Atlas Shrugged and the Decline of New York

This past Tuesday I had to take my wife to her dentist in Manhattan, so I spent a little time walking around our old neighborhood, the Upper West Side, while she got her crown.  I learned that apartment buildings now have policies that can ban smoking outside the building; supermarket plastic bags are now illegal; if you want to use paper bags, you must pay a 5-cent penalty.

With so many meddlesome laws, New York is not a place in which I care to live. I first realized that the city had gone past the point of no return in 2000, when I sat on a Manhattan narcotics grand jury.  The grand jury was in the New York Supreme Court Building, 60 Centre Street, where the 1957 movie 12 Angry Men takes place.  In interacting with my fellow Manhattanites, I realized that the people of New York had gone far down the left-wing path, that they no longer believed in the rule of law, and that the ultimate result would be increasing socialism and moral chaos.

I was just rereading Atlas Shrugged, which I assigned to my class as an extra credit assignment. When I was in Manhattan on Tuesday, several things reminded me of it.  It is about the exodus of industrialists, managers, and the competent from a United States increasingly dominated by socialist looters, with an end result of the country's reverting to 18th century standards—a goal advocated today by  environmentalists.   

This passage is an example of Ayn Rand's perception of how backward-trending socialist law works.  A bureaucrat named Dr. Ferris explains the process to capitalist Hank Rearden, inventor of Rearden Metal:

“Did you really think that we want those laws to be observed?” said Dr. Ferris.  We want them to be broken. You’d better get it straight that it’s not a bunch of boy scouts you’re up against—then you’ll know that this is not the age for beautiful gestures.  We’re after power, and we mean it. You fellows were pikers, but we know the real trick, and you’d be better get wise to it. There’s no way to rule innocent men. The only power any government has is the power to crack down on criminals.  Well, when there aren’t enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens?  What’s there in that for anyone?  But just pass the kind of laws that can neither be observed nor enforced nor objectively interpreted—and you create a nation of lawbreakers—and then you cash in on guilt.  Now that’s the system, Mr. Rearden, that’s the game, and once you understand it, you’ll be much easier to deal with.

 I can picture a Democratic Party policy adopted by di Blasio, Warren, Sanders, Ocasio-Cortez, et al. whereby neighbors are encouraged to inform on each other:  "Hello, police? I just saw my neighbor,  Mrs. Taggart, entering her apartment with a plastic bag of groceries.  Yes, we're at 140 Riverside Drive, Apt. 16-k. Please send a squad car."

How Progressivism Destroyed Utica

 Below is a picture of the population trend in Utica, NY from 1850 to the present. Unlike Buffalo, whose population peaked in 1950, right after passage of the urban renewal act, the population of Utica peaked in the 1930s, about 15 years before urban renewal and about 20 years after an expansion of workplace legislation in 1911 to 1913, during New York's Progressive era.

The 1911 Triangle Shirtwaist Company fire in New York City had led to the passage of dozens of labor laws in the mid 1910s. According to Wikipedia's entry on Al Smith (who was the speaker of the New York State Assembly and a member of the New York State Factory Investigating Commission, which proposed the laws):

 
New laws mandated better building access and egress, fireproofing requirements, the availability of fire extinguishers, the installation of alarm systems and automatic sprinklers, better eating and toilet facilities for workers, and limited the number of hours that women and children could work. In the years from 1911 to 1913, sixty of the sixty-four new laws recommended by the Commission were legislated with the support of Governor William Sulzer.

Other sources say that there were 36 laws, but whatever the precise number, there was a lot of new regulation.

The stagnation in the Utica population began about six or seven years after Smith's State Assembly (and Robert Wagner's State Senate) passed the Progressive-era laws, and the decline in the Utica population began about 15 years after.

According to Wikipedia, "Utica's economy centered around the manufacture of furniture, heavy machinery, textiles, and lumber." All of these are subject to factory regulation, which in effect raises wages. Employers contemplate the cost of regulation in their relocation decisions.

As well, the 1913 founding of the Federal Reserve Bank, also in the Progressive period, led to increased availability of credit. Easy credit meant reduced costs of relocation. There may have been early relocations of plants away from the city of Utica into surrounding suburban areas and into the South.


The combination of easing credit and increasing workplace and other regulation--the policy mix of both parties, but especially the Democrats--has been deadly to American manufacturing.


Instead of thinking about underlying causes of Trump's popularity, the American media has fixated on ad hominem attacks and shrill rhetoric.


Wikipedia's entry on Utica says that suburbanization began occurring in earnest in Utica in the 1940s, but there may have been an earlier trend as credit became available. The suburbanization of the pre- and post-war eras anticipated the broader globalization that followed the easing of credit and further expansion of regulation before and after the abolition of the international gold standard in 1971.


The post-1971 world has been brutal for those who create value. Those who live off the state as commercial or investment bankers, government contractors, government employees, and welfare recipients have fared well.


Unlike Syracuse, Utica does not have a nationally ranked university. Hence, it has not as easily participated in the state-subsidized education industry. Unlike Albany, it isn't a seat of an ever-expanding state bureaucracy. Unlike New York, the city that has benefited most from expanding credit, it is not a seat of global finance and bailout funding.


Utica actually produced goods of value like furniture. It was not a center of financial or political power, which produce nothing. Such production has been  punished in the credit-based economy, which supports a limited degree of innovation and instead favors low-risk investments such as plant relocations.

Historical Population of Utica, NY

  

How Urban Renewal Destroyed Buffalo, NY

    
Below is a picture of the population of Buffalo, New York from 1830 to 2017. In 1949, Congress passed the American Housing Act. According to Wikipedia, "It was a landmark, sweeping expansion of the federal role in mortgage insurance and issuance and the construction of public housing."

The Housing act was supposed to be a support to cities. It was the chief "urban renewal" law.  Encyclopedia.com adds:

Sites were acquired through eminent domain, the right of the government to take over privately owned real estate for public purposes, in exchange for "just compensation." After the land was cleared, local governments sold it to private real estate developers at below-market prices. Developers, however, had no incentives to supply housing for the poor. In return for the subsidy and certain tax abatements, they built commercial projects and housing for the upper-middle class.

Robert Moses was a leader in eminent domain actions going back to the 1930s. The sponsor of the law was Moses's friend and fellow Yale graduate, Senator Robert Taft. Taft had alerted Moses as to the passage of the law, and Moses saw a state law passed that increased his own power to oversee the urban renewal programs in New York.

The year before urban renewal went into law, signaling increased federal government involvement in the economy, Buffalo's population peaked. Its population, along with most other upstate New York cities, has declined ever since the law went into effect.

Democrats, Progressive Republicans Take Sledge Hammer to Economy

Bloomberg reports that the economy is in a tailspin.  The unemployment rate is now 9.7%, 0.2% lower than last month, but that statistic deceives.  Last month, there were 431,000 new jobs with 411,000 census workers hired. Only 41,000 private sector workers were hired.  Manufacturing jobs increased by 29,000  while service jobs, mostly temporary, increased by 27,000. The retail job number fell.

The labor force fell by over 200,000.  A statistical characteristic of the unemployment rate is that people not in the labor force are not counted in the unemployment rate. So if you give up looking for a job you are not counted.  200,000 left in response to the policies of Obama and the Democrats. They are so great at helping the average American. 

Now if you subtract the 200,000 who left the labor force and the 411,000 temporary census jobs from the 431,000 new jobs, do you really find an improvement in unemployment?

The truth is that the unemployment rate is too low.  The reason is that the government has subsidized badly run businesses that should be terminated and much of government is pure waste.  Rather than subsidize and stimulate waste as the Democrats have, the incompetently run businesses need to close.

Money should have been spent on welfare subsidies to the unemployed, whose lives have been upended by the incompetence of the Progressive/Keynesian economic system. Instead, the economy has been put on life support and the misallocation of investment will cause continued decline until the Democrats and Progressive Republicans are booted out of office.

I feel sorry for my students, who look forward to suffering economically because of the moron whom they voted into office, Barack Obama.

Ron Paul on the Dollar

I noticed this on Youtube. I don't totally agree with Paul on everything, but I will not settle for less than him as to the most important issue, America's collapsing currency.