The DC 37 Contract's Affect on the Housing Market

I've always thought that NYC has a responsibility to it's taxpayers to get the best value for their dollars; which in this case should include outsourcing any jobs not requiring an in-city presence to complete.

For example, most clerical work can be sent to Peoria, IL., or even India. Governmental offices such as the educrat department could be moved into low-priced and depressed neighborhoods, such as Canarsie/East New York, thus saving taxpayers the millions of dollars for comparable office space.

As to this particular housing requirement, I can make no sweeping and bold claims, other that when 1/7th of the total workforce is busy spending taxpayer's money on their housing needs, the city can hope to both lower the costs of housing, and sharpen their pencils on salaries which no longer have to support NYC housing prices.

Posted by: iceberg at July 20, 2006 4:18 PM

Petebklyn,

I dont want to degrade your reasoning, but suffice to say that you could possibly justify theft and robbery by extolling the greatness of the perps to spend their ill-gotten funds in the same city.

Secondly, its erroneous to deduce that economy is healthier when jobs are kept local, when in fact the opposite is the truth. The money paying these higher salaries had to come from somewhere. That somewhere has always been the taxpayer, whether financed by tax revenue, bonds, or the printing presses (monetary inflation). Those taxpayers have in fact lost the use of their money towards what they would have considered higher and better uses, perhaps buying a new yacht or an apartment, going for dinner, watching a movie, etc., spurring growth and jobs in the economy.

The money was thus extracted from one sector in the economy and put to use by some middling bureaucrat into a different sector. At best that money can be spent no better than had it been allocated by the market. But as we all know, there are numerous "handling" fees involved, so that by the time your taxpayer money is spent, it has first been reduced by about 50%. So before you even have the money reallocated, its already suffered a 50% inefficiency.

With 50% efficiency, you can't expect me to believe that the amount of jobs created through that government spending will keep the economy healthier that the counterfactual case in which the market put that money to 100% use creating even more jobs from the same dollars.

Going even beyond this, and really among the foundation of modern economics, societal wealth is not a zero-sum game, despite the faddish popularity of game theory, and this "us-versus-them" mentality should have died and stayed dead after Adam Smith's "The Wealth of Nations" demolished all arguments in support of mercantalism, and other forms of irrational protectionism.

"Keeping jobs local" is a form of protectionism, if I havent been clear enough.

Now, per se I might value having jobs kept local over spending less money elsewhere, but when it's not only my own money at stake, I would think that to demand the higher efficiency out of those dollars is more important than any fuzzy warm feelings I might derive from having the money being inefficiently spent here.

Separately, the goal of what society should be striving towards is maximum wealth creation, not job creation or producing more tax revenue, as neither of those should be considered ends within themselves.

Just so we dont get confused, wealth is not a physical condition, and is not quantifiable. You cannot point to a stack of benjamins and call it wealth, because money is only an abstraction which represents the possibilities of wealth.

Wealth is the ability to satify our needs and desires.

Jobs are all nice, but it's ultimately a resource that can be misallocated just like capital. Hiring people to dig and refill holes in the desert that serves no ultimate purpose is a destruction of wealth, no matter what Keynes would have you believe about the egyptian pyramids.

Babs,

What does it make a difference where NYC's clerical work is done- would you demand that we manufacture all our fire trucks inside NYC, because our firefighters work locally? What about our police cars? Our food resources? Clothing?

Google "comparitive advantage" or David Ricardo for some enlightenment.

In short, there is no rational for paying more taxpayer money for something which can be accomplished cheaper elsewhere. I'm not saying that it is guaranteed that we can lower our costs this way, but it should at least be explored.

Also, your pious sympathy on behalf of the local jobbers comes on the expense of everybody else who pays taxes. But I understand your concern, and your desire for charity, but I beg you and others who think like you to support the charity from your own moneys which is only fair.

Posted by: iceberg at July 21, 2006 1:33 PM

Bx2Bklyn,

>> That is some twisty logic.

WOW! A shorter refutal of my 'twisted' logic has yet to be seen.

>>Economics aside, no country can survive unless there is a certain common ground that works for all of us.

Please define what constitutes a country, why its fictional existence is paramount, and what does a line on a map have to do with the survival of human beings who reside within these imaginary geographic borders?

>>is the very society that has allowed you the freedom to amass that wealth.

You don't mean that some body politic actually gave us our freedoms, right? Hint: Freedom is a negative condition, not a positive right.

>>Civilizations don't work unless all their parts work together- that means while there is a certain unfairness built in, you have to take the long view

I fail to see how your argument flows from the first premise into the second (p -> q). What unfairness do you think is inherent in "civilization"? In fact, the term civilization implies a civilized manner, not a constant state of warring interests and unrest.

>>Frankly I don't see how you can separate wealth creation from job creation. Not to mention that all those lovely yachts you want have to be "created." Ergo, job creation is fundamental to wealth.

Simply wrong; don't conflate labor/jobs with productivity.

Wealth is derived from productivity and trade. If you misallocate labor resources into the wrong sectors, you destroy capital, human or otherwise. A bureaucrat creating a job for thousands of people to needlessly dig holes is not productive, and instead destroys capital. One of the major problems with government is that there is no price system to determine ex ante whether these jobs are productive at all.

>>All those fine and dandy numbers, and philosophies are no competition for the reality of human society. Some work all of the time, all work some of the time (sorry Mr. Lincoln), but everything remains in a constant state of flux.

Actually here I can agree with you. Modern economics is a fanciful application of math, and contains very little economics. The reason such is because economics is held to be an inductive science, an empirical discipline, quantifiable, and forward-looking. That is the major problem for what passes as economics today.

There is however an older school of economics, based on deductive logic known as Praxeology, which is to say the logic of human action. Starting with a number of axioms, it constructs a theory that describes reality. Since you cannot disprove the initial axioms, and the economic principles are deduced from those, if you were to find an economic theory not consistent with reality, the truth would be that either your known experience of reality is based on false premises, or that you have missed crucial data relevant to the application of the theory.

Posted by: iceberg at July 21, 2006 7:16 PM