Saturday, February 20, 2021

February, 2021, Part 9, Political Class Insanity: Stupid Taxation Idea In New York, Minneapolis Politicians Go Around In A Big Circle, and Seattle Circles The Drain

It is the beginning of another month which means it is time again to review the latest political class insanity from the American political class. Each month it takes us multiple posts to cover the wasteful spending, incompetent government organizations and employees, government programs that usually make a problem worse than resolving it, inane and idiotic politician comments, etc.

To review past posts on this insanity and idiocy, just click on the first few posts in each month listed to the right of this page. After reviewing just a handful of these insanity posts we think you will agree that we are currently being served by the worst set of American politicians ever to hold office in our entire history.

1) We have always made the claim that most politicians in the American political class these days are inept and incapable of fixing the problems and issues facing Americans today, with many of the issues and problems being caused by the same politicians' incompetence. As a result, ordinary Americans are faced with the following challenges:

  • Politicians keep raising taxes and imposing new taxes in a vain attempt to fix the problems they create or make worse.
  • Politicians are today generally incapable of providing a very, very basic government function, protecting the lives and property of citizens, as crime and violence continually increase in certain states and cities across the country.
  • As a result of the previous two realities, we have shown how residents and businesses are fleeing the states that are ruled by the most inept politicians, searching for places where their lives, their property, their families, and their freedoms can be better sheltered and protected.

As a result, we have often discussed the reality that many politicians are currently leading their cities and states into financial death spirals. This will quite soon collapse the financial, economic, and societal aspects of the entities they rule over, with the most comprehensive review of these imminent collapse discussed in the following post:

https://loathemygovernment.blogspot.com/2020/11/which-city-and-which-state-will-go.html

In this post, we make the case that Chicago, New York, and San Francisco are the most likely American cities to financially, economically, and criminally collapse in the near future. But as a recent article by David Kamioner on the Lifezette website shows, Seattle is also a viable candidate for collapse, given how ineptly that city’s politicians have ruled that city:
  • Jason Rantz is a Seattle talk show host who has some very real insights to what is going on in Seattle.
  • Specifically: “Plagued by surging violent crime and uncontrollable homelessness, Seattle business owners have had it. They are getting out of town before their employees or customers are seriously injured. Residents are following suit. Seattleites are being chased by aggressive, mentally ill homeless people. Professionals are dodging human waste on sidewalks as they walk to business meetings. Antifa riots are still destroying storefronts, deadly overdoses are surging, and police are leaving the hamstrung department in historic numbers. Seattle is on life support, while the mayor and City Council remain silent on the worsening crisis…At Miller Park in Seattle’s Capitol Hill neighborhood, city officials refuse to intervene in a growing encampment. Used needles are strewn everywhere, with car break-ins as frequent as fights. It’s gotten so bad the Seattle Youth Soccer Association stopped using the park over safety concerns…Meanwhile, Seattle’s murder rate rose an astonishing 61% in 2020 – its highest number of homicides in 26 years. And with a surge in rapes – January already registered 29 cases – people are feeling scared.”
  • Local business owner, Joey Rodolfo, co-founder of Buki clothing has the same viewpoint: “There’s no consequences. And we have a city attorney that turns his back on business people and lets these people just run wild in the city and destroy property. Seattle, unfortunately, is circling the drain as we speak.”
  • Obviously, it is the opinion of these two Seattle residents that the local politicians and the government they operate have failed to provide that very basic government function, protecting lives and properties of innocent residents.
  • And as we have discussed in previous posts, people are not going to sit still while their lives, livelihoods, safety, and freedoms are stomped on by the ineptness of local politicians.
  • For example, Mr. Rodolfo is moving his business to the safer and better business environment of Arizona, robbing Seattle of tax revenue, jobs, and a future.
  • A Seattle CEO, Megan Gluth-Bohan, has had similar frightening experiences: “We had one female employee chased into a Starbucks. Business partners coming in for meetings were dodging human fecal matter and homeless people on the sidewalk… [An employee] had her driver’s side window down working the parking machine, and someone attempted to enter her car.”
  • Mason McDermott of Cartender: “These people, because they’re poverty stricken or drug addicts or whatever you wanna call it, [city leaders] are allowing them to get away with whatever they want to do.”
  • Simply Seattle owner, Jamie Munson: “A string of break-ins, bricks through our windows, people coming in just in broad daylight with big groups, taking armloads of gear. Hard to operate and keep our staff safe at the same time.”
Hard not to make the case that Seattle will be the next major U.S. city to collapse, financially, economically and morally when this is what law abiding citizens and businesses have to put up with. A failure of epic proportions caused and extended by another set of inept American politicians.

2) American politicians generally do not know how to solve problems. Their solution is usually just to raise taxes and throw money at a problem or an issue they don't understand. And if you do not understand the root causes of a problem, then just throwing money at the problem is usually not successful.

This malady is especially bad in the city and state of New York. Both the city and state have some of the highest tax rates and tax burdens in the country and yet this extremely high taxation level has resulted in the following reality:
  • Crime is rising especially in NYC.
  • The out-migration of residents and businesses from NYC and the state is growing dramatically with recent news reports indicating that moving companies in NYC could not find enough moving vans for the demand they were seeing.
  • The city and state have enormous unfunded future financial liabilities that are going to be coming due soon without the revenue streams that will be needed to fund those liabilities as they come due.
  • This shortfall on the liabilities will eventually result in higher and higher taxes, lower and lower quantity and quality of government services, all of which will drive more and more residents and businesses out of the city and state which will reduce the tax base and the financial death spiral is in place.
  • The state of New York not only needs untold billions of dollars for future financial liabilities but it is likely about $6 billion short of having enough tax revenue for the current fiscal year expenses.
  • But rather than address root causes of all the problems that face New Yorkers, politicians just want to raise taxes in a desperate attempt to resolve issues that they either caused or made worse and which they do not understand.
  • This was made apparent by the latest hairbrained scheme of New York state politicians and their new idea for a new tax:
  • They are considering cheating a new tax that would levy a fee on all stock trades that are executed by companies who reside in the state of New York.
  • While this may have worked 50 or a 100 years ago, when stock trades were actually done in person in the state with paper and pencil, today all stock trades are done digitally, meaning that a physical company presence doesn't have to be maintained in NYC and on Wall Street.
  • To avoid this additional tax, stock exchanges could just move their physical footprints to more tax friendly states such as Texas and Florida since stock trades now happen electronically and not physically in New York.
  • If the exchanges and Wall Street financial companies made such a move to avoid this new tax, the financial results would be a disaster for the city and state of New York.
  • The stock securities industry generates 18% of New York state tax collection and in NYC the industry is responsible for a whopping 60% of all city private sector wages.
  • And this tax impact would likely be passed onto to those ordinary citizens who are invested in the stock market with Vanguard estimating that “a financial transaction tax of 10 basis points would force retirement-account investors to work roughly 2½ years longer before retiring to reach the same savings goals they might have achieved without the tax.”
  • When France imposed a similar tax in 2012, a third of stock trading in French companies simply moved to London and elsewhere to avoid the tax.
  • Other countries have tried the same tax gimmick with bad, bad results such as Sweden did in 1984, a tax they later repealed as stock trading and the jobs and tax revenue associated with simple stock trading moved elsewhere.
More and more taxation is rarely the solution to societal and government issues as we have shown so many times. And yet, politicians like those in New York are so obsessed with raising taxes they rarely have any time or energy left over to actually understand root causes of problems and how to resolve them.

3) Speaking of having no clue how to understand root causes of problems and how to then attack the root causes, let’s return to the inept city politicians leading the city government in Minneapolis. As you know, Minneapolis was the center of violent rioting in the summer in the aftermath of the George Floyd death that was caused by some inept city police officers.

Rather than address the root causes of a few ill performing police officers, the city council and the politicians on it went over the edge and started the ill fated, stupid movement to “defund the police.” They immediately cut funding to the police department with the intention of creating a social counseling organization that would use counseling and negotiation and not police actions to curtail crime.

Of course, they did all these actions without having a plan on what would happen when they cut police resources or when they actually tried to use social workers and not police to defuse criminal situations.

As a result, crime of all types has skyrocketed in the city, so much so, that the city council then used tax money to hire private armed security guards to protect themselves. No social workers for them, they wanted hardcore armed guards for their own private protection, the protection of private citizens be damned.

We have discussed this insanity and inability of Minneapolis politicians to resolve issues and problems before. Let’s check in and see what has happened in light of defunding the police department in the city and the resultant dramatic jump up in crime:
  • Keep in mind that the politicians’ badmouthing and disrespecting of city police officers and the budget cuts reduced the city police force by about 25%, from 800 officers to about 600 officers.
  • Thus, no surprise that crime has gone up when you disrespect law enforcement officers and you reduce the human resources by 25%.
  • All of this has resulted in citizens and businesses complaining about the increased crime and danger to their safety.
  • Thus, the council has recently budgeted over $6 million to hire MORE police officers after having gone months and months bad mouthing the police force and stripping them of personnel and resources.
  • According to a local newspaper: “In the months since then, some residents have begged city leaders to hire additional officers, saying they’re waiting longer for responses to emergency calls amid a dramatic uptick in violent crime.”
  • As background, in 2020 there were 532 gunshot victims, more than twice as many in 2019 when there was no defunding of the police, carjacking cases are up a whopping 331%, and violent crime is up more than 25% on a year over year basis.
So the city politicians had a problem with a small group of police officers, tried to dismantle and discredit the whole police force, reduced police resources without having a replacement plan, which increased crime which required the city politicians to go back to the situation that they had originally had. Unfortunately, this circle to nowhere caused many city residents and businesses to suffer at the violent hand of criminals that could not be stopped with a much smaller police force.

That will do it for today. Another set of examples where politicians have no ability to understand root causes of problems, knee jerk react to a current crisis with no long term plan ready for action, and whose go to, losing move is to always raise taxes.

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