Category: Public Choice

Wealthiest Resident of Illinois Moving His Business to Florida for Lower Taxes and Less Crime

(p. B1) Billionaire Ken Griffin is relocating his hedge-fund firm Citadel from Chicago to Miami, the third major employer to announce the move of a corporate headquarters from Illinois in the past two months.

In a letter to employees Thursday [June 23, 2022], Mr. Griffin said he had personally moved to Florida—a state that doesn’t collect personal income tax—and that his market-making business, Citadel Securities, would also transfer. He wrote that he views Florida as a better corporate environment and though he didn’t specifically cite crime as a factor, company officials said it was a consideration.

Mr. Griffin has been the wealthiest resident of Illinois, so his departure will hurt state tax collections on both the individual and corporate side. It could also be a blow to Chicago’s philanthropic scene. Mr. Griffin has given more than $600 million in gifts to educational, cultural, medical and civic organizations in the area, spokesman Zia Ahmed said.

For the full story see:

John McCormick and Juliet Chung. “Citadel Plans to Relocate to Florida.” The Wall Street Journal (Friday, June 24, 2022): B1-B2.

(Note: bracketed date added.)

(Note: the online version of the story was updated June 30 [sic], 2022, and has the title “Ken Griffin Moving Citadel From Chicago to Miami Following Crime Complaints.”)

New York City Hurt as Wealthy Residents Move to Miami

(p. A1) When roughly 300,000 New York City residents left during the early part of the pandemic, officials described the exodus as a once-in-a-century shock to the city’s population.

Now, new data from the Internal Revenue Service shows that the residents who moved to other states by the time they filed their 2019 taxes collectively reported $21 billion in total income, substantially more than those who departed in any prior year on record. The IRS said the data captured filings received in 2020 and as late as July 2021.

Many new or returning residents have since moved in. But the total income of those who had initially left was double the average amount of those who had departed over the previous decade, a potential loss that could have long-term effects on a city that relies heavily on its wealthiest residents to support schools, law enforcement and other public services.

The sheer number of people who left in such a short period raises uncertainty about New York City’s competitiveness and economic stability. The top 1 percent of earners, who make more than $804,000 a year, contributed 41 percent of the city’s personal income taxes in 2019.

About one-third of the people who left moved from Manhattan, and had an average income of $214,300. No other large American county had a similar exodus of wealth.

Early in the pandemic, Sam Williamson, 51, a white-collar defense lawyer living on the Upper West Side of Manhattan, first relocated to Utah, then to Long Island. After a return to the city, he and (p. A19) his family permanently moved to Miami last year when his law firm opened an office there.

“I love New York City, but it’s been a challenging time,” Mr. Williamson said. “I didn’t feel like the city handled the pandemic very well.”

. . .

Gergana Ivanova, 28, a clothing designer and social media influencer, said her decision to move to Miami was less about taxes. The pandemic made the downsides of living in New York City more noticeable, she said, including the lack of space in her tiny Queens apartment and the trash piling up on the sidewalks. She felt less safe walking around when the streets were emptier.

“It didn’t feel happy and positive like it used to,” she said.

. . .

The exodus to Florida was especially robust, and not just for the retiree crowd. In 2020, New York City had a net loss of nearly 21,000 residents to Florida, IRS data showed, almost double the average annual net loss from before the pandemic.

. . .

Zak Jacoby was the general manager of a bar on the Lower East Side when the pandemic hit. Throughout 2020, his employment status fluctuated with the city’s changing indoor dining rules, a stressful period that put him on and off unemployment benefits.

Mr. Jacoby, 37, flew to Miami in January 2021 to see a friend — and decided to stay permanently after getting a job offer at a local restaurant group. If there was another virus surge, he said, the state would be less likely to shut down businesses, giving him more job security.

“My mind-set was, Florida’s more lenient on Covid, and there’s going to be less regulation,” he said.

For the full story see:

Nicole Hong and Matthew Haag. “Exodus of New York’s Wealthy Leaves Lasting Costs in Wake.” The New York Times (Tuesday, June 28, 2022): A1 & A19.

(Note: ellipses added.)

(Note: the online version of the story has the same date as the print version, and has the title “The Flight of New York City’s Wealthy Was a Once-in-a-Century Shock.” The online version of the story says that the print version has the title “An Exodus of New York’s Wealthy Has Left Lasting Costs,” but my National print version has the somewhat different title “Exodus of New York’s Wealthy Leaves Lasting Costs in Wake.”)

Officers in Russian Military Are Rewarded for Following Orders, Not for Nimbly Taking Initiative

(p. A1) This war has exposed the fact that, to Russia’s detriment, much of the military culture and learned behavior of the Soviet era endures: inflexibility in command structure, corruption in military spending, and concealing casualty figures and repeating the mantra (p. A7) that everything is going according to plan.

. . .

The scripted way the military practices warfare, on display in last summer’s exercises, is telling. “Nobody is being tested on their ability to think on the battlefield,” said William Alberque, the Berlin-based director of the arms control program at the International Institute for Strategic Studies. Instead, officers are assessed on their ability to follow instructions, he said.

. . .

Rampant corruption has drained resources. “Each person steals as much of the allocated funds as is appropriate for their rank,” said retired Maj. Gen. Harri Ohra-Aho, the former Chief of Intelligence in Finland and still a Ministry of Defense adviser.

. . .

“It is impossible to imagine the scale of lies inside the military,” Mr. Irisov said. “The quality of military production is very low because of the race to steal money.”

One out of every five rubles spent on the armed forces was stolen, the chief military prosecutor, Sergey Fridinsky, told Rossiyskaya Gazeta, the official government newspaper, in 2011.

For the full story see:

Neil MacFarquhar. “Soviet-Era Tactics Hobble Russia on Battlefield.” The New York Times (Tuesday, May 17, 2022): A1 & A7.

(Note: ellipses added.)

(Note: the online version of the story has the date May 16, 2022, and has the title “Russia Planned a Major Military Overhaul. Ukraine Shows the Result.”)

“Quiet, Unassuming” Dr. Zelenko Got Twitter Suspension and Death Threats for Speaking on Hydroxychloroquine

Dr. Zelenko was stricken with a rare form of lung cancer in 2018, shortly before the Covid-19 pandemic. I wonder if that increased his personal sense of urgency to find a cure for Covid-19?

(p. A21) Vladimir Zelenko, a self-described “simple country doctor” from upstate New York who rocketed to prominence in the early days of the Covid-19 pandemic when his controversial treatment for the coronavirus gained White House support, died on Thursday in Dallas. He was 48.

. . .

Like many health care providers, he scrambled when the coronavirus began to appear in his community. Within weeks he had landed on what he insisted was an effective cure: a three-drug cocktail of the antimalarial drug hydroxychloroquine, the antibiotic azithromycin and zinc sulfate.

. . .

“At the time, it was a brand-new finding, and I viewed it like a commander in the battlefield,” Dr. Zelenko told The New York Times. “I realized I needed to speak to the five-star general.”

On March 28, [2020] the Food and Drug Administration granted emergency authorization to doctors to prescribe hydroxychloroquine and another antimalarial drug, chloroquine, to treat Covid. Mr. Trump called the treatment “very effective” and possibly “the biggest game changer in the history of medicine.”

But, as fellow medical professionals began to point out, Dr. Zelenko had only his own anecdotal evidence to support his case, and what little research had been done painted a mixed picture.

Still, he became something of a folk hero on the right, someone who offered not just hope amid the pandemic but also an alternative to the medical establishment and Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, who insisted that months of research would be needed to find an effective treatment.

. . .

A quiet, unassuming man, Dr. Zelenko seemed unprepared for the attention he received, which included harassing phone calls and even death threats. In May 2020, a federal prosecutor opened an investigation into whether he had falsely claimed F.D.A. approval for his research.

. . .

After the F.D.A. rescinded its approval of hydroxychloroquine as a Covid treatment, he founded a company, Zelenko Labs, to promote other nonconventional treatments for the disease, including vitamins and quercetin, an anti-inflammatory drug.

And while he claimed to be apolitical, he embraced the image of a victim of the establishment. He founded a nonprofit, the Zelenko Freedom Foundation, to press his case. In December 2020, Twitter suspended his account, stating that it had violated standards prohibiting “platform manipulation and spam.”

. . .

In a memoir, “Metamorphosis” (2018), Dr. Zelenko wrote that he grew up nonreligious and entered Hofstra University as an avowed atheist.

“I enjoyed debating with people and proving to them that G-d did not exist,” he wrote. “I studied philosophy and was drawn to nihilistic thinkers such as Sartre and Nietzsche.”

But after a trip to Israel, he began to change his mind. He gravitated toward Orthodox Judaism, and in particular the Chabad-Lubavitch movement.

He graduated from Hofstra in 1995 with a degree in chemistry, and he received his medical degree from the State University of New York at Buffalo in 2000.

. . .

In 2018, doctors found a rare form of cancer in his chest and, in hopes of treating it, removed his right lung.

For the full obituary see:

Clay Risen. “Vladimir Zelenko, 48, ‘Country Doctor’ Who Pushed Unfounded Covid Remedy.” The New York Times (Saturday, July 2, 2022): A21.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the obituary has the date July 1, 2022 and has the title “Vladimir Zelenko, 48, Dies; Promoted an Unfounded Covid Treatment.”)

Dr. Zelenko’s pre-Covid-19 memoir is:

Zelenko, Vladmir. Metamorphosis. Lakewood, NJ: Israel Bookshop Publications, 2019.

A highly credentialed Yale academic presented evidence of the promise of hydroxychloroquine for early outpatient treatment in:

Risch, Harvey A. “Early Outpatient Treatment of Symptomatic, High-Risk Covid-19 Patients That Should Be Ramped-up Immediately as Key to the Pandemic Crisis.” American Journal of Epidemiology 189, no. 11 (Nov. 2020): 1218–26.

Surge in Blacks Buying Guns “for Protection Against Crime”

(p. A17) It’s well known that gun sales have surged in recent years, but less well known is that blacks have led the trend. Retailers in an online survey conducted by the National Shooting Sports Foundation, a trade group, reported that they sold 58% more guns to black customers in the first half of 2020 than a year earlier, the highest increase for any ethnic group. Personal safety tops the list of why people decide to buy a firearm. In a 2021 Gallup survey, 88% of respondents said they own a gun “for protection against crime,” which is up from 67% in 2005.

. . .

The source of the problem is the failure or inability of the government to protect us. Common sense dictates that we do what is necessary to protect ourselves in the meantime.

For the full commentary, see:

Jason L. Riley. “Why Black Americans Are Buying More Guns.” The Wall Street Journal (Wednesday, June 8, 2022): A17.

(Note: ellipsis added.)

(Note: the online version of the commentary was updated June 7, 2022, and has the same title as the print version.)

Environmentalists on California Appeals Court Declare the Bumblebee to Be a Fish

(p. A9) What is black, yellow and coated in pollen?

Bumblebee, you say? A panel of top judges in California reviewed the matter and came up with fish, a judgment sending ripples across the state.

The unanimous ruling last week by a state appeals court was intended to straighten out a legal swarm involving conservationists, farmers and the interpretation of a scientifically challenged, half-century-old law.

. . .

(p. A10) California almond farmers were among those worrying about bees alighting on the endangered list. The state’s annual almond harvest, about 3 billion pounds, relies on bees pollinating as many as 1.3 million acres of the trees. Trade groups believe new protections would restrict farmers from working around bumblebees and prevent the use of pesticides, which protect trees but can hurt bees.

The farmers combed the text of California’s 1970 endangered-species law. It affords special protection to any endangered “bird, mammal, fish, amphibia or reptile.” Bees, farmers said, shouldn’t be included. The first California court to hear the case agreed, and the Fish and Game Commission appealed.

The commission pointed out that the legal definition of “fish” in California has been for years somewhat vague.

. . .

Justice Ronald Robie, author of the court’s opinion, is an expert in environmental law and wrote a textbook on the subject, according to his official biography. In his opinion, Justice Robie acknowledged the inevitable confusion.

“A fish, as the term is commonly understood in everyday parlance, of course, lives in aquatic environments,” he wrote, yet the court must follow its best interpretation of the legislature’s intent.

For the full story, see:

Matt Grossman. “In California, A Bumblebee Is a Fish.” The Wall Street Journal (Wednesday, June 8, 2022): A1 & A10.

(Note: ellipses added.)

(Note: the online version of the story was updated June 7, 2022, and has the title “When Is a Bumblebee a Fish? When a California Court Says So.”)

New York Subsidy of Buffalo Bills Stadium Sets NFL Boondoggle Record

(p. A21) ALBANY, N.Y. — New York State officials have reached a deal with the Buffalo Bills to use $850 million in public funds to help the team build a $1.4 billion stadium — the largest taxpayer contribution ever for a pro football facility.

. . .

. . ., the negotiations over a new stadium rekindled a bitter debate about whether government should be in the business of subsidizing arenas for professional sports teams; economic research has found that sports stadiums have rarely had a substantial impact, if any impact at all, on overall economic growth.

. . .

“To say you’re going to spend $850 million to get economic impacts, you’re playing on people’s emotions and not dealing with reality,” said Mark Rosentraub, a professor of sport management at the University of Michigan. “In the end, it’s nothing more than a subsidy to the N.F.L.”

Public assistance, in the form of tax breaks and free land, has been used to finance the construction of arenas for New York sports teams, but many of the teams, from the Yankees to the Mets, have financed most of the costs themselves. The Giants and the Jets, who play in New Jersey, paid for nearly all of their stadium, which opened in 2010.

For the full story, see:

Luis Ferré-Sadurní. “N.F.L.’s Buffalo Bills Close Deal for Taxpayer-Funded Stadium Costing $1.4 Billion.” The New York Times (Tuesday, March 29, 2022): A21.

(Note: ellipses added.)

(Note: the online version of the story has the date March 28, 2022, and has the title “Buffalo Bills Strike Deal for Taxpayer-Funded $1.4 Billion Stadium.”)

In 2020, After Deploring “Dark Money,” Democrats Spend $600 Million More Dark Money Than Republicans

(p. 1) For much of the last decade, Democrats complained — with a mix of indignation, frustration and envy — that Republicans and their allies were spending hundreds of millions of difficult-to-trace dollars to influence politics.

“Dark money” became a dirty word, as the left warned of the threat of corruption posed by corporations and billionaires that were spending unlimited sums through loosely regulated nonprofits, which did not disclose their donors’ identities.

Then came the 2020 election.

Spurred by opposition to then-President Trump, donors and operatives allied with the Democratic Party embraced dark money with fresh zeal, pulling even with and, by some measures, surpassing Republicans in 2020 spending, according to a New York Times analysis of tax filings and other data.

The analysis shows that 15 of the most politically active nonprofit organizations that generally align with the Democratic Party spent more than $1.5 billion in 2020 — compared to roughly $900 million spent by a comparable sample of 15 of the most politically active groups aligned with the G.O.P.

For the full story, see:

Kenneth P. Vogel and Shane Goldmacher. “Denouncing Dark Money, Then Deploying It in 2020.” The New York Times, First Section (Sunday, January 30, 2022): 1 & 22.

(Note: the online version of the story has the date January 29, 2022, and has the title “Democrats Decried Dark Money. Then They Won With It in 2020.”)

Some Texas Firms Resisted the Trend to Enter the Debate on the Texas Bill on the Integrity of Voting

On April 1, 2021, the Texas Senate passed Senate Bill 7 on “Election Integrity.”

(p. B6) . . . , Texas is an important state for big business, with companies and their employees drawn in part by tax incentives and the promise of affordable real estate. Several Silicon Valley companies have moved to Texas or expanded their presence there in recent years.

Apple plans to open a $1 billion campus in Austin next year, and produces some of its high-end computers at a plant in the area.

In December [2020], Hewlett Packard Enterprise announced that it would move its headquarters from California to the Houston area, while the software company Oracle said it would take its headquarters to Austin. And last month, Elon Musk issued a plea on Twitter for engineers to move to Texas and take jobs at SpaceX, his aerospace company.

Mr. Musk’s other companies, Tesla and the Boring Company, have also expanded their presences in the state in recent months.

None of those companies have so far voiced opposition to the Texas legislation. And at least for now, there is little indication that the growing outcry from big business is changing Republicans’ priorities.

For the full story, see:

David Gelles and Andrew Ross Sorkin. “Big Law Joins Fight To Protect Voting Rights.” The New York Times (Tuesday, April 13, 2021): B1 & B6.

(Note: ellipsis, and bracketed year, added.)

(Note: the online version of the story has the date April 12, 2021, and has the title “Defying Republicans, Big Companies Keep the Focus on Voting Rights.”)

Sugarman Spent $500,000 in a Losing Fight Against a $100,000 FTC Fine

(p. A12) Though many of his wackier ideas bombed, Mr. Sugarman came up with a big winner now and then, including pocket calculators in the early 1970s and his BluBlocker sunglasses, designed to filter out ultraviolet and blue light waves, starting in the 1980s.

. . .

Trouble came in 1979 when the Federal Trade Commission accused him of violating a rule requiring firms to send out mail-order items promptly or notify customers of delays. Mr. Sugarman said the delays were caused by blizzards and a computer breakdown. The FTC proposed a $100,000 fine.

Mr. Sugarman counterattacked with a pamphlet, “The Monster That Eats Business,” an indictment of the FTC illustrated with cartoons in the style of Mad magazine. He accused FTC officials of hounding him over trivial lapses. After six years of fighting, he agreed to a settlement requiring him to pay a fine of $115,000 over four years. Mr. Sugarman said he had spent $500,000 on legal fees and added that “we are completely innocent of the charges.”

The success of BluBlocker sunglasses dug him out of that hole. Mr. Sugarman had a home on Maui, where he published a weekly newspaper. He flew small airplanes. He drove a Ferrari Testarossa. He looked dapper in his BluBlockers.

For the full obituary, see:

James R. Hagerty. “Marketing Guru Survived His Flops and Found Hits.” The Wall Street Journal (Saturday, April 2, 2022): A12.

(Note: ellipsis added.)

(Note: the online version of the obituary has the date March 29, 2022, and has the title “Marketing Maverick Survived Flops, Found Hits.”)

Buffalo Stadium Subsidy Is Corporate and Union Welfare Pork

(p. A11) It’s bad enough that the budget agreement announced Thursday night by New York Gov. Kathy Hochul will shower more than $1 billion of the public’s money on a new stadium for the Buffalo Bills, a billionaire-owned football franchise that competes in the world’s most profitable sports league. But Ms. Hochul has attached conditions to the deal that will drive up the construction cost by roughly 20% and assure that a big chunk of the subsidy will be wasted. That contradicts her claim that she sought to negotiate the “best deal for taxpayers.”

Ms. Hochul is the first New York governor to hail from Buffalo since Grover Cleveland. Her husband is general counsel of Delaware North, the chief concessionaire at Highmark Stadium, the Bills’ current home in suburban Orchard Park. The new 60,000-seat facility is to be erected nearby, on the site of an existing stadium parking lot. Ms. Hochul says it’s a good deal for residents, who are rightly suspicious. So too are economists, whose strong consensus is that taxpayers almost always come out losers in publicly funded stadium projects, which chiefly enrich owners.

In this case, the corporate welfare pork is greased with a costly handout to unionized labor. That’s because of the state’s so-called prevailing-wage law, which effectively mandates that contractors on public construction projects such as schools, roads, bridges and subways pay union-level wages and benefits. Last year, a “source familiar with the negotiations” told the Buffalo News that the project’s $1.4 billion price tag was driven in part by “prevailing wage and union workforce requirements, among other rules.” Exactly how much the prevailing-wage law adds to the stadium deal is hard to know, but it’s likely in the hundreds of millions.

For the full commentary, see:

Peter Warren. “CROSS COUNTRY; The Buffalo Bills’ Stadium Subsidy Is a Hand-Off to Unions.” The Wall Street Journal (Saturday, April 9, 2022): A11.

(Note: the online version of the commentary has the date April 8, 2022, and has the same title as the print version.)