Since his re-election in November, New York Gov. Andrew Cuomo, a Democrat, has been quite busy. In just the past two months he’s made national headlines several times for a variety of reasons. To contrast, I do not recall a single instance of reading or hearing anything about the governor during my freshman year.
Here’s a brief review what Cuomo has been up to lately.
– On Dec. 17 Gov. Cuomo lifted the state’s moratorium on fracking in order to outright ban it. The state originally placed a moratorium on the controversial method of natural gas extraction in 2013 in order to review various scientific studies about its health effects. The move to ban fracking came as a shock to both environmental groups and pro-fracking groups, including oil and gas industry figures, local chambers of commerce, and those in upstate New York looking for lucrative jobs.
Contrary to this Huffington Post article lauding the governor, this decision was not what “democracy is all about.” There was no state-wide vote, for example. Cuomo simply lent his ear to anti-fracking activists and their research reports and, unsurprisingly, sided with them. I think a much more sensible solution would involve allowing each community–perhaps on the county level–decide for themselves whether to permit fracking in their own community. Why does Cuomo, whose elections are courtesy of Democrat voters in the state’s big cities like New York City, Albany, and Buffalo, get to condemn to poverty the residents of rural upstate New York, especially those in the Southern Tier? Let the people decide.
– Over the weekend Cuomo announced plans to draft legislation aiming to raise the state minimum wage to $10.50 and the minimum wage in New York City to $11.50. Currently, the state minimum wage is $8.25, which is above the federal minimum of $7.25. Naturally, business groups and the state GOP are opposed to these proposals, citing the numerous reasons why a government-mandated minimum wage increase is bad economic policy. Cuomo also proposed tax cuts for small businesses with fewer than 100 employees and sales less than $390,000, and a $1.66 billion tax credit for homeowners and renters with incomes below $250,000.
Putting money back into the wallets of those that earned it is not only morally righteous, it is good economic policy. Though the proposed cuts and credits are not massive, anything is better than raising taxes. However, a forced minimum wage increase is but a tired-out progressive play aimed at economic populism rather than at sound economics. Cuomo said “the wage gap is continuing to grow” as justification for the measure, but is the governor so ignorant as to think artificially boosting the minimum wage will help to close this gap? When government initiates wage inflation via mandated minimum wage hikes, every other level of wage earner will eventually see a salary raise–think of it as trickle-up inflation. In fact, income inequality will grow because minimum wage increases usually lead to increased lay-offs, condemning more people to poverty while middle- and top-earners whose jobs aren’t so easily automated or outsourced only see wage increases (via the aforementioned wage inflation).
– The governor’s office also released plans for a college loan forgiveness program that, according to the Wall Street Journal, would “ensure 100% coverage of student loan payments for the first two years after graduation for students who attended college in New York, live in the state after graduation, earn less than $50,000 annually, and participate in the federal income-based loan repayment program. The state would pay the difference between what the federal government covers and the total loan repayment.”
College loan debt is a crippling factor for many millennials trying to pursue the American dream. Buying a home and saving for retirement have become secondary priorities. The solution here is not for the government to forgive these loans, because such a policy creates moral hazard–a situation where one engages in risky behavior because he knows his potential damages and liabilities are protected by some third-party. In the same way that central banks acting as “lenders of last resort” encourage risky financial speculation on Wall Street, governments acting as debt-forgivers encourages more people to engage in the behavior that results in the accumulation of that very debt. This will also drive up the cost of education via two mechanisms: first, tuitions will rise because more students (who really should probably not attend college) will attend college knowing they won’t have to pay off their loans, and second, lenders will increase loan rates.
– The governor recently announced plans to lead a trade mission to Cuba, with whom the United States has officially resumed diplomatic relations. The plan will seek to attract investment in New York.
Really Cuomo? The Cuban people and their government don’t have enough money to invest in their own island workers’ paradise. What makes you think they’re going to send what they have to New York? I thought trade missions to Cuba were going to be about U.S. companies investing over there. At this rate, pretty soon upstate New York will become as desolate as Cuba.
Think what you will about these several recent initiatives and their effects on New York state, but I think something bigger is going on here: Is Cuomo gearing up for a 2016 presidential candidacy?
It seems like Cuomo is in over-drive right now in order to get some accomplishments under his belt before announcing a presidential candidacy later this year. In order to combat the inevitability-factor of Hillary Clinton and the ultra-liberalism of Elizabeth Warren, Cuomo will need to highlight his executive and governing experiences with tangible achievements and results. Warren is basked in rhetoric, but aside from writing syllabuses at Harvard Law School she has no accomplishments. Clinton, despite serving as a senator and Secretary of State, doesn’t either; in fact, her stewardship of the state department was marked only by failures, many of whose repercussions we are still dealing with today.
If Cuomo raises the minimum wage, wins over college students with loan forgiveness, gets some foreign policy fanfare by visiting Cuba, and touts his fracking ban, this will certainly appeal to the Democrat base. The only reason why he wouldn’t run is if the inevitability of Hillary overcomes him (and he can’t find any big backers), or if Warren jumps in early and the Democrat primary becomes all about the two women. Otherwise, he will run as an economic populist, but not an extremist, and a foreign policy progressive. Let wait and see if I’m right.