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The Real Reason to Fear de Blasio

NYC Leaders Hold Press Conf. Urging New Iranian President To Carry Out Reforms
How much does NYC have to fear from the impending de Blasio victory? The FT’s Christopher Caldwell, who also writes for the Weekly Standard, is comfortingly blasé. De Blasio only intends to raise taxes on people making more than $500,000 and he can’t even do that unless the legislature and the governor go along (they may not). The rich, therefore, are not going to flee New York even if the pro-sandinista candidate gets into Gracie Mansion, Caldwell assures us.

Caldwell is probably right that we we need not fear a mass exodus of the rich after de Blaiso wins. For one thing, there is more for rich people in New York than anywhere else. For another, de Blaiso wouldn’t really be at all interested in driving the wealthy plutocrats out of town. Democratic politicians like to excoriate the wealthy in public, but they suck up to in private. De Blasio will go after Wall Street rhetorically while kissing the Don’s ring behind closed doors, so there are few worries of that kind.

Nor is the problem education, per se. As a politician in favor of teacher unions, de Blasio doesn’t like charter schools, so it’s likely that poor kids in New York and their parents could wind up with fewer choices. But if poor schools could destroy New York, the city would have declined into ruins twenty years ago.

One bigger threat that the city could face during a de Blasio mayorship is from the impending end of QE. Since 2008 Wall Street has been floating first on TARP money and lavish bailouts of big banks, and quantitative easing has been a huge boost to the financial industry. At some point, the music will stop, and NY’s tax revenue is likely to take a major hit. Still, a de Blasio administration isn’t going to push the city into immediate bankruptcy.

What is likely to happen is that under his leadership the forces of entropic doom that are gradually wrecking the city’s middle class will gain strength—like a python slowly tightening the coils around its prey. Small businesses will groan under new loads of regulations. They won’t look like tax increases, but they will raise costs and make it harder to start a business or build an existing one. The cost of fixing infrastructure and running the city will grow as the unions claim their pound of flesh. More hidden but ultimately unsustainable costs will be shifted to the future through pension agreements. New York will become more and more a town of financiers, hotel maids and public and quasi-public employees because fewer and fewer normal businesses will be able to make it.

It has the makings of a blue death spiral. As regulations and “pro-poor” policies undermine the climate for most private sector business (manufacturing was largely driven out long ago), the politics will become polarized. The mass of poor, increasingly state-dependent inhabitants—who either work for the government, in government-supported sectors like health care, or survive on government welfare payments— will “vote their pocketbooks” for higher taxes and more entitlements.

The real middle class will be driven out of the city bit by bit, perhaps replaced in part by new waves of immigrants, but they too will head out as soon as they can. The city’s possibilities will continue to narrow as the financial problems get worse. For a while, Wall Street will stand by with innovative debt products (and associated fees); New York will have the most complicated bonds and indentures that its financial wizards can create.

We hope this won’t happen. New York is a wonderful place, and it is more important than ever that cities other than Washington maintain their health, their vigor and their cultural life. But nothing in the de Blasio campaign suggests anything other than an era of quiet as the city slowly wraps itself in a comfy blue cocoon.

[Bill de Blasio photo courtesy of Getty Images]

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  • Corlyss

    “At some point, the music will stop,”

    Yellin shows no interest in stopping as long as the economy is as weak as it is – which will be as long as Democrats run the government. With a poor Republican field and a hard-charging Clinton shaping up to be the combatants, that’s looking like a depressingly long time.

  • wigwag

    Yadi yadi yada.

    Professor Mead is right; de Blasio will almost surely be an awful Mayor. The sad part is that his Republican opponent might have been pretty good. But alas, he never had a chance.

    The interesting question (that Professor Mead never addresses in his post) is why New Yorkers who elected the billionaire Bloomberg three times, the tough on crime Guiliani twice, threw Dinkins out on his tuchis after one term and before that elected the moderate Ed Koch twice, have decided to move so far to the left.

    New York is not the progressive bastion people think it is. If it was, Rupert Murduch and David Koch wouldn’t choose to call it home.

    That New Yorkers are about to select the most leftist Mayor in decades (and perhaps ever) says something although trying to decipher the message in this election is difficult.

    If I had to guess, I suspect the message here is that Professor Mead is wrong when he says the Tea Party movement lives while the Occupy Wall Street movement has been extinguished.

    The sentiment behind the Occupy Wall Street movement propelled Elizabeth Warren to victory in the Massachusetts Senate race and it’s about to propel de Blasio to victory on Tuesday.

    The question is whether de Blasio’s victory is the canary in the coal mine for American politics over the next several years.

    I hope it’s not but I fear it is.

    • USNK2

      WigWag: de Blasio ‘won’ the Dem primary with 40% of a 22% turn-out, maybe 280,000 total votes.

      fwiw, the Working Families Party was the force behind OWS.

      deBlasio was a co-founder of the WFP.

      For more than ten years, NYC Dems sought the WFP ballot line.

      In 2013, the coup is complete: the WFP has taken over the NYC Democratic Party.

      Not that there is all the much difference.

      The big issue with a Mayor de Blasio will be whether he makes plowing out from a blizzard into a political statement, or actually realizes someone needs to manage NYC.

      Mr. Mead needs to buy a new snow shovel.

      • wigwag

        That’s good advice; I’m heading to Home Depot tomorrow to buy myself a new snow shovel though, truth be told, Bloomberg wasn’t that good at getting the snow removed either.

        During the Christmas snowstorm a couple of years ago it took me two weeks to get my car dug out.

        As I recall, Bloomberg was vacationing in his palatial estate in Bermuda at the time.

    • Ooga Booga

      Giuliani’s tough-on-crime policies enabled the gentrification that has made large swathes of Manhattan/Brooklyn/Queens an attractive destination for young, artsy college grads, many from the Mid-West, and a certain percentage of whom receive financial support from their families while they engage in a mix of unpaid internships, restaurant jobs and Kickstarter-funded projects. As most of them have no memory of pre-gentrification NY, and with a vague sense of guilt over their role as agents of gentrification, politics becomes largely a matter of striking the right progressive pose as compensation for one’s relative privilege. The preponderance of unpaid work, high rents and (for some) student debt also fuel the vague resentment against “the Man” that propelled Occupy, even if the current crop of Progressive politicians will do little to address these problems, and may even make them worse.

      It goes without saying that the behavior of the national GOP is tremendously alienating to these people, who care more deeply about gay marriage, abortion rights, immigration and the legalization of marijuana than anything else. That being said, given the tendency of like-minded people to congregate, I am somewhat less convinced than you that De Blasio’s impending victory is a bellweather for America as a whole.

      • wigwag

        I’m not necessarily convinced that a de Blasio victory will be a bell weather for America as a whole, but I think it might be.

        While I don’t like Peter Beinart or his views very much, I think the argument that he presents in this essay is reasonably compelling,

        I believe the spirit of the Occupy Wall Street movement is alive and well in the de Blasio campaign as it was in the Elizabeth Warren campaign.

        At the same time that an extreme leftist like De Blasio is able to masquerade as a mainstream candidate, the Tea Party is turning the phrase conservative into a four letter word and inspiring Americans to view the GOP with revulsion.

        None of this strikes me as particularly good.

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