Thursday, May 17, 2012

Economic idiots on display. Historical evidence means nothing to them

Channeling George Orwell

‘War is peace,” wrote George Orwell. “Freedom is slavery.”

He would have made a hell of a New York City councilman: Turn truth on its head, he understood so well, and power is yours.

Clearly that understanding animates Council Speaker Chris Quinn and her band of brigands and boodlers.

Consider the council’s latest masterpiece — The Responsible Banking Act, passed into law Tuesday by a veto-proof 44-4 margin.

It wouldseemthat the measure is meant to promote responsible banking.

In fact, precisely the opposite is true.

The bill is intended to bludgeon banks into making risky loans to folks who can’t repay them, and to make investments reasonable people would consider unsound — if not, well, irresponsible.

Much like the pressure Washington was putting on housing lenders right before the mortgage curtain came crashing down.

Now banks will have to submit reams of paperwork to a new panel that will publish annual reports on how well they meet “local needs.” Are they foreclosing too often on bad mortgages? Issuing a sufficient number of loans to high-risk borrowers?

Go along, or risk being barred from some $7 billion in city deposits.

Responsible banking?

It makes no sense — but Orwell would have appreciated the rhetorical flourish.

Mayor Bloomberg is planning to veto the bill — and maybe sue if he’s overridden, as is expected.

“I don’t know why the City Council thinks that they have the expertise or can really add anything” other than compliance costs, he said.

But it’s not just the banking bill that would have brought an ironic smile to Orwell’s face.

* On Tuesday, the council also overrode the mayor’s veto of the so-called prevailing-wage bill, a k a The Good Jobs Act.

A better name might be the GoodbyeJobs Act, because it’s more likely to drive work out of New York, by mandating higher-than-market wages for certain jobs.

* A similar bill passed this month, The Fair Wages for New Yorkers Act, would likewise inflate pay above market levels.

A better title: TheUnfairWages Act.


Because when wages exceed the value to employers of the work being performed, jobs are jettisoned and workers are fired. It simply makes no economic sense to keep them on the payroll.

This rarely penetrates to council members, who by and large are economic illiterates to begin with.

And those few whodoget it don’t care.

So how can you tell whentheyare lying?

Just read their bill titles.

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