During the Olympics we freely show unabashed pride in our native sons and daughters. The Rochester region cheers Jenn Suhr’s triumph over her longtime Russian rival in the pole vault and Abby Wambach’s soccer gold against Japan. Yes, some of the U.S. Olympians are transplants, immigrants to our nation. But most were born here.
While a burst of nativism is excusable during the Olympics, anti-immigration sentiment doesn’t serve our economy well. Asked by local businessman Dutch Summers to explore why Canada’s Golden Horseshoe—anchored by Toronto—has prospered and grown while Upstate New York has languished, we concluded that immigration policy is a powerful contributing factor. Read more »
The Supreme Court—through the actions of tie breaker Chief Judge John Roberts—has resolved the constitutionality of the Patient Protection and Affordable Care Act (ACA). In the best tradition of the court, his Solomonic ruling declares that the law is within the powers of Congress. Good law? Bad law? “Not my problem. It’s constitutional.” He also applied the “duck” test to the Administration’s “penalty”—if it looks like a tax and quacks like a tax, it’s a tax.
The constitutional sideshow behind us, let’s get back to the Main Event: Health care remains an unaffordable, inequitable mess. ACA addresses some of the coverage problems built into the American health insurance model, but it will inevitably create some inequities of its own.
Cost is still an enormous problem. In fact, the law will increase the share of GDP spent on health care. ACA’s supporters are eager to report the Congressional Budget Office (CBO) finding that the law will not increase the deficit. First, remember that this is a forecast built on complex models, loaded with assumptions. The CBO finding is an estimate, not a measurement. Read more »
Given a conflict between “good for us” or “good for me,” people generally pick the second. That proposition, obvious as it is, underlies most of economics. Thank goodness, human beings often rise above self-interest in ways that redeem human society.
But politicians shouldn’t push their luck. Consider what the European Union is asking of the Greeks. The austerity imposed as a condition of the bailout goes beyond expecting Greeks to behave like Germans, which would be heroic enough. No, the Greeks are expected to do penance for their past profligacy, the “sackcloth and ashes” Full Monty.
Reluctant to think ourselves selfish, we have a remarkable capacity to convince ourselves that “good for me” is also “good for us.” That capacity for self-delusion is evident in results from the Pew Global Survey: Respondents in Britain, France, Germany, Greece, Spain, Italy, Poland and the Czech Republic were asked to identify the “hardest working” people of Europe. Seven picked the Germans. The Greeks picked themselves. For the title, “least hardworking,” five picked the Greeks, but the Greeks fingered the Italians.
Is it any wonder that the Greeks’ penance is insincere? Or that support for austerity among voters proved to be so tenuous in Sunday’s election? Read more »
School districts share needs that can be more efficiently provided regionally, just as individual schools share needs that are more affordably provided by districts. What are we to think when the State Comptroller reports that New York’s approach to regional service sharing in the schools (BOCES) costs more than it saves? Read more »
The French have voted with their hearts and picked Francois Hollande as President. And who can blame them for wanting to be more like Italy and less like Germany? More Roman Holiday and less The Spy Who Came In from the Cold?
We should be grateful to the French. We need exemplars—countries whose policies we embrace and countries whose polices we avoid. France seems determined to set a bad example, if they expect Hollande to follow through on his promises. This is a nation that hasn’t run a budget surplus in 35 years, where labor costs have been rising in the face of blistering global competition, and where the public sector controls more than half of the economy. Hollande promises to hire more public sectors workers, raise the marginal tax rate to 75%, and reverse Nicholas Sarkozy’s feeble encroachment on the entitlement mindset of the French worker. Read more »
There is nothing like the IRS Form 1040 and NYS Form 201 to get you in the mood for tax reform.
We need a simpler system. Complexity is expensive by itself—we spend money simply keeping records and paying professionals to figure out what we can and can’t claim. The Taxpayer Advocate’s Service (TAS) of the National Taxpayer Advocate (appointed and funded by Congress) estimated in 2010 that taxpayers spend 6.1 billion hours filling out taxes each year (down from an estimated 7.6 billion hours in 2008, probably courtesy of tax software). 60% of Americans pay someone else to complete their tax forms. In 2008, TAS put the total cost of compliance at $163 billion, about 11% of total tax receipts. Read more »
On assignment out here in Arizona, I’m led to compare it to my adopted state of New York. First, there’s the weather: no snow, warm temps, bicycle-friendly year-round. Out here, of course, that’s a normal winter.
The big city dominates state politics. Here the city is Phoenix. With two-thirds of the state’s population, the Phoenix metro area carries a big stick. Arizonans living elsewhere complain that they have but a small, quiet voice in state political circles and that the interests of Maricopa County (Phoenix, Tempe, Scottsdale, etc.) rule. We’ve got our big city, of course: New York City alone accounts for just over 40 percent of the state’s population. Add in Long Island and Westchester and Rockland counties, and metro New York’s share rises to 61 percent. Read more »
“And which retirement plan do you want?” Retirement?!! As a newly appointed Assistant Professor of Economics at Potsdam College of SUNY, I was 28 and starting my first real professional job. I was being asked to make a decision that would have little impact on my life for 37 years.
I was offered two options: The first was the NYS Employee Retirement System (ERS). If I stayed in state service and retired at age 65, I would be eligible for annual benefits equal to 70.5% of my final average salary (defined as the highest salary earned in three consecutive years). My contribution would have been 3% of salary for the first ten years. The remainder of the cost would be paid by the state. This is what is called a “defined benefit” retirement plan. Regardless of what happens to the invested money, NYS promises to pay out a specified benefit for as long as I live. Read more »
In Triumph of the City, Harvard economist Ed Glaeser attempts to explain why some cities—think New York or London or Bangalore—have prospered, even as the cost of communication has plummeted. The “death of distance” suggests the death of cities. Why do some defy the prognosis?
Glaeser reminds us that cities are “density, proximity, closeness. . . . [T]heir success depends on the demand for physical closeness.” He asserts that electronic communication is not a substitute for face-to-face contact (a proposition anyone who has endured a few conference calls will accept). Even sophisticated “virtual meeting” suites fall short. (Maybe it looks like Nathan is in the same room, but you can’t go out for a beer after the meeting.) Read more »
Despite issues weighing down the US economy –fiscal stress in Europe, continued high unemployment, and gridlock over federal fiscal policy – the Rochester, NY economy is a bit of a success story. As summarized in a recent Wall Street Journal article, Rochester, “ticks many of the standard Rust Belt boxes” yet has held relatively steady through the recession.
As a participant in the Rochester Downtown Rotary’s annual economic forecast luncheon, I was pleasantly surprised by the generally upbeat expectations of my fellow panelists. Moderated by Sandy Parker, head of the Rochester Business Alliance, it included Steve Babbitt, chairman of the board of the Greater Rochester Association of Realtors; Brad McAreavy, president of the Rochester Auto Dealers’ Association; and Clayton Millard, first vice president of wealth management at Merrill Lynch.
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