The Next Governor of NY

by Jon Mandle on August 6, 2006

Joe Conason has a short but interesting review of a biography of Eliot Spitzer. He nicely summarizes what Spitzer did that “earned him the enduring fury of the Wall Street Journal editorial page, the conservative Federalist Society and every other exponent of an unfettered marketplace”:

He exposed widespread corruption, cronyism and immorality at the commanding heights of the American economy, exploding the myth of the self-regulating market. And he refashioned the conservative version of “federalism” into a weapon for liberal elected officials in the states, while the Bush administration was letting lobbyists write legislation and run regulatory agencies.

And he rightly points out the new challenges that Spitzer will face if elected governor:

Rather than policing business executives, he will need to persuade them to invest in the depressed upstate region. Instead of filing lawsuits and indictments, he will have to pursue his laudable goals within the constraints of a balanced budget and a bipartisan culture of legislative inertia.

I, for one, am eager to see how Spitzer handles these responsibilities. I have a friend who works in Spitzer’s office, and he tells me that in addition to Spitzer being very driven (obviously), he is also very, very smart. This certainly doesn’t guarantee success, but when you look at the alternative…

In the course of recounting Spitzer’s privileged upbringing, Conason comments that “the most challenging crisis faced by the real estate millionaire’s son [was] a last-minute change in thesis topics (from the philosopher John Rawls’s theory of justice to ‘Revolutions in Post-Stalin Eastern Europe’).” I assume this was his senior thesis at Princeton. I wonder how far he got with that first one?

{ 18 comments }

1

asg 08.06.06 at 5:21 pm

I think we’ve had enough recent experience with chief executives who don’t respect separation of powers to muster up enough enthusiasm for Spitzer.

2

asg 08.06.06 at 5:42 pm

Obviously there should be a “for me” somewhere in #1.

3

digamma 08.06.06 at 8:06 pm

No no no ASG, you don’t understand – Spitzer oversteps his authority to do things we LIKE.

4

David Sucher 08.07.06 at 1:32 am

ASG,
On what basis do you make the assertion that Spitzer doesn’t respect separation of powers? I didn’t get even a hint of that in Conason’s review. What facts do you have? (I don’t have an opinion one way or another — just curious about your statement.)

5

Ginger Yellow 08.07.06 at 7:01 am

“Rather than policing business executives, he will need to persuade them to invest in the depressed upstate region. “

As the authoritarian right never tires of saying, “If you’ve nothing to hide, what’s the problem?”

6

kharris 08.07.06 at 8:10 am

New York governor crusading against the power of corporate combines. Man! That’s never happened before!

7

George 08.07.06 at 8:50 am

… he will need to persuade them to invest in the depressed upstate region. …

I, for one, am eager to see how Spitzer handles these responsibilities.

Living in the region in question, I confidently predict that nothing will change on that particular score. IMO, ppl don’t invest here because it doesn’t make sense to. In competition with the world, the Sunbelt, or even Ohio, the return is just better elsewhere. It will just be more media events, more BS, more of the same.

(I really like it here, and plan to stay – I just think that our course is pretty well locked in.)

8

SamChevre 08.07.06 at 9:13 am

Well, I work in the insurance industry and really hate Spitzer. Here’s the problem, as I see it; he uses small violations of the law to force changes in basic structures, unrelated to those violations.

I’ll give an example of how he might do this in academia to make it clearer what the problem was.

Let’s say that Spitzer decided to target tenure. Every time he talked about academia, he spoke about “people have jobs for life and get paid well and don’t have to do anything.” Every time some academic got in the news for some particularly stupid action, he said “people have jobs for life and get paid well and even have to obey the law.” (For the next step to work, you have to assume that Spitzer could do this–he can do the equivalent in insurance.) So he required every NY college to turn over records of all their admission decisions, and hunted through all of the hand-written notes until he found some unfavorable comment on someone–then publicized, “See, all these people with jobs for life say things like, Good Lord this person is stupid.” And then he finds some minor, technical violation of law (Someone considered race explicitly when it was supposed to be a background factor), and says, I will forbid you to admit any new students until you stop giving tenure.

Substitute “paying contingent commissions” for “giving tenure”, and “sell any new policies” for “admit any new students”, and you have basically what he did to the insurance industry.

So yes, “blatantly opportunistic, with a disturbing inclination to play to the tabloids” describes him perfectly.

9

John I 08.07.06 at 11:27 am

I’d love to see Spitzer or a similarly inclined Democrat run for president on a platform promising to use all of the executive powers (newly expanded by Bush) for good instead of evil.

Just think what he could do with the resources of NSA, FISA-free warrantless searches, unlimited subpoenas of phone and internet records, (not to mention extraordinary rendition, GITMO, torture) to weed out corporate malfeasance and influence-peddling. Just retire the GWOT and declare “war on corruption.” Hell, you could even pre-emptively invade offshore banking and money-laundering havens – could be a lot of fun.

10

burritoboy 08.07.06 at 11:51 am

“Living in the region in question, I confidently predict that nothing will change on that particular score. IMO, ppl don’t invest here because it doesn’t make sense to.”

Though I generally agree, the interesting question arises is that the official corporate reasons for de-investing from upstate New York doesn’t really track well with any underlying economic reality. Upstate New York was an excellent place to do business until, very abruptly – over less than 15-20 years (1965/1970-1985), the various corporate headquarters decided it wasn’t. The fundamentals of the region didn’t really change (yes, it might have always been a bad place to invest – but that statement simply wasn’t true for well over a century).

The reality is that deindustrialization was a top-down policy usually imposed from above – not a “natural” atrophy from below.

11

Shelby 08.07.06 at 12:06 pm

My dislike of Spitzer may color my view of this article (samchevre covers part of the territory), but when I worked in journalism I would never have been able to get such a big, wet, sloppy kiss of a subject into print. This is really pretty embarrassing to read.

12

JP 08.07.06 at 12:32 pm

The fundamentals of the region didn’t really change (yes, it might have always been a bad place to invest – but that statement simply wasn’t true for well over a century).

Well, the fundamentals of other regions in comparison to Upstate NY could have changed.

13

JP 08.07.06 at 12:34 pm

Not saying they did, necessarily, just that it’s possible

14

George 08.07.06 at 3:30 pm

the interesting question arises is that the official corporate reasons for de-investing from upstate New York doesn’t really track well with any underlying economic reality

Well, the sunbelt bloomed. Air conditioning became more ubiquitous, transportation became cheaper, population re-distributed. Syracuse is a great place to build things for NYC; not so great, if your market is the southwest. And, (most) ppl became less locked to place – they could just go. to CA. A lot did, esp the young and adept.

1970-1985

Yeah, that was when it happened. Looking back at what was going on then, compared to now – we died, we just haven’t internalized it.

15

burritoboy 08.07.06 at 4:18 pm

“Well, the fundamentals of other regions in comparison to Upstate NY could have changed.”

OK, explain the changes in detail such that firms needed to uproot infrastructure investment on a massive scale. You can’t – the changes simply aren’t explanatory enough.

16

burritoboy 08.07.06 at 4:22 pm

“Well, the sunbelt bloomed. Air conditioning became more ubiquitous, transportation became cheaper, population re-distributed. Syracuse is a great place to build things for NYC; not so great, if your market is the southwest.”

Transportation costs are not only minimal compared to moving massive infrastructure on the scale we’re talking about…….transportation costs don’t seem to explain much at all, since the trend during the same period was America’s deindustrialization in favor of products made overseas (it seems unlikely that if transport costs were really the critical cost, that shipping things from Japan would work if shipping things from Syracuse was prohibitive – Japan’s further than Syracuse).

17

Shelby 08.07.06 at 4:50 pm

I suspect a lot of the decline is due to the region’s traditional role in heavy industry, especially steel-intensive manufacturing. As the US steel industry has declined, so have regions that depended on that steel being both competitive and nearby. On the other hand, I haven’t given this a great deal of thought before.

18

mds 08.09.06 at 8:59 am

I suspect a lot of the decline is due to the region’s traditional role in heavy industry, especially steel-intensive manufacturing.

This could easily explain Buffalo, which is much closer to a Rust Belt city, but doesn’t do as well with Rochester or Syracuse, the third- and fourth-largest cities. For example, Rochester’s decline more closely tracks the decline of its few (previously) huge employers: Kodak, Xerox, and Bauch & Lomb. All of these have been flops in recent years. Now, why they have been flops has very little to do with the “terrible” winters of Upstate. Kodak had management that would correctly declare, “You can’t cut your way to growth,” and follow it up with thousands more layoffs. Xerox decided that it would be really, really good for the company to move headquarters to Stamford, CT; indeed, having management located far away from the rest of the company, in a region where corporate real estate is an order of magnitude more costly, is so obviously beneficial that I won’t bother to list the pluses.

How to reverse this? Rochester tried for a while by putting to use all of that technical talent dumped by the former Big Three, but there just hasn’t been enough new business growth to completely stanch the hemorrhaging. If I were governor, one thing I might try would be to further encourage the growth of new businesses. Too much of the approach of state and local governments is based on a false “zero-sum game,” where the idea is to give away as many current tax dollars and as much future tax revenue as possible, in order to steal jobs from another struggling community. Dunno whether a NY governor could find a way to break this death spiral, though. Since Spitzer is smart and aggressive, perhaps he’ll think of something, assuming he’s not preoccupied with an eventual run for the Presidency (which is the only reason Schumer was interested in the governorship).

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