Normative Narratives


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Economic Outlook: De Blasio Administration Rebuffs JPMorgan; Sky Doesn’t Fall

Original article:

The possibility that JPMorgan Chase would build a two-towered, $6.5 billion headquarters on the Far West Side of Manhattan streaked across the skyline in recent weeks, only to die quietly on Tuesday.

Jamie Dimon, chairman of Chase, called Mayor Bill de Blasio and Gov. Andrew M. Cuomo on Tuesday to say that the country’s largest bank had decided to stay put on the East Side.

In the course of negotiations, the bank suggested that thousands of midlevel jobs could leave the city if the deal foundered. The mayor, in turn, publicly scoffed at the idea of handing over $1 billion in tax breaks and cash to Chase, on top of an existing $600 million in property tax breaks.

“This is an outcome that validates our approach, and our belief that these deals often come down to factors that have nothing to do with taxpayer subsidies,” Alicia Glen, deputy mayor for economic development, said in a statement on Tuesday. “We’re glad that JPMorgan has decided to maintain its buildings and its work force right where they are for the foreseeable future.”

Critics of corporate subsidies worried that the city might be returning to an era of retention deals, which had largely disappeared under Mr. de Blasio’s predecessor, Mayor Michael R. Bloomberg. The Committee for Better Banks, which includes labor unions and some liberal groups, was about to issue a report denouncing subsidies for Chase when the deal collapsed.

“New York has had an amazing run of job growth over the past decade,” said Jonathan Bowles, director of the nonprofit Center for an Urban Future. “I don’t see the need to turn back the clock and start another wave of big companies clamoring for tax breaks.”

When I started Normative Narratives 2 years ago, one of the first issues I wrote about was the (mis)use of tax dollars to attract private sector jobs. This “race to the bottom“, alongside unlivable minimum wages, make up the two most glaring forms of corporate welfare in America.

At a time of widening inequality (during which economic growth has gone almost exclusively to the wealthiest), marked by record corporate profits / cash holdings / tax minimization, and calls by those on the political right to slash the social safety net in the name of “fiscal responsibility”, corporate welfare is tantamount to taking from the poor to give to the rich.

Tax dollars should be spent on projects that make areas naturally more attractive to employers (a more skilled citizenry, better infrastructure, etc.). Since these projects are mutually beneficial, private money / expertise  should supplement public efforts (public-private partnerships), which in turn would build sustainable partnerships between corporations and municipalities (the opposite of “races to the bottom”).

Blindly throwing money at corporations because they promise to create jobs, without legally binding commitments and closely scrutinized CB analyses, is not a growth strategy.

Corporate interests always claim the sky is about to fall; look at an almighty “job creator” the wrong way and they’ll close up shop and skip town. In reality, there are costs and uncertainties involved in moving, two things businesses don’t like. Case in point; JP Morgan threatened to move if it did not get what it wanted, only to stay put.

Good job by the De Blasio administration in standing up to JP Morgan. The net result is the same number of jobs (perhaps some short term construction jobs were foregone), and $1 billion more in NYC’s coffers to address the many deserving issues affecting the city. Hopefully this show of political will can serve as an example for municipalities around the country.

Proponents of such subsidies would probably argue that NYC bargains from a unique position of power, which is true. However, other municipalities have their own “natural” comparative advantages (such as lower real estate costs, lower costs of living, economies of agglomeration, etc). If such a “draw” to an area does not exist, all the more reason to invest in creating one!

Generally speaking, large corporations decide they need to expand operations in order to meet demand, then shop around for the best deal (not the other way around). In other words, most subsidized jobs would exist with or without subsidies.

Ultimately, there needs to be better coordination at the federal level (including greater redistribution of tax dollars from high employment to low employment areas) to ensure municipalities are not bidding against each other for jobs that would be created anyway.

There are no shortcuts to sustainable economic development, but fiscal mismanagement, such as foregoing investing in making a market “naturally” attractive in order to subsidize jobs, can stall / reverse the process. Racing to the bottom provides cover for current administrations (and jobs for a select few), while ultimately leaving an area worse off in the long run (like putting a very expensive band-aid on a broken bone).

The De Blasio administration and JP Morgan had a staring contest, and JP Morgan blinked. If you happen to find yourself in NYC any time soon, look up–the sky isn’t falling.


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Economic Outlook: Bill De Blasio, Stop-and-Frisk, and “A Tale of Two Cities”

Large cities present unique security environments, perhaps none more-so than New York City.  It is therefore unsurprising that the future of “stop-and-frisk” was the focus of much debate during the recent NYC mayoral election. In order to give police officers a tool to proactively prevent crime, “stop-and-frisk” was deemed constitutional by the U.S. Supreme Court in the 1968 case of Terry v. Ohio:

The court agreed with the police that officers face uncertain and dangerous situations on the streets—circumstances that can potentially threaten both law enforcement officers and the public. For this reason, police officers need a set of flexible responses that allow them to react based on the information they possess.

Under the Terry ruling, a police officer may stop and detain a person based on reasonable suspicion. And, if the police reasonably suspect the person is armed and dangerous, they may also frisk him or her for weapons.

What exactly is Reasonable Suspicion?

Reasonable suspicion is defined by a set of factual circumstances that would lead a reasonable police officer to believe criminal activity is occurring. This is different from the probable cause (what a reasonable person would believe) required for an arrest, search, and seizure. If the stop and frisk gives rise to probable cause to believe the detainee has committed a crime, then the police officer should have the power to make a formal arrest and conduct a search of the person.

A Justified Stop

A stop is justified if the suspect is exhibiting any combination of the following behaviors:

  1. Appears not to fit the time or place.
  2. Matches the description on a “Wanted” flyer.
  3. Acts strangely, or is emotional, angry, fearful, or intoxicated.
  4. Loitering, or looking for something.
  5. Running away or engaging in furtive movements.
  6. Present in a crime scene area.
  7. Present in a high-crime area (not sufficient by itself or with loitering).

A frisk is justified under the following circumstances:

  1. Concern for the safety of the officer or of others.
  2. Suspicion the suspect is armed and dangerous.
  3. Suspicion the suspect is about to commit a crime where a weapon is commonly used.
  4. Officer is alone and backup has not arrived.
  5. Number of suspects and their physical size.
  6. Behavior, emotional state, and/or look of suspects.
  7. Suspect gave evasive answers during the initial stop.
  8. Time of day and/or geographical surroundings (not sufficient by themselves to justify frisk).        

 

Does the ability to stop and frisk go too far? Many police departments are at odds with the public in certain neighborhoods concerning what some people deem unwarranted stops. People in high crime areas and in areas with high minority populations often complain they are stopped and questioned at a disproportionately higher rate than their counterparts in other areas of the city.

When used correctly, the stop and frisk tool benefits the police and average citizens. Curbing crime and ensuring the safety of our on-the-beat public servants, stop and frisk can help us all sleep a little more soundly – a good step in the all-American pursuit of happiness.

At the center of the NYC stop-and-frisk debate is racial discrimination. It was argued that stop-and-frisk unfairly targets minorities, and therefore must be reformed. With the legal appeals process currently ongoing, it is helpful to have a parallel public debate on the matter. First, some statistics:

In 2012, New Yorkers were stopped by the police 532,911 times:
473,644 were totally innocent (89 percent).
284,229 were black (55 percent).
165,140 were Latino (32 percent).
50,366 were white (10 percent).

Demographics of NYC
White: 33.3%
Black: 22.5%
Latino: 28.6%

Based on these numbers, it would appear that the police are unfairly targeting minorities (at least black people), while letting white people go. However, these are not the correct numbers to compare. Remember stop-and-frisk occurs within the context of a particular crime. Police officers are responding to a specific crime, in a specific area, with a description of a suspect which is almost exclusively on physical attributes (including race). To strip police of the power to pursue suspects based on the best information and their knowledge as law enforcement officials puts everybody at risk (including minorities, which the data shows are disproportionately the victims of minority violence).

There should be safeguards put in place to protect minorities, particularly when there is no specific crime / suspect description a police officer is going on, but is rather “racially profiling” an individual. The program itself, however, should not be outlawed. In fact, the data (p. 21) suggests that, if anything, minorities are under-targeted for stop-and-frisks based on how often the suspect matches their race:

The most frequently occurring race/ethnic group within the Violent Felony suspects is Black, accounting for (65.3%). Hispanic suspects account for an additional (26.6%) while White and Asian/Pacific Islanders account for (6.1%) and (1.9%) respectively. The most frequent race/ethnic group within the Stop Question and Frisk subject population is Black, accounting for (54.2%). Hispanic subjects account for an additional (32.5%) while White and Asian/Pacific Islanders account for (9.6%) and (3.2%) of total Stops respectively.

There will always be anecdotal examples of racist cops racially profiling. For the most part, however, police officers are brave men and women who do their job with the greatest integrity they can. They are simply using the information available and their technical knowledge to make the best decisions they can, just like any other professional does. Considering the balanced racial breakdown of NYC police force, one must wonder how anybody could accuse the force of being “systematically racist” to begin with.

Proper safeguards must be put in place to protect minorities from unwarranted stop-and-frisks, and those who are found guilty of racial profiling must be held accountable. However, police officers should not have to consider the race of a person when assessing whether they are “eligible” for stop-and-frisk–“eligibility” should be based only on information available about the crime in question. Race is simply one of the many pieces of information an officer has when considering whether to stop-and-frisk an individual.

Mr. De Blasio ran for mayor on a ticket of progressive values. Behind these progressive values is the true key to reducing the number of minorities targeted by stop and frisk; by reducing the number of minorities suspected of violent crimes.

Throughout our criminal justice process–from arrest to conviction to incarceration–minorities are disproportionately represented. Is this due to racial undertones? Probably to a certain extent, based on how we categories and punish different offenses. Violent crimes are disproportionately committed by minorities, while “white-collar”crimes often go unpunished and are never the subject of “stop-and-frisk”. But stop-and-frisk is about safety and immediate physical harm, not about longer term financial type crimes. While I certainly believe white-collar criminals should be held accountable, this has nothing to do with the issues of violent crime and stop-and-frisk.

The socioeconomic roots of violent crime are the true culprit behind the apparent “racial profiling” in stop-and-frisk, and therein lie the solutions. When Mayor De Blasio talks about progressive taxation, social programs, equality of opportunity, social mobility, he is talking about creating new opportunities for everyone on the bottom wrung of the socioeconomic ladder (which recent evidence suggests is not as minority-dominated as some might believe). These opportunities, in time, present an alternative to violent crime. Given the option, the overwhelming majority of people of all races would choose a life of rewarding work, comfort, and security over a life of crime (if it was a true possibility and not some unattainable goal).

So mayor De Blasio, while I am eager to see your liberal vision for NYC unfold, and hope it offers a model for the rest of the country, I urge you not to take your racial equality crusade to far. There are deep rooted socioeconomic issues behind the racial breakdown of stop-and-frisk numbers; to gut the program would be a mistake. Instead, allow your vision for NYC to change the statistics “organically”, without putting innocent people and police officers in danger. In the meantime, reforms can make stop-and-frisk a more transparent and accountable process (however this is true of all public programs, they are hardly issue unique to stop-and-frisk).