Assemblyman Charles Schumer

Sun Tzu referred to the saying, apparently well known in his time, that “if you know the enemy and know yourself, you need not fear the result of a hundred battles.” Chapter 3, section 18, transl. of Sun Tzu on the Art of War by Lionel Giles, 1910, originally written 6th century B.C.

Most of us think knowing yourself is the easy part, but we are wrong. Politicians, including myself, tend to fall prey to self-delusion. Once I got into office, like many others, I would happily peruse my press coverage. On some level, consciously or not, I assumed that the voters absorbed the same information. Of course they did not – certainly not the vast majority.

Schumer never made that mistake. When he was a member of the Assembly, he managed to win more press attention, sometimes, than the rest of the Legislature put together. He also hit all the morning subway stops, all the graduation ceremonies from elementary school up, all the lobby meetings to organize tenant associations, every community organization meeting, and he was a loud and visible presence. His voice was so loud that it occurred to me once to think that perhaps he had a compact bullhorn implanted in his chest.

Nonetheless, I remember him storming into the office one morning, listing all the things he did to make himself known, and ranting that half the voters still didn’t know who he was – “they could be dead for all the impact I make on them!,” or words to that effect. We got some poll numbers: he was right that only about half of the voters recognized his name at that point – but other local elected officials had a fraction of his name recognition levels. This did not satisfy Schumer.
Everyone who has watched Schumer in action credits his enormous and varied political skills. Since most people underestimate the power of self-delusion, however, they underestimate the significance of his strong grasp on reality. When I worked for him, he was brash, shameless, coarse. He really did epitomize the old and unfair image of the obnoxious, pushy Jew. But he was quite aware of all this, took it into account, factored it into his calculations, and proceeded accordingly.

Some of his other skills drew me to him. He understood me better than I understood him at the time. He knew how to recruit to his service my passion for honesty in government. I expected that we would expose corruption, outrage the power structure, and lose our funding. After all, the Assembly Speaker, Stanley Fink, came out of the clubhouse of Meade Esposito himself, the Democratic County Leader of Brooklyn, and while I had heard good things about Fink in the legislative context, surely attacks on corruption would rile the established power structure, and therefore Esposito and his allies. Therefore, I thought I would work for Chuck for a year or two before he’d be forced to let me go, and I’d search for another job.

But Schumer knew better. He told someone once that I was an “unguided missile,” but he guided me. He had no problem with much of my agenda: having run the Summer Food Program investigation, I knew we would find good targets in New York City’s drug abuse treatment programs when I saw some of the same crooks in management positions. My instincts and background also led me to real estate issues, generally a fertile ground for financial shenanigans. But sensing my inability to resist a challenge, Schumer also kept me busy learning new fields, like rail freight and criminal justice system capacity, areas in which I could help him build his own expertise while perhaps diverting me from investigations that might prove more dangerous to Schumer’s ambitions.

We made a great team. I wrote solid and comprehensive reports both on the muckraking side and on the pure policy side, and Schumer converted almost all of them into great headline stories that got tremendous press coverage. The press coverage generated reforms: we closed the City unsalvageable drug abuse programs and cleaned up the merely dirty ones; we stopped the City from selling back buildings taken for tax arrears to the same sleazy landlords who had milked them dry and lost them in the first place; we even stopped a City University campus from cheating the State out of tuition reimbursements. Of course I took great satisfaction in all this. Reforming Government, my 1981 book referenced in an earlier blog, tells some of these stories, and they were good ones too.

Schumer drew me closer to him personally with great charm, intelligence, and humor. He could be extremely funny. I will never forget Schumer’s brilliant spot-on mimicry of a fictional argument between Ed Koch and Al Lowenstein, perfectly caricaturing the verbal tics and foibles of each. I think Schumer knew how much I admired Al, but Schumer’s performance was just too hilarious. Of course no one foresaw Al Lowenstein’s tragic demise a few years later.
We went out to dinner together, usually in Chinatown. A fair trencherman myself, Chuck gave me a good run for my money. I cooked Chinese dinners for him and his wife-to-be at my father’s house in Rockaway. I truly thought of him as my friend.
It quickly became clear that I had seriously underestimated Chuck’s political abilities. Not only did our subcommittee not get defunded, in less than one year, as of January 1978, Speaker Fink reconstituted it as a full committee, the Committee on Oversight & Investigation, with Chuck as chair and me as counsel.

Shortly before that, with my mother having died four years earlier and my father unable to deal as a co-resident with my brother’s psychiatric difficulties, my father sold our family house in Belle Harbor and moved to a small apartment in Rego Park in mainland Queens. I moved in with my aunt and uncle in Manhattan Beach. Coincidentally, Schumer’s Assembly district happened to include that neighborhood.

A few months prior, in the late spring of 1977, only a few months after I had started working for Schumer, Liz called me. The Assembly member for what was then the 42nd District, David Greenberg, once known as the hero police officer nicknamed “Batman,” had recently been convicted of fraud. Liz thought I might want to run for the seat. But I had no real connection to that district, centered at the time in the eastern half of Sheepshead Bay while Schumer’s 45th District included the western half. Also, my loss in 1974 seemed too recent for me to contemplate another run right away, and I was greatly enjoying my work with Schumer.

Excerpt #2 from Tales from the Sausage Factory: Compromise, Tolerance, and Symbolism

The legislature — avenue for compromise:

The legislative process actually improves participants’ behavior in some respects. Since legislators must negotiate to win enactment of bills, they learn to consider viewpoints quite different than their own. Some of my ultra-Orthodox Jewish constituents vehemently objected to my refusal to support legislation that I thought was unconstitutional, banning pornography. Fred Schmidt, probably the most conservative Democratic member of our House, and among the most conservative of either party, sat next to me for twelve years. Responding to his own very conservative and mostly Roman Catholic constituents, Fred had a bill prohibiting the public display of racy magazines that I thought I could revise into constitutionally acceptable form. I could, I did, and the Schmidt-Feldman bill became law, of course with conservative Republican sponsorship in the Senate.

Legislative coalitions often open minds to the reality that people can differ dramatically on what kind of society we should have (within some limits – I don’t think any of us were totalitarians) and still respect the intelligence and integrity with which they hold their views.

The legislator as “social glue”

I came to understand another aspect of my role in the seemingly endless string of evenings and weekends dropping in on meetings: the East 22^nd Street Block Association (or any of dozens of other block associations); the Sheepshead Bay Kiwanis Club; the Plumb Beach Civic Association; the St. Edmund’s Home School Association; the Beth El Synagogue Men’s Club; the Midwood Development Corporation; the Meyer Levin Post of the Jewish War Veterans; the P.S. 195 Parent-Teacher Association, et cetera, et cetera, et cetera.

My presence brought the State to them. Even more, it conferred the imprimatur of the State, the dignity of the State, on them and legitimized their work. By visiting the various organizations, I served the function of a sort of social glue: I cemented all these groups into the polity, into the political fabric that makes up the State. This dignity, this acceptance, was for them a significant psychological reward for their past efforts and incentive for their future efforts on behalf of their communities.

Perception is reality

From time to time my constituents saw me on television. When they told me they saw me I’d ask, “What was I saying?” More often than not, they’d reply, “I don’t know. But I saw you!” This enhanced and strengthened my ability to confer dignity and inclusion into the greater world [by their association with me]. Since they could see that I held citizenship in TV-land, not only was I part of the State, I was important enough to join in the world of Jay Leno, Derek Jeter,  Roseanne, Mickey Mouse, the President, and Oprah Winfrey. Anyone who lives in that little box shares in the world of the people who really matter [in their view], so that my corporeal presence in their own actual living rooms or shabby meeting halls gave them a bridge to that “important” world.

Many, many people understood this function better than I did. After I rewrote Fred Schmidt’s bill into the Schmidt-Feldman law, the publisher of Screw magazine, Al Goldstein, debated me on a local New York City TV station. Wearing a t-shirt imprinted with pictures of tiny sperm, he scoffed at our legislation, which he maintained – incorrectly – would suppress the display of his tee shirt. He challenged my ethical and legislative priorities, along the lines of “instead of fighting violence and poverty, you’re trying to suppress freedom of speech!” After the show, as we were unclipping our microphones, he leaned over and assured me that we had written a sound and sensible piece of legislation, “but I couldn’t say so – that wouldn’t make good TV.” Though I hadn’t known it, I had participated in a fictional debate, but its political value to him and to me, and perhaps even its educational value to the audience, would have been no greater had he been sincere.

Excerpts from Tales from the Sausage Factory: We Need the Legislature, Good or Bad – or Good and Bad

By March 2010, one State Senator darkly joked that he longed for the days of “dysfunction” – at least it “has function in its title.”

It is hard to imagine, but about forty years earlier the New York State Legislature . . .was considered a model of institutional professionalism. In a 1971 report, it was one of four that received the highest ranking available from the Citizens Conference on State Legislatures. (The others were California, Illinois and Florida.)

Quinnipiac University polls New Yorkers’ attitudes toward “the way the state legislature is handling its job,” and regularly finds – urban, suburban or rural, male or female, upstate or down – that less than a third approve.

Does the Legislature deserve all the disapprobation that is heaped on it? Some say not. Syracuse University political scientist Jeffrey Stonecash, for instance, has said the idea that the New York State Legislature is dysfunctional a “myth.” According to Stonecash, “what takes place in Albany is just normal haggling over policy.” Long-time Assemblyman Richard Brodsky, a Democrat from Westchester County, has asserted in The New York Times “Although in the last few years there have been things the Legislature has had to improve, most things we do well.”

Brodsky went on to attribute the New York State Legislature’s problematic reputation to bad public relations. “We’ve been very effectively Swift-boated as dysfunctional, ineffective and corrupt,” he said. “And it’s our fault. We have never gotten the message out in a coherent way of what we do well and right.”

Stonecash and Brodsky overstate the case. The legislature has been performing dismally, and is in major need of reform. But, to be fair, [Feldman and Benjamin remind us, drawing upon Feldman’s eighteen years of service in the Assembly and writing in his voice,] state legislators do some things well.

Good or bad – good AND bad – we need it

Legislatures are not simply arenas for rational problem solving. They are places in which society’s emotional and psychological needs are manifested, manipulated and addressed.

Efforts to change laws are meaningful. The bills introduced to reform the Rockefeller drug laws, for instance, and the widely publicized arguments by politicians who supported them – did constitute a kind of “official” response. The fact that some part of the government – the legislators advancing reform ideas – is “trying to make things better” can bring satisfaction to members of the public who want change. Society is stronger when we have faith in our democratic institutions.

I'm just a bill

On the other hand, efforts without outcomes over many years are delegitimizing, as we have seen in the corrosive effects of New York State’s persistently late budgets. A regularly demonstrated incapacity to reach a result inevitably undermines public confidence in government. Comparative high taxation, questionable state fiscal health, and regional unemployment also contribute to voter hostility.

As we seek to appreciate the Legislature’s strengths as well as its shortcomings, the institution defies definitive characterization. Like all political institutions, it continues to evolve – sometimes in mysterious ways. For those who care about government and policymaking, the mystery is part of the attraction.

Can Americans Handle the Truth? (Part II)

Sometimes it appears that every New Yorker feels aggrieved at the “unfair” benefit someone else has. The homeowner decries the rent-stabilized tenant, who gets such a great deal on his beautiful apartment. The tenant notes the mortgage interest deduction on federal taxes that the homeowner takes for granted, but puts tens of thousands of dollars in his pocket. The elderly citizen may resent high property taxes that pay for someone else’s children to go to school.

FICA takes a big bite out of the young parent’s paycheck to provide Social Security payments that she doubts will be around for her when she gets old. “Keep your dirty government hands off my Medicare or Medicaid,” they said, in fear of “Obama-care,” incredibly forgetting that Medicare and Medicaid come from government hands. The pensions of government employees are the latest bête noir; how soon we forget the firefighters and police who risked or lost their lives or health at the burning buildings at Ground Zero.

Of course there are abuses by some; and recessions, as has recently been noted, follow peaks in inequality driven by the greedy few in this country whose share of the national product is hundreds or thousands of times that of those who work for them. But overall, we tend to lay the blame for our ills on large categories of our fellow citizens who are no more guilty than we are, while we zealously guard the benefits we ourselves enjoy, mostly without acknowledging even to ourselves that we are lucky to have them.

This reflects the same instinct that has us re-elect legislators who bring construction projects or other forms of largesse to our neighborhoods, while decrying the spendthrift ways of Albany or Washington.  The “hypocritical” politicians simply reflect their voters when they call for budget cuts while grabbing all the “pork” they can. The gridlock and dysfunction in Albany and Washington, to a great extent, reflect the incompatible tasks we assign our representatives there. We simply want it all. 

The founders of our nation wanted to “promote the general welfare.” Even before the Constitution, foundational documents like the Mayflower Compact reflected their authors’ pledge to pursue “the General good of the Colony.” Selfish ends were commonly subordinated to the common good, to be achieved through the public sphere.

But today we treat the public sphere as Garrett Hardin portrayed herdsmen in his article “The Tragedy of the Commons”: each herdsman calculates that an additional sheep will gain him its full price, while its effect on overgrazing the pasture (the “commons”) will be borne by all the herdsmen, so his cost will only be his proportionate fraction. Therefore, he should keep adding sheep. Of course, since each herdsman calculates the same way, the commons will soon be destroyed for everyone.

As we face this electoral season, consider that it is long past time for us to outgrow the childish notion that untrammeled selfishness and greed benefits our society, or indeed is even tolerable. We must start with our selves: let’s try to support candidates who will not necessarily appeal to our personal short-term interests, but to the common interests of our society.  Let them, and us, commit ourselves to “promote the general welfare.”

How to Revive New York’s Non-Financial Sectors

Let’s go a little deeper into this question of letting wealthy hedge fund managers pay much lower tax rates than the rest of us. Assuming Congress continues their federal tax break, New York would, indeed, risk their flight out of New York altogether should it impose a higher state tax. But that raises a much larger question. Does New York have to be so much at the mercy of the financial sector, or so dependent on it that it cannot afford to risk the occasional departure of some its wealthiest practitioners? The answer is no.

For a number of years, Cassandras have warned that New York was allowing itself to become much too dependent on the FIRE (finance, insurance, and real estate) sector.  [A 1999 report acknowledges, but underestimates the problem.]

What happened to New York’s great garment industry, printing industry, and many other kinds of light manufacturing? The common answer is that we lost them to competition from lower-wage areas of the country, and then the world.  But New York lost hundreds of thousands of manufacturing jobs in the 1970s as a result of the decline of its preeminence as a freight transportation center.

Yes, that’s hundreds of thousands – when today, a loss of 2000 jobs is considered a disaster, and politicians thirst for the opportunity to claim credit for bringing in a few hundreds jobs.

In the mid-19^th century, and probably through the 1950s, more freight came through the Port of New York than through the rest of the country’s ports put together.   Cargo crossed the Hudson by “carfloats” – barges that carried railway cars, from and to the railheads in New Jersey, hundreds of them every day.  Cargo came directly by rail across the Poughkeepsie Bridge. It came in, either for consumption by New Yorkers and other Americans east of the Hudson, or for shipment to Europe by freighters docked in Brooklyn or Manhattan, and it went out, from New York manufacturers by rail to markets in the west.

But New York’s political leadership took the Port for granted. New York City imposed a four percent railroad cargo transfer tax on the gross receipts (not the profits) of freight moved from one kind of carrier to another, from rail to ship, say; the Poughkeepsie Bridge burned down in 1974 and was not replaced; and we made a deal that allowed the Port Authority to give the container port to New Jersey and the World Trade Center to New York.  Results? New York manufacturers face a competitive disadvantages with manufacturers in any city that did not have to pay truckers to sit on the Gowanus Parkway or the Cross Bronx Expressway for hours in order to get their cargo to the railhead in New Jersey; and New York consumers have to pay a premium for products shipped to them over the same routes in the other direction.

For over thirty years Member of Congress Jerrold Nadler has urged the construction of a rail freight tunnel under the Hudson. Nothing could revive New York’s economy more effectively, making New York manufacturers competitive once again, easing pollution, and lowering prices for consumers east of the river.

New York has fallen prey to the notion that only the highest-end businesses should thrive here: the FIRE sector, and maybe medical services and high-tech. But New York has always thrived, and has only thrived, because ambitious poor people come here to improve their lives. They may become great entrepreneurs or doctors or artists some day, but first they need good entry-level jobs, which manufacturing used to provide and could again.

New York does not have to remain at the mercy of the FIRE sector. With a revived manufacturing sector, we would not need to say “how high?” when the hedge fund managers say “jump.”

You may be thinking that what is wrong with New York in this way is a synecdoche for what is wrong with the United States: we produce too little in the way of real things, with our mostly unproductive financial sector – the big casino – gobbling up way too much money, time, and talent. You’re right.

New York’s New Late Budget

In a few weeks, Tales from the Sausage Factory will hit the bookstores. Its subtitle explains its scope: Making Laws in New York State. But making laws in New York State involves more than just the Legislature and the Governor.

The political environment that shapes those laws integrates vertically, up to Congress in Washington and down to City Hall in Manhattan and to city halls and county seats throughout the State; and horizontally, to courts, interest groups, media, civic groups, and especially to political movements and organizations.

So the book, and the continuing tales from the sausage factory to be found here, covers a wide territory.

Sometime last spring the publisher told us to stop writing, so it could actually publish the book.  That was tough, because the New York State Legislature kept giving us good fodder for comment. Here, though, we can pick up where we left off.

Let’s start with some recent news: the Legislature completed the budget earlier this week. Not the tardiest budget in history – that was August 11, 2004 – but close.

One of the issues that held up passage was the fight to “empower” SUNY and CUNY colleges to set their own tuition rates and in other ways have more autonomy. Some upstate legislators, especially Senator Bill Stachowski from Buffalo, hoped this would strengthen their local public college campuses as economic engines for their communities. Most downstate legislators feared that it could put tuition out of reach for financially strapped students. Ultimately, Stachowski and his allies had to settle for the equivalent of a study commission.

Another hang-up was the effort to tax hedge fund managers more heavily.

These managers, some of the highest-income people in the world, pay capital gains tax, at only 15 percent, on most of their income, not the 28 percent or 33 percent that most people have to pay, based on the income tax schedule. The Working Families Party is to the Democratic Party in New York something like what the Conservative Party is to the Republican Party. Working Families, reflecting outrage over this fact, argued that New York State should solve its budget problems in large part by taxing these extremely wealthy people more heavily.

But Mayor Bloomberg and the legislative leadership defeated the effort, pointing out that if New York did this, the hedge funds – which still contribute a very hefty sum to New York’s tax revenues – could escape by moving out. Connecticut Governor Jodi Rell helped by asking a few such hedge fund honchos to lunch, over which she very publicly asked them to move to her State.

Of course, if there were a national tax, the hedge fund managers could not simply escape a heavier tax burden by moving to a different state. A few years ago Senator Charles Schumer was among the leaders of the opposition to the effort in Washington to raise the national tax rate paid by hedge fund managers.

So the hedge fund managers escaped the tax, and the new New York State budget has its new taxes on the common folk, as well as the usual structural weaknesses, and the likelihood of real holes leaving us vulnerable to further “adjustments” later in the year and bigger problems next year.

More later on why we are so vulnerable to the hedge fund managers and others of their ilk.