New York Lieutenant Governor Richard Ravitch went off the reservation in a speech today, Bloomberg reports.
First, he criticizes state cash cow Wall Street:
Wall Street bankers perceive New York’s $9 billion budget deficit as an opportunity to propose financing deals that may worsen the state’s long-term fiscal condition, Lieutenant Governor Richard Ravitch said.
“They are up here peddling the same cockamamie borrowing schemes that helped get us in trouble,” Ravitch said today at a conference sponsored by the Rockefeller Institute of Government in Albany, the state capital.
But then Ravitch goes and undermines his state’s ability to borrow—or at least the rate it pays to do so—and Bloomberg stuffs it in the last paragraph of the story.
While New York has many ways to raise cash, Ravitch said he was concerned enough about the safety of state debt that he personally would buy only bonds backed by revenues such as the personal income tax, and avoid those backed by annual appropriations.
Seems like that ought to have been the lede rather than the last sentence of the story.
— Remember how Tea Party candidates won governorships in Wisconsin and Ohio and promised to turn down hundreds of millions of dollars in federal funds for rail projects? Here’s how I summed that up last month:
Wisconsin Governor-elect Scott Walker promises, as he did in the campaign, that he’ll turn down free federal money for a high-speed rail project in his state, a dumb move the LaCrosse Tribune points out “could end up costing the state millions of dollars and thousands of jobs.” Eight hundred million to be exact.
Why would he do that? Because the line will cost the state $750,000 a year to operate—and that’s assuming it gets zero riders and zero fares not to mention the money it will save by taking drivers off the road from Milwaukee to Madison (and help connect them to Chicago). Walker wants to use the money to pave roads, but it’s against the law to do that with those funds.
Hand meet forehead.
U.S. Transportation Secretary Ray LaHood said $1.2 billion in high-speed rail funds originally designated for Wisconsin and Ohio will be redirected to states “eager” to develop faster-rail corridors.
California and Florida will be the top recipients of the money, receiving as much as $624 million and $342.3 million respectively, the Transportation Department said in a statement today. States are to receive $8 billion in rail money as part of the American Recovery and Reinvestment Act.
Look on the bright side: Wisconsin’s loss, at least, is actually a good thing. The money will be better spent in higher-density California and Florida.
— The gold-plated revolving door keeps spinning.
Peter Orszag, Obama’s former budget director, is cashing in his administration chips with a cush job at Citigroup, which owes its continued existence to and is still part-owned by Uncle Sam.
At least there’s this, for what it’s worth:
Due to ethics rules, Orszag is prohibited from contacting U.S. federal government officials in his new role.Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at firstname.lastname@example.org. Follow him on Twitter at @ryanchittum. Tags: Bond Market, Citigroup, Rail, Revolving Door, Tea Party