Can A Federal Bailout Of State And Local Public Employee Pensions Be Stopped?

I have nominated so-called "Affordable Housing" in Manhattan as the worst possible public policy, but suddenly there is a second nominee:  A federal bailout of state and local pensions. 

This is one you probably have not heard of yet.  Time to wake up. 

Previous Manhattan Contrarian articles on the looming state/local pension crisis are collected here.  How big a problem is it?  A 2011 CBO report available here puts the nationwide underfunding figure at "only" $0.7 trillion, using the numbers reported by the states and localities themselves, which include discounting liabilities at an average of at or close to 8%.  I would call that methodology completely fraudulent.  To its credit, CBO also gives numbers at discount rates of 7, 6, 5, and 4%, and by the time you get to 4% the underfunding figure has gotten to $2.9 trillion.  By the way, at this point are you, like me, asking what possible legitimate interest CBO has in this subject to begin with? 

Meanwhile, an NBER/Cato Institute study available here puts the underfunding number at +/- $3 trillion.  Basically, they take the view that liabilities that must be paid come hell or high water must be discounted at a (kind of) risk free rate, which sounds right to me.  Separately, Moody's announced in 2012 a plan to recalculate government pension liabilities at a 5.5% discount rate as part of its bond rating processes.  That rate gives an underfunding number of around $2 trillion. 

Importantly, the problem is not spread uniformly among the states, but rather is heavily concentrated in (surprise!) a handful of big deep-blue states.  Illinois has the worst problem, California second, while New York, New Jersey and Connecticut vie for third, fourth and fifth place.  Pennsylvania is probably sixth.  Many red states have no pension problem at all, although Texas is not without its issues.

Yesterday the Manhattan Institute and Real Clear Politics co-sponsored a conference on this subject here in sunny New York City.  A panel on "How Bad Is It?" did not cover much that would be new to Manhattan Contrarian readers.  But then came a panel on "How To Fix It" -- and suddenly the number one topic of discussion became the seemingly inevitable "federal role."   

Former Mayor (1993-2001) Dick Riordan of Los Angeles spoke by video feed from California.  Apparently he is making a big personal push for California pension reform.  After describing a failed effort last year to gather signatures to get a pension reform measure on the California ballot, he moved on to his current ideas, prominent among which was a plan to get the federal government involved in some kind of insurance scheme for state and local pensions.  Although the proposal was vaguely described, and he never used the acronym, it sounded to me very much like the PBGC.  When other speakers' turns came, I was fully expecting them to dump well-deserved scorn and ridicule all over this idea, but no!  The opposite -- one after the other they said something like, "well, it may be necessary," but "of course, if they do this they will have to impose stringent conditions."  (Other panelists who spoke to this issue included generally sensible types like Dan DiSalvo of City College and Steve Malanga of the Manhattan Institute.)  One participant, Joshua Rauh of Stanford Business School, described meetings with Congressional leaders, including, he said, Republicans, where the discussion was more what form the bailout should take as opposed to whether there should be such a thing at all.  One speaker said that Governor Quinn of Illinois had included a line item in his most recent budget for an assumed federal contribution to alleviate the state's pension woes.  Asked (by me of course) how anybody could possibly think federal intervention in state and local pensions would be a good idea, the answers mentioned "preventing another financial crisis" or "avoiding a meltdown."    

Yikes!   Like many other gigantic federal power grabs, this proceeds to seeming inevitability before anybody even finds out about it.  Any sort of a federal bailout for state and local pensions is a world class bad idea.  Let me count the ways:

(1) Politicians in general have no ability to run (or guarantee) any pension system because they cannot resist the temptation to buy votes today with current payouts and hide and delay the funding until after they have left office.  But at least the states have the semi-discipline imposed by not being able to borrow in a currency that you can print, which is why the state/local pension problem is "only" around $3 trillion.  The feds, as we all must know, having the ability to print the currency in which their obligations are denominated, therefore have the illusion of the infinite credit card, and have used it to turn their pension and health care programs into Ponzi schemes with unfunded liabilities of $80 trillion or more.  So the right answer to the state/local pension problem is to turn it over to the feds?  And why exactly won't the feds then promptly turn it from a $3 trillion problem into, say, a $50 trillion problem? 

(2) I loved the business about the feds supposedly imposing "stringent conditions."  Because, I guess, federal congressmembers and bureaucrats are responsible people who just want to do the right thing with taxpayer money?  It was like it hadn't occurred to anybody that the public employees who are the beneficiaries of these pensions, and their unions, are the core constituency and prime operatives of one but not the other of the political parties.  Money going to public employee union members is not just buying individual votes, it is buying political contributions, phone banks, driving people to the polls, and everything else needed to swing elections and entrench incumbents and enhance their power.  Politicians simply cannot behave responsibly when faced with these kinds of temptations. 

(3) Any federal pension bailout will be a massive wealth transfer from the responsible to the irresponsible and from the red states to the blue.  The Republicans cannot possibly be stupid enough to go along with this.  (I know, don't underestimate them.)  Can they not perceive the political advantage of pointing to the upcoming struggles of the big blue states and saying, that's what happens to you when you vote for the Progressives?

I could think of a bunch more reasons, but that's enough for now.  Of course, the prime argument of the forces of bailout will be to stampede their opposition with fear of a "crisis" or a "meltdown."  All I can say is, back in the days before the federal government bailed everybody out, we had very sharp contractions, followed by equally rapid rebounds and booms.  Now that downside risk is gradually being eliminated from life we have endless sluggishness.  Maybe if we can socialize all risk we can achieve the high-tax collectivist nirvana of the Eurozone, which according to the August 14  Wall Street Journal, still has not recovered to pre-recession 2008 gdp.  

The Government Shutdown Brings Out A Flood Of Economic Nonsense

Does a brief shutdown of the government, and an accompanying minor reduction in government spending, help or hurt the economy?  I start from the proposition that all wealth is created by the private sector while much government spending is wasted; and from the observation that the countries with the lowest government spending as a percent of gdp (Singapore, Switzerland) have the most successful economies, while those with the highest government spending as a percent of gdp (Cuba, North Korea) have the least successful economies. To improve an economy's performance, cut government spending!

But the government shutdown has brought out a flood of ludicrous economic nonsense somehow attributing the economy's ongoing poor performance to the shutdown and accompanying slight reduction in government spending.  Most of the nonsense falls into the categories of either fake Keynesianism or the uncritical acceptance of the fraudulent government gdp methodology that counts all government spending as a 100 cents on the dollar increase in gdp. 

Just a few examples to prove I'm not making this up.  The New York Times graces us with a long analysis piece on October 18 titled "Shutdown to Cost U.S. Billions, Analysts Say, While Eroding Confidence."   What analysts exactly?  How about IHS Global Insights:

“The three weeks of government shutdown will cost the economy $3.1 billion in gross domestic product from lost government services,” estimated Paul Edelstein and Doug Handler of IHS Global Insight, an economic research firm. “There will also be some impact from lost private-sector jobs tied to the shutdown, as well as a loss of consumer and business confidence resulting from the debt-ceiling showdown.”

The $3.1 billion is just total acceptance of the idea that reducing government spending reduces gdp dollar-for-dollar -- not really a fallacy so much as a fraud.   I guess government spending can never be reduced then!  But the $3 bil is so paltry.  S&P promptly upped the ante to $24 billion, according to this from Business Insider on October 16, quoting an S&P press release:

We believe that to date, the shutdown has shaved at least 0.6% off of annualized fourth-quarter 2013 GDP growth, or taken $24 billion out of the economy. However, the closer we get to breaching the debt ceiling, the higher we expect the economic impact to be.

Funny that they don't have any comparable number for how much damage Obamacare is doing to the economy.  Perhaps trying to curry favor with the administration to get out from under that $5 billion lawsuit?

Bloomberg Business Week gives us two articles in October attributing the continuing economic stall to the shutdown and spending cuts.  On October 7 we have "Republicans Are No Longer the Party of Business," containing this gem: 

Over the past several years the series of budget crises engineered by Republicans to extract concessions from Democrats has damaged economic growth by reducing spending and increasing uncertainty. 

Or try this, from BBW on October 21's "The Tea Party's Pyrrhic Victory":

Fiscal policy is probably subtracting 1.5 percentage points from the economy’s growth rate in 2013, taking into account this year’s spending cuts and higher taxes, estimates Zandi of Moody’s Analytics.

It's the old "austerity" fallacy, mixing a benefit to the economy - spending cuts - with a detriment - tax increases.  And this is before we even get to the screamers like Media Matters or Think Progress.  Or Krugman -- I can't even read him any more.

I just hope no one here is reading this stuff and thinking that because these people have credentials they must know what they are talking about.

UPDATE, October 25:  Don't know how I missed it before, but the classic of this genre is the op-ed by Steven Ratner in the New York Times on October 23, "The Biggest Economy Killer: Our Government." 

[T]he sharp decline in the budget deficit, from $1.4 trillion in 2009 to $642 billion in the 2013 fiscal year that ended Sept. 30, has braked the economy at a time when it was already improving only slowly, as Tuesday’s jobs report demonstrated.  According to estimates by the Congressional Budget Office, the pullback in spending by Washington — it declined in 2013 for an extraordinary second year in a row — together with higher taxes will cause the economy to grow by 1.5 percentage points less this year than it would have if the deficit had remained constant.

For those who don't know him, Ratner is known variously as the New York Times' favorite investment banker and as Obama's one-time "car czar."  Those kind of credentials do not make one immune from falling for preposterous fallacies.  Can somebody please tell this guy, and the other guys, that counting government spending at 100 percent in the gdp is a scam?

When Will The Young Figure Out They Are Getting Taken?

The government shutdown is over for the moment, and lots of pundits are chortling about how badly the Republicans, and particularly those who fought to defund Obamacare, got "beaten."  For example, check out Timothy Noah at MSNBC here:   

[W]hat the GOP’s right flank is experiencing right now, in government and the court of political opinion, is failure.

Well, you can look at this politics thing as a series of skirmishes where what counts is who "won" and who "lost" the latest skirmish; or you can look at it as trying to come up with the right system to enhance the wealth and happiness of the people.   Looked at from the second perspective, what exactly has been "lost" or "won"?  Every last government program has been defended until some time early next year, entitlements continue merrily on their unsustainable growth path, the cash basis deficit is almost $1 trillion and the accrual-basis deficit is more like $5+ trillion, and Obamacare is now launched.   All of this amounts to a Ponzi scheme where the benefits owed to the old are accelerating and the new entrants -- the young -- have to pay more and more the longer it continues, with little prospect that the scheme can survive long enough for today's young ever to get their due.

And yet.  What age cohort gave Barack Obama and the Democrats the largest share of the vote in the 2012 election?  That would be the 18 - 29 cohort, which according to the Huffington Post here went 60 - 36 for Obama.  These would be the people who already have to pay for Social Security and Medicare for the baby boom generation, who are bearing the lion's share of the now over $1 trillion in student loan debt, non-dischargeable in bankruptcy, and who are about to get hit with Obamacare.  Why are these people voting overwhelmingly for the defenders of the Ponzi scheme status quo?  Hello?  

The weekend edition of the Wall Street Journal has an interview with Stanley Druckenmiller, one of the most successful hedge fund entrepreneurs of the last several decades, who is currently on a tour of college campuses giving talks on the subject of the generational theft.   Druckenmiller's theme to his young audiences is that they can't possibly come out ahead in this game.  Among other things, he points out to them that proposals to fund increasing benefits by raising income tax rates on "the rich" will fail to catch people like himself and others in the baby boom generation who have already made their money; instead, such higher tax rates will catch those now young as they move up the income ladder, making it harder and harder for them to keep up with their debts, let alone get ahead. 

And into this mix, throw Obamacare.  Here again, almost all of the reporting is about who gains or loses from the problem of the day.  But a longer view says that today's website problems are far less important that the attempt at yet another huge chunk of generational theft from the young to the old.  Have the twentysomethings really been fooled into believing that you can add tens of millions of people to the ranks of those with access to healthcare, not add any doctors, hospitals, or other health providers to the system, and everyone's healthcare costs will go down?  People, the whole idea here is that twentysomethings are to be forced to pay double or triple or quadruple the fair cost of health insurance so that the money can be transferred to others who are older and less healthy. 

I have previously reported on the huge efforts ($684 million in spending) of the federal and state governments to promote Obamacare, particularly to the young for whom it is a terrible deal.  See The U.S. Government Embarks On The Most Massive Fraud In World History, September 2, 2013.    Kyle Smith in today's New York Post takes it a step further, revealing a grant to the USC Annenberg Norman Lear Center  to get Hollywood to work Obamacare propaganda into television shows and movies. 

There are two ways for the Ponzi scheme to end -- by crashing, or by the young people figuring out that this can't work for them and voting for politicians who support fundamental reform to the entitlement state.  I actually have some optimism that the sticker shock of Obamacare is going to be the thing that will finally start waking these twentysomethings up.   

Bill de Blasio: How Bad Is This Guy?

Democrats like to call the Republicans the Stupid Party, and lord knows I find plenty to disagree about with plenty of Republicans.  But now we have as the Democratic candidate for mayor in New York one Bill de Blasio, a standard-issue Leftist of the most doctrinaire and uncritical strain.  Let's go over a few issues that might serve as a proxy for his IQ. 

It is by now widely known that as a young "idealist" in the 80s de Blasio went to Nicaragua to work with the Sandinistas.  When initially questioned about this he described his work as bringing food for the poor.  This was 1988 -- nine years after the Sandinistas had seized power and only one year before the fall of the Berlin Wall.  Was it possible by that point not to realize that this was a Soviet-backed thugocracy?  Here's a New York Times article from September 22 that, charitably described, does not exactly back up de Blasio's description of his Nicaraguan adventure as a mission of mercy to the poor: 

Mr. de Blasio became an ardent supporter of the Nicaraguan revolutionaries. He helped raise funds for the Sandinistas in New York and subscribed to the party’s newspaper, Barricada, or Barricade. When he was asked at a meeting in 1990 about his goals for society, he said he was an advocate of “democratic socialism.”       

Then, of course, de Blasio honeymooned in Cuba in 1994.  This is now three years after the collapse of the Soviet Union.  Asked on a radio program a couple of weeks ago to justify that one, his answer was:

I also think it’s well known that there’s some good things that happened — for example, in health care.

OK, he's dumb enough to be completely taken in by Cuba's Potemkin health care charade, even now, 22 years after Communism fell apart.   

Enough of the ancient history; how about de Blasio's current campaign proposals for New York?    First up is "universal pre-K," supposedly to be paid for by yet higher income tax rates on the highest earners.  The proposed budget is about $500 million per year, and by the way it's only for about half the kids, so not really "universal" at all.  What is the evidence that this would be money well spent?  As those who follow this subject at all know, the federal Head Start program has been around for five decades, and there have been five decades of efforts to show that it actually has any measurable effect, at least after a couple of years.  Red Jahncke of the Townsend Group summarizes the latest information in yesterday's Wall Street Journal:

[T]hat $8 billion-a-year program [Head Start] has been found to be ineffective in educational terms by most research. That includes the “Head Start Impact Study,” a multiyear study conducted by the Department of Health and Human Services during the Bush and Obama administrations. Released in December 2012, the study found “no significant impacts” in education—in the short or long term.

Well, the pre-K program might be effective in one respect, which is having the City hire an additional few thousand teachers union members to contribute to de Blasio campaigns.

The next de Blasio signature issue is "affordable housing. "  Just a couple of weeks ago I nominated "affordable housing", particularly in Manhattan, as the worst possible public policy.   This one is really pretty objective: even if you believe that any and all government handouts "help" the recipients, it can easily be demonstrated so-called "affordable housing" programs cost far more money to "help" far fewer people than obvious alternatives. 

The "crisis of income inequality"?  de Blasio has not yet figured out that the government statistics he relies on to think there is such a crisis are rigged in excluding nearly a trillion dollars of in-kind handouts from the calculations.  And then he proposes to cure the inequality by yet more in-kind handouts, which then will not be counted in measuring income inequality and will leave us spending yet more money and having achieved nothing by our own measures.  Is this anything other than excruciatingly dumb? 

Finally, two things strike me as far and away the most important issues facing New York City.  First is the shocking overspending on K-12 education for shockingly inferior results.  According to the latest Census Bureau data (for 2011) reported at the Huffington Post here, New York has the highest per student in the country at $19,076 per student, compared to the U.S. average of $10,560.  And half the states are below the average, with Utah at only $6,212.  This is a $10 billion overspending item in the $70 billion annual New York City budget.  I haven't seen de Blasio mention it.   Ditto for pensions, where New York City allows police and fire workers to retire in their 40s, teachers, transit workers, sanitation and others in their 50s, and then guarantees lavish retirements of 30 to 50 years.  These are completely unsustainable promises, already costing $8 billion per year in the current budget, and set to double over the next several years.  Again, I can't find any place where de Blasio mentions it.

So yes, this guy is bad, and also dumb.  Oh, by the way, he's up 47 points over his opponent Joe Lhota in the latest Real Clear Politics average of polls.   Hey, this is New York.

National Political Polarization And The Boundaries Of Legitimate Debate

With Congress deadlocked and the government "shut down" now for several weeks, the latest fashion is lamenting the terrible partisan divide that has the country so terribly polarized.    According to a July 2013 survey from the Pew Research Center here, partisan polarization in Congress and among the public is the greatest it has ever been in the U.S.  "From immigration reform to food stamps to student loans, it almost seems as if congressional Republicans and Democrats inhabit different worlds."  And they don't even mention Obamacare!

Why can't we all just get along here?  How could Congress be so irresponsible as to fail to come to a deal to run the government? -- isn't that their number one job?

Here's the problem.  There really are two views of the proper role of the federal government, and they are not compatible.  One view, exemplified by the Democrats, is that the proper role of the central government is to solve all the personal problems of the people and to remove all downside risk of human existence.  The other view, far less well-exemplified by the Republicans, is that the government does not have the ability (let along the constitutional authority) to solve all human problems, is way too big, and needs to shrink.

Is there actually an appropriate compromise between those two views?  On the one hand, we have Nancy Pelosi and those like-minded with her, who would gladly see the government double in size, and then double again.  On the other hand, you have myself, who thinks that the government needs to shrink substantially.  Until recently the Republicans were not actually pushing for shrinkage, but rather, most of the time, for sort of holding the line.  For decades this led to a  "compromise" between these two sides that the government always grows, generally somewhat faster than GDP, although less fast than its most extreme advocates would like.   And the result was that an already too-big government became gradually bigger and bigger as a part of our economy and of our lives.  Here is a chart of post-war federal spending as a percent of GDP, going from about 16% in 1947 to almost 26% in 2009-11.  (It was well under 10% before the New Deal.)      

View fullsize

But now we have some substantial voices for actual shrinkage entering the debate -- for example, the TEA Party and some Senators like Cruz and Paul.  For literally my whole life, the boundaries of civilized discussion of the role of government have been defined by a relatively narrow band between growth and more growth -- Should we grow spending by 5% this year, or 10%?  OK, we'll compromise at 7.34958%.  Done!  But what's the compromise between the side wanting 20% growth and the side wanting big shrinkage of, say, at least 20%?  Not so easy.  If you think the government needs to shrink, and by a lot, the idea of a "compromise" at 7+% growth is just fundamentally not OK.  

The whole idea of shrinkage poses an existential threat to those living well off the government, most notably its senior bureaucrats and hangers on in and around DC.  They're not going down easily.  The main effort at the moment seems to be to rule the whole idea of shrinkage -- that any program can be reduced by even a dollar, let alone eliminated -- as off limits of legitimate discussion.  Thus the favorite epithet of the DC establishment is that the Republicans are "extremists" for holding out for the idea that the government should be funded by anything other than one gigantic continuing resolution that continues every single program and of course most notably Obamacare.  See for example E.J. Dionne of the Washington Post here.  Or how about this from Nancy Pelosi on September 23:   

But for many of them, I call them legislative arsonists. They're there to burn down what we should be building up in terms of investments in education and scientific research and all that it is that makes our country great and competitive.

And those are the polite ones.  Other terms applied to anyone seeking to shrink any government program by even a few percent include "repugnant," "repulsive," "cruel," "devastating," "disastrous," "mean," and plenty more, as I noted in my post about food stamps a few days ago.

Well, the problem is that the government needs to shrink.   Food stamps just grew from $40 billion per year to $80 billion in 5 years of supposed economic recovery on Obama's watch.  Recruiters comb the country looking for new people to enroll.  Home equity and retirement accounts in unlimited amounts will not disqualify you.  Does anyone really think this can continue?  Medicare and Medicaid have grown at approximately 8% compound annual growth rates since inception in the 60s.  If not fundamentally restructured, they will swallow the whole economy at some point during the 21st century.  The cash-basis federal deficit is around $900 billion this year, but the far-more-honest accrual basis deficit would be more like $5 - 10 trillion.  You can try for a while to keep the forces of shrinkage at bay by calling them names, but in the end, it's only a question of when it happens, not whether. 

I say we should establish new boundaries of legitimate debate.  To count as civilized, you must propose shrinking the federal government by at least 20%, and proposals for shrinking up to 50% are perfectly reasonable.  So you think the government should grow??????  That's "extremist," "irresponsible," "arsonist," "repulsive," or whatever other name you want to come up with. 

The "Respected" Met Council And Sheldon Silver

In reading about the Rapfogel embezzlement scandal at the Metropolitan Council on Jewish Poverty,  you can't get through an article without the author somewhere mentioning how "respected" the Met Council was here in New York.  The Daily News here on August 15 calls the Met Council "one of New York's once-most-respected charities."  The New York Times on September 15, commenting on the failure of government "oversight" to catch this long-running scam, says "There was little reason to wonder about the integrity of Met Council, a respected 40-year-old organization."  And even the Post on September 25 describes Rapfogel as "head of the well-respected Metropolitan Council on Jewish Poverty."

This is just another difference between me and almost everyone else here in New York.  The Manhattan conventional ignorance is a complete sucker for anything that sells itself as doing "good," without applying even a hint of critical thinking.  Long before it was caught in the current scandal, I thought that so-called "anti-poverty" non-profits like the Met Council and its ilk were bad, even despicable. 

The Met Council fundamentally is and always was an entrenchment scam for politicians, with any help to the poor as a secondary by-product at best.  What kind of legitimate "anti-poverty" organization takes $90+ million of annual taxpayer anti-poverty funding and never raises a single person out of poverty?  A legitimate anti-poverty organization would have as its number one goal to move its clientele to middle class independence as rapidly as possible and shrink itself gradually out of existence. 

Not these guys.  Absolutely the last thing they want is for the "poverty" population to shrink.  Then the funding would go down!  The basic idea is in kind handouts of one sort or another.  As readers here know, those do not count at all in the official measures of "poverty" and therefore will never remove anyone from the rolls.  Look at their list of programs here:  "providing quality housing," "providing clothing, furniture, and help with home repairs," "assisting seniors with essential living tasks," "helping families recover from domestic violence," "enrolling New Yorkers in low and no-cost health care and food stamps," etc., etc.   There is no risk at all that these kind of things will decrease the poverty count by a single soul.   

And it's not just that the in kind handouts don't count in the definition of "poverty"; they also function as a trap that keeps people from moving themselves up the real income ladder.  Things like Medicaid, food stamps and public housing have eligibility criteria that you had better not cross by succeeding on your own.

Nobody who actually wanted to end or reduce poverty would ever design a so-called "anti-poverty" agency in this way.  But while this kind of program may not be very good for the poor, it is perfect for politicians bent on perpetuating the power of themselves and their colleagues.   The programs create a permanent class of handout-dependent people who know that if the out party ever gets in, the funding could well go away.  And that's only the beginning.  Lots of people work for these agencies.  They are reliable advocates for continuing and increasing their funding, and for the election of the politicians who promise to do that.  They also can be counted on to rally their friends and supporters to fight for continuation of their funding.  Here on the Met Council web site is the section where they urge readers and supporters to "Advocate against budget cuts."  "2000 frail homebound New Yorkers are at risk" "778 households Utilities turned off Unable to pay rent Nowhere to turn"  etc., etc.  Oh, is that advocacy paid for by the $90+ million of annual taxpayer funding for the organization?

And then there's the very best part:  political contributions to fund campaigns.  The allegation in the AG complaint against Rapfogel is that, as the Times describes it, he "conspire[d] with someone at the insurance brokerage . . . to pad the charity's insurance payments by several hundred thousand dollars a year. . . .  Mr. Rapfogel . . . pocketed some of the money and was involved in getting the rest to politicians who supply the government grants to the nonprofit organization. . . ."     

Now, even though Rapfogel's wife has been Sheldon Silver's chief of staff for decades while this was going on, I don't have any reason to believe that Silver knew the details of the mechanism by which Rapfogel stole taxpayer money and funneled it back into the political campaigns of Silver and his friends.  But here's what I do know.  I know that Sheldon Silver is a very competent man, and does his main job well.  His main job is perpetuating the large majority in the New York Assembly of Democrats, particularly Democrats loyal to himself.  And if he is to do that job at all competently, he must keep very, very close track of the flow of political money to himself and his supporters.  He must know in great detail which of the taxpayer-funded non-profits in the state come through with big contributions for his machine from their executives, their employees and their boards, and he must have that information in his head when he is influencing which of them get more and less money from the taxpayers in the coming year.  And he must see the Bill Rapfogels of the world regularly at political and social events, and he must let them know how much he really, really appreciates their contributions to help get his candidates elected, as well as their efforts to get additional contributions from the employees of the organization.  If he doesn't do these things, he's incompetent; and he is definitely not incompetent. 

A reader yesterday asked me if I thought there was any hope for cleaning up the current situation, such as through the state Moreland Act (ethics) commission appointed by the governor.  The short version of my answer is, there will be hope for cleaning this up when organizations like the Met Council are no longer "respected" in polite New York society.  We have a long way to go.