Monday, April 27, 2009

Links to Avoid: Unnecessary Temptation, Unnecessary Subsidies

(Enlarged portion of New York Times image in article about arrest of Ray Harding.)

By the end of this article we will be talking about the evils of unwarranted public subsidies and their abuse by top government officials. But first . . .

A Teaser?

What is the name of those little teaser headlines that appear, lines separating them from the rest of the text, in the middle of the newspaper or magazine story in which they appear? They are not subheads, not sidebars, not “pull quotes.”

Ah, but why worry? What’s in a name anyway? A rose by another name! . . . (. . .and all that) Let’s just call what we described a `teaser subhead.’ There is a `teaser subhead’ in a New York Times article (print edition only) which currently has us interested:
A boss is linked to the sort of corruption his old party once fought.
The article in question?- - Ex-Leader’s Indictment Further Weakens Liberal Party, by Sam Roberts, April 19, 2009. The story is about the recent indictment of Raymond B. Harding, the former Liberal Party leader in the broadening Hevesi pay-to-play investigations scandal. See also: Ex-Chairman of New York Liberal Party Indicted, by Danny Hakim, April 15, 2009.

A Party in Name Only

These days people are wondering whether the Liberal Party is a party “in name only.” That brings us right back to the slippery question we started with: “What’s in a name?” Things will be what they are, but names can be misleading if things drift away from the names by which they are known.

A Tempting Drift Diagnosis

We offer a diagnosis of the source of political drift: We think that what most often separates a political party from its name and principles is the pull of temptation. The temptation in the comptrollers’s scandal is that the structures allowed one man to control too much money and there was a lack of transparency to boot. It was just too easy to skim. That’s why reforms called for in the wake of the Hevesi scandal envision a board at the state level rather than having single individuals be responsible for investments. (By the way, we note that this important reform was not amongst the reforms proposed by the State Comptroller, the Governor and the State Superintendent of Insurance, in December 2007 per state press release proclaiming that the pension fund had been brought “up to modern standards”: GOVERNOR AND COMPTROLLER PROPOSE PENSION FUND REFORMS- Changes Will Create New Ethics Standards and Increase Transparency.) We suggest that as an indicator of earnestness, people watch to see which reformers call for pension investment decisions to be reposed in a newly formulated board and which reformers call for less than that.

Forging a Link: Describing Another Temptation

We’d like to forge a link here and wend our way to talking about another temptation in politics: Discretionary subsidies. Ray Harding’s arrest couldn’t help but make us think of the criminal prosecution of his son, Russell Harding, who once held a political position under Mayor Rudy Giuliani. Russell Harding was put in charge of the New York City Housing Development Corporation by Giuliani. In that position he oversaw the flow of huge amounts of subsidy and was invested with a fair amount of discretion that could tilt the balance with respect to the financial value of that flow for recipients. Russell Harding was ultimately sentenced to more than five years in prison for embezzlement (and possession of child pornography). It was excellently covered in articles by Tom Robbins in the Village Voice. (See- Features: The Private Lives of Russell Harding, The Feds Enter the Picture, Tom Robbins, Tuesday, June 11th 2002. as well as the “related stories” at the site.)

The sad tale of the younger Harding’s looting of the city agency for personal expenses obviously involves cumulative infractions significant enough for Harding to have wound up in jail but it also involved small pettiness like Harding’s having the agency pay for his morning bagels.

Eliminate Unnecessary Subsidies to Eliminate Political Drift

We have another prescription to eliminate temptations that lead to political drift: Eliminate unnecessary subsidies. Even though subsidies are proliferating in our society that does not mean they are necessary, and unnecessary subsidies engender political drift. They are hard to police and in pursuit of their tempting allure, Democrats cease to act like Democrats and Republicans and Conservatives cease to act like Republicans and Conservatives.

Atlantic Yards Example: Public Rolled With the Drift of Role Reversals

Consider, for example, the case of the highly unnecessary Atlantic Yards that is proposed to be massively subsidized almost beyond belief. For starters, the project will never deliver its ostensible benefits which are little but Orwellian fictions. In championing this project, Republican’s like former Governor Pataki or former Senate Leader Joe Bruno become proponents of excessively large government and an extraordinary level of government intervention in the private sector. Conversely, Democrats, like former governor Eliot Spitzer, become proponents of specially aiding a wealthy real estate developer and sports team owner like Bruce Ratner at the expense of the general New York populace. Voila! What better example could you have of political drift?

Unencumbered by a fixed party label, Bloomberg alone is not subject to such criticism since, names aside, he seems to be fixedly devoted to only one thing. He is regularly on the side of an oligarchic big government that aids the privileged.

Prosecutorial Drift . . .

Speaking of drift, the Russell Harding story also tells the tale, if it is to be believed, of a former prosecutor (Giuliani) behaving like a criminal. We suggest giving belief a try even if the story is told by convicted felon Russell Harding himself Last September a story came out when Mr. Harding started blogging. The story regards Harding's role in getting Judith Nathan, the girlfriend and future wife of the then “still-married Giuliani, an Upper East Side apartment at below-market rent.” If it is true, it provides a good example of how unmanageable these kinds of public subsidies can be and a good argument for eliminating or strictly limiting them. (See Atlantic Yards Report: Saturday, September 27, 2008, In tale of Giuliani influence, insight into the flexibility in size of affordable housing units.)

We won’t repeat the Atlantic Yards Report story above at length but it is a piece well worth revisiting that highlights highly problematic concerns and offers:
. . . insight into how much flexibility the city allows regarding the size of apartments designated as affordable housing.
Even if the Judith Nathan below-market apartment procuring part of the story is not true or provable, Atlantic Yards Report’s analysis of the problematic “flexibility” described by Harding in his blog is real and incontrovertible.

Awkward Toleration?

Did the alleged Judith Nathan impropriety occur as described? Part of the overall Russell Harding HDC story is that Harding’s other improprieties at HDC were known and not halted or publicly revealed by colleagues and other professionals at the agency. Without being on the inside, it is hard to say for sure who perceived exactly what wrongs occurred and who was fighting those wrongs in what ways. But what was done to stop Harding is significant; this is the kind of thing that affects careers. One wonders what those professionals believed would ultimately become public. And who knows which of those professionals may, for instance, have been doing a public service by feeding information to prosecutors or Tom Robbins at the Village Voice?

Why wasn’t Russell Harding outed sooner? We offer the explanation that he was perceived as being supported from the top no matter what was his misconduct.

Analogy Offered: Another Mayoral Administration (Bloomberg’s), Another Unnecessary Subsidy (for the Yankees), Another City Agency (Taxation and Finance) in Moral Drift

We cannot help but analogize. The HDC situation under Giuliani’s Russell Harding seems like the current situation of New York City Finance Department under Commissioner Martha E. Stark. The Finance Department is beset at the top simultaneously with nepotism scandals and with a (bigger) scandal involving manipulation of real property assessments in order to specially benefit the Yankees with financing (something that was desired by Bloomberg) at the expense of the public. (We mentioned above Bloomberg’s penchant for oligarchy delivering goodies to the rich.)

We have already asked whether Bloomberg’s reliance on Commissioner Stark to deliver an inflated property assessment for Yankee Stadium’s benefit engendered the culture gone awry in the City Finance Department:
. . . By the same token, we can see how if Commissioner Stark was a little bit lax in the nepotism department she might have problems enforcing rules against her top deputy engaging in a little bit of the same. . .

Beyond this, there is something else: Did Ms. Stark and Ms Ottley-Brown, by virtue of executing the Yankee Stadium maneuvers, feel that they had insurance for a little bit of the inside privilege that was swashing about? After all, the IRS and the U.S. taxpayers were being raided for millions.
(See: Sunday, April 19, 2009, Keeping up with Bloomberg and Friends: Stark New Scandals and Is it True WSJ Readers Don’t Commit Murder?)

Doesn’t this sound a great deal like Russell Harding under Giuliani?

Top-Down Moral: Avoid the Drift

The moral here is that when there is toleration or endorsement of subsidy abuse that comes from the top and the resulting haze of political drift takes over, you can readily get a culture of corruption that permeates down.

It is all linked. One things leads to another. Our prescription for a cure? Avoid all unnecessary subsidies: Our politicians are not mature or responsible enough to handle them and our technocratic professional class can’t be counted upon to keep us safe from their abuse.

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