Tuesday, April 15, 2014

April 10, 2014

Looking For That Old Spark

Politics, climate change, and doom porn

Set side by side, two brand-new reports from two big international agencies—the UN climate-change committee and the International Monetary Fund—should induce acute mental distress in any person masochistic enough to look at them both. A third report, by a math student in Maryland, got re-issued just in time for the truly worried to nod nervously at what the guy’s numbers say is ahead—numbers that are very consistent with what a couple of economists who study income trends have been reporting year after year since they first started tracking winners and losers after the 2008 global economic meltdown.
What those guys have been saying should frame the rest: In the US, we have predators and we have prey. Emmanuel Saez and Thomas Piketty say that since 2009, the 99 percent have actually seen their incomes shrink by about half a percentage point, but that the top one percent (really, the top 0.1 percent) have taken in just around 100 percent of all the new money in our “recovery.”
Our political discourse reflects this fact uncomfortably: A very few people feel prosperous and hopeful, while most don’t, and as former Obama advisor David Axelrod recently put it, if the president of the United States is talking about Ukraine or Putin or climate change, he’s not talking about economic growth, which is what voters overwhelmingly care about, because, frankly, we all still sense that the predators are out there, and whether we sympathize more with Occupy or with the Tea Party, lots of us feel like prey.
That’s why we tend to talk incessantly about economic growth. Happy people, one expects, are delighted to learn that the International Monetary Fund predicts 2014 global economic growth of 3.6 percent—which is a healthy rate of growth, sort of like what the US enjoyed in the 1960s, when all boats rose with the rising tide. Growth is strongest, says the IMF, in the US, Germany, Britain, China, and Canada. Hallelujah!
But politically? That claim of aggregate uplift is not going to induce behavioral change because too few people feel or experience any uplift.
And don’t expect any behavioral change in the wake of the new United Nations report on climate change, either. This report is not, repeat, not going to become a political fact. The assembled scientists of the United Nations committee reiterated their warnings about severe more weather, more droughts, more loss of the coral reefs that are so crucial to fish-spawning, more coastal erosion, and worse—but it is disempowered discourse.
This is not the age when we can expect scientists to change public policy the way that the University of California’s Professor Rowland did when he found that aerosol sprays were eating a hole in the global ozone layer. Rowland and his fellow researchers succeeded in convicing politicians all across the planet to take decisive action.
Nope. We’re now in the age when somebody’s new definition of economic growth is the goal even if that growth rewards financial speculators and capital-owners at the expense, literally, of everybody else—and as a consequence, science that sounds like it might interrupt returns to capital is science that has no policy legs.

Meanwhile, back home…

Locally, we’re in celebration mode. The environmentalists’ long-desired gift of near-complete ice cover on Lake Erie came true this past winter, meaning that the ugly evaporation and lake-shrinkage trend of recent years—when the weather was too warm for the freeze-over—was, happily, interrupted. The cold that used to stay way north in Canada came down here, leaving Arctic sea ice to shrink while Great Lakes ice grew. Locally, life is good. Globally? Not so much.
But that’s not our concern, right?
However, locally, the income-polarization trends look a lot like the national trends. Yet in our own version of the IMF report on how sweet things are in the aggregate, the Bureau of Economic Research reports that the Buffalo-Niagara metro economy grows and grows, overall. By their measure, there’s no disputing that the overall size of the economy here is on the rise, again—just as the overall size of the population here seems to have stabilized after decades of loss. Housing in the urban core, at least the upper-end slivers of the urban core, is in strong demand. A slight uptick in the population of Millenials here may have more to do with college graduates returning home from fruitless job searches elsewhere (internal US migration is off sharply since 2007), but hallelujah here, too. It’s good to be lucky, cheap, fashionable, the urban flavor of the month. This coming June, as the Congress for the New Urbanism conference meets in Buffalo, the celebration will spill out onto the streets. The major media here will quote our polite and learned visitors. Yay!
But because the system of redistributing all the new economic growth was broken in the 1980s, and because the distress profile of middle-income Americans is unchanged, here’s how the politics will work, nationally, and here: Barack Obama won’t get enough credit for the economic recovery, and so not enough people will be happy enough to vote for sufficient numbers of his progressive, pro-science, pro-urbanist friends. That will leave the New Urbanists speaking mainly to one another rather than to an audience encompassing all the commute-weary suburbanites. The likely November upshot is that Congress will be more anti-science and even more fervently anti-redistributionist than it already is.
Unless something goes terribly wrong.

A galvanizing disaster?

The UN report on climate change is a catalog of specific impacts that, all assembled, make for very alarming reading. But it doesn’t sound like news any more, not even a fortnight after it was released. California’s huge earthquake was news. Washington’s murderous mudslide was news. Then those events were over, and we went back to asking about the economy again.
The central thesis of the climate-change observers, of course, is that there will be dire economic consequences not if, but as we continue to pump carbon-dioxide emissions into the atmosphere. It’s not about the weather at all: it’s about the money.
But the debate in Washington is not whether, but when Barack Obama—or his successor, Hillary Rodham Clinton—will allow climate-altering Canadian tar-sands oil to flow through the Keystone pipeline. The debate is not whether steps should be taken to arrest the production of greenhouse gases—it’s about how to spread economic growth around so that more people can participate in the American automobile paradigm. The progressive discussion is about the gender-equity pay gap, and about a national Living Wage or at least a $10 minimum wage. The “conservative” discussion is about how more people can get jobs, jobs, jobs, and not need the burden of Obamacare, or regulation, or any law at all in a perfected predator-prey paradigm that is, don’t you know, in the Bible itself!
And the debate locally, as everywhere else, is about economic growth—not whether the Medical Corridor will produce all the jobs that state government is inducing, subsidizing, and facilitating with all that new construction, but when, precisely, those jobs will arrive. The closest Western New York gets to a climate-change preparedness discussion, or to a carbon-emissions situation report, is not very close at all.
Yet are these issues intimately connected, and they do connect here.

Doom in a dozen years

Making the local connection is going to be hard. Our ice is back, and now our spring is coming, and there’s no disaster on our horizon. Yet it is a fruitful read to dive into a paper that asks, “How real is the possibility of a societal collapse? Can complex, advanced civilizations really collapse?”
That’s the question asked by University of Maryland graduate student Safa Motesharrei and the co-authors of a newly revised paper that sets out to weigh, with a mathematical model, all the major risk factors for complete social collapse—risk factors including the 1 percent taking in almost all, or (by another measure) just simply all the new money in our economic recovery.
Safa and his friends concluded, unhappily, that the collapse is probable, and that it will come in 15 years (okay, a dozen years, since their first run-through of the numbers came a couple of years ago). Why? Mainly because of what we already know: A tiny portion of the planet’s people taking in insanely disproportionate shares of total income; over-use of natural resources; social polarization; overpopulation.
Happily, the scholars conclude, “[c]ollapse can be avoided, and population can reach a steady state at maximum carrying capacity if the rate of depletion of nature is reduced to a sustainable level and if resources are distributed equitably.”
Got that?
If we stop letting the top one percent take in all the new income of the economic recovery, and if we pay attention to the UN scientists on climate change, and if we stop pumping endless quantities of carbon dioxide into the atmosphere, and stop the Keystone pipeline, and click our heels three times, we can avoid catastrophe. So says the Human and Nature Dynamics model, which presumes that humanity still conforms to the “predator-prey” pattern of human interaction with the environment.
Bruce Fisher is director of the the Center for Economic and Policy Studies at Buffalo State College. His recent book, Borderland: Essays from the US-Canada Divide, is available at bookstores or atwww.sunypress.edu.

March 20, 2014

The Great Spring Forward

How not to wreck the Western New York economy

The numbers are in from the recent unpleasantness known as the Great Recession, and they are as follows:The richest two percent of people who filed tax returns in Erie County in 2010 made over $200,000. The next eight percent made over $100,000 but less than $200,000; about 20 percent made between $50,000 and $100,000, and the rest—about 70 percent of us—made under $50,000. The next time a developer, a law firm, or, say, the owner of a professional sports franchise asks for a taxpayer handout, remember: Though we have a small upper-middle class, and just over 8,000 high-income households, almost exactly seven out of 10 households here report less income than the household median for New York State. And more than half of all households here—223,000 out of around 413,000 that filed tax returns—had incomes of $30,000 or below.
These numbers come from the Internal Revenue Service. They’re always a long time coming; state-by-state and county-by-county information about the tax returns filed in 2013 won’t be available until three years from now. Fresher, localized data sooner would aid the generally intelligent planning ethos that the Regional Economic Development Council has loosed in our land, but the trends from the first decade of the 21st century are obvious from the national numbers, the ones that some economists out at Berkeley in California peek at: A relatively tiny group of Americans has a very large and growing share of all the income that all households bring in, and that pattern is not confined to Manhattan, Hollywood, Silicon Valley, and a few resort towns. It’s everywhere, even here in Buffalo.
If you filed a tax return on $200,000 or more in 2010, congratulations: You’re in top two percent, a group of 8,500 households here that brought in almost 22 percent of all the income reported by 413,000. Just 1,700 of that elite group reported more than half of that total. Slice it this way: Less than one-half of one percent of the households in Erie County took in almost 12 percent of all the income that came here in 2010. Or this way: Two percent of the people here brought in more income than all the Erie County households that reported incomes of $40,000 or less, which is well over half of the county.

Bloodless numbers, political numbers

The new movie by former labor secretary Robert Reich, Inequality for All, explains much of the recent economic and social history of the United States in straighforward language, using real data from unimpeachable sources. Fewer people will see his movie than will click “like” on a Facebook video of a cute kitten.But since the crash of 2008, there is some halting, fleeting evidence—notably the re-election of Barack Obama—that Americans are generally more aware of income polarization than they were before.
Yet nobody here raised an eyebrow—not a single politician said a word—when the $6+ million pay package for the former CEO of a health insurance company was reported. Not even the unions whose members are being asked to pay higher premiums for their health insurance, or to accept smaller-than-inflation raises, made the connection—that they, and the rest of the low- and moderate-income health insurance rate-payers—were all chipping in to the pay package of an executive who cured no diseases, created no masterpieces, invented no technologies, nor saved a single life, but rather just rode the new wave of the zeitgeist.
Yes, even in greater Buffalo, whose central city and inner-ring suburbs boast unemployment, underemployment, and workforce-disengagement levels almost as high as those in Milwaukee, Detroit, and Cleveland, we have multi-million-dollar paydays for people other than sports stars. A regulated monopoly that sells energy to customers who literally have no alternative paid its CEO even more than the health-insurer paid its leader. An investor-owned bank here just doubled the pay package of its CEO—but at least the bank in question has to fight for its share of the markets it serves, and at least it’s not one of the banks that ex-Rolling Stone reporter Matt Taibbi calls “vampire squid” in Griftopia, his blistering account of what went wrong in 2008.
But imagine what would happen to the regional economy were the middle of the middle class here to take the hit that Carl Paladino, Chris Collins, and the rest of the union-bashing rantocracy here seek to deliver them.
Nine out of 10 households here report incomes of under $100,000, with over half that number reporting less than $30,000. The folks who bring in between $30,000 and $100,000 qualify, broadly, as the middle class. There are just under 150,000 of them. Without further research, it’s impossible to say how many of the two-county area’s 90,000 or so public-sector workers are Erie County residents whose earnings fall within that range, but one expects that most of them live here and earn somewhere in that range. There is no question that the public-sector workforce—teachers, college professors, public safety, public health, assorted parks and public works and environmental and postal workers—constitutes the bulk of the middle class here. Their pay gets spent here; most of their wages and salaries get spent rather than saved or invested; they and their families are full participants in the regional economy, both as taxpayers (especially sales and property tax payers) and as purchasers of local goods and services. Reducing their ability to participate in the regional economy—especially by cutting their pay by privatizing or outsourcing their jobs—would not guarantee even a very slight, very temporary property-tax cut to homeowners here, but would absolutely shift disposable income away from their hands, and thus reduce all-important aggregate demand here.
The question our economic development team here has to ask is this: Given the current distribution of income, which has been the set pattern for the last decade, what can be done to raise wages for the bottom half of households here, and stabilize if not grow the rest of the under-$100,000 households here? The news from the recession of 2010 is that the very well-off 10 percent stayed well-off, taking home a larger share of regional income than they did in previous years. The CEO wave crests on and on—but what will raise the rest of the boats?
The politicians need a little guidance here. The most articulate elected official here today is Carl Paladino, who would de-unionize 3,000 Buffalo Public School teachers, his preference being to replace them with lower-paid charter school teachers, but who has little to say about taxes or about the economy as a whole, except when he angrily snarls at anyone questioning his own taxpayer-subsidized developments.

Subsidies for the few, little for anyone else

The crisis of low incomes here grinds on. So does the crisis of those who will not show up in IRS statistics based on tax returns filed, as they are out of the workforce and won’t be filing with that particular government agency. With half the households here earning such low incomes, our public policy disconnections become more and more difficult to explain: big subsidies for office buildings when the same or fewer numbers of workers will be here to occupy them; big subsidies for the Detroit-based ownership of the National Football League franchise; no plans for expanded public transportation; and no change in plans for locating the worker-training and skills-enhancement centers where the low-income, disengaged would-be-workers are clustered—despite the new, refreshed centrality of the old regional center, the old crossroads, the “hub” for which a longtime Buffalo planner won a national award for restating.
One is tempted to mutter darkly that the lesson of history is that poverty can’t be avoided, ignored, or overlooked for very long, because inevitably, the wretched arise—but this is not actually true. The wretched Russians are allowing their nationalist juices to flow at the repatriation of the poor Tatars’ homeland in Crimea, which distracts them from their sorry, oligarch-run economy. Buffalo can be expected to stay distracted with its football and its never-ending promises of developer-led renaissance, as our own oligarchs make off with all that lovely boodle that keeps a-coming from Albany.
And soon enough, it’ll be spring, and the boomerangs will swing through again, and relatives and expats will swell the festival throngs, and some will come back to enjoy the real renaissance that happens here every spring and summer, thanks to unsubsidized gardeners, and to folks whose incomes aren’t high enough to buy suburban real estate, but who might just have the scratch to plant roots in the poor old hub.
Hope. It springs eternal, as it should.
Bruce Fisher is director of the the Center for Economic and Policy Studies at Buffalo State College. His recent book, Borderland: Essays from the US-Canada Divide, is available at bookstores or atwww.sunypress.edu.

March 13, 2014

An Inconvenient Choice

Fracking, flaring, and surviving hard life on the rez

Up in the drought-stricken and economically marginalized northern part of North Dakota, there’s an oil boom underway. The US Geological Service estimates that the Bakken Formation holds over 3.65 billion barrels of recoverable oil. Until 2008, production was small, and centered mainly around Minot, whose main connection to the outside world had previously been mainly through the nearby Air Force base.
Then the extraction technique known as hydraulic fracturing—fracking—abruptly began changing the economic, social, and ecological landscape. The Bakken Formation holds oil, and also natural gas, but the infrastructure for transporting the gas doesn’t yet exist, so the drillers just flare it off—they burn it. The night sky of North Dakota used to be dark. It is now bright. And the question that now faces the Assiniboine and Dakota people who live just west of the border of Montana-North Dakota border is whether their sky, too, will get bright, because the Bakken Formation extends under most of the Fort Peck Indian Reservation.
Northeast Montana is home to around 15,000 indigenous people who have a very precarious connection to the new global economy. About half the working-age population is out of the workforce. Many adults who were employed in ranching and farming have been displaced by persistent drought conditions that are mitigated by extensive irrigation ditches used to channel fresh water from the Missouri River. The Fort Peck Community College in Poplar has a successful training program that has graduated a few dozen people a year for oil-field jobs, but those jobs aren’t on the rez, but rather over in the North Dakota “man towns” of the Bakken boom. The scene there, according to a former Fort Peck Reservation president: expensive temporary housing, high pay, prostitutes from the Fort Berthold Reservation who are frequently beaten up, instant millionaires who make their money selling to the transients, big corporations that take the money back to where they’re form, and politicians scrambling to open every regulatory door for more, more, more production.
This coming week, officials as high as the secretary of the interior herself will be in northeast Montana to talk to the Assiniboine and Dakota leadership about doing for the Fort Peck Reservation what fracking the Bakken Formation has done for North Dakota.
“We supposedly have as much oil as Kuwait,” the former Fort Peck Reservation president said. “But we don’t know what fracking will do to our water, our land, our environment, our people.”

The contrast

Meanwhile, the fracking debate in New York State grinds on. But the geologists and the petroleum industry experts have weighed in: There is strong evidence that the debate in New York is over a nullity, and is merely a rhetorical exercise, because those parts of the Marcellus and Utica shale formations that lay below New York State do not contain recoverable quantities of natural gas, and contain no oil at all.
Here, the debate is like a pair of political hamster-wheels set side by side. The Right gets to blame environmentalists for preventing an Upstate version of the economic bonanza that has wiped out North Dakota’s unemployment and created fortunes for some members of the Mandan, Hidatsa, and Arickara tribes—at least those who can lease their mineral rights—and jobs for thousands of people from the high plains. The Left gets to defend Upstate farmers, brewers, second-home owners, and their own reputation as effective stewards of irreplaceable watersheds.
The reality is that, because there’s no here here, the fight is a pair of team-building efforts, something like identity politics.

The real issues

The real issues are elsewhere, but they connect here, and they’re huge:
• Transporting the volatile crude oil from North Dakota, like transporting the volatile crude bitumen from the enormous Canadian tar sands of northern Alberta, means loading up railroad tank-cars with stuff that can spill, leak, and create the risk of many more explosions like the one that killed dozens in the resort town of Lac Megantic, Quebec, one night last summer.
• Using this oil means changing American foreign policy, probably forever, in ways that delight isolationists but scare internationalists, especially those who care deeply about the survival of Israel and of the US-European Union alliance, and possibly also the American-dominated globalized trade system.
• Getting to the fracked natural gas in Pennsylvania has now produced a new surge of interest in changing long-standing US export rules so that producers can sell overseas.
• But producing these fossil fuels means accelerating the production of greenhouse gases, and that means accelerating their effects, because all this new production releases more methane and more carbon dioxide than old-style oil production—and places more and more aquifers, streams, rivers, lakes, and farmland at risk of permanent contamination, because no matter what the pro-frackers say, the evidence is incontrovertible: Fracking dirties up the land and water wherever fracking happens.
The discussion in Montana will probably culminate in a decision to extend extraction to the Bakken formations under the rez. The promise, as always, will be that the economic benefit to the under-employed indigenous peoples will far outweigh any damage to their land and their water. None of the published reports disagree that there are a couple of billion barrels of oil out there. The survival issues for them are pointed and immediate. What we have to think about is not whether fracking should happen here—it won’t—but about tougher stuff.
Bruce Fisher is director of the the Center for Economic and Policy Studies at Buffalo State College. His recent book, Borderland: Essays from the US-Canada Divide, is available at bookstores or atwww.sunypress.edu.

February 27, 2014

Cuomo's New Money

It’s not Christmas any more

To drive south from Buffalo on the Skyway is to take in the superb binational waterfront views that are utterly unavailable to anyone who doesn’t have a high-floor office downtown. To drive the Skyway is to lift one’s sights from the clutter of unlovely late-winter roadside snowdrifts and dirtied ice in favor of the vast vista of the winter palette—the temporary tundra atop Lake Erie, the sharp blue of ice-free water north of the end of the ice boom that connects the Canadian and US shores, the happy contrast of the Buffalo water intake’s red-tile Mongol cap with all that flat whiteness that brightens the air on a sharply cold winter’s day.
The Skyway: Where else but from a high-rise corner office does one get so pleasant a view of Lake Erie and the Buffalo River?
To drive the Skyway is to have two minutes of peace and respite from the clamor of voices calling for its destruction, and to get some sky, some light, some sense of elevation, perhaps of freedom, as one is lifted over the moored gray naval vessels and the gray grain elevator and get a glimpse of the geography itself, specifically the confluence of land-forms—the lake’s end, the Niagara’s beginning, the river’s mouth, the Canadian lakeside prairie—that drew our ancestors here and made them rich. To drive the Skyway is to see the expanse of lake, the adjacency of another nation, the employed power of wind as it turns the blades of turbines, the softened moraine hills of the last glaciers, and in this season, it is to see the water undisturbed by much that is human at all—all this, all available, all built, already.
Tearing down the Skyway was not a part of Governor Andrew Cuomo’s Monday speech about the new public inputs into Buffalo’s economy. Neither did our governor direct either his words or New York State’s money toward any promise of development of the outer harbor, that 100-acre strip of low-lying, windswept former landfill that Frederick Law Olmsted and his sensible successors sensibly saw and see as parkland. And instead of pledging hundreds of millions of dollars to take down a functioning high bridge and replace it with a bridge with a worm’s-eye view, Cuomo came to town to get us to lift our sights about the next economy here.
The message was this: New York State will invest some more money in bringing high-paying jobs here that you’re going to have to study hard to qualify for. And this: New York State will pay your kid’s college tuition if your kid studies math and science. And this: what money will come will come to downtown Buffalo, where the science-based jobs will be.
In the latest Siena College poll, Cuomo’s favorability tracks by region, and by how the region’s residents see the economy going. The sentiment west of the Hudson River is sour; Cuomo scores better than Obama, but not by much, though unemployment rates have dropped everywhere. Were Cuomo doing what New York governors have done since the late Nelson Rockefeller’s day, his inputs into Buffalo would look more like what the last Republican governor did, the one who offered great state largesse to the Rigas family, formerly of Coudersport, Pennsylvania, and now residing at various secure locations in that great Commonwealth. Democrats spend money, Republicans spend money. The difference this time is that Cuomo’s spending looks more like a chain of linked challenge grants than a series of one-off construction projects.
Last year, Cuomo came with money for moving a solar-energy technology company, after he’d brought in a firm that does computer models of systems that have moving mechanical parts that wear out. The Albany-based firm for which Cuomo built a shop two years ago will soon start making markets for the drugs and other healthcare-related compounds that Buffalo-based researchers are coming up with. The next Cuomo inputs are for firms that will produce things related to the study, once centered here, of how the human genome works, and now, per Monday’s announcement, for a branch office of IBM’s software-development operations. Cuomo’s efforts are targeted to the specific geography of downtown. They are specifically targeted toward technological innovation that will (so it is hoped) create exports that will import money from other geographies.
Buildings will inevitably get built in order to get these new firms here, or, once here, to get them going. But there are three aspects to this approach that are quite disruptive, quite new. First, the new state money is going for amplifying the strengths of institutions—especially the university—yet it is not particularly focused on fixing what is broken institutions. Second, the money is going to change the mix of employed people here by bringing more scientists, more technicians, more engineers, in a regional economy that lost all but the academic versions of those folks when the aircraft industry left here a generation ago. Third, the existing structures of economic development are going to be involved to the extent that they’re going to help with sites, probably also with the usual array of construction-oriented tax abatements and finance, but these offices will be steered from above.

Meanwhile, the locals

Every year at budget time, the fissures between Upstate and Downstate become more visible than usual. For Long Island, as for the Upstate metros and for the Hudson Valley suburbs of New York City, there is talk about property tax relief—an issue that has very little political salience for the more than eight million people who live inside the boundaries of New York City. Job growth in the New York metro area is so strong, as is population growth, that the worry and hand-wringing about the economy there has been set aside, and the pollsters observe that the outlook for Cuomo there is strongly positive. Cuomo beats Donald Trump by 44 points in the Siena poll; he beats Westchester County Executive Rob Astorino by 42 points. The trouncing is immense where the economy is strong and where it’s perceived to be strong. Such anti-Cuomo sentiment as exists is centered here, in Paladino country.
That’s what makes the politics of Cuomo’s investments here so distinctive. There’s no question that, in his re-election year, any governor would do anything other than come to town bearing gifts: To paraphrase Cuomo, we know how politics works. What’s different is that Cuomo’s packages aren’t going to get opened for a while: They’re more like the savings bonds that stern uncles give at confirmation parties, not the video games found under the tree at Christmastime. The savings bonds are all about a future of obligation, and of college days ahead, not about fund and parties today. George Pataki gave state money to help the crooked cable guys come in and buy a hockey team. Andrew Cuomo is giving state money and telling everybody to turn Wii off and turn the Khan Academy math-tutorial videos on.
Meanwhile, the locals do what they do: They clamor for state money to knock down one bridge over the Buffalo River in order to build another one. They clamor for more money for a great big collection of school districts to go their separate ways rather than taking Cuomo up on his consolidation challenge, which, if they’d only read the actual budget documents, show precisely how to get the money.
Changing the political culture in Upstate, where the state money keeps a-comin’ in, is a bridge too far even for the ambitious Andrew Cuomo. What our locals should awaken to is the sentiment at the very center of this soon-to-be-enacted budget: that though there is no revolution at hand, and though the dysfunction of dependency on make-work projects and go-it-alone local governance may persist awhile, the incentives are for new behavior, not for more old behavior. This is a governor who will be re-elected: The budget initiatives for this year will get amplified next year, doubtless sharpened, too—with even more emphasis on human capital, even less sugar for construction projects, and a more explicit push for governmental consolidation.
So far, it’s not clear that local elected officials have awakened to the change. The Amherst site for the new Erie Community College science and technology building is still Erie County government’s plan. No locally generated efforts at school district consolidation are happening anywhere west of the Hudson River. Merger talks are happening neither between Rochester and Monroe County nor between Syracuse and Onondaga County, and certainly not between Buffalo and Erie County.
Not yet, anyway.
Bruce Fisher is director of the the Center for Economic and Policy Studies at Buffalo State College. His recent book, Borderland: Essays from the US-Canada Divide, is available at bookstores or atwww.sunypress.edu.

February 20, 2014

Casino Rachacha?

Seneca Niagara Casino

The next drama is beginning

Sixty-five miles east of Buffalo, in the general vicinity of the Genesee River, a battle is heating up over whether, when, and where the Seneca Gaming Corporation will establish a fourth gambling casino. The target area for the next casino complex has been announced: It’s a highly developed commercial corridor where existing restaurants, hotels, and other retail businesses would suddenly face a tax-exempt, politically wired competitor that explicitly targets local residents.
Unlike in Niagara Falls and Buffalo, where local politicians clamored to bring the slot machines, the fight so far involves businesses. This past week, the people who operate the horse-racing track and video gambling parlor in Batavia filed an ethics complaint against a Rochester developer who may or may not be lobbying to help the Senecas put their next casino in the town of Henrietta, the suburb with a big commercial area quite close to a major New York State Thruway exit for the Rochester metro. Tempers have already flared: A registered lobbyist who is already on the Rochester developer’s payroll snarled to the news media that he’s the lobbyist, not the developer, and that everybody has been on notice about this since at least since Governor Cuomo and the Senecas announced their agreement last August.
In nearby Canandaigua, there’s another racetrack with slot machines. The Canandaigua business is operated by Delaware North, the Buffalo-based firm that knows the gambling business very well, in many and varied places in North America and beyond. Delaware North has lobbyists that can be expected to advance its interests, which include the Finger Lakes racetrack, which employs 502 people and has a significant impact on the regional agricultural economy, being that in addition to folks working at the restaurant and slot-machine parlor there, there are horse-trainers, jockeys, veterinarians, and other jobs at stake.
But unless there’s an effective campaign that engages the broader business community, the elected officials, and community activists as well, the experience of Buffalo may be the scenario that will be replayed in Rochester, because not only has the Cuomo administration renewed the state gambling compact first negotiated with the Senecas by the Pataki administration, but far away in Washington, the Obama administration has done nothing to overturn what the Bush administration did for the Senecas, literally in the last few hours before George W. Bush turned the White House over to Barack Obama, with a federal district court judge in Buffalo essentially shrugging his shoulders at what apparently seems to him a bipartisan done deal.

How it seems to go

Cuomo negotiated a renewal of the Seneca Gaming Compact to achieve two explicit goals: first, to get the Seneca Gaming Corporation to cough up a few hundred million dollars in due-and-owing payments to the host municipalities (and the State of New York); and second, to settle that the Senecas had exclusive casino development rights for Western New York, so that he could permit private developers to build casinos in much of the rest of the state. The new bipartisan consensus is an ugly one: Casinos in neighboring states, especially New Jersey and Connecticut, are taking hundreds of millions of dollars from gamblers domiciled in New York State because there is nowhere for them to go but far upstate to Buffalo, Salamanca, Niagara Falls, and the Oneida tribe’s casino in Verona. Therefore, the New York metro area’s gambling dollars will continue to leak out into the exchecquers of our neighbors unless we allow them to gamble here.
But in the Rochester area, sited conveniently between the Oneida casino to the east and the trio of Seneca casinos to the west, there are already two “racinos,” as the racetracks with slot machines are so cleverly named. It’s in the nature of the gambling aficionado to drift from the racetrack to the slot parlor. This has been especially true of the lower-income, less-educated, local-living casino-goer who makes up at least 85 percent of the clientele of the Seneca Niagara Casino, and possibly an even greater share of the Buffalo casino. (The Niagara numbers come from the last Seneca Gaming Corporation filing with the Securities and Exchange Commission.)
Rochester, or one of its suburbs, may be a slam-dunk for a new Seneca casino because of a critical historical difference between the Genesee Valley and the western part of the state: The Genesee Valley is unquestionably the aboriginal territory of the Senecas. Federal District Court Judge Richard Arcara found, in a 2002 decision that was upheld on appeal, that the Niagara River area, and specifically Grand Island, is unquestionably not aboriginal Seneca territory. The still-pending federal lawsuit brought by Citizens Aganst Casino Gambling in Erie County argued that the federal government was wrong to let the Senecas purchase land for an off-reservation casino after 1989, and that the Senecas are the only Native American entity in the entire history of the United States that have been allowed to operate an off-reservation casino on such “after-purchased” land.
So will they get to do it again?
Here’s the experience of Buffalo and Niagara Falls: The Senecas act, the federal government is complicit, the local politicians generally salute, then the activists jump into the fray with lawyers gnawing away for years (in Buffalo, the case has been going on since 2006) while the Seneca Gaming Corporation pulls the money in.

Treaties, competition, and chances

This time, however, a few things may be different.
First and foremost, there are alert business-owners—namely, the Off-Track Betting Association that owns the Batavia site, and Delaware North at the Finger Lakes, who understand that the Seneca Gaming Corporation is not going to bring in anybody’s customers but theirs.
Second, there are other business-owners, especially those in Henrietta, and most especially those along “restaurant row,” which is the equivalent of Sheridan Drive or Transit Road in the Buffalo area, who stand to lose substantial trade to a tax-exempt dining-drinking-entertainment site whose main tactic is to bring customers in for gambling and to keep them there until all their discretionary disposable incomes has been spent.
The town supervisor of Henrietta, or the mayor of Rochester, will have to face up to the major caveat of even the seemingly pro-casino study published by Rochester think-tank CGR in 2005, which concluded that any Rochester casino that operates on tax-exempt land, and that competes with existing restaurants and entertainment venues, would destroy the local property tax base and result in net job losses to the area. Any new economic impact study done would be able to draw upon the experience of many casino host communities in the past 20 years.
And then there’s this other reality, which may or may not have any salience with the federal Department of the Interior that has so far let the Senecas do what they like: The aboriginal territory they’re interested in hasn’t been in Seneca hands since shortly after the Revolutionary War, when the Senecas signed treaties in which they ceded their Genesee Valley lands to the United States. The Senecas may have a compact with New York State, but the rules for every other Native American nation have been clear: Nobody gets to buy off-reservation land to put up an off-reservation casino after 1989. The calendar says 2014.
This is just starting. Some community opposition has already been organized. The Senecas may already have purchased some land, and may have already made their arrangements to set up a casino in a market currently served by people who operate horseracing shops with slot machine additions. Soon, Rochester will be reading the claims about how many high-paying jobs the Senecas have created in Niagara Falls, Buffalo, and Salamanca. Soon, vendors for everything from internet service to phones to rugs to food and beverages will be lining up to get a piece of the action. Soon, politicians will be promising more money for schools, roads, and property tax breaks.
You know the words to this story. Here’s the real story, summed up in economist-speak: It’s a zero-sum game. There won’t be any net new jobs, because gambling money already goes to existing gambling sites. The Seneca casino will be tax-exempt, and more profitable thereby, so there’s lots of money to be made by whoever wants the change from for-profit to tax-exempt.
But economic development? Economic growth? As Donnie Brasco said, “Forget about it.”
Bruce Fisher is director of the the Center for Economic and Policy Studies at Buffalo State College. His recent book, Borderland: Essays from the US-Canada Divide, is available at bookstores or atwww.sunypress.edu.

February 13, 2014

Teaching, Not Tests

The Smartest Kids in the World... And How They Got That Way

by Amanda Ripley

Simon and Schuster 2013

How rigor and smart teachers help kids in Finland, Poland, and Korea

Unless one has a massive trust fund for each child in the house, so massive that your child’s report cards don’t matter, every parent with both a brain and a heart pays attention to the news about schools. Today’s story is that a well-intended set of reforms called Common Core is having a rockier roll-out than Obamacare—not because anybody really objects to the idea of elevating the level of rigor in the classroom, but because neither moms nor dads nor teachers think it’s sane to make kindergardeners sit for standardized tests.
Testing smacks of blaming; wherever there’s obsessive focus on standardized tests, there’s pushback. And teachers, the last fully unionized sector of the American workforce, are organizing to push back against the neoliberal impulse to task teachers alone with addressing every single chld-nurture issue without allowing teachers the autonomy, authority, and flexibility to do their jobs.
The emotional tone doesn’t help, either. Carl Paladino doesn’t put up billboards protesting the loss of high-wage work, or criticizing New York State for funding new medical-school buildings rather than endowing new medical-research fellowships. Instead, he slams public schools, and would shunt taxpayer dollars into charter schools to “rescue” the 27,000 Buffalo kids currently enrolled in city schools.
But as Amanda Ripley’s new book shows, like Diane Ravitch’s work before her, neither charter schools nor private schools have any better success than public schools in helping American kids perform better at reading, math, or critical thinking. We’re rich enough to do it right—far richer than faraway little countries like Finland, Poland, and South Korea—yet not only are our children getting stressed out by all the meaningless tests they have to sit through, they’re not getting either the psychological support or intellectual guidance that will make them employable in the brave new globalized economy.

The culture, the culture

Ripley tagged along with three American high-school students who did foreign-exchange programs. One went to Finland, where poor kids and rich kids and immigrants somehow all manage to learn self-reliance, critical-thinking skills, four languages (seriously!), and respect for learning in an environment that prepares them for a rigorous end-of-high-school test but that doesn’t require much, if any, homework. Another went to Poland, where peer-group pressure to compete in math seems to be an element in having transformed the system from mediocrity to excellence—and where becoming a teacher became a whole lot harder, and thus a whole lot more prestigious, than it is here. And one American kid Ripley followed went to the insane, soul-crushing educational nighmare of South Korea, where obsessive kids and obsessive parents invest vast private sums in after-school hagwons, or tutoring sessions, so that the kids can take the all-important national exam that determines who goes to what university, which determines who gets a big job and who gets to be a minion forever. Former Washington, DC superintendent Michelle Rhee breathes that air, and tries, in her current role as a testing advocate in the US, to inject a little of that South Korean competitive vibe into what we do here.
The common elements of the national education systems that deliver better equipped students seem to be these: smarter teachers, a culture of respect for getting an education, very little in the way of scholastic sports, and a universal understanding that everybody is in the same boat—not only because nobody will get left behind, but also because everybody faces the same make-or-break exam at the end of high school.
It’s the culture. “This consensus about the importance of a rigourous education led to all kinds of natural consequences,” writes Ripley. “[N]ot just a more sophisticated and focused curriculum but more serious teacher-training colleges, more challenging tests, even more rigorous conversations at home around the dining room table.”
And perhaps most important: Both students and teachers had more autonomy because there are serious consequences for everybody. Especially in Finland and Poland, kids learned to handle failure—and learned to recover. “When they didn’t work hard, they got worse grades.” Shocking! “The consequences were clear…they didn’t take a lot of standardized tests…”
But the most important difference with American schools that these exchange students came from and the foreign schools they attended was the pro-rigor, pro-performance “feedback loop” that started in kindergarten and grew more intense every year and that the kids themselves reinforced. Kids in Finland, Poland, even Korea—and in Canada, New Zealand, and the other high-performing countries—get “generous grants of autonomy” even as they face more challenging work. More responsibility, fewer hall monitors.

Creating virtuous cycles

We’re so rich, and in New York State anyway we spend vast sums on primary and secondary education, but parents continually hear that our kids are getting a bad deal, and that their performance—especially in math—lags so badly that a revolution is required. Suburban parents justify their deadening commutes mainly because, they think, long car rides are the price they have to pay for better schools. Poor city kids are continually told—by gesture, by their most alienated peers, and by the culture at large—that they are already lost.
So what needs to change?
Losing the culture of blame, and quieting all the whining, would be a helpful start. Recognizing that poverty per se does not predeterimine academic achievement—though poverty is highly correlated with lack of academic achievement—would be helpful. Shedding our American fad for self-esteem, shedding our American obsession with sports, and embracing rather than fearing visible, consequential academic competition…all sounds very unlikely.
What happened first in these little countries was a fundamental change in teacher education. Becoming a teacher suddenly became much harder. Getting a teaching certificate in Finland is as hard as passing the bar exam lawyers have to take. Ditto Poland and South Korea. Teachers have hard-earned autonomy there, and in Canada and in the other high-performing systems—and they have strong unions, good pay, and good benefits, too.
One wonders what a teacher-led injection of rigor could do in our reputation-challenged community. Should we do as Finland and Poland did, and raise the teacher education admissions standards in all our degree-granting institutions here? Should we abruptly require SAT scores above 2000 (out of a possible 2400), thus radically increasing the competitiveness of entry into the profession that Carl Paladino and his friends bash, blame, and whine about?
Sure, of course. We should study harder. But changing the culture here means more than setting goals and performance standards. Getting buy-in means leading, positively, with rewards for success, and with confidence in the integrity of the outcomes. The most critical ingredient Amanda Ripley found in her survey of successful education systems wasn’t math or reading skills, not conformity with some outside norm. It was something unquantifiable: diligence. Conscientiousness, “a tendency to be responsible, hardworking, and organized.”
Ripley saw greatest evidence of this trait in the country with a worse child-poverty rate than ours: She saw it in Poland.
Bruce Fisher is director of the the Center for Economic and Policy Studies at Buffalo State College. His recent book, Borderland: Essays from the US-Canada Divide, is available at bookstores or atwww.sunypress.edu.

January 30, 2014

Professor Obama's Amnesia

The “Crisis!” film series our president should host

Progressives got themselves quite excited recently. There was widespread speculation that President Obama’s fifth State of the Union address would squarely address the radically amplified trend toward income inequality that has begun to become a political fact since Bill DiBlasio’s landslide victory in New York City’s mayoral race. DiBlasio squarely addressed the facts about the 99 percent that then-Senator Barack Obama had no trouble articulating in the 2008 campaign, and that his opponent Mitt Romney ill-advisedly scoffed at in the 2012 campaign. The electorate may be experiencing great confusion about why it’s so, but there is increasing clarity about the near-universal experience of American working people working the same or harder for the same or less.
What progressives had been hoping for is further clarity from Obama about why it’s so. Robert Reich’s new movie Inequality for All does a good job, which is why we’ve included it in the free “Crisis!” film series that starts Thursday, January 30 at the Burchfield Penney Art Center. Emmanuel Saez and Robert Piketty do a great job of explainiing how 93 cents of every new dollar in the post-2008 economy has gone to the top one percent. But at some point—say, at the beginning of the year in which the entire House of Representatives is up for re-election—one might reasonably expect that the explainer-in-chief, the top educator in the land, the law professor become the law-giver, would take the lead in describing the perils of letting the trend remain undisturbed, and the steps we need to take to change course.
The first hint that Obama was not going to go down that road came in his explanation of what happened in the year he campaigned for and won his office. He didn’t describe the pop of the housing bubble, or the bankruptcy of Lehman Brothers, or the trillion-dollar-plus taxpayer-funded bailout of the banks in 2008 and 2009 as a financial calamity, a regulatory failure, a criminal conspiracy gone wrong, or a disaster that exposed the rottenness of our globalized, financialized, anti-worker Ponzi scheme of insider-dealing gangster-politician-bankers. Nope. Not a word of it. Obama described 2008 and its aftermath as “the great recession.”
If you want to know why, read Reckless Engangerment, the book by New York Times reporter Gretchen Morgenson and investment analyst Joshua Rosner.

Many hands on the knife

Morgenson and Rosner carefully explain the history of the mortgage crisis that enveloped the United States and then disrupted the entire world economy. The story is centered on the bank-like, taxpayer-supported outfits known as Fannie Mae and Freddie Mac, which were created to help Americans borrow money to buy their own homes. Whether the rhetoric was Republican George W. Bush’s call to make America an “ownership society” or Democratic Congressman Barney Frank’s relentless advocacy for low-income households getting a chance at “the American Dream,” the result was the same: Republicans and Democrats invested politically, legislatively, and as regulators in wrecking what had been a very well functioning system that made mortgages available to millions of working- and middle-class homeowners, but that required of them that they have some measure of creditworthiness before they got the help. Until the mid-1990s, one used to have to demonstrate something like adult behavior in terms of showing up for work, paying one’s bills on time, saving a few bucks, and generally being a reasonable risk before one could qualify for a mortgage. That changed. Ideologues of both parties changed it. Political operatives of both parties made sure that it changed. Intellectuals and scholars of every political persuasion got fees, subsidies, grants, and career-advancing conferences and publications for standing up and saluting the change.
And bankers, mainly on Wall Street but everywhere else around the country, got in on the deal. There was big money to be made by letting poor people take out mortgages they couldn’t handle, especially when the properties they were being loaned money to buy were being appraised as ever-more valuable. Mortgage bankers made big fees handing out mortgages like Halloween candy, and mortage-bundlers made big money packaging up newly invented investment devices that could be traded on the big exchanges as if they were the equivalent of contracts for pork bellies, bushels of wheat, or barrels of oil—as if these mortgages were real things, like actual commodities with a market value, rather than promises that could not be kept.
Barack Obama was not free to say a negative word about what caused what he called “the great recession” because everybody who created the disaster is still in power. But don’t for a moment imagine that this is a Democratic dilemma. Neither George W. Bush nor Barack H. Obama, nor the Republican leadership of the House of Representatives nor the Democratic leadership of the US Senate, is at liberty to blame any Republican or any Democrat for having enabled, empowered, and profited from as well as having politically benefitted from the disaster they all had a hand in engineering.
Because they all had a hand in it, and they haven’t changed the law in any significant manner to prevent it from happening again.

Viewing the crisis from Buffalo

Here in Buffalo, where every single one of our public-funded construction projects and every cent of the Buffalo Billion depends on the tax revenue from New York City, we have an opportunity to see with some clarity—because without the ongoing profitability of Wall Street, we would’t have the construction cranes, the medical corridor, or the other inputs that are lifting hopes and spirits. When first George W. Bush and then Barack H. Obama authorized the transfer of hundreds of billions of dollars to stabilize the collapsing financial system in 2008 and 2009, back when the market value of all those Fannie Mae mortgages abruptly dropped, the bailout money kept us going, too.
The second-most alarming quote from the Morgenson-Rosner book is not from a politician, a banker, or from one of the few non-compromised researchers who frantically warned about the coming calamity. It’s from a long-deceased Frenchman named Frederic Bastiat. “When plunder becomes a way of life for a group…they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it.” Yipes. That’s sort of what we have today, still.
The truly alarming message of this book, however, is the list of names of all the people who made the problem happen. The current and the last two secretaries of the treasury, the last two heads of the Federal Reserve, the leading Republicans and Democrats in law, finance, housing, and regulation…Yipes. They’re all still in power. And their party identity doesn’t seem to matter. And they cycle from the White House to the Cabinet to the banks and investment firms and think tanks and back. Round and round.
We’ll be talking about the movie versions of all this every Thursday evening at 6:30pm at the Burchfield-Penney Art Center, and then watching the movies at 7pm. Come enjoy the show in one of the lovely places at all that Wall Street money helped fund.
Bruce Fisher is director of the the Center for Economic and Policy Studies at Buffalo State College. His recent book, Borderland: Essays from the US-Canada Divide, is available at bookstores or atwww.sunypress.edu.