At first glance, Leo Kayser's proposals for Roosevelt Island appear to flow from a party-line analysis of private sector versus public sector economics. On one level he is simply following the approach of the Republican governor, George Pataki, who is praised on the RIOC Web site ("Better Than Ever") for having "shifted the focus of State government away from the failed policies of the 1980s and early 1990s and toward policies that promote freedom, encourage economic growth and prosperity and improve the quality of life for New Yorkers."

But Kayser brings more than a partisan zeal to these issues, and it is soon apparent, in conversation, that he prefers to build a case on many levels. As he proceeds, clause by clause, a practical matter only remotely related to Roosevelt Island seems to veer off into a complete digression, only to be pulled back into relevant focus and as part of a coherent, logical scheme. Perhaps most surprising is the consistent streak of populism that threads its way through Kayser's rather scholarly lectures.

The following exchange between WIRE editor Dick Lutz and Kayser is presented as a sample of a Leo Kayser "flight," if you will: an analysis that manages to connect the East Side condo market with the war in the Balkans, and the theory of tax regression, and wind up back right here on Roosevelt Island.

DL: You sit on a number of Boards.

Kayser: Well, I started out on the United Nations Development Corporation Board. About five years ago the Governor appointed me to that, and I have been involved in the privatization efforts there. The idea is that this is just a real-estate holding company. There was no reason for any of that real estate to be held in a governmental entity. And we've sold off the United Nations Plaza Hotel - that was for $102 million. We've sold off 633 Third Avenue... for 50-odd million dollars. We've sold off buildings on First Avenue, one of which was to Bhutan, which got some press because people got Bhutan confused with Burma. They were looking at human rights issues, but that [was] finally approved after about a two-year delay.

And we're in the process now of trying to sell off the balance of three buildings. And then we'll be out of the business of managing real estate over there. And what you do, by the way, when you sell these buildings off, is they go back on the tax rolls, you broaden the tax base, that property then becomes a part of your economy in the private sector.

When you have too much of your capital resources owned by the government, it really puts a dampening effect upon the vibrancy of your economy, and one of the reasons, in my opinion, why the economy in the Northeast, and particularly in the New York-New Jersey area, has not been as exuberant as in the South and other parts of the country is because so much of our capital structure is owned by government - just billions of dollars of capital structure owned by government - which could be privatized and used as collateral for other projects if it were in private hands, because government people are not that creative. They don't have the incentive. They want to see to it that things are run honestly and well and that they don't get criticized, but risk-taking and risk-reward evaluations and things like that - those equations just don't happen in a great natural fervor.

DL: So you're applying the same kind of philosophy as the UNDC work to RIOC to a certain extent.

LK: Well, I would not want to say it's the same. It's quite distinct and different. There are very different considerations. One, you don't have a constituency within the United Nations Development Corporation. This is pure bricks and mortar. There's not the issues of living conditions and quality of life and any of those things that you have [on Roosevelt Island], so that's very distinctive.

There are some general principles which I do bring to the analysis, which is that I suppose I still hold to Jeffersonian ideas that while you need government and government brings order to the relationship of people, that to the extent that government has a cost attached to it and you have to have taxes associated with it, and those taxes fall upon the economy as a whole, they generally filter down and hit lower-income people the hardest. Even though they may not be where the taxes fall, ultimately, the people who are hurt most by the cost of government are still your lower-income people, no matter how progressive theoretically your taxes are, it's still a tax on capital, a tax on labor, and it ultimately falls upon the poor people. You can try to redistribute it, which is the liberal-progressive philosophy, in order to keep it from hitting those lower-income people so badly, but the fact is that as you begin to recycle percentages of the economy through a governmental filter, with all sorts of social planning and the best of ideas and the best of objectives, there are inefficiencies which creep into that process: bureaucracy, all sorts of costs that get into the structure, and then a terrific amount of infighting and controversy as to how you divide up that pie, which has been sort of scraped off the top - skimmed, that's the word I'm looking for - you're skimming a certain part of the economy into a governmental public sector. And then people fight over it, and those fights become very politicized and subjective, and that's what's led, in the socialist countries in Europe, where so large a percentage of the economy is in government, that's why you have these ethnic groups at each other's throat, and the political process becomes, really, taking bread out of somebody's mouth and putting it in somebody else's mouth. That's why you have so much of the ethnic conflict in places like Yugoslavia, which is a highly socialized part of the world.

This country has been able to avoid a lot of that by trying to keep the private sector as large as possible and keeping the public sector as small as possible, but in this part of the country, in New York, we have a large public sector, and it does get into the public structure of the system. I mean, you see it in the ethnic politics we have in New York... and you see it in Roosevelt Island in the issues that people raise out there.

So I think there are going to be all sorts of benefits that come from people knowing that there's going to be a private-sector solution that is nondiscriminatory, not arbitrary, and people who have the initiative - you don't have to have the capital yourself, if you have the ideas and the initiative and it makes economic sense, you can get the capital through putting your deals together, and people on Roosevelt Island will have that opportunity as will anybody else. I mean, it's open access to where capital comes from in these projects we're talking about.