s work.” No surprise, then, that President Barack Obama, who himself has never had a real job, endorsed his candidacy. 

De Blasio’s big idea: free universal prekindergarten for all children, paid for by a tax on those New Yorkers earning more than $500,000. His most interesting claim to fame is his past support for Nicaragua’s Sandinista party. Given his avowed socialist world view, it is no surprise that two of his opponents expressed alarm about his political beliefs.

“It’s pretty obvious we think very, very differently about the way the governments of the world should work,” Joseph J. Lhota, the Republican Mayoral nominee, said at a news conference, adding: “In his own words, he called himself a ‘democratic socialist.’ It’s really unfortunate that that’s the level that we’ve come to in this city.”

Adolfo Carrión Jr., the Independence Party candidate for mayor, was even more pointed in a statement to The New York Times, accusing Mr. De Blasio of “propping up a brutal dictatorship in Central America,” and asserting that his political philosophy was inspired by Che Guevara and Fidel Castro. What ever happened to Fiorello La Guardia, New York City’s Mayor from 1934 to 1945?

New York voters who are surprised by the radical views of De Blasio and other local Democratic politicians in New York City can thank Mike Bloomberg. The Mayor’s national media presence and disdain for local politicians nicely cloaked the left-wing menagerie that is the New York City Council. The former congressman and sexual exhibitionist, Anthony Weiner, was one of De Blasio’s main opponents in the Democratic primary. Incredibly, some believe that Weiner may still be a spoiler for De Blasio should he enter the Mayor’s race as an “independent.” 

De Blasio is the hero of New York liberals and has virtually no ties to the business community. While he is not yet in thrall to the city teachers and other public sector unions, De Blasio will need to either raise taxes significantly or confront the unions a la Governor Cuomo to maintain NYC’s growing population of Millennials in the fashion to which they are accustomed. Watch for other innovative proposals from De Blasio, like free public day care for NYC’s single moms, a proposal I understand is already in the works.  Once again, New York’s wealthy and businesses will foot the bill. 

None of this is set in stone, you understand. Some of New York’s biggest business leaders hope that De Blasio’s socialist rhetoric will fade after Election Day, but I would not hold your breath. Should Bill de Blasio win the mayor’s office in Gotham, the New York City business community–and the world–is in for a very rude surprise indeed.