by Attorney Carl E. Person
Office and Telephone Consultations Are Free
Carl E. Person, Attorney at Law
325 W. 45th Street - Suite 201
New York, NY 10036-3803
Tel: (212) 307-4444
Fax: (212) 307-0247
Copyright © 1994 by Carl E. Person. Permission is given for non-commercial users to send a copy of the data processing file for this work by electronic means to a specific individual for his or her own use, and then only if the entire file is sent, including this copyright notice, but no permission is given for anyone to copy or transmit this file for or to any person for public viewing or downloading. It is intended by the author of this work that the work shall be made available in electronic fo rm only through LawMall.
NYC and many other cities in the United States are losing jobs for a variety of identifiable reasons. Each of these reasons accounts for a specific number of job losses (which can only be estimated), and the elimination of such job-losing conditions woul d cause a return of all or most of such jobs. For persons interested in a city or state other than New York, just read your own city and state into the discussion. The problems and solutions are pretty much the same, and the number of jobs to be created would be in proportion to the size of the city and the extent of the problems.
It is interesting to observe that, in my opinion, the creation and loss of jobs is something which is occurring more because of state and local activities than due to federal activities. NYC has more control over the creation of jobs in NYC than the fede ral government, as I see it, because the state and local governments in most instances have the power to cure the job-loss problem. The reason that state and local governments fail to do what they can do to create jobs is something which the electorate s hould cure, by insisting on change or voting someone into office who will do what needs to be done.
I will identify various reasons for NYC job losses, and discuss how to deal with the problems so identified, if possible.
One main reason is that our economy is becoming globalized, which means that low labor rates in far eastern countries cause millions of jobs to be exported from the United States to such other countries. U.S. businesses do this, they claim, to remain com petitive, and to some extent they have a point.
Yet, to some extent we have caused the loss of jobs to other countries by governmental practices at the state and local level mostly, which create unnecessarily high costs in the United States, and encourage businesses to shift some (or even all) of their activities out of NYC or the United States to take advantage of more favorable labor and regulatory markets.
If we view NYC as a competitive job environment with other cities in the United States, as well as with foreign countries, we would do well to try to eliminate the governmental excesses which cause the loss of jobs in NYC. By dealing with these excesses, we can make NYC more competitive, create 1,000,000 new jobs in NYC and recreate NYC as the world's economic and business capitol.
The job-losing specific problems discussed below are arranged in no real order of importance. I found it too difficult in many cases to determine whether one idea was more important than another. I'll leave this determination to you, the reader.
Although NYC is the focal point of the discussion, most of the problems and suggested solutions apply to other cities in the United States, as well.
There are some things you can do which will help to reinvent NYC. Let me point out what these things are. The only way that things will change is if you and others understand what needs to be done, and then get the word out, as I discuss below.
If our elected officials get enough letters (and list of demands) they will as politically-driven politicians, take notice and perhaps do something about some or many of the demands. As to any demands you don't agree with, just strike the demand with a p en or pencil (which is in a sense a way for you to demand no change).
The caretakers of NYC are living a lot better than the average residents of NYC, it appears to me, which should be changed though competition. The average municipal worker, when adding up his/her salary, and the value of sick days, free time, personal da ys, vacation days, parking, free transportation, breaks, dental plans, medical plans, pensions, retirement plans, including early retirement, and the prospects for "double dipping" at all of the above, earns the equivalent of perhaps $40,000 to $50,000 or more per year, or $800 to $1,000 or more per week, which is a hell of a lot better than the average taxpayer is doing, I believe.
The effect clearly is to cause local taxes to be too high, and services to be too low and too costly, which is destroying NYC's economics and tax base, and driving NYC and many of its residents (who are not working municipal employees) into financial ruin .
The cure for this is privatization of present NYC governmental services (such as the repair of school buildings, NYC vehicles, issuance of parking tickets, office work, data processing programming, maintenance and repair), the sale of government businesse s to private enterprise such as NYC's parking lots, transportation systems (subways and bus systems) and the offering of NYC jobs to an open bidding process, when the lowest bidder with the qualifications gets the job at the low-bid salary.
This will reduce the cost of municipal services and enable NYC to a achieve a tax base of prosperous businesses and financially stable, sound buildings to provide the taxes for the needed amount of legitimate governmental services. For example, each new bus-driver position should be opened to competition, including a description of the hours, location, licensing requirements and qualifications. Some shifts and locations may be more attractive than others, so that some jobs may be w on at $9 or $10 per hour (or less) where other bus-driver jobs may go for $15 per hour (or more). But this is in contrast to $30 to $35 per hour which I estimate NYC bus drivers earn when everything (meaning salary plus all benefits) are taken into consi deration.
For years, NYC and many other cities in the U.S. have been engaging in the profitable business of issuing parking tickets and collecting fines against hapless resident and visitors, and issuing other violations against, and collecting fines from, store-fr ont merchants. At the same time, NYC wonders why businesses and their owners are leaving NYC. Each new departure decreases the legitimate tax base for NYC and drives up the need for NYC to find more activities to ticket and fine, which drives out of NYC even more businesses and jobs.
When policepersons and meterpersons find it difficult to ticket legimitate violators, they start ticketing innocent persons to meet their NYC quotas or "performance goals". I have gone all the way to the United States Supreme Court to try to stop this ticketing activity in NYC, but without success. The courts have said, in effect, that the solution must be political -- too much money is involved, amounting to hundreds of mi llions of dollars if not billions of dollars throughout the nation.
The best way to curtail this reprehensible municipal activity is to require that collected funds not be used to create more tickets and fines, and instead require that all ticketing/fining activities be budgeted at the beginning of the fiscal year, and th at the managers spend the fixed sum in the most economical way they can to reduce the problem which ticketing/fining is supposed to cure.
Thus, if one really believed that the purpose of ticketing/fining the owners of illegally-parked cars in NYC is to eliminate traffic congestion (caused by double parked cars, as distinguished from cars parked at a broken or expired meter) or to create pa rking space for customers of business, the manager would spend his allocated money on personnel who would look for double-parked cars in traffic-congested areas, and look for cars parked all day (by business owners feeding the meter all day in front of th eir store).
The result would be maximum efficiency of the money allocated to curing a NYC problem, with no profit to be plowed back by the manager into less desirable ticketing activities. The NYC fleet of vehicles, drivers, courts, judicial, filing, data processin g personnel and ticket personnel would be freed up (if not terminated) to do something more constructive such as repairing streets, or NYC-owned tenement buildings or taking care of sick or other needy persons.
Welfare hasn't worked. It has created a vast human wasteland consisting of generations of unskilled, unmotivated and unproductive dependents on governmental handouts; an impoverished nation whose own economic capacity to provide needed governmental servi ces to all its residents has been significantly reduced, as a result; and a welfare bureaucracy which is about as motivated and productive as the people they serve (amounting to another level of welfare which could be called "bureaucratic welfare"). Welfare reform is needed and easy. Just get rid of the bureaucracy (including state, federal and city employees) and let you and me as individuals do the job on a one-on-one basis.
How would you like the opportunity to help one welfare recipient of your choice to get off welfare, and receive as your compensation a check for $25,000? This amount is my estimate of a reasonable amount of contingent compensation needed to do the job, a nd represents a significant saving for government (federal, state and city) over the cost of providing money, services and bureaucracy to a welfare recipient and his/her family over a long period of time.
This is just what I propose.
1. Eliminate all statutes, rules and regulations regarding education, training, job placement, employment agencies, minimum wages, withholding taxes, apprenticeships, loss of welfare benefits for payments and other benefits received during the training pe riod, and the like.
2. Have a shape-up hall or building (similar to a union shape-up hall where union members assembled to be selected, each hoped, for any available work) where persons on welfare gather each day when they really want to get off welfare. Nobody should be fo rced to show up, at least in the formative stages of the program. The welfare recipients would go to floors or rooms according to categories of interest to them such as manual labor, construction, computers, office work, driving cars and trucks, uncertai n. In these breakdown areas the welfare recipients would be available for mixing and talking with prospective bidders (such as you and me).
3. You, I and anyone else who wants a shot at earning $25,000 or similar amount will show up at the "Welfare Auction" to talk with some of the assembled welfare recipients and then bid for the right to take a specific person (selected by the bidder) to ta ke off of welfare. All expenses are to be borne by the winning bidder, who will be encouraged to do what he can for the person he "wins" at auction. For example, a cab driver could teach his welfare trainee how to drive a car. (I would buy my welfare trainee an old, inexpensive used car, with monthly payments to be maintained, and encourage the trainee to repair the car himself; also, I would encourage the trainee to become employed so he/she can make the car payments and avoid losing the car to the f inance company or bank.) Also, the cab driver could show the welfare trainee how to become a black-car (without medallion) cab driver or anything else, as was probably discussed by them before the auction took place.
When the welfare trainee is "gainfully employed" for a "specific period of time" (the only regulations we need are to define these 2 terms), the cab driver would receive a check for his winning bid of $25,000, I've assumed. I would pay $5,000 of this amo unt to the welfare trainee, and tell him so at the outset (even promising the amount in writing), to give him/her the incentive to get off of welfare as soon as possible.
If we have 500,000 people in New York each willing to help as little as one welfare recipient, we could eliminate most welfare cases in a short period of time. The help I would be willing to render is to take the apprentice into my home, if necessary, an d into my business, especially, to provide the attention and training necessary to turn the human being into a different person. I have done this already (without the $25,000 motivation) and can assure you that it can be done, especially if the apprentic e is motivated and can help you out in your own business to some extent. It may be easier for self employed persons to train welfare recipients as a result, but the very act of training welfare recipients on a one-on-one basis is a form of employment whi ch would be created for hundreds of thousands or even millions of persons -- whatever number is necessary to do the job and maintain welfare in the U.S. at a proper, low level.
The real problem is the politicians and bureaucrats who have a vested interest, it seems, in perpetuating the welfare system and mess. The reasons for this interest should be explored to try to eliminate the self interest. Some reasons include landlords receiving huge amounts of rent from NYC to house welfare recipients; and training programs for the poor (a paltry 30 of them in NYC, paid for by federal funds, but permitted to operate only on a non-competitive basis with local political approval).
All training programs for welfare recipients should be allowed to compete not be required to have any license, which is no more than a political way to divert federal training funds to friends of the politicians. The one-on-one apprenticeship program of my proposed welfare auction is far superior to a classroom of 30 people to repair bicycles or work on hair. Welfare auctions provide a "niche opportunity" for training and placing of trainees into the small pockets of the economy which larger training pr ograms and their sponsors don't know how to do and couldn't train for if they did.
You and I could find a job for one person, but one welfare training program sponsor being paid up front and hiring an unmotivated staff to teach a class of welfare trainees cannot find bicycle repair jobs for 30 bicycle repair trainees. The one-on-one rel ationship and help which this provides, including heart, is missing, and the trainee is just a nameless person for whom most of the compensation has already been received and spent by the training-program sponsor.
Don't worry about my requirement that there be no regulation. It's the regulation which causes welfare recipients not to receive the training they need. Let my self interest and free-market spirit provide the "rules" of training and placement. As you c an see from the ideas in this booklet, it is too much to expect bureaucracy to write rules which would work and cover the millions of variations of problems which will arise. It would be in my own best interest to provide some income (perhaps $3-4 per ho ur) for the welfare trainee, in addition to the $5,000 bonus. Of course, the amounts I pay to the welfare trainee must not be permitted to reduce the welfare trainee's welfare benefits during the training period, which is another governmental regulation which must be eliminated to make my program successful.
Regulations need too much bureaucracy to determine if the regulations are carried out, when what we are really looking for is success in taking persons off of welfare. So, let me do the job the best way I can, without any regulation and at my own expense , and if I succeed, pay me the $25,000 for a job well done, some of which will be recovery of my expenses (and interest thereon) in my on-speculation effort at making a human being gainfully employed. Let someone else, such as yourself, try something dif ferent, but don't put any of us in the same straight jacket which has destroyed the lives of many welfare recipients, resulted in billions of dollars of waste for all governments, and has destroyed America's educational systems.
In due course, as more residents bid to take people off of welfare, the winning bid will reach a competitive level, and the skill of persons in accomplishing the training/placement goal will be high, and the country will cure its welfare mess at a reasona ble, competitive price through this obvious privatization technique.
The main reason, I believe, that NYC is losing its business and tax base is the inability of the governments' education and training systems to adjust to vast changes brought on by the computer and by the globalization of the economy. Our professional ed ucators are obsolete but through politics (mainly at the state level, which carries over into federal politics) they control the purse strings, even to the extent of causing the enactment and perpetuation of laws, rules and regulations which make excessiv ely-regulated for profit training programs unprofitable and unable to compete with the less-regulated public and other non-profit schools.
I spent 18 years in the private vocational school business in NYC and NYC, as the founder, sole owner and manager of a proprietary school. I founded the second paralegal school in the U.S. and as such I was responsible for the vast growth of the paralega l career field. Also, I created another career field, the "personal assistant", which has not been able to have its impact in the economy up to this time, but which itself could increase the nation's gross national product in an amount exceeding the nati on's foreign-trade deficit. But why would any bureaucrat care about this. Excessive governmental regulation at all levels killed this program, but it can be done in part through the proposed "welfare auctions", providing a vast niche area for the immedi ate training and placement of welfare recipients. Without boring you with the minutiae of the complicated educational regulatory system, which includes regulation by the United States Office of Education, the state agency overseeing federal student loans, the NYS Department of Education (which licenses v ocational schools, their curricula, their instructors and many other things, and prohibits most for-profit vocational or career educational programs which do not submit to oppressive regulation by the SED), the banks which provide student loans, and other federal, city and state governmental agencies which can get into the act.
The cost of providing the needed vocational education is driven beyond the amount made available through student loans. The private school often finds they cannot be both a functioning vocational school as well as a governmental agency filled with unneces sary bureaucrats soaking up costly space, time and money to comply with all the rules and regulations governing for-profit (i.e., "proprietary") career schools.
If all the regulations governing education were eliminated, I could provide a college education to a class of 30 students for only $2 to $3 per 50-minute hour, which translates on a weekly basis into $12 or $18 (for an evening student attending 6 hours pe r week) or $30 or $45 (for a full-time student attending 15 hours per week). This rate of $2 to $3 per hour should be contrasted with NYU's current charges, which are $30.45 per 50-minute hour, or 10-15 times as much as I would need to provide an equally good (if not better) basic college education. I say "basic" advisedly, because the college program I envision would be a basic program (such as in history, English, law and other non-laboratory courses). Courses in physics, for example, would require a higher tuition, say $4 per 50-minute hour.
The reason that I and other proprietary school owners cannot offer you vocational or college education at $2-3 per 50-minute hour is the high cost of regulation, which has destroyed private enterprise in the educational field, and has created a high-cost educational monopoly made up of unionized professors and instructions, and non-profit or government owned colleges, universities and other training programs with less regulation than the for-profit schools.
The best way to provide education is to eliminate the restrictions and let free enterprise design and provide the programs of instruction. Bureaucrats cannot do this and have never been able to. Yet, we have delegated the educational and training fields to "professionals" who have grabbed the money and produced very little or nothing in many instances.
What I would like to see is a privately-owned (unlicensed) college equivalent program at $2 per hour or $12 per weeks for evening students and $30 per week for day students) which would have no loans, no attendance (which is a waste of education time), a nd no accreditation and no licenses. The school management could focus on the quality of instructions and instructors. This is what all the rules and regulations have never been able to achieve, and in their efforts to regulate something have created a vast bureaucracy to regulate the size of school door knobs, space between desks, the point size of disclaimers, the physical attractiveness of the school and other areas which bureaucrats can harass the private school owners and detract them from their mi ssion of providing a high-quality education.
Imagine the employment interview process. The proposed employer asks the high-cost university graduate how much he owes in student loans (answer: $60,000) and the $2/hour college equivalent graduate (answer: zero).
The right-thinking employer would readily conclude that, if everything else is equal, the hiring of the graduate who owes no money would be best. He/she would have more income left from the paycheck to advance his/her interests, and wouldn't be diverted with monetary worries and a possible second-income job.
Collection of tuition, I envision, would be by credit card payments each day, on a pure pay-as-you-go basis. Each day, when entering the class, the student would swipe his credit card in the machine on the instructor's desk, which would issue a receipt. There would be no need for a bursar's office or student loan staff. If the student doesn't pay, the computer tell the instructor that the student's seat should not be occupied (due to non-payment) and a desk could be invented which would fold up or be disabled in some fashion and therefore be unable for use unless tuition is paid for the desk.
When NYC pays one contractor, say, $50,000,000 to perform a job, the result is that, from your standpoint and mine, the $50,000,000 is spent by the contractor and not by NYC, which makes the taxpayer's money spent on a non-competitive basis, unavailable f or you and me to obtain.
I would require NYC to subdivide its contracts as much as possible to enable anyone to bid for small portions of the contract. This would enable the overall costs of the job to be competitive, and lower in price. This would benefit all parts of the econ omy, including rental car companies, lawyers, envelope providers, process servers, table manufacturers, messengers, office rentals, laborers, programmers, and so forth.
The large contractors will argue these points and others, I am sure.
1. Small bidders would be unable to obtain the insurance and performance bonds required by NYC of its contractors as a condition to any bidding. My answer to this objection is that NYC should buy the insurance to cover both NYC and its suppliers, and el iminate the NYC bond requirement. Both requirements are more costly and anti-competitive than they are worth. The insurance would be less costly if purchased competitively by NYC, and the bond requirement only serves to eliminate 99% of the potential bi dders, thereby driving up the bid to a much higher level than would prevail if the bond were not required. Everyone at the top knows that the bond requirement was only put in there to eliminate competition in the bidding for NYC contracts, and it has suc ceeded in doing that. Now is the time to eliminate that requirement and permit competition in the providing of services and goods to NYC.
2. Large contractors are needed to manage the overall project, and NYC doesn't have the required managerial skills. My answer to this objection is that NYC should convert some of its welfare and educational bureaucracy into managers to enable NYC to cont rol more of its expenses and not delegate this to the few companies which now perform that function. The result would be lower prices for goods and services and more profits and opportunities for small business and individual suppliers. A job costing $4 0,000,000 could be done for 50% to 75% of that price if bidding opportunities were made available to all.
As a professional, I lose about one hour per day of my legal time to unnecessary traffic congestion. For example, if the average lawyer loses $200 per day (or $1,000) per week in billable time, and others types of occupations suffer similar time losses, the cost to the economy for all time lost by lawyers and all other persons is staggering, amounting to many billions of dollars for NYC alone, which is undoubtedly why some businesses leave NYC.
Several things should be done:
1. Enable private citizens to commence a qui tam lawsuit for fines, where 50% of the recovery would be given to the qui tam plaintiff. Suits would be against Con Edison, road-repair firms, contractors and others who unnecessarily block roads in NYC.
2. Enact laws prohibiting roads from being obstructed when work is not in progress and require work to be done with an adequate number of personnel to complete the job in 1-2 days at the most.
3. Reduce the number of, and re-route, parades and street festivals, which cause far more congestion costs and loss of tax revenues than the activities are worth. I never could understand why NYC has to participate so readily in the traffic congestion th rough its management of parades and street fairs, when such congestion is so costly to persons (including business and their customers) who are significantly delayed and inconvenienced by the way these take place. Who are these faceless and nameless poli ticians who cause NYC to come to an end for hours at a time. Can some type of competition be applied?
4. Permit qui tam suits based on vehicles blocking intersections during designated rush hours as posted at the intersection. To discourage drivers from blocking the intersections. I could envision motivated individuals from the area affected waiting at an intersection with a previously-prepared summons and complaint to serve on the truck driver while he is stuck in the middle of the intersection with his 50-foot truck. This would be the last time he would block that particular intersection.
5. Invent and use portable sidewalk arches to permit pedestrians to cross over a busy avenue and permit traffic to be unimpeded by pedestrians. I can envision the arch being hidden beneath the sidewalk and street, driven by motor, which pulls the arch si dewalk into position during rush hours for the rerouting of pedestrian traffic.
6. Eliminate tolls from bridges and tunnels during rush hours or at times when there is a wait of more than 1-2 minutes. The cost of pollution and the delays in the NYC area amounts to several billions dollars per year, which comes out of our local econom y, and makes it more costly to do business. The revenues received are only a fraction of the real cost, which means that the tolls should not be collected, at least to the extent they create delays, traffic congestion and environmental pollution having a value exceeding the amount of the tolls.
Competition is the factor in business which ordinarily decides who wins and who loses. But not in NYC. NYC uses tax policy to give economic/business advantage to big business while smothering small businesses in a variety of unfortunate taxes.
Whenever a major company calls City Hall (any political party in control) to suggest that it is thinking of leaving NYC, NYC then figures out a way to give tax relief to encourage the company (and its thousands of jobs) not to leave.
Tax relief to a major competitor without corresponding relief to a small competitor can only bring on business disaster to the small business, which has even higher costs, thanks to NYC.
With this type of thing in City Hall, small business is driven out, only to be followed by some of the big business which were given preferential treatment. Taxes which are not collected from big business by reason of the tax giveaway would have to be raised from all taxpayers resulting in higher taxes and the loss of as much small business and jobs as NYC thought it was saving with the tax break to the large company.
The newspaper headline of 1,000 jobs saved by NYC are never offset by smaller headlines saying that small businesses have closed down or left NYC, resulting in NYC's loss of 1,000 jobs.
Other tax unfairness is that a business which owns its own building doesn't pay business "occupancy" taxes, whereas a business renting space in the same building is required to pay the NYC business occupancy tax (as well as a proportionate part of the NYC real estate taxes on the property).
NYC's uneven tax bite out of small business makes small business get even smaller, and often drives small business out of business -- or out of NYC.
The loss of jobs and decline in NYC's standard of living, and rise of various social evils, are the major consequences. We have to cater to business to create jobs, but NYC has never catered to small business (which everyone knows is the main engine of o ur economy from a job-creation standpoint) which means that NYC should adopt statutes, rules and regulations which permit small business to create their own environment. Thus, qui tam actions would enable motivated businesspersons to eliminate congestion at nearby intersections and to free up parking meters from abuse by other merchants, and "welfare auctions" would permit small business persons to get assistance at a price they can afford. One of the reasons that small business remains small is that tr aining of persons at public expense has been with programs benefitting big business, so that the trained persons are too costly for small business to hire, which leaves the training of lower categories of employees to small business but saddled with costl y rules and regulations which make it unprofitable. At this point consider my slogan "The 1st 3 Are Free!", found elsewhere in this booklet, which would eliminate many of these barriers to small business hiring and training of new (low-level) employees.
The economic future of NYC depends on the type of employment available to NYC residents, which will depend to a large extent on the quality of NYC residents.
It is imperative that something be done to improve the overall quality of the average employee in NYC. Obviously, many persons need little or no improvement, but most of these persons are gainfully employed already.
A large number of NYC residents have insufficient skills to compete in the employment marketplace, causing them to be unemployed or underemployed and for prospective employers to look elsewhere than NYC for the needed employees.
A solution (admittedly partial) is to set up creativity incubators (which I also call "Intellectual Property Learning/Motivation Centers") to give NYC residents the opportunity to acquire skills which are needed by them and employers (present and future).
A way to do this would be to use our NYC libraries as the base for operations, and to set up programs and facilities to attract NYC residents to learn how to be creative, and to create various types of intellectual property, including performance of resea rch, writing of articles, books, plays, screenplays, conceiving inventions, development of marketing plans, and development of financial strategies.
The well-equipped library should have books and magazines on a vast array of creative subjects and how to protect the intellectual property interests of the creator, and should have a speaker's program to interest NYC residents in various types of creativ ity and the creation of intellectual property. Also, the program should include instructions on using computers, software and databases.
The purposes include (i) motivation (ii) self sufficiency; (iii) honing one's natural creative skills; (iv) environment and associations conducive to the creative process. By focussing on creativity and intellectual property, the creativity incubator program should be able to turn tens of thousands of persons (or more, hopefully) into persons fully-prepared to compete and prosper in the new global economy.
It is thought that the centers or incubators would be a meeting place for creative persons to encourage others to become creative, and to create, for the benefit of themselves, NYC and the U.S.
NYC has programs to finance small business but these programs tend to be too little, and too generous. By "too little" I mean there isn't enough capital to make any significant impact on small business generally, and by "too generous" I mean that the financing (usually as a loan) is an unwarranted gift to the few lucky recipients. The mere fact that banks would not lend money to a small business doesn't mean that NYC should make a loan. The only type of investment for NYC in a non-bankable situation should be an equity investment, where its prospects for gain are higher, to offset the risks of loss which are also higher.
These financings ought to be on a business-like basis, so that (i) the financing are equity financing, with NYC owning a substantial share of the business; (ii) on a competitive basis, with a panel of business persons (not politicians) deciding which deal s are best (i.e., the most profitable, potentially, for the risks involved) for NYC as investor; and (iii) NYC's equity position should be sold at auction within 1-3 years and the proceeds used to invest similarly in other small businesses.
If NYC's interest is tax-free (and I am not sure that it would be), the rate of compounding would provide a substantial fund for investment in small businesses within a few years.
Politicians should not be the persons determining who gets the financing. Instead, an impartial group of business persons (and not educators) should decide, with some incentives, perhaps, to make the best decisions.
Also, NYC should try to establish a capital market or exchange for small business, to facilitate the investment of capital in small business. Essentially, such a market or exchange would provide information about small businesses seeking financing and in formation about possible investors.
Also, the market or exchange could standardize investment forms and transactions to reduce the costs and delays of investing in small business. Finally, the NYC capital market or exchange should maintain an aftermarket for resales of small-business secur ities owned by investors. There is no organized market for the financing of small business, which is one of the reasons why small business remains small, and unable to prosper.
Small business is often profitable, but the financing of small business cannot be done in the same way that Wall Street finances major corporations. The differences make a difference and must be taken into account, such as that financial statements often show no profits, to avoid income taxes on net income.
Finally, it should be noted that if NYC provided the envisioned Small Business Capital Market (which, incidentally, would probably have to be registered with the Securities and Exchange Commission as a "stock exchange", another world of regulatory nightml ares for small business), there would be no need or legitimate incentive for NYC to invest its own (taxpayer's) funds into specific small businesses. The capital market would provide the needed capital to small business on a competitive basis, and NYC wo uld benefit from all of the added jobs. Also, the capital would come from other parts of the country, which would have them contribute to NYC's jobs for a change, instead of receive the jobs which are pouring out of New York. This is a major thing for N YC to consider doing to not only stop the job loss, but to have other parts of the country pay back some of the jobs they have taken (in effect reinvesteing the profits they have derived from the NYC jobs they have taken to take advantage of the need, sim ilar to the U.S. putting money into Japan and Germany after we defeated them during the Second World War).
One of the official justifications for rent control is that low-rent apartments are needed to keep employees in NYC at a price they can afford. Perhaps the failure of NYC to provide the proper environment for business has caused jobs to be scarce, with l ower wages as a result, which makes employees unable to afford market-priced housing. But whatever argument can be made, the truth seems to be that rent control has caused thousands of deteriorated buildings involving hundreds of thousands of substandard apartment dwelling units to be turned over to NYC as the owner of last resort, where the buildings and apartment units deteriorate even further. I have had experience in the NYC courts during the past several years concerning numerous decaying residenti al buildings and can report that (aside from the elimination of rent control in some politically acceptable way or forcibly by the federal courts) one important thing to be done as soon as possible is to require the tenants to pay their rent. We don't do this at present for bureaucratic reasons which have overlapped into the landlord-tenant courts in NYC. Let me explain what has happened and what needs to be done.
Thousands of residential buildings have been abandoned by their owners to NYC (for non-payment of real estate taxes), which has caused a crisis in unpaid taxes (and has forced NYC to issue more parking tickets and other violations against small business t o offset). This deterioration of building stock in NYC has been caused by laws which have been construed by the landlord-tenant judges to permit a tenant (or even all tenants in a building) to withhold rent from the landlord while litigating whether cer tain repairs should have been made. Groups of tenants (unincorporated, fluid groups euphemistically called "tenant associations") have withheld rent from their landlords, thereby denying the landlord the money required to perform the allegedly needed rep airs (and in many cases the repairs are in fact needed).
In other states, a tenant is required to pay the rent into court under similar circumstances, but in NYC the tenant is not required by the L&T judges to pay rent, and when the "rent strike" is finally over, the landlord loses all of the rent from the tena nts who meanwhile have moved out of the building, and much of the rent from the other tenants who remain. Not being required to pay the rent into trust or into the court, the non-paying tenants often spend the money for something else and cannot be made to pay the back rent upon settlement of the litigation.
The solution should be to pay the rent into court or into a trust fund maintained by the landlord's attorney, and let the landlord use the money to make the needed repairs.
Because the judges are political, a statute would have to be passed requiring the result (especially since most of the landlord-tenant judges in NYC have not honored a recent federal court order in NYC requiring them to order payment of rents by striking tenants into court). And even then the typical landlord-tenant judge would try to find some way to let tenants live in the apartments without paying rent, when claiming various repairs haven't been made by the landlord.
Unless we stop this waste of real property, the tax base of NYC will continue to erode, taking with it more jobs, and resulting in lower wages, less opportunity, and more social upheaval in NYC. Something as simple as requiring tenants to pay rent seems so simple, but not in NYC, which has a history of doing everything wrong, to guaranty reelection of the politicians who bear no responsibility for what they have done and are doing to run NYC.
NYC has certain incentives for an employer to hire low-end employees (basically, persons who are otherwise unemployable and require training by the new small-business employer), but these incentives consist of payments or tax credits to be received long a fter the employment period is over. Many small businesses would hire more otherwise "unemployable" employees if the incentives were up front, since the small businesses generally don't have the capital to finance the employees' salaries and benefits duri ng the delay in obtain the promised compensation.
Thus, by paying the small-business employer in advance or contemporaneously with the period of employment, the employer would not have to lay out any cash to hire the low-end employees, who require a lot of valuable time to be trained in many cases. Many small businesses cannot use tax credits because they have no profits or taxes to offset (or reduced by the tax credit).
Thus, the benefits have gone, mainly, to big business, and not to the businesses which could really use the subsidized employees to expand their activities and hire more regular employees.
Drug dealing is rampant in NYC for many reasons, not the least of which is the perceived belief that there is no significant economic opportunity for a high percentage of the minority population. Drugs provides far more money than many of them could ever earn working for any type of business or agency, and the risks are considered to be worth it, especially since the penalties for drug dealing seem to be a slap on the wrist in many cases, because of the public's unwillingness to pay for the jails and ser vices needed to incarcerate drug dealers for any appreciable periods of time.
I think there is something which can be done. NYC should set up a new way of dealing with drug dealers. As soon as they are arrested, they should be trucked to military camps in upstate NYC (no longer being used by the military) for processing, including attempts at treatment, AIDS or other-disease identification, training and counselling or incarceration for appropriate lengths of time after conviction. Some drug dealers might elect to voluntarily stay in the camp.
The long truck or bus ride from NYC will prevent the drug dealers from being released immediately, and will keep him/her off their home streets for several days or more. Also, the military camps could be used to incarcerate the dealers (after conviction) for long periods of time which the courts now do not require because of the shortage of regular jail cells and the high costs of incarceration.
By using already-existing military camps and requiring prisoners to take care of their own needs (sewing, growing food, cooking, washing dishes, attending and teaching classes, and even engaging in some productive activities such as auto or equipment repa ir to pay for some of the camp expenses) the cost of incarceration can be low, and a higher percentage of convicted drug dealers may be deterred from continuing their trade.
The low-cost use of existing military camps to jail convicted drug dealers should be explored, to enable judges to give full sentences, and to be able to train and motivate the convicts, during their sentence, for gainful employment.
It is possible, because the price is right. Training could also be done on a low-cost "on speculation" basis through a "Drug Prisoner Auction" as a takeoff on the Welfare Auction idea, where a group of prisoners could be auctioned off to a company for tr aining and motivation, with the compensation to be paid upon the release and gainful employment of each prisoner. It's just a thought, but why not give it a try?
Small businesses as well as big business would be better off if disputes could be resolved faster, more fairly and at lower cost. Because of the dire shortage of judges, courtrooms, court facilities and court personnel, it often takes years to resolve a civil complaint after it is filed.
During 1983, I sued a copier company for selling me a copier which could not be repaired and in 1994 the case is still pending in Civil Court (New York County) with various motions awaiting decision. I paid a total of about $12,000 to the copier company and the value of the legal time spent on my side of the case has well exceeded $100,000. The defendant's legal time is also substantially higher than $100,000 by this time.
If courts were not congested, the judges could decide cases more quickly and more fairly.
"Court congestion" is no more than a decision (usually political) not to give the court system all the money it needs to do the job which society requires. Congestion is no more than an insufficient number of judges, courtrooms, judicial personnel and fa cilities to handle the cases which the people in our society present to the courts. So called "frivolous" cases could be eliminated (as they are now) more easily if there were enough judges and judicial facilities.
It is not so-called "frivolous" cases which make up the congestion but the lack of judges to hear meritorious cases which causes cases to pile up into a judicial crisis, as exists today in many courts, including the NYC courts.
The legislative and executive branches get the money they need to operate, but they do not give the courts (one of the 3 co-equal branches of government, but the branch designed to put a check on the excesses of the other two) the money they need to opera te properly. This willful failure to finance the courts weakens the judicial system and the persons dependent on it for relief against the rich and politically powerful.
I have often said that 5% of the gross national product should be devoted to the resolution of disputes, to make the other 95% of the GNP most efficient and productive, including the creation and improvement of jobs and opportunities.
If small business has to spend years in litigation, the benefits of the small business are wasted, including the jobs which it could produce, but for the delay in obtaining justice.
Business taxes in NYC are too high, and businesses are fleeing as a result, and taking thousands of jobs with them. NYC businesses cannot compete with companies located outside of NYC because excessive NYC taxes have to be added to the costs of the produ cts and services, making the NYC businesses non-competitive. People in China don't want to pay the added cost of NYC's excessive taxes (or fines, or court congestion for that matter).
In theory, there is an optimum level of tax, above which will drive out or destroy business and lower the overall tax revenues for NYC and below which (presumably) the taxing authority will needlessly give up tax revenues (although I'm not sure of the sec ond half of this argument).
If adequate monitoring of NYC business (e.g., via bank deposits, inventory, orders, payroll-tax deposits) could take place while taxes were being lowered (perhaps a little bit each month), NYC might be able to determine the point at which it will maximize its business base, tax revenues, and employment percentages.
An econometric model would have to be constructed to trace and interpret the results, and each component followed closely while taxes were ratcheted down. The changes in tax rates should be reflected in the monitored activities to determine the effective ness of the tax decreases. Waiting for years to go by, before tax relief is provided to small business by NYC, is a joke, because businesses are fleeing or being driven out of business. Relief is needed now, and my plan seems like the obvious way to sta rt making significant decreases in business taxes right away, while showing that there is no actual loss of significant overall tax revenue.
NYC has various business assets all of which should be sold off, to let the private sector decide what to do with the businesses. For example, NYC owns a municipal garage at 8th Avenue and 54th/53rd Streets and another one under the new police headquarte rs building near the federal court buildings in Manhattan.
NYC's ownership is a diversion of municipal money, and creates the possibility of exploitation for the unwarranted financial gain of a limited number of persons. Instead, the properties should be sold at auction to the highest bidder.
This is true of NYC's residential buildings, which are hoarded by the City for the apparent purpose of allowing emergency repairs (at highly inflated prices) to be made by friends of the government official who order the "emergency repairs". These repair s are often in buildings where the tenants were not required to pay rent, and the building could not be repaired as a result, so that the persons paying for the repairs are the taxpayers, at up to 10 times the cost which a free market would have paid. Th is is another area where qui-tam actions should be permitted against the wrongdoers.
OTB likewise should be sold, although the present NYC administration apparently wants to have a chance to build sales and profits to increase the price. Perhaps the OTB branches should be sold, one at a time, at auction, to the highest bidder, with NYC p roviding purchase-money mortgages and keeping an equity investment interest in the branches until they are paid off.
Bus routes and bus assets should be sold as well. If private bus companies don't want to run 24-hour service, a lot of Gypsy (or jitney) van or car operators would like to step in.
Government should reduce operations, to have fewer persons on payroll, minimize sweetheart deals with friends of the politicians, and permit the government to concentrate its time and resources on problems which only government can solve.
A related problem is the sale of licenses by NYC. These licenses should be offered at auction annually. Thus, taxicab medallions should be sold to the highest bidder each year, rather than having the medallion be owned by licensees. To facilitate this transition, $.10 to $.20 on each cab ride should be used by NYC to buy back the medallions from the existing owners - using the passengers' money. Medallions currently cost about $170,000 (to buy from a current owner), but only $1,040 per year is paid to NYC to renew the license yellow-cab license underlying the medallion.
Actually, I would prefer that there be no medallions at all, and that there be a free market for cabs in NYC. This would result in the elimination of most NYC bus lines, since vans seems to be doing a better job on Flatbush Avenue in Brooklyn in meeting the public's transportation needs. Probably the same would be true along the avenues and main cross streets of Manhattan.
Tour licenses held by Gray lines and Circle Lines should also be auctioned off each year to the highest bidder, to ensure that NYC receives the maximum amount for its (apparently, exclusive) franchises. Of course, I'm not convinced that there should be a ny exclusivity or any licenses at all for that matter. Why shouldn't other groups be permitted to operate bus and boat sightseeing tours.
It would seem that municipal employees should be subject to quality control, to ensure satisfactory performance. Too often, municipal employees forget that they are there to serve the public. Municipal employees sometimes believe that their civil servic e status protects them no matter how poorly and uncivilly they perform. The reason is the elaborate mechanisms, including union grievance procedures, and appeals, which make it difficult for them to be fired.
Civil service laws and union contracts should be revised to allow terminations at will but not by reason of discrimination, including the employee's political affiliations.
By allowing non-discriminatory terminations and adopting quality control methods and employee incentives (which is of extreme importance), the performance of municipal employees can be improved substantially, which will amount to a saving of millions of dollars for NYC, and increase the number of jobs and the profitability of business in NYC.
The U.S. government has the Fraud Claims Act. California has a similar statute. A bill was defeated in New York State which would have provided a qui tam type False Claims Act for NYS. The public seems to be ready for the enactment of a NYC or NYS Fals e Claims Act styled after the federal False Claims Act, including qui tam procedures.
If such a bill is passed, it should include a qui tam provision for fingering governmental waste (as well as fraud), with appropriate incentives for governmental employees or others to identify waste and receive a percentage of the savings if the informa tion is either acted upon by the government (and the waste ended or abated) or if the court feels that the government should have done something to end the waste (with the qui tam plaintiff receiving an appropriate qui tam fee for identifying and proving the waste).
Billions of dollars could be saved for NYC if fraud and waste were curtailed. Often fraud and waste are substantially similar. Fraud often occurs by third parties receiving money from the government as independent contracts, while waste is often a type of fraud perpetrated by employees of the government. Whether an employee who is not performing his/her job is merely wasting the government's money or is fraud being perpetrated by the employee and participated in by his/her supervisor is often unknown, so what may appear to be waste at first glance may be pure fraud on the government and the taxpayer when the truth is known. Waste is an indication of fraud, and waste should be eliminated as a way of getting at undetected fraud.
Governmental employees should be offered substantial compensation to report waste and fraud (and whistleblower's protection for doing so), and supervisors should be given similar incentives, as long as they are not involved themselves in the waste or frau d.
Working for government is great for some persons because it enables them to control a check book without any interested person looking over his/her shoulder. Government controls over expenses are notoriously lax, which is why some persons want to work th eir way up in politics and government.
Judges have a code of ethics. So do doctors and lawyers. Persons who work at all levels of governments should have a "NYC Code of Ethics" to create a fiduciary standard for those who deal with taxpayers' money. Qui tam remedies should be allowed to enc ourage private citizens to enforce these standards against persons who would breach their fiduciary duties to NYC and its taxpayers and residents.
Admittedly, doctors, lawyers and judges and others do violate their respective codes of ethics from time to time. But the codes do have substantial impact upon conduct of the persons subject to the code and a NYC Code of Ethics (coupled with qui tam righ ts of NYC residents and taxpayers) would go far in creating a desire on the part of NYC officials and employees to stay away from fraud and waste.
Upon reflection, why should governmental employees who bring actions against residents for violation of law be immune from similar acts for violations (fraud and waste) by them. Qui tam rights on the part of NYC residents and taxpayers would be the best way for NYC residents and taxpayers to register their protest, between elections against governmental wrongdoing.
How do you require NYC to perform its governmental services? Here's a novel way.
NYC often fails to perform required repairs, such as pot holes, sidewalks, governmental bathrooms, broken street lights, parking meters. It would be interesting to see legislation enacted which would permit any private person (resident of NYC and presuma bly a person or company experienced in the required type of maintenance activity at issue) to be permitted to give written notice of the defect and, after, say, 7 days of non-repair by NYC, or its agent, make the repairs himself/herself and bill NYC a rea sonable amount for performing the repairs.
To start, just a few types of repairs should be permitted, such as broken meters, pot holes and broken lights, for example. If the legislation works out satisfactorily, additional types of repairs could be included, such as repairs to NYC-owned residenti al apartment buildings.
Bureaucracy throughout the world thrives on licensing, which is a way to grant monopoly status to friends of the politicians and exclude competition by others (such as you and me).
In ancient Greece, licensing reached a high degree of perfection. One person was licensed to sell only black olives and another person was licensed to sell only green olives. Everyone else had to buy the desired type of olives from the one person sellin g them, unless they were able to grow olives for themselves.
The best rule for licensing is to "let licensing float in a free market", by which I mean the following. If a community or state requires the licensing of gas stations, it should change the rule to make licensing optional. Then, you can envision two com peting gas stations, one across the street from the other. The one on the right has a sign saying "Licensed Gas Station - $1.49 Per Gallon". Across the street, on the left side, the competing gas station has its own sign, proclaiming "Unlicensed Gas Sta tion - $.99 Per Gallon". Let the public choose between the competing gas stations to determine whether they want to buy gas from a licensed station or not. This should also be applied to schools, barber shops, day care centers, and all other areas of ou r economy where the purpose of licensing is closer to the Ancient Greeks than to any significant need of the public for protection.
In NYC, there are hundreds of licensing requirements, from taxi cabs (the "medallion", taxicab drivers, busses, barbers, hairdressers, street vendors, used-equipment dealers, persons who sell wine, beer, liquor, restaurants whether or not they serve liquo r, and so on.
Licensing restricts competition, increases costs, creates a costly inefficient bureaucracy and decreases competition (as to price, quality and service). Licensing should be used only when necessary, and existing licenses should be reviewed from time to t ime for purpose of eliminating or reducing of unnecessary licensing and regulation. In lieu of licensing, government should use actions for commonlaw fraud to enforce minimum standards sought to be enforced through licensing. Licensing is no more than a deprivation of a person's freedom through bureaucratic action, to avoid having government prove to a court the need to stop someone from engaging in business. I would rather have my day in court than to have my day in a (NYC) bureaucracy.
Educational (proprietary or for-profit school) licensing is a great example of inefficiency, waste and anti-competitive activity. Due to the onerous licensing and related restrictions on private (for profit) schools of the vocational as well as academic type, the cost of a college education is $30.45 per 50-minute hour at NYU whereas I could run a for-profit college (basic, non-lab program) for 2$ per 50-minute hour. In other words, licensing has caused education to be 15 times as costly as competition would provide. The effect on the nation and NYC is devastating and cannot be overestimated.
Perhaps 25% of NYC residents are earning a living doing menial work because neither they nor their family could afford higher education at $30 per 50 minutes of instruction. Many of the rest of us are underemployed in relation to our native abilities bec ause of the excessively high costs of training and education forced upon the nation by government and politics.
Of course, the people in favor of licensing are the ones who are beneficiaries of licensing (persons who are either licensed themselves and want to exclude others by reason of the licensing requirements, or, as is the case of education, the non-profit col leges and universities which are licensed under different, less restrictive rules, and are trying to license (i.e., regulate) for-profit competitors out of business. We should eliminate these protected groups particularly since we now see that licensing protections have only helped to destroy our economy.
Government seems to have the least able employees, who retain their jobs by keeping silent and offering no suggestions for improvement. Of course, most governmental employees probably do not have enough outside experience to be able to offer any construc tive improvements.
In any event, one of the big time-wasters for persons dealing with the government is the need to fill out governmental forms. These forms usually require a person to use a pen to complete the blanks. Computers and data-processing printers don't work bec ause of the need to type or place the information in a precise place on the antiquated governmental form. Thus, persons dealing with government agencies are required to fill out forms by hand or by typewriter (which many of us no longer have).
To remedy this, all governmental agencies should be required to put their forms on PC and Mac compatible diskettes (in ASCII or in data processing files compatible with the Word and WordPerfect word processing programs) to enable the form to be filled in using computer word processor programs and laser printers.
This would save enormous amounts of valuable time for persons who have to deal with government, and enable people to correct mistakes quickly without having to fill out another antiquated form by hand or typewriter.
Perhaps a right to commence a qui tam action against a government agency which refuses to make its forms available on data-processing diskette would ensure that government agencies followed this (proposed) computer forms legislation.
One of the facilities which NYC has an insufficient supply is places (centers) where youth can associate, play and acquire socially and economically needed skills under the watchful eye of one or more responsible adults.
The reason for this lack of centers is that government has insufficient funds to provide them, and private-enterprise has a few real barriers which would have to be overcome. These barriers are (1) NYS licensing requirements for vocational training progr ams (discussed elsewhere); (2) licensing requirements for day-care centers (which, if applicable to any extent, would have to be preempted); (3) NYC requirement of public liability insurance to make use of government-owned buildings such as schools during off hours; and (4) the high cost and exposure to private suits by the parents or guardians of children injured (or purportedly injured) while using (or purportedly) using the youth center.
A law should be enacted which would entitle all users (injured while using the facilities) to free medical care at any city-owned hospital and a requirement that all users and their parents and guardians sign a waiver of any liability of NYC or the priva te owners or the youth center itself (and each of its officials and employees and perhaps all persons using the facilities) as a condition to using the facility.
Society may have to design ways to overcome the high costs of litigation which have caused medical costs to go sky high and have reduced or eliminated businesses where persons (especially children) could be injured. This proposal, limited to overcome the perceived reasons for the lack of privately-owed, for profit youth centers, would seem to be a good way to start building youth centers to provide healthy associations, sports, vocational training or interest, computer skills and character for our near-f orgotten youth who have to spend too much of their times at home alone or in the streets without supervision.
Although persons sponsoring events could advertise the events in newspapers, pennysavers, magazines, cable TV, TV, radio, billboards and in other ways, many events do not have the funds, the time, or the inclination to do so.
To encourage more events to take place in NYC (with corresponding creation of economic activity and jobs for NYC residents), NYC should create, maintain and market a data processing bulletin board, available on CompuServe, Genie or Prodigy, for example, t o enable interested event-goers to search for information such as the type of event, prices, where held, the date, instructions on how to get there, time of performance, and additional information supplied by the event sponsors themselves.
This would be a boon to small event holders who now find it difficult to reach any market because of the high costs of advertising in comparison to the number of people needed to make the event a financial success.
At such time as the "NYC Activities and Events Bulletin Board" becomes viable and self supporting, if at all, NYC could consider selling the business at auction.
The bulletin board would seem to be a legitimate function of government not requiring any revenues or profits, and a counterpart to the money which government puts into the seeking of jobs for unemployed persons.
In, on the other hand, a political decision is made to make such bulletin board self sustaining, the bulletin board could charge fees to users as well as listing fees to the businesses and sponsors who list their events in the bulletin board.
The advantage to residents of and visitors to NYC would be substantial, enabling them to find events which they have heard about (directly or indirectly through advertising) but need more information about. Also, many people would find things to do which they never dreamed existed. For example, under the category of "transportation, antique" there would be listed (in part) the NYC subway museum in Brooklyn, any collections of antique automobiles or trucks, any maritime museums, any trolley or bus collec tions or museums, any railroad collections or museums, any museums or collections of blimps, space craft or busses, and so on.
Otherwise, parents might look up various activities of interest to children, even broken down by ages, including museum book readings, plays, ongoing youth centers, group play events, juko activities (Japanese style after-school learning centers as supple mental education).
Furthermore, senior citizens could find programs and people of interest to them.
The possibilities are endless and exciting, and why this isn't being done already will always be a mystery to me. The activity could well be profitable, but since no one has apparently come forward to start such a business, it would seem appropriate for NYC to do so, and be prepared to sell the business at auction if it becomes profitable or would appear to be able to become profitable if sold to private owners who had a direct money-making incentive. Of course, the risk would be that some activities or uses or data would be excluded by private owners, which might require a supplemental bulletin board to be maintained by NYC to provide the same service in non-profitable areas of listing and use.
NYC has a huge cost in dumping items of furniture, equipment, toys, etc. which persons no longer want. This vast volume of unwanted items could be reduced for the profit of NYC and its residents in the following way.
NYC should finance a data processing market (using CompuServe, Genie and Prodigy) to permit all residents of NYC to list all or any part of the items of personal property they own and would like to sell (all of which are, of course, "used", even though bo ught in some cases only yesterday).
NYC could put a lot of people to work (hundreds or thousands) gathering listing, by door to door sales with notebook computers or as system assistant stationed in stores, offices or government agencies throughout NYC to assist homeowners, apartment dwelle rs, businesses and even government agencies to list whatever items they wanted to sell. Listing fees would be charged.
The persons who list are also, potentially, persons who may want to buy "used" items listed by others.
Also, NYC would hire and train other persons to market the database to persons seeking to buy items at bargain prices. These persons would be induced to use the data processing services for a small search fee. I don't envision any kind of fees based on the sale price because of the difficulties in administering such a fee arrangement. It seems better to offer the data processing service for appropriate fees and not to get involved as partners of any of the listing persons or other database users.
The used item market would bring sellers and buyers together to put unwanted items into the hands of persons who wanted the items and out of the hands of persons who would only throw the item away, at the expense of NYC.
But the database is far more valuable than merely saving NYC money in its rubbish removal activities. It is a way to expand out economy by permitting purchases to be recycled to others so that the original purchasing dollar is given new life and buys mor e than just the original purchase, which makes NYC more efficient in its businesses, and creates more jobs in the database system itself as well as in businesses which expand their operations by reason of the lower costs of doing business.
Any costs of start up would be offset by reduced disposal costs to NYC, and the overall business could be profitable, and auctioned off by NYC in several years, with the proceeds to be used for some other NYC self-improvement venture.
NYC already maintains a database of job openings and job seekers. But in our new, global economy, there is a shrinking of "jobs" (for reasons including the high government-imposed costs of hiring an employee) and a corresponding increase of persons worki ng for themselves as "independent contractors" (including "consultants").
Independent contractors receive 100% of the promised compensation, without deduction of payroll taxes (withholding, social security, disability income insurance, workmen's compensation insurance), but what compensation they receive is all they get. No re tirement plans, no paid vacations, no sick days, no healthcare benefits, no breaks with pay, and so on.
There should be a database of offerings by individual independent contractors (including consultants) to create a unified market for the non-employment services being offered by individuals, such as electricians, home repair services, lawn and garden main tenance, housecleaning, bulb changers, child caring, tutoring, doctors, lawyers, accountants, automotive repairs, report writers, researchers, and the 1,000,000 other types of services which people are anxious and willing to perform for compensation.
The unified market approach makes it easy to offer these services collectively, whereas it is near impossible for these estimated 1,000,000 providers of services in NYC to advertise their services in newspapers, magazines, radio, TV, bulletin board and fl yers. The database would provide a means for these 1,000,000 and additional persons to become more self-sufficient, and would enable purchasers of services to obtain them on a competitive basis and at competitive prices, thus making NYC businesses more c ompetitive, and increasing the overall employment in NYC (including self-employed persons in the definition of "employment").
The database should include names, addresses, telephone numbers, a description of the type(s) of services being offered by the lister, including categories maintained by the NYC official in charge of the database, and the price or hourly rate for the serv ices.
Any kind of (lawful) activity which is being offered or is being sought should be acceptable to the database manager, including movers, persons with truck, handypersons, gardeners, bicycle repairpersons, etc.
A listing fee should be charged. NYC would market the services of all the listed persons by advertising the availability of the database to companies, agencies, families, individuals, homeowners, coop owners, tenants, landlords, schools, taxicab drivers, airplane pilots, and all others who may want to find someone to do a specific chore or task, whether the proposed work involves minutes or days of activity.
I have plenty of things which I would like to get someone to do for me, but they are too specialized to hire one persons to do everything. And it is impossible without the envisioned database, to find 50 or so different people each with a required skill or experience to do the jobs I have in mind (e.g., backup my computers, do research in a specialized subject requiring familiarity with several different libraries and resource centers in NYC, fixing some plumbing difficulties, repairing the appliance wir ing in a van).
But with the envisioned skills and services market (centered on the database), I could find, with little effort, the qualified persons to do what I need to have done and at a reasonable price.
Persons who list and find businesses at rates per hour far above what they would receive if working 40 hours per week. A person might get between $5 and $12 per hour for a full-time job (typically), but I wouldn't mind paying some persons $13 to $25 per hour or more for doing a specialized job for me taking 1-3 hours, for example. I would hope to save many more hours of my own time by reason of the transaction.
The economy would prosper by the creation of income-producing opportunities (as distinguished from "jobs") for many persons and would enable small business and homeowners and apartment dwellers to do the odd jobs which need to be done to make their hours more profitable, and their lives more enjoyable (a higher quality of home and apartment life).
For example, I was having trouble obtaining a specific type of repair on my computer (involving a computer which would start up only after it was on for about 5-10 minutes, and would stop functioning properly after the computer was on for several hours). By having specific computer repair persons to call, I could talk with them and see if any of them could be of help. One person (a computer consultant) told me to pull the computer back from the wall and give the computer air space in the back. The com puter was overheating because it was too close to the wall and had insufficient air space to dissipate the heat coming from the power supply located in the back corner of the computer. I did what he suggested and the computer worked well thereafter. I p aid him his fee of $25 for 10 minutes work on the telephone, which was well worth it to me. Later I hired him to do work for many hundreds of dollars, which he performed equally well. He lives 50 miles from NYC, which means that the database might well be available to persons who want to service NYC even if they don't live here or have an office in NYC.
It is getting more difficult to reach responsible governmental officials and employees because of telephone systems which make callers wade through menus and at the end cut you off without giving you the person or information you called for in the first p lace. One would believe that government officials like this easy way to avoid speaking with concerned citizens and taxpayers.
To counteract this development, I would require NYC to create a database of information about all of its officials and employees (and consultants, possibly) including the name, position, agency, salary, civil service level if any, name of immediate superv isor, telephone number, fax number, brief job description, and other useful information.
This database should be made available on Internet and/or Genie, CompuServe,d Prodigy and America On Line. Thus, if someone at the Department of Consumer Affairs sends me a letter, I could look up the persons, including his salary, position, years on the job, and even the name and numbers of his/her supervisor(s). I could telephone or fax the individual witho ut going through a meaningless telephone menu, and I could reach his/her supervisor (or his/her supervisor's supervisor) until I obtained satisfaction. The database as envisioned by me may be the only way which government can be made responsive to most r esidents and taxpayers who try to interface with faceless and irresponsible (or perhaps overworked) governmental officials.
Homeowners and apartment dwellers use maids or house cleaners to come in once per week to do cleaning. The law requires that the amounts paid be subject to withholding, but many millions of persons failed to withhold including tax and report the withhold ing.
The reason is the enormous paperwork and income to comply with the law. Busy business persons with staffs to perform similar chores in their business have no time to fill out the report for themselves as to their weekly house-cleaning employee.
This problem to millions of apartment-dwelling and homeowners is comparable to the problem of an individual business persons who is deciding what to his his/her first employee. The amount of additional work caused by the hiring of the first employee (i.e ., the payrolls report; deposits, and summary reports) is so onerous in comparison to what a first employee could do (which is very little in many cases) that small business decides not to hire and to review without any employees and cause a loss of milli ons of jobs in the United States.
A solution to the problem is found in my slogan "The 1st Three Are Free", which is my proposal that any persons or businesses be allowed to hire up to 3 employees without any obigations imposed by statute, rule or regulation of any type. This means that minimum wage laws, apprenticeship requirements, withholding, and all other laws (including rules and regulations) would be preempted (i.e., made inapplicable) and that the first 3 employees are totally free of government involvement.
The employees themselves would, if the government thought desirable, go to the local Post Office each week and report their own income and pay their own withholding and other taxes. After all, if the employee did not do this, the employer (meaning me) wo uld have to do the same thing. I see no reason of a low-end employee should not be required to report and pay his own income and withholding taxes, in lieu of the small business employer. The employer would have to pay the employed enough money to enabl e him to make the required tax payments, which in effect is requiring small business to pay its taxes at the time that it pays its salaries (as to the first three employees), thereby eliminating the often-present problem of failing to withhold and pay wit hholding taxes, which causes many small businesses to get mired down in IRS penalties and interest charges at rates which would put a mobster in jail.
My time as a small business person is my main business asset, and whatever government can do to reduce demands on the time of small businesspesons should be done, to maximize the prospects for small business and create as many jobs as possible in the comm unity. Bureaucrats and politicians are the persons responsible for making demands on the time of others, and they usually have no idea at all the damage they cause. Most bureaucrats and politicians have never owned and run a small business, particularly one where there is only one person (i.e., the owner). If they had, they would be more sympathetic to the plight of small businesspersons and try to make it easier for them by reducing the demands on their time.
Thus, concept underlying "The 1st Three Are Free" would, if adopted by the nation, encourage millions of jobs to be created, with a substantial revenue to all governments. Of course, this is not something which NYC could unilaterally do. It requires federal legislation which preempts all incompatible state and local statutes, rules and regulations applicable to employment, education and training.
If NYC is going to encourage its residents to become more creative, there is still the problem of how residents without money can pay for the patent protection needed to protect the inventions which NYC should try to encourage them to make.
A patent application can cost $2,000 to $5,000 or more when done by a typical patent attorney or patent agent. Many NYC residents don't have $2,000 to $5,000 or more to spend for patent protection.
NYC should make itself available to be the "patent parent" of its residents (individual inventors) and provide the staff and pay the fees to obtain patent protection from inventors of NYC residents, if the resident chooses not to pay for patent protection himself/herself.
This would not be without cost, however. NYC should receive 50% of the patent for this investment, and from time to time NYC should probably auction off its 50% patent interests to obtain the funds to do even more patent applications.
Otherwise, NYC might want to hold onto the patent interests to profit from any licensing or infringement suits, the proceeds of which would then be used to fund other patent applications.
NYC on a voluntary basis could provide, prepare and prosecute patent applications at much less cost than patent law firms or patent agents in NYC, although it seems probable that the quality of applications would be somewhat less. Nevertheless, obtaining a less than perfect patent, it seems, is better than obtaining no patent at all.
In the economic sense, where so much is manufactured outside of the United States and outside of NYC, the only income which NYC and its residents may obtain from the products manufactured under the patent and sold in NYC might be the royalty or proceeds f rom infringement lawsuits, which could add up to about 7% of the wholesale price of the product.
If this were done in each city and state throughout the U.S., we would have a major weapon against the Japanese, requiring them to pay a 7% royalty to Americans for their sales of Japanese-made products in America which were manufactured using U.S. patent ed technology. To the extent we permit Japan and other countries to sell products in the U.S. which could have had U.S. resident patent protection, we are giving away more of our country needlessly. Another point to consider is whether or not the cost o f patent applications and renewal fees is too high. These costs discourage many persons from seeking patent protection.
NYC and NYS should review each proposed statute, rule and regulation to determine its impact on small business, and to reject any statute, rule or regulation which involves regulatory costs and burdens on small business which are not more than offset by e conomic advantages to the public.
For example, a proposed rule might require every business to pay a $1 fee to the City agency to register as a business. The cost of such registration would be approximately $100 to each business ($100 in time of managers and accounting fees plus the $1 f ee, with the total cost amounting to $111.
Thus, the cost to each business would be $111 for the government to receive $1 of income (assuming the government had no costs of its own in processing the $1 payments). The value of such list to NYC would seem to be zero, since a list could be compiled by NYC without cost from tax returns and telephone company records.
NYS and NYC offer their respective residents and taxpayers little or no participation in political affairs other than periodic primaries and elections.
Although New York law permits citizens to use an "initiative" (which enables a group of citizens to place a matter on the ballot for adoption by the electorate) or "referendum" (where the electorate gets to vote directly on a law or proposed law), the per missible use is limited. Any law requiring expenditures by a municipality must be accompanied by a plan to raise the money through new taxes.
See New York Municipal Home Rule Law paragraphs 10 and 37, and recent Court of Appeals case Roth v. Cuevas, 82 N.Y.2d 791 (1993).
"Recall" is when voters can elect to call back an elected official and end his/her tenure as an elected official. NYC and NYS law does not permit recall elections. MacFarlin v. O'Leary, 268 N.Y. 605 (1935).
Inasmuch as initiative and referendum require group action, an individual will have trouble trying to accomplish anything through use of initiative or referendum. Instead, individuals should be given additional political rights through legislative adopti on of qui tam actions to enable citizens to enforce their rights with an economic incentive, designed to encourage enforcement by the few on behalf of all residents of NYC.
Qui tam actions are where residents and others can sue to enforce law and keep a percentage of the recovery, but NYS and NYC do not have any statutes authorizing qui tam actions. However, it is possible that there is a common law "common informer's" caus e of action in New York and in other states.
Thus, NYS and NYC offer very little opportunities for political participation to their voters (other than the periodic primary/election process), which may be the reason that NYC and NYS are in the poor economic condition they are in, with poor schools, h igh unemployment, higher taxes in the nation, and the most unfavorable laws relating to business (except for the at-will employment rule, in which New York has the strongest law favoring the employer).
To assist NYC and NYS in recreating their one-time leadership and greatness, the public should be allowed to participate by legalizing recall elections and qui tam actions (discussed elsewhere in this booklet), and by expanded opportunities for initiative and referendum.
I would like to know if my neighbor or business competitor is receiving money from NYC, and if so, how much and for what reason. Also, I would like to know which NYC officials are responsible for giving the money to my neighbor or competitor. For one th ing, it may help me to obtain money to which I'm entitled, if qualified; also, it may give me valuable competitive information to enable me to apply (or bid) for government contracts or positions.
The effect of the availability of such information would be to decrease NYC's costs of doing business and reduce the corruption, illegality and unfairness in which some NYC (taxpayers) funds wind up in the hands of a favored few.
The data processing (database) system should be made available, once again, on Internet and/or CompuServe, Prodigy, Genie and America on Line, from the business and home and through public terminals (run on a for-profit basis) by entrepreneurs, who would assist NYC residents, taxpayers and others in using the data base to obtain information about NYC's expenditures.
If you have any ideas for improving NYC, please give me a call. I would like this booklet to become a growing collection of NYC problems and their cures. So, please let me have any ideas which you believe should be added to this booklet. Call me, Carl E. Person, at 212-307-4444 (weekdays from 9 to 5), fax your letter to 212-307-0247, or e-mail your comments to firstname.lastname@example.org.
Carl E. Person
325 W. 45th Street - Suite 201
New York NY 10036-3803
Tel: (212) 307-4444
Fax: (212) 307-0247
Copyright © 1994 by Carl E. Person (see extended notice above)