Great Cities A Must, So Tax Superrich Hard, Everywhere.

Shallowness of thinking is a sin. Many view it as a creature’s comfort., though (“Thus spoke the Tyranosopher”). OK, not a sin in the Bible (otherwise the Bible would have put itself out of business!). But it’s a dangerous consequence, and temptation from the Internet and “multitasking”. For shallow thinking one of my reference is Paul Krugman, the most respected “liberal” (USA) or “progressive” (anywhere else) in America and Europe.

Krugman wrote “Inequality and the City” an editorial, where he depicted the success of New York, and pointed, all too moderately, and somewhat disingenuously to its features. Here he goes, with a striking disinformation hook at the end:

“New York, New York, a helluva town. The rents are up, but the crime rate is down. The food is better than ever, and the cultural scene is vibrant. Truly, it’s a golden age for the town I recently moved to — if you can afford the housing. But more and more people can’t.

Rich Gets Into More Expensive Housing, Low Lives Sleep Outside

Rich Gets Into More Expensive Housing, Low Lives Sleep Outside

And it’s not just New York. The days when dystopian images of urban decline were pervasive in popular culture — remember the movie “Escape from New York”? — are long past. The story for many of our iconic cities is, instead, one of gentrification, a process that’s obvious to the naked eye, and increasingly visible in the data.

Specifically, urban America reached an inflection point around 15 years ago: after decades of decline, central cities began getting richer, more educated, and, yes, whiter. Today our urban cores are providing ever more amenities, but largely to a very affluent minority.

But why is this happening? And is there any way to spread the benefits of our urban renaissance more widely?

Let’s start by admitting that one important factor has surely been the dramatic decline in crime rates. For those of us who remember the 1970s, New York in 2015 is so safe it’s surreal. And the truth is that nobody really knows why that happened.”

Did he really say that? “Nobody really knows why” New York became safer? Really? Never heard of Mayor Giuliani? (Giuliani was several times presidential candidate.) He was tough on crime, strong on “profiling”.

The USA has the highest incarceration rate in the world (with the Seychelles islands). Eight million people are under justice supervision. Police brutality helped. This may be why nobody Politically Correct knows why New York is so much safer; nobody wants to know why. Hard thinking is always uncomfortable.

As soon as plenty of police brutality videos surfaced, and the police was reined in, crime rates exploded. That was in 2015. That is, a few months ago.

Paul Krugman does not want to praise the virtues of daily fascism as far as direct repression is concerned. Not PC. However, he dares to be a little bit, very delicately, NON PC:

“But there have been other drivers of the change: above all, the national-level surge in inequality.

It’s a familiar fact (even if the usual suspects still deny it) that the concentration of income in the hands of a small minority has soared over the past 35 years. This concentration is even higher in big metropolitan areas like New York, because those areas are both where high-skill, high-pay industries tend to locate, and where the very affluent often want to live. In general, this high-income elite gets what it wants, and what it has wanted, since 2000, has been to live near the center of big cities.”

I already mentioned this: the new young elite is less dumb and wasteful that the one which preceded it. Krugman, correctly playing psychologist:

“Still, why do high-income Americans now want to live in inner cities, as opposed to in sprawling suburban estates? Here we need to pay attention to the changing lives of the affluent — in particular, their work habits.

To get a sense of how it used to be, let me quote from a classic 1955 Fortune article titled “How Top Executives Live.” According to that article, the typical executive “gets up early — about 7 a.m.. — eats a large breakfast, and rushes to his office by train or auto. It is not unusual for him, after spending from 9 a.m. until 6 p.m. in his office, to hurry home, eat dinner, and crawl into bed with a briefcase full of homework.” Well, by the standards of today’s business elite, that’s actually a very relaxed lifestyle.

And as several recent papers have argued, the modern high earner, with his or her long hours — and, more often than not, a working partner rather than a stay-at-home wife — is willing to pay a lot more than the executives of yore for a central location that cuts commuting time. Hence gentrification. And this is a process that feeds on itself: as more high earners move into urban centers, these centers begin offering amenities: — restaurants, shopping, entertainment — that make them even more attractive.”

Notice Krugman does not mention the Darkest Side: having the rich living only among the rich… Let alone correctly colored. I have observed this many times: entire neighborhoods, cities, islands, secluded enclaves of the 1%.

On this Krugman is a bit naive:

“We’re not just talking about the superrich here, or even the 1 percent. At a guess, we might be talking about the top 10 percent. And for these people, it’s a happy story. But what about all the people, surely a large majority, who are being priced out of America’s urban revival? Does it have to be that way?

The answer, surely, is no, at least not to the extent we’re seeing now. Rising demand for urban living by the elite could be met largely by increasing supply. There’s still room to build, even in New York, especially upward. Yet while there is something of a building boom in the city, it’s far smaller than the soaring prices warrant, mainly because land use restrictions are in the way.”

It is true that land use restrictions are a huge problem (in the San Francisco Bay Area, cities which want to build skyscrapers next to train stations, have been blocked… Mostly by the superrich, who do not want the poor, mediocre and thoroughly medium to rise up in the sky. The result has been the greatest gridlock in the USA).

Here is how Krugman concludes: “But will that understanding lead to any action? That’s a subject I’ll have to return to another day. For now, let’s just say that in this age of gentrification, housing policy has become much more important than most people realize.”

Trust Krugman to be as hard as a soft-boiled egg. Krugman, or why moderation is a sin. All what Krugman said was true, but it is “non-controversial“, namely everybody knew it already. Is that what the top thinking on the left can be? With moderates like that, who needs Republicans?

Something Krugman does not say:


Housing policy, thus the built-up of infrastructure, is crucial for the economy… and for comfort: infrastructure deteriorates, and has to be worked on continuously. Let alone modernized.

Private infrastructure in a city, depends upon PUBLIC infrastructure (water, electricity, basic transportation, basic police, justice, schools, government).. Thus, because of the necessary involvement of public infrastructure, PRIVATE infrastructure requires more PUBLIC spending.

Hence a thriving PRIVATE economy requires more PUBLIC economy, hence more taxes on the wealthy (Canada’s Trudeau, the new PM, advocates just this).

An example is schools: they can be made profitable, thus private, as long as they cater to the top 10% To cater to everybody, thus make a sustainable city, taxes will have to be augmented and redistributed to public schools. So sustainable cities will require a change in the philosophy of the socio-economy.

Ah, something else: taxes cannot just be restricted to the cities, as then the superrich will escape again. So they have to be national. And even international. And “Dark Pools”, “Shadow Banking”, Tax Havens, Delaware, have to disappear.

Building thriving cities is about not destroying the planet: cities are more efficient. Most of humanity lives now in cities, and the proportion will have to go up.

Don’t trust the superrich, don’t let them call themselves “philanthropists”, as if they could tax themselves. Latest clown here is the Facebook founder, who got free advertising everywhere, for his pledge to “give 99% of his fortune away“. Meanwhile he will keep on enjoying it, while claiming he does not, before he can convert it into tax-free vehicle, for himself, his wife, and child, Bill Gates’ style. It is rather sad to see so many applauding some clowns whom I do not find funny.

Politics is named after cities, so is civilization. Cities can, and will have, to save the biosphere, as they can be made more efficient, and smarter, than any alternative. And what is cities’ greatest historical enemy? Plutocracy.

One must crush infamy, and thus plutocracy, and it’s exactly why taxes were (mostly) invented.

Patrice Ayme’

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6 Responses to “Great Cities A Must, So Tax Superrich Hard, Everywhere.”

  1. richard reinhofer Says:

    Great points Patrice, and I love that you call out PK. The MMT followers are also skewering his economic meanderings as he misses what is real.

    But but but…how does one go about killing the rulers without being marginalized? PK wouldn’t have his platform if he wasn’t moving the goal posts incrementally, and I believe he is too cautious to consider more than incremental moves.

    What to do?


    • Patrice Ayme Says:

      Agreed to all, Richard, and thanks. The NYT blocked all my comments for weeks, some of them deliberately hyper innocuous, I sent them an incendiary email about that, (and so?) they let pass my comment on the Krugman editorial (after more than 12 hour delay).

      I agree a lot with Modern Monetary Theory (money is a matter of law), but with the further twist of AWE (Absolute Worth Energy) to anchor the value of money into efficiency.

      I do agree about your analysis of Krugman’s plight. Considering how nastily I have been blocked, I know very well, that, should Krugman become as thorough as I am, (some would say strident,) he would be fired from his editorial job. Martin Wolf at the FT and many others are in similar predicaments. And it’s not just in finance and economics: quoting the Qur’an is a big no-no, especially when talking about Islam. It would be hilarious, if the sea was not rising much more dramatically than officially acknowledged, as I just saw…


    • Patrice Ayme Says:

      What to do? Paul Handover was saying that we have blogs for that, but they are drowned under a trivial deluge. His own blog is popular, because it’s about dogs (yet it is nothing relative to Kim Kadarshian’s!). Blogs are popular when they enable escapism. I used to gain an audience fast, but that was before been blocked or delayed roughly anywhere. I think the plutocratic MSM does this deliberately, knowing full well interesting sites are a giant threat to its own existence and sponsors. That is why they create fake top commenters with totally uninteresting sites, and then advertise them (as the NYT did last week, and not for the first time).


  2. Kathleen Hawes Watkins Says:

    ‘Shallowness of thinking is a sin. Many view it as a creature’s comfort., though.’

    Kathleen Hawes Watkins: Agreed. Comfort is to evolution as gravity is to space-time: Comfort (shallow thinking) deters adaptation, retarding expansion of intellect and consciousness. In that sense, shallow thinking, failure to evolve and thrive is certainly a sin.


    • Patrice Ayme Says:

      Patrice Ayme: Glad you agree, Kathleen. Unfortunately, our culture, especially in the USA, extols the comfort of shallow thinking, including systematic formal self-amusement about oneself’s failings, a way to pirouette out of serious analysis. And then there is the obsession with sport scores, sport figures, sport teams, sport images and sematics… A way to feed sexism, BTW, as sport obsession is much more of a male thing, especially in the USA.


  3. Kevin Berger Says:

    Also, though more conspiracy-like :

    FWIW, only a few years ago, there was an actual, academic/research study of “control nodes”, mapping the interlocked & networked microcosm of global Big Money; and, the results boiled down to a small number of companies owning each others and the rest – most of them Brits, IIRC & FWIW.
    The sun never really set down on the empire, the owners just got rid of the outdated and unnecessary (people and lands… including the Brit vulgum pecus, amusingly enough, for all of the silent but quite real and IMHO widespread nostalgia for the Britannia rules the waves thingie… really, the lower class White man is just a nigger, not far removed from any other inferior specie).


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