Savagery on the Hudson: Three Ideas to Fix New York’s Fiscal Crisis

We heard all the alarm bells one year ago. A massive financial crisis had served to bankrupt New York State’s finances resulting in the undeniable need for sharp reductions in public spending. Remember the whole “Doomsday Budget” thing? Well, Governor David Paterson is back again, this time armed with more than $1 billion in cuts. What slick tag should we propose for this one? “Savagery on the Hudson?” “The Even Bigger Doomsday Budget?”

Perhaps Paterson, and by extension Bloomberg, could have been given the benefit of the doubt last time. No one, less a few dozen Marxist economists, most socialist organizations, and anyone with a modicum of financial sanity, expected a financial crisis of this severity. Caught unprepared, politicians did what they always do – lay off the financial burden on the most vulnerable. Things would, they said, certainly turn around by 2010. This year, however, the burden falls squarely on the politicians’ shoulders.

Paterson and Bloomberg could have done something different. We gave them the prescription last time and they should have acted. The root of fiscal problem lies at the over dependence of state and local governments on tax receipts from the financial, insurance and real estate sectors (FIRE). New York City depends on Wall Street for nearly 33% of its budget and NY State some 15%. This is bad financial planning. Yet, one year later, we are right back where we started, lamenting the lack of revenue from the financial sector and preparing new rounds of cuts to necessary social services.

So, dust off the old prescription again. NY State and City need to create a progressive tax structure for income – the wealthier you are the higher rate you pay, no loopholes. We also need to think about creative, yet not very complex, ways to create new revenue streams through the taxation of wealth. Specifically, NY State could extend existing laws regarding property taxes to the ownership of stocks and bonds. Your house is surveyed for value and taxed, so should your stock holdings. Finally, the state needs to sponsor programs that fund a new green-economy democratically-managed cooperative sector in order to reduce the region’s dependency on the FIRE sector. We need to produce real things that people need, instead of living off the increasingly small amounts of fat being produced by Wall Street.

Three ideas that could put an end to the financial crisis in the State without necessitating budget cuts and while transforming our economy. In fact, I am guessing that so much revenue would be generated, that the state would need to solicit ideas on how it might be spent. Don’t expect movement on these issues by Paterson and Bloomberg. Expect more of the same – sob stories about financial misery, peppy speeches about belt tightening and sharp cuts in services that move closer toward the logic of privatization. We need to vote with our feet in the street – to let these ideas reverberate from every community in the city. Or else, next year we may just face the “Super Gigantic Terrible Budget” or the “Fiscal Godzilla Destroys New York Budget.”

Billy Wharton is a writer, activist and co-chair of the Socialist Party USA. He can be reached at: Read other articles by Billy, or visit Billy's website.

One comment on this article so far ...

Comments RSS feed

  1. Mulga Mumblebrain said on December 20th, 2009 at 2:24am #

    Yes, decent proposals, all, with zero chance of being realised. Zilch, nada, nix, as they mumble. The ‘financial crisis’ has been carefully contrived, has a way to go and is intended to immiserate billions to enrich the parasite elite, the real rulers of the planet.The era of financial excess overseen by Ayn Randista Alan Greenspan, facilitated by the bought and sold political stooges of the West, particularly in the US and UK, saw billions skimmed off by financial parasites, while the serfs resorted to debt to continue mindlessly consuming, as their wages and conditions were undermined, the real reason we fought the Cold War against the Satanic Communist hordes.
    Come the inevitable collapse, the tax-payer suckers pay the bill, and the parasites go on paying themselves larcenous bonuses, as ever. The resulting indebtedness is then used as the excuse for the next stage of this Class World War. The imposition of Third World-type ‘Structural Adjustment’on First World populaces, starting with Iceland, Ireland, Latvia, Greece etc. Decades of social savagery, falling wages and fully fledged class hatred run amuk beckon, all to protect that tiny stratum of ruthless, insane, avaricious and evil parasites who rule the world.
    The Copenhagen fiasco illustrates our future beautifully. It was a set-up by the rich countries from the beginning. The choice of Denmark, a centre of Rightwing reaction and climate change denialism was always suspicious, and the use of WTO type ‘negotiating’ tactics, ie shutting the global ‘niggers’ out while the White Men and a few selected stooges, like the genocidaire Zenawi, make all the decisions then shove them down the losers’ throats as a fait accompli, proved the point. The subsequent actions of the Western media sewer and its ‘floating world’ of disinformationists and liars quaintly mislabeled ‘journalists’ to blame China shows that the Western rulers of the world will do anything to keep global hegemony from moving from its proper place, in white hands.
    Undoubtedly the acceleration of the market capitalist neo-feudal project in the epoch of planetary ecological collapse offers the Masters interesting prospects. A world sans 90% of the lower ranks would be a paradise for the elite, and these psychopaths certainly would have no qualms over such a cull. Really,has it ever been more plain that removing the psychologically malignant,morally insane and spiritually depraved global elites from power is now a matter of life and death for billions, and a battle for the soul of humanity?