Credit: Billie Grace Ward from New York, USA, CC0, via Wikimedia Commons
Welcome, folks, to the Adams Administration! New York’s new mayor hasn’t had much in the way of challenges yet, but in the early days of his administration, the mayor has revealed plenty about how he will govern. It has become obvious that Mr. Adams has some shady connections with much of New York, from real estate developers to construction contractors. While the media has recently had a sensation over him having dinner with a friend and restaurant owner previously convicted of money laundering, he has much bigger problems. I’m not opposed to the mayor having dinner with a friend—and the mayor can be friends with whoever he wants; it doesn’t really matter. What does matter is who he puts in the many offices the mayor controls by appointment.
These appointments have had serious problems. The worst one, in terms of its blatant disregard for conflicts of interest, was his brother, who Adams appointed to be police commissioner. Aside from the fact that the “tough on crime” mayor Adams just picked his brother to run the police department, nominating family members to office is a blatant conflict of interest, especially because the police commissioner makes about $200,000 per year. Even worse, he responded to these criticisms by saying that he can hire who he wants because (and no, I’m not making this up) “I’m the mayor.” Other hires he has made include Phil Banks for deputy mayor. In 2014, Phil Banks settled out of court with the FBI in a bribery case for trying to funnel construction contracts to specific contractors.
These picks are all terrible, and I have no doubt that they will impede the efficient functioning of NYC’s government. However, China does prove that even a corrupt city can be functional, and it still can be. I’m more concerned about officials who have demonstrated that they cause dysfunction, and nobody epitomizes this more than the mayor’s pick for MTA chairman: Janno Lieber. Lieber formerly ran the Capital Projects Division of the MTA from 2017 to 2021. His division has some notable accomplishments: the $265 million per track mile LIRR third track project, the 14-years late East Side Access project (which was also $6.8 billion over budget), and the under-construction Second Avenue Subway Phase II, which at $4.2 billion per mile will be the most expensive subway line in the world. For reference, subway lines in Paris, in line with European averages, cost $150 million per mile. As you can see, Lieber has managed to efficiently and quickly spend New Yorkers’ money, and impressively, he has gotten almost nothing out of it.
One might (with a little bit of credibility) say that the cost overruns aren’t entirely his fault; some of these projects have been managed by several people, not just Lieber. To get an accurate picture of his competence, we would need to find a project managed exclusively by him. Luckily, we have just such a project: the rebuilding of the World Trade Center, which he managed from its start in 2003 until 2017. While there, he managed to make One World Trade Center the most expensive building in the world, crashing through the original $3 billion budget on his way to a $900 million 30% cost overrun. He also managed to spend $4 billion on the originally $2 billion WTC PATH station, doubling the budget of an already overpriced station.
The MTA as an organization already has serious problems in cost and efficiency. Operations on the subway and both commuter railroads are too labor-intensive; the bus system is one of the slowest in the world (which leads to, you guessed it, higher costs); and none of them are able to run consistently. They clearly have a cultural problem: they don’t push for efficiency; there is no institutional cost pressure; and accountability is almost nonexistent. However, the Capital Projects Division is definitely the worst division on all counts, routinely surpassing budgets that are already 10 times the size of comparable European projects. Janno Lieber made these problems worse, so he is clearly a major contributor to all of these problems. The worst part about this observation is that it is obvious. If I can perform this analysis, then Eric Adams (or someone in his administration) definitely can. The only explanation, then, is that Eric Adams and/or his government wants maximum cost and minimum efficiency. While that initially sounds nonsensical, it is actually in line with long-standing traditions in New York State politics.
To truly understand how the NY city and state governments thrive on inefficiency, one has to look at its history. New Yorkers have been in favor of a large, activist government since the city’s founding, producing Federalist leaders such as Alexander Hamiltion and taking the distinction of most important municipal government from Philadelphia as its growth exploded in the early 1800s. However, the most important organization in the story is the founding of the Tammany Society (aka Tammany Hall) in 1789. Originally, it was meant to oppose the Federalist party and fight for small government, but when the Federalist Party fell apart after the War of 1812, Tammany Hall noticed a power vacuum and moved to take it, becoming the party of big government. It also became the party of immigrants as ship after ship unloaded new voters into Ellis Island and then Lower Manhattan. Noticing the electoral advantage to be gained by earning the support of new immigrants, Tammany Hall made sure it ran immigrants or residents in immigrant areas for municipal offices and made sure to send these areas plenty of money from city government. In this way, New York developed an advanced system of interest groups from different neighborhoods way before any other state. However, this was still the 1800s, and the anti-bribery, oversight, or incentives for efficiency had not taken root yet. As a result, Tammany Hall became predictably corrupt, unaccountable, and highly entrenched.
The national stereotype of a corrupt, dysfunctional inner-city government has its origin in the Tammany Hall, which quickly grew to dominate New York City’s politics. To keep this power in place, large bureaucracies were arranged, which both funded welfare and allowed high-level politicians to hand out jobs based on loyalty and favoritism. As a result, politicians directly benefited from a larger bureaucracy and larger contracts. Politicians in the Tammany Hall system handed out construction contracts the same way they appointed bureaucratic officials: with an intent to build loyalty, not create efficiency. While this system of government was not accountable or transparent, most voters seemed to agree that it helped Hard-Working-Real- New-YorkersTM, and so it endured the political turmoil of the 1800s. It outlived the Whig party, found a home in the 1850s Democratic party and has stayed blue ever since (despite the Democratic party changing its views significantly). When the good-government reforms of the 1920s came and slowly curbed the highly visible kind of direct bribery, the contracts and appointment systems remained.
The Tammany Hall governmental structure of the 1910s impressed Robert Moses in particular, who modeled his bureaucratic apparatus after the society of the government. However, Moses had a particular eye for finding productive bureaucrats, so his section of the government was unusually productive. As the good government reforms finally overwhelmed New York City and put Fiorello LaGuardia in office, the Tammany Hall system was dismantled, but it endured in Robert Moses Parks Commission and his Triborough Authority. Robert Moses himself was forced out of office by Nelson Rockefeller in the 1970s, and his government rolled the Triborough Bridge Authority (at that point responsible for nearly all of New York’s road bridges & tunnels) into the Transit Authority, creating what we now know as the MTA. To this day, the MTA’s culture comes from the Triborough Bridge Authority, which comes from Tammany Hall, quite possibly the most corrupt political system in US history. That lineage is still evident today. Construction contracts are restricted to a few major companies, who agree not to bid down prices. Those same contractors are major donors to the Democratic Party, and the bureaucracy of the MTA live in isolated houses owned by the state, face no accountability, and get to go on lobbying trips paid for by the contractors, who are paid off by the government.
The situation for “regular” workers is in some ways even worse. Work rules are governed by employment contracts with the TWU (Transit Workers’Worker’s Union), which regularly sets worker numbers way too high. The MTA then agrees to whatever number the TWU says, since the mere threat of a strike, which the NYC population would blame the MTA for, gives the MTA no leverage. For example, two people run a train, done by one person abroad. To run a tunnel-boring machine takes 13 people at the MTA, as opposed to theagainst four people it takes in Germany and France. Furthermore, supervisors reward preferred workers with overtime jobs, which pay at two times the nearly rate. Anonymous workers have told the New York Post that “sleeping on the job is regular part of overtime stints,” which can be up to 16 hours long (At that point, the MTA could save money by just hiring more people and removing overtime). The result of all of this is that the MTA pays some absurdly high salaries. 25% of MTA employees make over $100k per year in income, along with enormous employee benefits and pensions; the highest paid conductor (the person who checks the tickets) made $319,000 in 2020.
Attempts at reforming this system usually fail because the state government relies on unions to spread support for the Democratic Party, and the contractors or real estate developers to come up with donations. As a result, fixing the system, from sane zoning to teacher accountability to transit efficiency, is politically impossible because the New York state government relies on an oversized teaching and transit workforce, overpriced contracts, and oversized employee benefits which together add up to the equivalent of mass bribery. So yes, Janno Lieber’s appointment is terrible for New York transit riders and taxpayers. However, we shouldn’t be surprised—his failure is the product of a system designed to fail. He may be uniquely inefficient and unqualified, but that’s what the party wants. This is the time where I tell you to vote for liberal republicans instead of democrats, to break the one-party hold on government and fix this problem, but honestly I wouldn’t hold my breath. Instead, if you want an efficient, competent government, get packing.
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