The legal ball that state Senator-elect Joe Markley tossed into the Superior Court has been batted by Judge Henry Cohen back to the Department of Public Utilities Control (DPUC).
Mr. Markley, striking a blow for Connecticut citizens and good government, filed a suit in October against the DPUC for having permitted a fee to appear on energy bills that anyone with half a brain would recognize as a disguised tax.
In 2000, the state legislature initiated energy deregulation in Connecticut. Having made inquiries of the state’s two largest energy distributors concerning the cost of deregulation, legislators were told the bill would run about $1.7 billion. Rather than raise the money for deregulation though a forthright tax, it was decided to pay for deregulation through bonding. The bonds used to pay the cost were securitized by the imposition of a fee on electric bills amounting to about $15 per month. The Competitive Transition Assessment (CTA), which has been appearing on electric bills for a few years, was set to expire in 2011 for one company and 2013 for another.
Through a combination of impudence and imprudence, Connecticut in the meanwhile had accumulated a budget deficit of some $3.5 billion in each of the next two years and beyond. The governor and the legislature, lacking the courage to raise taxes before an upcoming election, as usual stuffed the 2011 budget hole with temporary and dubious fixes, one of which is a brand new tax to be applied as a fee on energy bills. This one -- a so called “fee” with lipstick on it designed to look like Marylyn Monroe, though it is an obvious tax pig – the legislature, with a bow to George Orwell, called the Economic Transition Charge (ETC). Having received no political push back the first time when the legislature secreted a tax in the form of a “fee” in energy bills, a repeat was in order.
Who says you can’t fool all the people all the time?
When Mr. Markey noticed the imposture, he filed a suit contesting the imposition on two grounds: The DPUC, he argued, lacked the authority to implement the tax; and the tax was also inequitable because ratepayers in several districts would not be required to pay it. Judge Cohen recently decided that Mr. Markley had not exhausted all the administrative remedies available to him before filing suit and, while making no decision on the merits of the case, ruled that Mr. Marley should exhaust himself by first seeking a remedy from the DPUC, which is on the order of seeking a missing chicken from the full bellied, satiated and smiling fox in the henhouse. In oral argument, Mr. Markley characterized this route as “a matter of theatre,” showing that there is room in legal pleadings for searing poetry.
To people unused to artful legal subtleties, it may seem obvious that the legislature, suffering from a lack of courage, delegated the DPUC to implement a tax used to securitize bonds the proceeds from which would be dumped into the state’s depleted general fund. Assessments collected from citizens and transferred to the general fund to pay off debts incurred by legislatures are taxes, though these collections have cleverly been styled as “fees” to dupe citizen the legislature has tapped out with taxes.
Perhaps in Utopia one might expect from judges clear, courageous and constitutional rulings. But Connecticut is very far from Utopia. The usual outcome in cases involving taxes is to allow the taxing authority as much liberty as needed to fill state coffers; the whole governmental apparatus, judges being a principle part of the Republic’s tri-partite structure, feeds at the same public trough. Empty bellies and possible joblessness within the public sector are powerful inducements, sometimes more persuasive than measures that truly advance the public good.
According to a luminous story in the Ridgefield Press written by Carrie Schmelkin and Macklin Reid, Mr. Markley, not at all intimidated, has said he intends to press on with his suit. State Senator Toni Boucher and state Rep John Frey, both representing Ridgefield, have placed themselves on the side of the angels and overtaxed citizens. They are certain to be joined by other conscientious legislators courageous enough to confront chicanery and call it by its right name.
The case made by Mr. Markley against this odious hidden tax -- paid by everyone, by the way, including the 80 year old mothers of editorial writers who have not yet muckraked this obvious imposture -- should not be permitted to whither on the judicial vine, even if the courts should decide in favor of legislative duplicity. Preeminently, this subterfuge is a political matter and should be resolved at the voting booth by those people in Connecticut -- Republican, Democratic and Independents -- who refuse to allow themselves to be fooled all the time.
At the very least, these controversial and inappropriate “fees” should figure prominently in upcoming campaigns for legislative seats opened when Governor-elect Malloy reached into the legislature to fill important positions in an administration that he has promised countless times would be forthright, transparent and honest.
Friday, December 31, 2010
Tuesday, December 28, 2010
What “A Spending Problem” Means
Russell Long of Louisiana, son of the more notorious Huey Long, is famous for having said, “Don’t tax you, don’t tax me. Tax that fellow behind the tree.”
Mr. Long was no stranger to tax laws, having served as Chairman of the Senate Finance Committee for several years from 1966 to 1981, after which Republicans assumed control of the Senate. The prominent Democrat was an unashamed proponent of tax breaks for businesses. “I have become convinced,” he once said, “you’re going to have to have capital; if you’re going to have capitalism.” At the same time, he was somewhat wary of “tax reform” which, to his way of thinking, involved a certain amount of political subterfuge: “Don’t tax you, don’t tax me. Tax that fellow behind the tree.”
In Connecticut, the fellows behind the tree are thought to be capitalists “millionaires” earning more than $250,000 per year, most of them quartered in what we have come to call the “Gold Coast.” It is no surprise that “millionaires” in the United States have been down graded since the sixteenth amendment establishing the tax was ratified in 1913, at which time the top tax rate was 7% on incomes above $500,000, about $10 million in 2007 dollars. During World War I, the top rate rose to 77% while the income threshold that deposited millionaires in the top bracket rose to $1,000,000 or $16 million in 2007 dollars. Following the war, the top rate was reduced to 24% and the income threshold for paying this rate fell to a low of $100,000 or $1 million in 2007 dollars. But over time the tax was more broadly levied to include the proletariat. Begun as a tax on millionaires and multi-millionaires, the income tax eventually ended as a tax on pastry cooks and hairdressers. We are the future mysterious fellows behind the tree.
Almost everyone in state government, with the possible exception of Speaker of the House Chris Donovan, has now become convinced that Connecticut has a spending and not a revenue problem. Such was the buried assumption in most Democratic campaigns in this the winter of our discontent.
On Sunday the Hartford Courant, whose editorial page editors several years ago reminded us that the state had a "revenue not a spending problem," repented in sackcloth and ashes, courageously advising legislators in a sprawling 1,400 word editorial, “Agenda: For The State” to -- STOP SPENDING MONEY.
For added emphasis, the paper quoted former Governor and Senator Lowell Weicker, father of the state income tax and a notorious revenue raiser:
Key to understanding the obvious and direct correlation between getting and spending is this golden perception: If you don’t tax it, you can’t spend it.” Its destructive corollary is: If you “solve” a spending problem by raising new revenue, it will not be long before the revenue is spent, producing – this is not rocket science – more debt and, shortly following, more and higher revenue increases. This is how dangerously red permanent budget holes are dug. Given the dialectic “more revenue raising leads ineluctably to more spending,” one may question whether Mr. Weicker’s solution “solved” the state’s deficit, which today is many times larger than it was during the first golden days of Mr. Weicker’s one term administration. When Connecticut’s editorial pontificators grasp the causal connection between getting and spending, their conversion may be complete.
The sorrowful truth is that Connecticut has run out trees behind which may be found mythical taxpayers. The recklessly destructive spending spree that followed the Weicker income tax, and the bottomless abyss of federal spending that has followed the current deep recession, have emptied the forest of hiding spots: There is no painless way to spend money and hand off the bill to the quarter-millionaires Donovan and others suppose will pay it.
Connecticut’s state debt, not counting the state’s massive pension liability, amounts to about $3.5 billion for each of the next three years, which means that Connecticut must reduce its spending by a like number – PERMANENTLY.
But the prospect of permanent reductions in spending have had in the past the same effect upon leaders in the state’s Democratic caucus that water had on the wicked witch of the West in The Wizard Of Oz. And it is very much an open question whether Governor-elect Dan Malloy can convince such leaders as Donovan that the dissolution of the state awaits those who lack the necessary mental and emotional skill set to appreciate the problem and its ONLY sound solution -- STOP SPENDING MONEY.
Mr. Long was no stranger to tax laws, having served as Chairman of the Senate Finance Committee for several years from 1966 to 1981, after which Republicans assumed control of the Senate. The prominent Democrat was an unashamed proponent of tax breaks for businesses. “I have become convinced,” he once said, “you’re going to have to have capital; if you’re going to have capitalism.” At the same time, he was somewhat wary of “tax reform” which, to his way of thinking, involved a certain amount of political subterfuge: “Don’t tax you, don’t tax me. Tax that fellow behind the tree.”
In Connecticut, the fellows behind the tree are thought to be capitalists “millionaires” earning more than $250,000 per year, most of them quartered in what we have come to call the “Gold Coast.” It is no surprise that “millionaires” in the United States have been down graded since the sixteenth amendment establishing the tax was ratified in 1913, at which time the top tax rate was 7% on incomes above $500,000, about $10 million in 2007 dollars. During World War I, the top rate rose to 77% while the income threshold that deposited millionaires in the top bracket rose to $1,000,000 or $16 million in 2007 dollars. Following the war, the top rate was reduced to 24% and the income threshold for paying this rate fell to a low of $100,000 or $1 million in 2007 dollars. But over time the tax was more broadly levied to include the proletariat. Begun as a tax on millionaires and multi-millionaires, the income tax eventually ended as a tax on pastry cooks and hairdressers. We are the future mysterious fellows behind the tree.
Almost everyone in state government, with the possible exception of Speaker of the House Chris Donovan, has now become convinced that Connecticut has a spending and not a revenue problem. Such was the buried assumption in most Democratic campaigns in this the winter of our discontent.
On Sunday the Hartford Courant, whose editorial page editors several years ago reminded us that the state had a "revenue not a spending problem," repented in sackcloth and ashes, courageously advising legislators in a sprawling 1,400 word editorial, “Agenda: For The State” to -- STOP SPENDING MONEY.
For added emphasis, the paper quoted former Governor and Senator Lowell Weicker, father of the state income tax and a notorious revenue raiser:
“’The spending cuts have to come, and they have got to be huge,’ says former Gov. Lowell P. Weicker Jr., who solved the state's billion-dollar deficit 20 years ago by instituting a state income tax. ‘It certainly has been spent,’ he says."
Key to understanding the obvious and direct correlation between getting and spending is this golden perception: If you don’t tax it, you can’t spend it.” Its destructive corollary is: If you “solve” a spending problem by raising new revenue, it will not be long before the revenue is spent, producing – this is not rocket science – more debt and, shortly following, more and higher revenue increases. This is how dangerously red permanent budget holes are dug. Given the dialectic “more revenue raising leads ineluctably to more spending,” one may question whether Mr. Weicker’s solution “solved” the state’s deficit, which today is many times larger than it was during the first golden days of Mr. Weicker’s one term administration. When Connecticut’s editorial pontificators grasp the causal connection between getting and spending, their conversion may be complete.
The sorrowful truth is that Connecticut has run out trees behind which may be found mythical taxpayers. The recklessly destructive spending spree that followed the Weicker income tax, and the bottomless abyss of federal spending that has followed the current deep recession, have emptied the forest of hiding spots: There is no painless way to spend money and hand off the bill to the quarter-millionaires Donovan and others suppose will pay it.
Connecticut’s state debt, not counting the state’s massive pension liability, amounts to about $3.5 billion for each of the next three years, which means that Connecticut must reduce its spending by a like number – PERMANENTLY.
But the prospect of permanent reductions in spending have had in the past the same effect upon leaders in the state’s Democratic caucus that water had on the wicked witch of the West in The Wizard Of Oz. And it is very much an open question whether Governor-elect Dan Malloy can convince such leaders as Donovan that the dissolution of the state awaits those who lack the necessary mental and emotional skill set to appreciate the problem and its ONLY sound solution -- STOP SPENDING MONEY.
Wednesday, December 22, 2010
Joe Lieberman And His Enemies
U.S. Sen. Joe Lieberman’s principled stand in favor of ending the invidious “don’t ask don’t tell” policy in the U.S. military has elevated him to heroic status among some liberals, but the news continues to rasp the more tender consciences of puritanical progressives who feel they must applaud Mr. Lieberman’s efforts even as they strenuously condemn the man.
All this hero worship, Greg Hladky writes in the Fairfield Weekly, is a Washington beltway distortion: “Isn't it interesting how different the Lieberman situation appears down in Washington compared to the Lieberman reality back home?... Lieberman stands virtually no chance of winning the Democratic U.S. Senate nomination.”
Here at home in the progressive camp, Mr. Lieberman’s dark deeds will not easily be forgotten or forgiven. Mr. Hladky ticks off a familiar bill of particulars:
The loss of a party primary “due in large part to his unrelenting support of the wars in Iraq and Afghanistan” forced Mr. Lieberman to run as an independent in 2006 and “compelled him, ill-advisedly, to support John McCain for president in 2008, and ironically the GOP senator from Arizona emerged as one of the most vocal opponents of ‘don't ask, don't tell.’"
Some progressives might quibble somewhat with the word “compelled”; the senator is, after all, a grown man and well above the age of reason. Politicians generally are “compelled” to do or say this and that in the same sense that the denizens of bordellos are compelled to do business with each other. Time and chance have not treated kindly some legislators who bolted their parties to run as independents. Neither Charlie Crist (R-I-Fl) nor Arlen Specter (D-R-D-PA) are serving any longer in the U.S. Congress.
Mr. Lieberman incautiously has left in his wake a rich store of UTube clips tracing the outline of what progressive consider his rank betrayal of the left wing of their party. Could he defend himself, Mr. Lieberman likely would say, along with former President Ronald Reagan, that his party left him, though at least one progressive in Mr. Lieberman’s party, President Barack Obama, has since assuming office veered to the middle on issues of war and peace. Tactically, Mr. Obama’s position on Afghanistan bears a striking resemblance to former President George Bush’s position on Iraq.
Similar campaign killer clips – which save lazy commentators the necessity of thinking seriously about issues – were used successfully to torpedo Linda McMahon’s campaign for the U.S. Senate. These bloody slices of demagoguery are the equivalents of knives drawn across the throats of people who cannot argue with damning visuals: wrestlers slamming each other in the ring, Mr. Lieberman bussing Mr. Bush on the floor of congress. Mrs. McMahon was also unfortunate enough to have earned her millions to self finance her campaign; and while Mr. Lieberman is no multi-millionaire, he does have more than a million campaign bucks socked away under his pillow in case one or another of his potential Democratic challengers should summon the courage to attempt to beard the lion in his den.
Mr. Lieberman’s challengers so far are being coy, perhaps hoping that the senior senator from Connecticut will follow U.S. Sen. Chris Dodd’s sterling example and leave the senate after his weak points have been sufficiently probed by assassins in the media who really should be supporting term limits.
That’s right, term limits. Good for what ails you, term limits would have the same beneficial effect on a sclerotic political system that the retirements of Mr. Dodd Mrs. Rell this year have had in Connecticut on media sales. When time servers leave the political arena, things begin to pop. People come out of the woodwork to vote, patriotism flutters from every street corner, and nearly everyone sinks happily into the comforting illusion that this time the country as a whole will enjoy, in the immortal world of Mr. Abraham Lincoln “a new burst of freedom.”
All this hero worship, Greg Hladky writes in the Fairfield Weekly, is a Washington beltway distortion: “Isn't it interesting how different the Lieberman situation appears down in Washington compared to the Lieberman reality back home?... Lieberman stands virtually no chance of winning the Democratic U.S. Senate nomination.”
Here at home in the progressive camp, Mr. Lieberman’s dark deeds will not easily be forgotten or forgiven. Mr. Hladky ticks off a familiar bill of particulars:
“It wasn't just Lieberman's unquestioning support for the Iraq war that produced the hostility. It wasn't just Joe's affectionate closeness to George W. Bush, or his decision to speak at the 2008 Republican National Convention and campaign for his buddy John McCain and against Barack Obama, or his suggestion that he might support Republican Linda McMahon in Connecticut's U.S. Senate race this year.Mr. Lieberman’s position and perseverance on the issue of gays in the military received at the more moderate New London Day an encouraging response: “Sen. Lieberman's determination to reverse the policy may help redeem his reputation in his home state, with which he has had a love-hate relationship in recent years.”
“It was all those things and the feeling that Joe has for a long time considered himself better than the Connecticut Democrats who used to believe in him, who used to think they knew who he was.”
The loss of a party primary “due in large part to his unrelenting support of the wars in Iraq and Afghanistan” forced Mr. Lieberman to run as an independent in 2006 and “compelled him, ill-advisedly, to support John McCain for president in 2008, and ironically the GOP senator from Arizona emerged as one of the most vocal opponents of ‘don't ask, don't tell.’"
Some progressives might quibble somewhat with the word “compelled”; the senator is, after all, a grown man and well above the age of reason. Politicians generally are “compelled” to do or say this and that in the same sense that the denizens of bordellos are compelled to do business with each other. Time and chance have not treated kindly some legislators who bolted their parties to run as independents. Neither Charlie Crist (R-I-Fl) nor Arlen Specter (D-R-D-PA) are serving any longer in the U.S. Congress.
Mr. Lieberman incautiously has left in his wake a rich store of UTube clips tracing the outline of what progressive consider his rank betrayal of the left wing of their party. Could he defend himself, Mr. Lieberman likely would say, along with former President Ronald Reagan, that his party left him, though at least one progressive in Mr. Lieberman’s party, President Barack Obama, has since assuming office veered to the middle on issues of war and peace. Tactically, Mr. Obama’s position on Afghanistan bears a striking resemblance to former President George Bush’s position on Iraq.
Similar campaign killer clips – which save lazy commentators the necessity of thinking seriously about issues – were used successfully to torpedo Linda McMahon’s campaign for the U.S. Senate. These bloody slices of demagoguery are the equivalents of knives drawn across the throats of people who cannot argue with damning visuals: wrestlers slamming each other in the ring, Mr. Lieberman bussing Mr. Bush on the floor of congress. Mrs. McMahon was also unfortunate enough to have earned her millions to self finance her campaign; and while Mr. Lieberman is no multi-millionaire, he does have more than a million campaign bucks socked away under his pillow in case one or another of his potential Democratic challengers should summon the courage to attempt to beard the lion in his den.
Mr. Lieberman’s challengers so far are being coy, perhaps hoping that the senior senator from Connecticut will follow U.S. Sen. Chris Dodd’s sterling example and leave the senate after his weak points have been sufficiently probed by assassins in the media who really should be supporting term limits.
That’s right, term limits. Good for what ails you, term limits would have the same beneficial effect on a sclerotic political system that the retirements of Mr. Dodd Mrs. Rell this year have had in Connecticut on media sales. When time servers leave the political arena, things begin to pop. People come out of the woodwork to vote, patriotism flutters from every street corner, and nearly everyone sinks happily into the comforting illusion that this time the country as a whole will enjoy, in the immortal world of Mr. Abraham Lincoln “a new burst of freedom.”
Friday, December 17, 2010
Is Malloy Serious?
How do you know when a politician is serious about what he says? You watch what he does. The assessing requires a careful attention to words measured, as a tailor measures cloth to a pattern, against actions.
Just now, prior to his taking office, most people who write about politics are weighing words and asking themselves important questions concerning Governor-elect Dan Malloy. If campaigns are a theatre of words, holding office is a theatre of action. It will not – because it cannot – be long before Mr. Malloy presents his budget. A budget is not a speech; it is an action plan that will set the future of Connecticut for Mr. Malloy’s first term and beyond, and it is very likely that his budget, after its particulars are finalized by Connecticut’s dominant Democratic legislature, will determine both the fate of Connecticut, now knee deep in red ink, as well as the future of individual legislators. Voters tend to be somewhat impatient with politicians responsible for the failure of states, and Connecticut, by any reasonable measure, is a failing state.
Managing Editor of the Journal Inquirer Chris Powell took the measure of Mr. Malloy in one of his recent columns. “Facing a state budget gap of nearly 20 percent between planned expenditures and likely revenue,” Mr. Powell wrote, “Connecticut state government needs ‘systemic’ changes, Gov.-elect Dan Malloy told a business group breakfast in Hartford this week. What does that mean?
“Does it mean the sort of ‘systemic’ change Connecticut got when the state income tax was enacted in 1991 -- higher taxes and bigger government serving only to diminish Connecticut's quality of life? Probably.”
Mr. Powell wants Mr. Malloy to move Connecticut’s so called “fixed costs” -- “collective bargaining for public employees, binding arbitration of public employee union contracts, public employee pensions, ‘prevailing wage’ requirements for government construction projects” – out of the “fixed” column into the fixable column, because these costs, presently safe from meddling interference from legislators and governors alike, are the most costly costs. Any attempt in the future to cut spending without pruning “fixed costs” necessarily must be an exercise in futility. Bringing such costs into the arena of legislative action would empower the governor and the state legislature to fix such holes in the state’s bucket as its stratospheric pension obligations.
Consider: The pension fund has $9 billion in assets and $21 billion in liabilities, which represents 45% of coverage. But, Mr. Powell writes, “instead of fixing the problem, state government lately has been diverting pension fund contributions and spending them. Fixing the problem -- depositing another $8 billion into the pension fund to reach the actuarial standard of 80 percent coverage -- would consume 42 percent of the current state budget of $19 billion if done in a single year. Even done over four years, a fix would consume 10 percent of the budget.”
Connecticut’s debt, the largest per capita debt in the nation, is so deeply rooted that one might reasonably conclude the state no longer has the luxury of protecting large areas of spending by removing them from ordinary legislative action. The present system of governance, in which huge swaths of spending are designated untouchable as “fixed costs,” is part of the architecture of government-by-special-interests. It is becoming increasingly apparent that professions of special interests are conspiracies against the general interest and the common good. Removing areas of spending from cuts made by elected representatives is a recipe for accelerated spending and tax increases. If 75% of the state’s fixed costs are untouchable, only 25% of state debt may be reduced through spending cuts; or, to put it another way, 75% of increased costs MUST be resolved through tax increases, which is why, come to think of it, spending in Connecticut has increased so dramatically since the institution of the income tax. Last year, the Democratic legislature made the tax more progressive. The Promethian hill we climb, only to have the rock roll down to the bottom once we reach the top, IS the fixed costs structure. Tax increase are permissions to spend; it does not take long for a government that has forbidden itself to cut “fixed costs” to rise to the occasion.
Preparing to attack some of these problems, Mr. Malloy recently addressed two seemingly antagonistic groups. The MetroHartford Alliance is a group devoted to spurring business activity. Hearing Mr. Malloy lament that Connecticut ranks 35th among states in a pro business environment, members of the group no doubt were encouraged to think that the speaker was prepared to offer painful but effective remedial action. The members of the second group, the Working Families Party, a union scheme to elect friendly politicians, were as delighted to hear from a politician they helped to elect to office the soothing message that he was committed to maintain an ever broadening safety that would secure the interests of unionized workers.
No one should doubt Mr. Malloy’s ability to turn heads and hearts with words; in this, he bears a striking resemblance to the nation’s sweet tongued president, Barack Obama, whose political agenda Mr. Malloy enthusiastically embraces. Beyond words lie actions. It is by their actions that political actors will be judged – not by the intent of the actors, but rather by the practical consequences of their actions.
Just now, prior to his taking office, most people who write about politics are weighing words and asking themselves important questions concerning Governor-elect Dan Malloy. If campaigns are a theatre of words, holding office is a theatre of action. It will not – because it cannot – be long before Mr. Malloy presents his budget. A budget is not a speech; it is an action plan that will set the future of Connecticut for Mr. Malloy’s first term and beyond, and it is very likely that his budget, after its particulars are finalized by Connecticut’s dominant Democratic legislature, will determine both the fate of Connecticut, now knee deep in red ink, as well as the future of individual legislators. Voters tend to be somewhat impatient with politicians responsible for the failure of states, and Connecticut, by any reasonable measure, is a failing state.
Managing Editor of the Journal Inquirer Chris Powell took the measure of Mr. Malloy in one of his recent columns. “Facing a state budget gap of nearly 20 percent between planned expenditures and likely revenue,” Mr. Powell wrote, “Connecticut state government needs ‘systemic’ changes, Gov.-elect Dan Malloy told a business group breakfast in Hartford this week. What does that mean?
“Does it mean the sort of ‘systemic’ change Connecticut got when the state income tax was enacted in 1991 -- higher taxes and bigger government serving only to diminish Connecticut's quality of life? Probably.”
Mr. Powell wants Mr. Malloy to move Connecticut’s so called “fixed costs” -- “collective bargaining for public employees, binding arbitration of public employee union contracts, public employee pensions, ‘prevailing wage’ requirements for government construction projects” – out of the “fixed” column into the fixable column, because these costs, presently safe from meddling interference from legislators and governors alike, are the most costly costs. Any attempt in the future to cut spending without pruning “fixed costs” necessarily must be an exercise in futility. Bringing such costs into the arena of legislative action would empower the governor and the state legislature to fix such holes in the state’s bucket as its stratospheric pension obligations.
Consider: The pension fund has $9 billion in assets and $21 billion in liabilities, which represents 45% of coverage. But, Mr. Powell writes, “instead of fixing the problem, state government lately has been diverting pension fund contributions and spending them. Fixing the problem -- depositing another $8 billion into the pension fund to reach the actuarial standard of 80 percent coverage -- would consume 42 percent of the current state budget of $19 billion if done in a single year. Even done over four years, a fix would consume 10 percent of the budget.”
Connecticut’s debt, the largest per capita debt in the nation, is so deeply rooted that one might reasonably conclude the state no longer has the luxury of protecting large areas of spending by removing them from ordinary legislative action. The present system of governance, in which huge swaths of spending are designated untouchable as “fixed costs,” is part of the architecture of government-by-special-interests. It is becoming increasingly apparent that professions of special interests are conspiracies against the general interest and the common good. Removing areas of spending from cuts made by elected representatives is a recipe for accelerated spending and tax increases. If 75% of the state’s fixed costs are untouchable, only 25% of state debt may be reduced through spending cuts; or, to put it another way, 75% of increased costs MUST be resolved through tax increases, which is why, come to think of it, spending in Connecticut has increased so dramatically since the institution of the income tax. Last year, the Democratic legislature made the tax more progressive. The Promethian hill we climb, only to have the rock roll down to the bottom once we reach the top, IS the fixed costs structure. Tax increase are permissions to spend; it does not take long for a government that has forbidden itself to cut “fixed costs” to rise to the occasion.
Preparing to attack some of these problems, Mr. Malloy recently addressed two seemingly antagonistic groups. The MetroHartford Alliance is a group devoted to spurring business activity. Hearing Mr. Malloy lament that Connecticut ranks 35th among states in a pro business environment, members of the group no doubt were encouraged to think that the speaker was prepared to offer painful but effective remedial action. The members of the second group, the Working Families Party, a union scheme to elect friendly politicians, were as delighted to hear from a politician they helped to elect to office the soothing message that he was committed to maintain an ever broadening safety that would secure the interests of unionized workers.
No one should doubt Mr. Malloy’s ability to turn heads and hearts with words; in this, he bears a striking resemblance to the nation’s sweet tongued president, Barack Obama, whose political agenda Mr. Malloy enthusiastically embraces. Beyond words lie actions. It is by their actions that political actors will be judged – not by the intent of the actors, but rather by the practical consequences of their actions.
Monday, December 6, 2010
Unemployment Up - And Responses?
From the Bureau of Labor Statistics:
This is an absolute disaster - so what's the solution? No, it's not giving tax breaks to the rich. Nor is it discontinuing unemployment compensation to force people to go back to work. It's more stimulus - a lot more. But that's not going to happen - thanks to the idiots in Washington who think deficit reduction is more important than putting people to work - and that idiocly seems to go all the way to the top.
Bernie Sanders tells it like it is:
The number of unemployed persons was 15.1 million in November. The unemployment rate edged up to 9.8 percent; it was 9.6 percent in each of the prior 3 months.
Among the major worker groups, the unemployment rates for adult men (10.0 per-
cent), adult women (8.4 percent), whites (8.9 percent), and Hispanics (13.2 per-
cent) edged up in November. The jobless rate for blacks (16.0 percent) showed little change over the month, while the rate for teenagers declined to 24.6 percent. The jobless rate for Asians was 7.6 percent, not seasonally adjusted.
Among the unemployed, the number of job losers and persons who completed temporary jobs rose by 390,000 to 9.5 million in November. The number of long-term unemployed (those jobless for 27 weeks and over) was little changed at 6.3 million and accounted for 41.9 percent of the unemployed.
This is an absolute disaster - so what's the solution? No, it's not giving tax breaks to the rich. Nor is it discontinuing unemployment compensation to force people to go back to work. It's more stimulus - a lot more. But that's not going to happen - thanks to the idiots in Washington who think deficit reduction is more important than putting people to work - and that idiocly seems to go all the way to the top.
Bernie Sanders tells it like it is:
Sunday, December 5, 2010
Welcome To The One Party State
Governor-elect Dan Malloy, with an impressive assist from big cities such and Bridgeport and New Haven, won the election with enough votes to satisfy pretty nearly everyone, including outgoing Secretary of State Susan Bysiewicz, which means that Republican gubernatorial candidate Tom Foley, who had pledged during the campaign to settle the state’s massive debt without an tax increase, lost.
The winners in the elections decide all important matters, including the two most important questions in politics: What is to be done, and who decides what is to be done? The answer to the second questions is heavily implicated, as the cops might say, in the first question, since deciders map the future.
Connecticut has now become a one party state, all the deciders being Democrats. For the foreseeable future, the Republican Party will be a loyal opposition that lacks the power to oppose, except on those rare occasions when it may make common cause with moderate legislative Democrats or a governor who has placed himself in opposition to a dominant Democratic legislative caucus. The real power vectors are to be found in the governor’s office and the state legislature, both commanded by Democrats, ever obedient to their traditional interests.
Occasionally, the media may play a role in shaping the direction of these vectors; but in a one party state, its countervailing influence is much diminished. And in a one party state in which the media leans to the left – welcome to Connecticut – the media, as a traditional left of center opposition useful in states that lean to the right, tends to disappear into a power structure that like-mindedly leans to the left, co-opted by a system of governance in which the enemy lies always to its right. Useful news, as opposed to cleverly concealed party propaganda, is for the most part opposition reporting. News is most alive, alert and visible when the media opposes the status quo. It disappears altogether when the media assents internally to a left or right regime. In a one party state in which both the government and the media are either left or right of center, news consumers tend towards cynicism and news producers lose their customers.
Government in a one party state tends to be conducted through movable caucuses that operate behind impenetrable veils either with the assistance or reprobation of a media that is entirely dependant on news shaped by unchallenged governors, administrators and legislators, all working in tandem to advance the interests of the governing sector.
To put it briefly, the power vectors in a one party state bend towards authoritarian rather than democratic means and solutions. In a one party state in which both the media and the governing power is reflexively leftist -- welcome to Connecticut – a feeble opposition from the right can easily be ignored. In a one party state in which an assenting media permits itself to be absorbed by the governing power, intelligent opposition, including the corrective opposition one expects in a vibrant democracy, tends to disappear.
One party states on the right tend to eliminate opposition on the left; one party states on the left tend to eliminate opposition on the right.
The most important attribute of a vibrant democracy is opposition to the status quo.
It is not difficult to paint a picture of the status quo in Connecticut. The General Assembly has been dominated for years by Democrats. Republican governors have done little more than tap the breaks on the state’s forward moving, increasingly progressive spending machine. The inability of two Republican governors and a faux Republican governor, Lowell Weicker, to reign in spending is one of the principal marks of a one party state. For two decades, there has been little effective opposition to spending from the state’s left of center media. And even now that a crippling recession is growling wolf-like at the door, important media outlets continue to insist that scarce money should be dumped into dubious projects such as an improved rail line that will more efficiently carry a hand full of employed commuters across a state teetering on the edge of bankruptcy. The state’s current bonding debt is a little less than $20 billion; its budget debt two years out is about $6 billion.
With the ascension of a Democratic governor, the possibility of an effective opposition to a continuing status quo that will render Connecticut uncompetitive with other states, once the weight of a recession is removed, becomes ever more remote.
That is why some small “d” democrats now are sifting through Mr. Malloy’s past and recent media interviews for indications that he is not captive to a political narrative incapable of restoring Connecticut’s competitive edge in a post recession period. Some cynics would be satisfied with an unambiguous signal that Mr. Malloy’s brake foot is in good order. So far, there is little reason for celebration.
The winners in the elections decide all important matters, including the two most important questions in politics: What is to be done, and who decides what is to be done? The answer to the second questions is heavily implicated, as the cops might say, in the first question, since deciders map the future.
Connecticut has now become a one party state, all the deciders being Democrats. For the foreseeable future, the Republican Party will be a loyal opposition that lacks the power to oppose, except on those rare occasions when it may make common cause with moderate legislative Democrats or a governor who has placed himself in opposition to a dominant Democratic legislative caucus. The real power vectors are to be found in the governor’s office and the state legislature, both commanded by Democrats, ever obedient to their traditional interests.
Occasionally, the media may play a role in shaping the direction of these vectors; but in a one party state, its countervailing influence is much diminished. And in a one party state in which the media leans to the left – welcome to Connecticut – the media, as a traditional left of center opposition useful in states that lean to the right, tends to disappear into a power structure that like-mindedly leans to the left, co-opted by a system of governance in which the enemy lies always to its right. Useful news, as opposed to cleverly concealed party propaganda, is for the most part opposition reporting. News is most alive, alert and visible when the media opposes the status quo. It disappears altogether when the media assents internally to a left or right regime. In a one party state in which both the government and the media are either left or right of center, news consumers tend towards cynicism and news producers lose their customers.
Government in a one party state tends to be conducted through movable caucuses that operate behind impenetrable veils either with the assistance or reprobation of a media that is entirely dependant on news shaped by unchallenged governors, administrators and legislators, all working in tandem to advance the interests of the governing sector.
To put it briefly, the power vectors in a one party state bend towards authoritarian rather than democratic means and solutions. In a one party state in which both the media and the governing power is reflexively leftist -- welcome to Connecticut – a feeble opposition from the right can easily be ignored. In a one party state in which an assenting media permits itself to be absorbed by the governing power, intelligent opposition, including the corrective opposition one expects in a vibrant democracy, tends to disappear.
One party states on the right tend to eliminate opposition on the left; one party states on the left tend to eliminate opposition on the right.
The most important attribute of a vibrant democracy is opposition to the status quo.
It is not difficult to paint a picture of the status quo in Connecticut. The General Assembly has been dominated for years by Democrats. Republican governors have done little more than tap the breaks on the state’s forward moving, increasingly progressive spending machine. The inability of two Republican governors and a faux Republican governor, Lowell Weicker, to reign in spending is one of the principal marks of a one party state. For two decades, there has been little effective opposition to spending from the state’s left of center media. And even now that a crippling recession is growling wolf-like at the door, important media outlets continue to insist that scarce money should be dumped into dubious projects such as an improved rail line that will more efficiently carry a hand full of employed commuters across a state teetering on the edge of bankruptcy. The state’s current bonding debt is a little less than $20 billion; its budget debt two years out is about $6 billion.
With the ascension of a Democratic governor, the possibility of an effective opposition to a continuing status quo that will render Connecticut uncompetitive with other states, once the weight of a recession is removed, becomes ever more remote.
That is why some small “d” democrats now are sifting through Mr. Malloy’s past and recent media interviews for indications that he is not captive to a political narrative incapable of restoring Connecticut’s competitive edge in a post recession period. Some cynics would be satisfied with an unambiguous signal that Mr. Malloy’s brake foot is in good order. So far, there is little reason for celebration.
Wednesday, December 1, 2010
Mr. Dodd's Valedictory Speech
“The evil that men do lives after them; The good is oft interred with their bones."
So said Mark Anthony in William Shakespeare’s “Julius Cesar” during Cesar’s funeral oration. Anthony, who took no part in the assassination of Cesar, the bloody work of Brutus and others, all honorable men, was determined that the good Cesar did should not be buried with his bones and that the evil done by his assassins should not outlive them.
U.S. Sen. Chris Dodd’s farewell speech before the senate serves a like purpose. Farewell speeches by senators of long standing and exit interviews recorded in newspapers are like brief autobiographies, and there never yet was an autobiographer who was not the hero of his own reminiscences. Eventually, the encomiums are overwritten by sober historians far removed from the partisan atmosphere that colors all the deeds, evil and good, of their subjects.
Mr. Dodd’s errors in office lie just beneath memory’s skin. His three decades in the senate are hardly ancient history. It may be recalled – though not of course by Mr. Dodd, and especially not in a farewell address to his colleagues in the U.S. Senate -- that Mr. Dodd was the senator who, to speak metaphorically, assassinated the Roosevelt era Glass Steagall Act, a measure that prevented rapacious financial institutions from meddling with the bankbooks of Mr. Dodd’s constituents, as noted by Managing Editor of the Journal Inquirer Chris Powell:
“I suspect,” Mr. Powell noted in an interview a little over a year ago, “that Connecticut's Senate election will be determined more by doubts about Dodd's personal integrity than by doubts about his record, particularly his long subservience to Wall Street. That will be too bad, since, in providing what turned out to be the crucial support for the repeal of the Glass-Steagall Act and thereby letting commercial banks and investment houses merge, Dodd bears as much responsibility as anyone for the collapse of the world financial system. His Irish "cottage" and the terms of his mortgages are trivial by comparison, not that those things don't imply his having lost touch with Connecticut, a sense of entitlement as part of the ruling class.”
The crushing Dodd-Frank regulatory bill may be Mr. Dodd’s feeble attempt at repentance.
It will not be long before the regulations in that bill are offset by exceptions awarded by the commanders of the nation’s new command economy in Washington. Companies too big to fail – Fannie Mae and Freddie Mac, for instance, both Government Sponsored Entities (GSEs) responsible for the swelling housing bubble the bursting of which preceded the collapse of the mortgage industry in the United States – always have been able to purchase the ears of congressmen prepared to dole out tax dollars to favored failing enterprises.
Before Mr. Mr. Dodd decided not to run for re-election, the Chairman of the Banking committee, always attentive to opportunities, was hauling in campaign dough from major financial institutions, among them Countrywide, the now bankrupt GSE whose CEO, the odious Angelo Mozillo, regarded Mr. Dodd as a “Friend Of Angelo.” Mr. Dodd recently pointed to a lack of reform in Fannie and Freddie as one of the biggest gaps in the new legislation.
In his Senate Swan Song, Mr. Dodd also lamented that “Powerful financial interests, free to throw money about with little transparency, have corrupted the basic principles underlying our representative democracy. And, as a result, our political system at the federal level is completely dysfunctional."
He signed off by quoting from 2 Timothy 4:1 – “I have fought the good fight, I have finished the race, I have kept the faith.”
The author of those words, concerned that Christians following him in later years would “turn away their ears from the truth and will turn aside to myths,” earned his crown of suffering and kept the faith by dying for it. St. Paul suffered martyrdom near Rome at a place called Aquae Salviae (now Tre Fontane), somewhat east of the Ostian Way, about two miles from the splendid Basilica of San Paolo fuori le mura, which marks his burial place.
Mr. Dodd, no doubt, will enjoy a more pleasant end. It has been rumored that Mr. Dodd has been offered a job as chairman of the Motion Picture Association of America. Should Mr. Dodd accept the position, he will earn a handsome salary of a little over a million a year. Should he decline the offer, his future still promises to be more remunerative than that of St. Paul -- and his final years less agonizing.
So said Mark Anthony in William Shakespeare’s “Julius Cesar” during Cesar’s funeral oration. Anthony, who took no part in the assassination of Cesar, the bloody work of Brutus and others, all honorable men, was determined that the good Cesar did should not be buried with his bones and that the evil done by his assassins should not outlive them.
U.S. Sen. Chris Dodd’s farewell speech before the senate serves a like purpose. Farewell speeches by senators of long standing and exit interviews recorded in newspapers are like brief autobiographies, and there never yet was an autobiographer who was not the hero of his own reminiscences. Eventually, the encomiums are overwritten by sober historians far removed from the partisan atmosphere that colors all the deeds, evil and good, of their subjects.
Mr. Dodd’s errors in office lie just beneath memory’s skin. His three decades in the senate are hardly ancient history. It may be recalled – though not of course by Mr. Dodd, and especially not in a farewell address to his colleagues in the U.S. Senate -- that Mr. Dodd was the senator who, to speak metaphorically, assassinated the Roosevelt era Glass Steagall Act, a measure that prevented rapacious financial institutions from meddling with the bankbooks of Mr. Dodd’s constituents, as noted by Managing Editor of the Journal Inquirer Chris Powell:
“I suspect,” Mr. Powell noted in an interview a little over a year ago, “that Connecticut's Senate election will be determined more by doubts about Dodd's personal integrity than by doubts about his record, particularly his long subservience to Wall Street. That will be too bad, since, in providing what turned out to be the crucial support for the repeal of the Glass-Steagall Act and thereby letting commercial banks and investment houses merge, Dodd bears as much responsibility as anyone for the collapse of the world financial system. His Irish "cottage" and the terms of his mortgages are trivial by comparison, not that those things don't imply his having lost touch with Connecticut, a sense of entitlement as part of the ruling class.”
The crushing Dodd-Frank regulatory bill may be Mr. Dodd’s feeble attempt at repentance.
It will not be long before the regulations in that bill are offset by exceptions awarded by the commanders of the nation’s new command economy in Washington. Companies too big to fail – Fannie Mae and Freddie Mac, for instance, both Government Sponsored Entities (GSEs) responsible for the swelling housing bubble the bursting of which preceded the collapse of the mortgage industry in the United States – always have been able to purchase the ears of congressmen prepared to dole out tax dollars to favored failing enterprises.
Before Mr. Mr. Dodd decided not to run for re-election, the Chairman of the Banking committee, always attentive to opportunities, was hauling in campaign dough from major financial institutions, among them Countrywide, the now bankrupt GSE whose CEO, the odious Angelo Mozillo, regarded Mr. Dodd as a “Friend Of Angelo.” Mr. Dodd recently pointed to a lack of reform in Fannie and Freddie as one of the biggest gaps in the new legislation.
In his Senate Swan Song, Mr. Dodd also lamented that “Powerful financial interests, free to throw money about with little transparency, have corrupted the basic principles underlying our representative democracy. And, as a result, our political system at the federal level is completely dysfunctional."
He signed off by quoting from 2 Timothy 4:1 – “I have fought the good fight, I have finished the race, I have kept the faith.”
The author of those words, concerned that Christians following him in later years would “turn away their ears from the truth and will turn aside to myths,” earned his crown of suffering and kept the faith by dying for it. St. Paul suffered martyrdom near Rome at a place called Aquae Salviae (now Tre Fontane), somewhat east of the Ostian Way, about two miles from the splendid Basilica of San Paolo fuori le mura, which marks his burial place.
Mr. Dodd, no doubt, will enjoy a more pleasant end. It has been rumored that Mr. Dodd has been offered a job as chairman of the Motion Picture Association of America. Should Mr. Dodd accept the position, he will earn a handsome salary of a little over a million a year. Should he decline the offer, his future still promises to be more remunerative than that of St. Paul -- and his final years less agonizing.
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