De Blasio’s Dilemma: Too Many Rich People or Too Many Poor People?

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The New York Sun

Where exactly does Bill de Blasio want to take New York? During the campaign, Mr. de Blasio focused on income inequality – but he seems much more concerned about New York having too many rich people (“nearly 400,000 millionaires!”) than too many poor people. Maybe that’s because New York does not claim the country’s highest poverty rate – it does not even rank in the top ten.

Because of the financial crisis, the number of poor people soared across the country in recent years. But New York did better than most. In 2000, New York suffered the 6th highest poverty rate among the 20 biggest cities in the nation; in 2012 that had fallen to 13th. In other words, progress. As even the New York Times – friend to Mr. de Blasio – reported recently, “On average, New York had a lower poverty rate, fewer people without health insurance and a higher median household income than other major metropolitan areas.”

Mr. de Blasio has implied that the growing income gap in New York is the nefarious handiwork of our billionaire mayor, Michael Bloomberg, whom Mr. de Blasio accuses of looking out for our “elites” over the Average Joe. It is instead part of a national trend dating to the 1970s that has rewarded capital at the expense of labor and differentiated more than ever between the highly educated and everyone else.

A Congressional Budget Office study reports that household income for the wealthiest one percent nearly tripled between 1979 and 2007 while the bottom 20% of the population saw its income grow by less than 20%. Scholars trace the shift to a growing wage gap and also to changing social structures – in particular the emergence of single-parent households.

New York can do better, for sure. But Mr. de Blasio’s “tale of two cities” is just that, a tall tale. We have a huge income gap, but that says more about the appeal of New York to some of the wealthiest people in the world — people who pay taxes and boost our economy — than it does about the lack of opportunity for those at the bottom of the pyramid.

Thanks to Mayor Bloomberg and Police Commissioner Kelly, New York has become home to well-heeled people from Russia, the Middle East, Brazil, China and elsewhere who have flocked to New York looking for a safe haven and who want to enjoy the city’s renowned cultural offerings. In the first half of 2013 foreigners poured $1.96 billion into Manhattan real estate alone, according to Real Capital Analytics, surging ahead of rivals Tokyo and London.

Not only is the city viewed as practically crime-free; it is also considered a secure place to invest, insulated against whimsical government policies like confiscatory taxes or damaging regulations. Will Mr. de Blasio safeguard this reputation? Does he understand how important it is?

Like most liberals, Mr. de Blasio is more concerned with divvying up the pie than increasing it. All New Yorkers benefit from growth. Higher taxes — even when only targeted at our top earners — do not encourage investment or employment. Just the opposite, as we can see from the sub-par recovery delivered from the Obama administration. A 2012 report from the Center for an Urban Future pronounced that New York City had emerged as the nation’s second-largest tech center; five years earlier it wasn’t even on the map. Does Mr. de Blasio know how to build new industries?

Earlier this year New York polled voters declared that “empathy” was the attribute they most wanted in our new mayor — above management expertise, the ability to attract businesses or anything else. They got their wish. Mr. de Blasio will undertake to manage our messy, huge, distracted, and glorious city with little in the way of experience or credentials to guide him. He does, however, appear long on empathy.

The New York Sun

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