Tuesday, August 30, 2011
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Sunday, August 21, 2011
A ban on bailouts is written into the legislation. Among the tools in the bill’s toolbox is a provision that provides for an orderly winding down of bankrupt firms. The bill includes a proposal that the Federal Reserve (the "Fed") receive authorization from the Treasury for extensions of credit in "unusual or exigent circumstances";
The ban on bailouts, which removes the principal protection that spurred those inept business practices that gave rise to the effective bankruptcy of major banks in the United States considered “too big to fail,” has not persuaded rating agencies to downgrade the banks.
If the federal umbrella has been removed that in the past prevented “too big to fail” banks such as such as Bank of America, Citigroup or JP Morgan from getting wet in the same rainstorms that affect non-protected industries, why hasn’t Standard & Poor’s downgraded the Big Banks?
S&P has “pointedly disputed the often-stated claim on Capitol Hill that the legislation had put an end to ‘too big to fail’ and the era of federal bailouts,” according to an analytical piece in The Washington Times:
“S&P thinks ‘the government in a handful of situations may be forced to provide some sort of support to an institution,’ especially if the failure of the bank threatens the economy and well-being of ordinary Americans, as occurred in the fall of 2008, said S&P managing director Rodrigo Quantanilla. S&P cited the long history of bank bailouts in times of economic stress as well as what it sees as ambiguities in the Wall Street reform law.”The big banks have become bigger and more powerful. The county’s six largest banks -- JP Morgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley – controlled assets equal to 17 percent of the U.S. Economy in 2008, the year of the financial crisis. Their combined assets today equals 64 percent of economic output, and they control nearly half of all bank deposits in the U.S, according Joshua Rosner, managing director of Graham Fisher & Co. and author of a book on the financial debacle.
"In fact, the Dodd-Frank law reinforces the market perception that a small and elite group of large firms are different from the rest," Mr. Rosner said, “by designating those banks as ‘systemically important.’”
Breaking up banks that are “too big to fail” is the most certain way to assure that taxpayers will not be on the hook in a future bailout, but congress last year repeatedly rejected such measures. An alternative, Mr. Rosner suggest, might be to require the top executives of such banks to pay dearly when their banks fail.
Though Mr. Dodd has moved from the U.S. Senate to Hollywood -- a step up in salary and, according to the latest public opinion polls, prestige -- the real consequences of Dodd-Frank bill will weigh heavily on a U.S. economy wracked by legislative and presidential nincompoopery.
Dodd-Frank, thought by its architects to provide a check on capitalist greed, will instead promote crony-capitalism, increase the pressure of the already deadening hand of the federal government on businesses, undermine what is left of the free market in the United States, limit true competition and favor capitalists of choice over capitalism.
Dodd-Frank will kick in as a second deeper and perhaps more intractable recession looms on the horizon, spurred on by European financial incompetence and an equally incompetent U.S. government government that has shown it cannot repair its debt or curb its looming entitlement costs. This brew of breathtaking stupidity very well may provide the spark that will set off a double dip recession both in Europe and the United States
Saturday, August 20, 2011
And he has a pony tail.
Pony tails, however, may be deceptive. They evoke the silly sixties, free love, pot and the slow evisceration of the antique morality of benighted backward looking parents of the Woodstock generation. But as Mr. Pattis’ ponytail swishes through the chapters of his book, it moves disturbingly right and left.
Consider chapter 14, “Too Many Lawyers: Time to Revisit the American Rule.” The premise of this chapter – a surfeit of lawyers desperate for work increases costly suits – will not likely be embraced warmly by lawyers desperate for work and hungry for big verdicts:
“What most lawyers will acknowledge, privately, when only other fellow lawyers are around, is that there are too many of us. The result is that many lawyers are desperate for work.The obvious solution to this problem, and the one recommended by Mr. Pattis, is to attach sanctions to losing. In most human endeavors those who lose pay and those who win carry home the trophy: “I see no justice or fairness in requiring defendants, whether they be corporations or individuals, to pay unwarranted legal fees. Why shouldn’t a loser be required to cover the winner’s costs?”
“And what do desperate lawyer do? They sue people. Why not? Access to the courts is inexpensive, and here is no downside. You might always hit a big verdict. And even if they lose, the so-called American Rule has transformed the American civil justice system into the equivalent of a roulette wheel. Why not spin the wheel when the costs of doing so are low?”
Mr. Pattis proposes to require all plaintiffs to post bonds “to cover the eventual winner’s reasonable legal fees for all the cases they bring,” a common sense reform that would protect the rights of all Americans to obtain justice from the courts, while at the same time affording defendants the opportunity of “recouping their fees when the roulette wheel comes up a loser for the plaintiff.” Flexibility would be introduced into the Pattis rule by making the bond a rebuttable presumption in all civil cases, allowing judges to relax the bond for good cause.
There are 21 chapters in the book, all crafted in layman’s verbiage, some of which have been lifted from Mr. Pattis’ columns in The Connecticut Law Tribune. The last two chapters are devoted to Mr. Pattis’ ardent opposition to the death penalty, and here he is less convincing than Albert Camus, the author of “Reflections on the Guillotine,” a passionate assault on the death penalty in France.
As a defense lawyer, Mr. Pattis is concerned chiefly with the part that has been played in a particularly gruesome Connecticut case by a husband who was the lone survivor of a murderous assault on his family, Dr. William Petit. Following the murders of his wife and two daughters, Mr. Petit has not gone quietly into the good night that shrouds the victims of heinous crimes, and Mr. Pattis fears that remarks made by Mr. Petit to the media might prejudice a jury now considering the case.
On the question of the marginalization of juries, a theme that runs throughout many of the chapters, Mr. Pattis, who provides a much needed in-house view of court proceedings, is informative and convincing. In the real world of courts, judges, juries and trials, justice is sometimes a victim of process, tedious and endless, or experts who lack expertise or judges who lack judgment or infantilized juries.
Among the questions asked and answered in “taking Back The Courts” are these: What would happen if a jury were to be made aware of the prospective sentence that could be imposed on a defendant before its members rendered a verdict? If the ignorance of a jury in such matters is bliss, can we rely on blissful ignorance to achieve justice? Evidence supplied by so called “forensic scientists” can be arrived at scientifically or not, but is the evidence supplied “scientific” simply because it is furnished by a forensic scientist? What is added to the word “science” when it is combined with the word “forensic” – other than a kind of magical incantation that bewitches juries and judges? Is expert testimony true simply because the person testifying is festooned in credentials? If the expert is paid for his service in rendering testimony, does the testimony become suspect? Suppose a juror were to raise his hand during a trial and ask the judge what sentence would reasonably be attached to a finding of guilty in a specific case? What would happen? Why are juries rather than judges permitted to determine sentences in capital felony cases alone but not in other cases? Is plea bargain justice just?
In Chapter 13, “Experts for sale,” a title one likes to think may have been drawn from Lucian’s savage second century satire “Philosophers For Sale,” Mr. Pattis has some fun with expert testimony, which is often based, he says, on very questionable science.
Mr. Pattis points to a National Academy of Science (NAS) report on the forensic use of science that splashes cold water in the faces of prosecutors who use junk science to obtain convictions. The report recommends that forensic labs and investigations should be independent of “law enforcement efforts either to prosecute criminal suspects or even to determine whether a criminal act has indeed been committed… With the exception of nuclear DNA analysis … no forensic method has been rigorously shown to have the capacity to consistently, and with a high degree of certainty, demonstrate a connection between evidence and a specific individual or source,” heady and cautionary stuff.
Mr. Pattis has more than once heard prosecutors at trial urge judges to admit contested evidence: “’The state cannot prove its case without the evidence, your honor,’ the argument goes. To which I typically respond: ‘So what?’ The rules of evidence require reliable evidence. The trial deck is not supposed to be stacked in favor of conviction. But the deck is so stacked. And few judges seem prepared to do much about it.”
Impatient with conventional nonsense and cant, Mr. Pattis, pony tail swinging like a baseball bat, here offers some necessary correctives.
Thursday, August 18, 2011
Some pro-union Democrats, Jonathan Pelto among them thought the governor had been wielding his big stick a bit too exuberantly. Mr. Malloy’s Plan A, rejected by the union rank and file, was generally regarded as being soft on sacrifice, a point emphasized by union leaders in a memo to rank and file workers sent out prior to the vote affirming Plan A2.
Mr. Malloy’s “clarified” plan following the disappointing union vote is, according to the memo, an agreement that guarantees union members security:
“We would receive four years of job security, an extension of our health care and pension plans to 2022, an irrevocable trust fund to insure there will always be retiree health care, three years of wage increases, a reaffirmation of the independence of the state employee health plan, and contract protection lasting through 2016. Additionally, all of the layoffs, anti-union legislation, and faculty/office closures would be reversed.”
Not a bad deal there, considering the sacrifices unions in other states have been forced to make in the interests of balanced budgets. Additionally, the union memo warned rank and file members, “there is legislation pending on the House calendar that would limit collective bargaining, with the goal ultimately of taking away our ability to bargain over health care and pensions.”
If Mr. Malloy’s initial plan had been long on carrot, the propaganda effort launched by union leaders in concert with Mr. Malloy to persuade their rank and file members to accept a slightly revised Plan A was, many political commentators might agree, equally long on stick. Even dyed in the wool union collaborators in the General Assembly considered Plan A beneficial to union interests, as witness Senator Edith Prague’s astonished gasp upon its rejection. Mrs. Prague -- and other ardent union defenders in the General Assembly, among them Speaker of the House Chris Donovan and President of the Senate Don Williams -- is to union interests what General George Patton was to the Third Army during the Second World War.
Union leaders, working hand in glove with Mr. Malloy, were determined to steer Plan A2 past rank and file union naysayers, and for this reason both union leaders and Mr. Malloy belabored labor with a big stick. Union by-laws were changed to accommodate a “Yes” vote. And though “the world has changed since even a few weeks ago,” as the union memo proclaimed, the leaders of some union units had decided they would not allow rank and file members who previously voted Yes on Plan A to change their votes. The Malloy administration, using the union communications pipeline, announced prior to the vote that negligent union members who vote No on Plan A2 would be subject to sanctions: their jobs will not be secure. Job security could only be achieved by voting “Yes” on the revised plan.
Legislative leaders had also pulled mightily on the oars. Over the muted protestations of reliable union supporters in the General Assembly such as House Speaker Chris Donovan, Mr. Malloy had asked the General Assembly for extraordinary rescission authority that would give him the power to lay off workers to meet his budget goals. That rescission authority could be applied to balance the books – even after Mr. Malloy’s Plan A2 had sailed past whipped union rank and file members.
The possibility alarmed pro union legislators such as Senator Toni Harp, for five terms a leader of the budget-writing Appropriations Committee, who had suddenly discovered the doctrine of the separation of powers months after the Democratic dominated General Assembly had approve a budget that was, prior to the union vote, billions of dollars out of balance.
Although Mr. Malloy’s slightly revised Plan A was this time overwhelmingly affirmed by rank and file state union members by a vote of 25,713 to 9,291 – Given the electric cattle prods used by Mr. Malloy as inducements to change votes, how could the plan fail to pass? – there are some loose ends to be tidied up. A claim before the State Labor Department filed by Lisa Herskowitz, a senior assistant state's attorney in Manchester, that the SEBAC state labor union leadership had no legal authority to negotiate wage concessions for the 15 state labor unions and no authority to change the bylaws when the deal was rejected may prove to be a thorny problem.
Should Ms. Herskowitz’s suit reach the courts, pity the judge who must decide it. Mr. Malloy’s cattle prod is fully charged and he is on speaking terms with newly reappointed Chief State’s Attorney Kevin Kane.
Saturday, August 13, 2011
Actuarial figures supporting claimed budget savings in Plan A2 -- son of Plan A, a slightly revised budget that Governor Dannel Malloy months ago submitted to the General Assembly for approval -- have been called into doubt for some time.
The Malloy budget approved by the Democratic controlled General Assembly early in May, for instance, contained a savings line that could not be actuarially verified. The Malloy budget simply assumes a savings of $270 million arising from a commitment from state workers to devise ways of saving money.
When Republican leaders -- who have been successfully cut out of the budget negotiation process by Mr. Malloy and Democratic leaders in the General Assembly – questioned the assumptions that underpinned the projected savings, Malloy communications director Colleen Flanagan intemperately responded that the figures had been verified by their actuaries and they were accurate – “period!”
But there are few periods in politics, and one budget exile, House Minority Leader Lawrence Cafero, has now bravely questioned what Mr. Disraeli most certainly would call a damned lie.
Period? Seems more like a question mark, Mr. Cafero mused after a letter written by Malloy budget chief Ben Barnes began to circulate through the political grapevine.
Mr. Cafero noted that “Office of Policy and Management (OPM) Secretary Ben Barnes contradicted claims that savings included in the $1.6 billion state employee union concessions package had all been verified by actuaries” in a letter Mr. Barns sent to State Senator Andrew Roraback.”
In his letter to Mr. Roraback, Mr. Barnes sought to “correct what must be a misunderstanding about Ms. Flanagan's statement.”
The review conducted by Mr. Malloy’s actuaries, Mr. Barnes wrote, centered upon “the health benefit plan design changes, and the changes to plan design and eligibility for the State Employee Retirement System (SERS)… Other savings in the agreement reflect commitments between SEBAC and the State to identify operational, contractual, and efficiency‐related savings in the areas of technology, healthcare contracting (under the terms of the existing plan of benefits), and other operational savings. These particular commitments to achieve savings were not actuarially determined, because they are not savings of an actuarial nature [Italics mine]. Nevertheless, they reflect a commitment between the State and our employees, and more importantly between the Governor and the people of Connecticut, to reduce the cost of government this year and into the future.”
Noting that Mr. Barnes “rather clearly states only two areas of the plan were verified" by Malloy hired actuaries, Mr. Cafero offers a “period” of his own: “This means two things, and they are both important: First, the governor's office has been less than factual in their wholesale assurances of actuarial reviews. Second, the question still persists - how will we achieve these projected savings, and what will we do if they can't be realized?”
The Democratic controlled General Assembly last May approved over the protestations of Republicans a budget that was dependent upon an affirmation from SEBAC, the union coalition authorized to negotiate contracts with the Malloy administration, that never materialized. State union worker rejected Plan A. Leaders of SEBAC, yielding to strong suggestions made by the Malloy administration, then unilaterally changed union by-laws to insure that a future vote would not incommode Mr. Malloy, his administration or supportive Democratic leaders in the General Assembly – principally Senate President Don Williams and Speaker of the House Chris Donovan, who recently announced he is running for the U.S. House in the 5th District.
And now, on the eve of what some consider a fixed vote, rank and file union members are poised to affirm a budget that relies on savings that cannot be verified by the General Assembly’s own Office of Fiscal Analysis.
Responding to Mr. Cafero’s concerns, Malloy senior advisor Roy Occhiogrosso was every bit as terse as Ms. Flanagan. None of Mr. Malloy’s agents can rightly be accused script deficiencies; they are always on the same page.
“Let's be honest,” Mr. Occhiogrosso retorted, “What's bothering Rep. Cafero and his Republican colleagues is that if all this comes to pass it'll be a Democratic Governor who achieves this historic restructuring of the relationship between the state and its workforce, not a Republican. It's sour grapes on their part - nothing more, nothing less.”
Friday, August 12, 2011
Governor Malloy figures prominently in the National Journal story. Mr. Malloy, “repulsed” by budget cutting tactics in Wisconsin and New Jersey, has charged other governors with “scorched-earth, unilateral governing,” according to the National Journal. The news story does not mention Democratic Governor Mario Cuomo as one of the scorchers, and one assumes Mr. Malloy has not identified him as such, although the New York governor managed to put his budget to bed without raising taxes, for reasons of Democratic comity.
“Malloy took office,” Mr. O’Sullivan writes, “with a roughly $3.5 billion deficit, the largest per-capita shortfall in the country. ‘We cut, we sought concessions, and we raised taxes. That’s what we did,’ he [Mr. Malloy] said. After his initial benefit-trimming package—including a two-year wage freeze and increased contributions for health care and pension plans—was voted down by unions, labor leaders lowered the threshold for approval. Those deliberations are still pending; Malloy expects to learn the results by August 18. The plan, he said, would save $1.6 billion over two years, and $21.5 billion over 20 years. If labor rejects the deal, additional layoffs and $700 million more in cuts will take effect, he said.
“’When in doubt, collaborate,’ Malloy said. ‘Or always be in doubt and collaborate.’”
One hardly knows where to begin. Mr. Malloy’s collaboration, it should be obvious by now, was not with Republican leaders in Connecticut’s General Assembly. From the very beginning of budget deliberations, Republican legislators were deliberately frozen out, rather as if Mr. Malloy had been intent on pursuing a scorched earth policy against his political opponents. Mr. Malloy won election over Republican candidate Tom Foley by a narrow margin in cities where unions routinely turned out votes for Democrats, and the governor’s budget collaboration was with the leaders of SEBAC, a union coalition authorized to bargain collectively on health care and pensions– not Republicans.
It is generally agreed in Connecticut that Mr. Malloy’s first budget, Plan A, was a boon to unions when compared with Mr. Malloy’s alternative budget Plan B. Initially, Mr. Malloy sought to wrest $2 billion from state union workers as a part of his “shared sacrifice" agenda. Even within the union universe, Mr. Malloy’s sacrifice was not shared among union members in the state’s municipalities. Mr. Malloy’s shared sacrifice was limited only to state union workers, and the burdens placed on SEBAC were much lighter than those imposed on a wider swath of unionized workers under Plan B.
Plan A came to grief when rank and file members of SEBAC, pointedly rebuffing union leaders, rejected the package. Upon the rejection of Plan A, SEBAC negotiators began collaborating with the Malloy administration to overturn the disappointing vote. Mr. Malloy had at the ready Plan B, which was to contract negotiations what a howitzer is to diplomacy by other means. While the Malloy administration sent out Plan B layoff notices to union workers, union negotiators – the same crew that failed to sell Plan A to rank and file members of SEBAC – pumped out propaganda sheets warning any members who might consider rejecting a slightly altered Plan A2 of the perils that would most certainly would befall them should they not relent and vote in favor of the more mild plan. So, far Mr. Malloy has sent out 3,000 pink slips, almost all of which will be withdrawn after Plan A2 is approved. None of the $1.6 billion in tax increases will be rescinded.
After the Democratic dominated General Assembly voted to accept the Plan A budget -- which was approximately $2 billion out of balance and relied on as yet unrealized savings – Mr. Malloy asked the General Assembly to increase his rescission authority from 5 to 10 percent, so that he might unilaterally cut budget expenditures that legislators had supposed were in balance months earlier.
Some legislators in the General Assembly are loathed to share their constitutionally authorized legislative powers with the governor.
"I know it's uncomfortable to deal with the Legislative Branch, that it's inconvenient," said Toni Harp, the Democratic co-chairwoman of the Appropriations Committee. "But that's our system of government.”
In New York, New Jersey and Wisconsin budget messes such as this already have been settled – to the satisfaction of taxpayers. Budgets there have been put to bed. In Connecticut, the budget yet has miles to go before it sleeps. SEBAC, Connecticut’s fourth branch of government, is due to conclude its vote on the budget on August 18.
Monday, August 8, 2011
Maryland Resident, D.C. Insider Chris Shays Wants to Run for Senate in Connecticut…But Still Doesn’t Live Here
Today, the Connecticut Democratic Party today welcomed Maryland resident, D.C. insider Chris Shays back to the Nutmeg State, as WTNH reports that Shays is planning a run for Connecticut’s open U.S. Senate seat. Shays put his Connecticut home on the market moved to the Maryland suburbs just a few months after losing his reelection to Congress in 2008.
Now, after spending three years working in Washington D.C., Shays is trying to get voters to forget that he doesn’t live in Connecticut and wants to join his Republican friends in Congress as they try to gut Medicare and prolong the wars in Iraq and Afghanistan.
“On behalf of Connecticut residents, the Connecticut Democratic Party welcomes Maryland resident Chris Shays back to the Nutmeg State as he reportedly prepares to run for Connecticut’s open U.S. Senate seat,” said Jacie Falkowski, spokesperson for the Connecticut Democratic Party. “After Connecticut residents voted him out of Congress, Chris Shays just couldn’t stay away from his Republican insider pals and moved to the Washington D.C. area. Now, Shays is about to ask Connecticut voters to let him join his Republican friends (and neighbors!) in Congress as they try to gut Medicare and continue sending troops to Iraq and Afghanistan.”
After Connecticut residents voted Shays out of Congress in 2008, Shays apparently decided he couldn’t stay away from Washington D.C. and moved with his wife to a prominent Maryland suburb that caters to Washington’s power set. At the time, a news report explained reason for his family’s move was because Shays “and his wife…both work now in the Washington, D.C. area, and returning to Connecticut often has become difficult.” [Connecticut Post, 11/6/09].”
When Shays flirted with the idea of running for governor in 2010, Shays disclosed he was considering buying a condo in Connecticut, ostensibly to get around the residency requirement for the office. While he bought a property a few months later, news reports revealed that his intention was “to find a weekend place in Connecticut after moving to Maryland.” [Only In Bridgeport blog, 2/11/10].”
Shays’ Maryland homestead is located in the town of St. Michaels and is a very popular outpost for other D.C. insiders. Shays can even count Dick Cheney as one of his neighbors.
• November 2009: Shays Sold Bridgeport Home For $1.55 Million After Losing Reelection Because “He And His Wife…Both Work Now In The Washington, D.C. Area, And Returning To Connecticut Often Has Become Difficult.” In November 2009, the Connecticut Post reported that, “Former Rep. Chris Shays sold his Beacon Street home Friday for $1.55 million and is moving out of state…Shays, 63, said he and his wife, Betsi, decided to sell the home, in the Black Rock section of the city, because they both work now in the Washington, D.C., area, and returning to Connecticut often has become difficult…He decided to sell his home of 10 years after losing his re-election bid last year to Democrat Jim Himes. The couple purchased the 12-room Colonial on Beacon Street in 1999 for $490,000… The home has an assessed value of $817,580, with a market value of $1,167,980. According to Elaine T. Carvalho, Bridgeport's tax assessor, Shays' tax bill in 2008 was $24,556… It had been on the market more than 200 days and was previously listed with a sale price of $1.85 million.” [Connecticut Post, 11/6/09]
• Shays Moved To St. Michaels, Md, Same Town Where Dick Cheney Owned A Home. In November 2009, the Connecticut Post reported that “Shays is moving to St. Michaels, Md., located on the Chesapeake Bay. Former Vice President Dick Cheney also owns a home in the town.” [Connecticut Post, 11/6/09]
• February 2010: “Considering Gov. Race, Shays Buys Bridgeport Condo.” In February 2010, NBC Connecticut published a story with the headline, “Considering Gov. Race, Shays Buys Bridgeport Condo.” According to the report, “Former U.S. Rep. Christopher Shays might be making another run for office. He's likely to enter the governor's race, but he’s not ruling out running again for the congressional seat he lost to Democrat Jim Himes in November 2008… After losing his bid, he sold his Bridgeport home and now lives in St. Michael's, Maryland… He has since put down a deposit on a Bridgeport condo as he considers running for office, Shays' wife, Betsy Shays, told NBC Connecticut.” [NBC Connecticut, 2/13/10]
• Shays’ Intention Was “To Find A Weekend Place In Connecticut After Moving To Maryland.” In February 2010, the Only In Bridgeport blog reported that “Former Congressman Christopher Shays, in an interview with OIB, confirmed he has placed a binder deposit on a condominium in Black Rock as he weighs his decision to seek the Republican nomination for governor. He cautioned, however, he has not made a final decision to enter the gubernatorial race and it was always his intention to find a weekend place in Connecticut after moving to Maryland.” [Only In Bridgeport blog, 2/11/10]
• April 2010: Shays Bought Bridgeport Condo For $115,000. According to the City of Bridgeport Assessor’s office, Shays and his wife bought a condominium at 350 Grovers Avenue in Bridgeport for $115,000 on April 12, 2010. The value of the property is listed at $299,240. [Bridgeport, CT Assessors’ Online Database, accessed 7/29/11]
Sunday, August 7, 2011
Mr. Pelto, Mr. Scully wrote, “is a thoughtful and accomplished media relations professional who is deserving of being heard on the issues facing the state.”
But – here come the slings and arrows – “He and other critics, however, are also hopelessly disconnected from the average Connecticut citizen and continue to wallow in the failed, far-left, now-fringe policies of 1970s.
“George McGovern is no longer relevant, nor are his policies. Today's Democrats (myself included) are in the camp of John F. Kennedy, Bill Clinton, Barack Obama and, yes, Dan Malloy.”
Here is Mr. Scully’s Kennedy on the importance of tax cuts:
Mr. Scully should feel free to pass along the clip to Mr. Malloy, who just imposed on his state the largest tax increase in its history.
If a rising tide lifts all the boats, what does a receeding tide do?
Friday, August 5, 2011
Apparently, Mrs. Gloria Beccaro, the 85 year-old retired nurse and mother of William Beccaro, a lawyer for the Connecticut State Senate, didn’t know what her son was doing, according to a columnist for the Connecticut Post.
"They (People for Excellence in Government) list me as chairman?" Beccaro asks. "Why am I chairman? I don't know anything about this."Pouring over the financial report of the People for Excellence in Government (PEG), Connecticut Post Columnist MariAn Gail Brown discovered, “…reimbursements to the Finches for items purchased at T.J. Maxx, the discount clothing store. But no explanation as to how that directly benefits a political action committee. There's a $25 donation to a charity reimbursed to Sonya Finch. If the charity was worthwhile, couldn't she have sprung for it out of her own wallet. About the only positive thing to be gleaned from People for Excellence in Government's financial reports is that Finch and Wood patronized lots of Bridgeport restaurants.”
“Alright then, what does she do for the PAC?
"’They reimburse you most every month for your cell phone service,’ I point out. ‘What exactly do you do for the PAC?’
“Beccaro: ‘Cell phone? I don't know. I don't even have a cell phone. What would they be doing reimbursing me?’"
The above mentioned Finch is the mayor of Bridgeport. Mr. Finch, according to the report, plowed his sizable campaign surplus of $46,056 into the Campaign For Excellence and, upon taking office, hired Mrs. Baccaro’s son, a longtime friend of the mayor, as a campaign consultant to Bridgeport’s legal department. From 2008 to date, People for Excellence in Government, has reimbursed “Finch, his wife, one of his top aides, Adam Wood, and Wood's wife thousands of dollars for hotel stays, travel and meals... Last year,” Ms. Brown writes, “William Beccaro earned $91,000 as an independent contractor to the city of Bridgeport. This arrangement certainly has the look, the feel and the aroma of you scratch my back, I'll scratch yours.”
No one involved in this latest Bridgeport stinky-poo, other than Mr. Baccaro’s mother, is answering even soft bat’em out of the park” questions. And those brave souls who do are armed to the teeth with oleaginous evasions.
The aptly named Derek Slap, for many years a reporter for NBC and now the communications director for Democratic Senate President Donald Williams and Senate Majority Leader Martin Looney, handling the barbed query of another Post reporter – "What do Mr. Williams and Mr. Looney think about all this?" -- evaded the question: “The complaint was raised in the context of the Bridgeport mayoral primary. We have confidence the State Elections Enforcement Commission will take a thorough look at the facts, as they always do.”
Right. So, Mr. Williams and Mr. Looney, both of whom as legislators leapt on the ethics in government bandwagon that gave rise to the State Elections Enforcement Committee -- soon to be subsumed into a catch all agency that will include, among other watchdog groups, the Freedom of Information Commission and six other entities under an administrator to be appointed by Governor Dannel Malloy – are what... too tired, too far removed from possible Democratic corruption in Bridgeport, too slippery … to answer the least offensive of questions from a reporter?
Mr. Slap’s response, delivered on behalf of Mr. Williams and Mr. Looney, is a perfectly appropriate evasion coming from autocrats operating out of a one party legislature, in a one party state, concerning a one party town. But really – this is Connecticut!
The public who votes for Mr. McDonald and Mr. Looney might want to ask them, preferably when they are on the stump running for reelection, why such golden tongued Ciceros should need a Charlie McCarthy to answer simple media questions.
Mr. Finch’s operatives are not without resources. A pro-Finch PAC, a Connecticut political action committee called A Better Connecticut, has produced a video that puts Mr. Finch's opponent, Mary Jane Foster, in her place within the Bridgeport scheme of things. The treasurer of the PAC, Philip Benoit of Rocky Hill, unsurprisingly had contributed $750 to the Fiche campaign, a sum that should be added to a prior contribution of $250:
Lennie Grimaldi, who is to Bridgeport what Honore Balzac was to France, notes:
"Finch campaign handlers wouldn’t kick out this spot unless they felt Foster inching too close for comfort, especially in light of the latest news revelations over Finch’s relationship with a PAC. Finch says he’s done nothing wrong. Don’t be shocked if Finch handlers deny association with this attack video that was teed up and ready to go before the latest PAC revelations against the mayor played out in the news."
Wait for it.
Wednesday, August 3, 2011
A new report from the Council on State Taxation, a trade association of multistate corporations, ranks Connecticut’s business taxes as the lowest in the nation. In fiscal year 2010, Connecticut’s state and local taxes on business comprised only 3.3% of private sector economic activity (private sector gross state product or GSP), compared to the national average of 5.0%. The business group has placed Connecticut at or near the bottom of its tax rankings for the last seven years.
The study was conducted for COST by the Ernst & Young accounting firm based on what businesses actually pay in taxes (rather than relying on tax rates, which are peppered with loopholes and difficult to compare across states). The Ernst & Young measure is also comprehensive, including not just the corporation business tax (CBT), but also the other taxes that fall on businesses: property taxes on business property; general sales taxes on business inputs; unemployment insurance taxes; business and corporate license fees; public utility taxes; personal income taxes on pass-through business income; excise taxes; insurance premium taxes; and other miscellaneous taxes.
In a summary of the analysis, Connecticut Voices for Children, a research-based think tank, suggested that in the upcoming special session, the Governor and state legislators should turn their attention to other costs that weigh more heavily on decision making for Connecticut businesses, such as energy, health care, and transportation costs.
“For many years, Connecticut’s economic development efforts have been heavily focused on tax subsidies for big businesses,” said Wade Gibson, Senior Policy Fellow at Connecticut Voices. “In light of 20 years of anemic job creation, this study suggests that strategy is misguided.”
Although the Malloy administration failed to reach by some $400 million the $2 billion in cost savings measures it initially had demanded from SEBAC, the coalition of state unions authorized to negotiate contracts with the administration, the tax increases the administration imposed upon nearly everyone in the state as a part of its “shared sacrifice” effort has, perhaps unsurprisingly, yielded an “unexpected” surplus.
The Malloy surplus, made possible in part by an ex post facto income tax charge, should not astonish those commentators in the state who have previously reported on state budgets. Surpluses were common in the budget years following the imposition of the Lowell P. Weicker Jr. income tax.
The predictable announcements of surpluses during these years of plenty followed an almost religiously observed rite, beginning with an declaration of a possible deficit, followed by an agonizing appraisal of the likely damage done to Connecticut’s fragile social services net should the legislature be so unwise as to insure savings necessary to balance their budget through prudent cuts, followed by a last minute announcement that an unanticipated surplus had magically materialized, obviating the need for cuts and permitting legislators to return to their districts and there proceed to hand out state distributed goodies before their next election.
This budget year, the usual dance varied, but not much, from the usual formula.
Mr. Malloy, the first Democratic governor in more than 20 years, had been wafted into office on a promise that as governor he would not resort to the same discreditable budget persiflage as his predecessors – two Republican governors and another, Mr. Weicker, of indeterminate party status -- all of whom had produces surpluses to avoid raising taxes or cutting costs.
GAAP would be instituted, Mr. Malloy vowed during his campaign, to prevent wily politicians from drawing revenue from future budgets and dragging them into the current year, while at the same time pushing costs into succeeding budgets. The state’s current Comptroller, Kevin Lembo, recently advised that the state’s antique computer system is not prepared to handle such accounting changes; which is all very well and good -- because Mr. Malloy had postponed implementation of the new accounting procedures for a couple of years. And there is no need to fudge figures in any case, because wily Democratic legislators – Big surprise here! – had embedded into the Malloy budget an artificial surplus that would relieve the pressure put upon them to cut costs.
All this spelled frustration for Republicans and others who were trying unsuccessfully to force Democrats who control the legislature to cut costs by denying them revenues. The presence of red ink in a budget usually is a persuasive spending disincentive for rational legislators. But time-serving progressive ideologues committed to wealth transfers from productive workers in the private marketplace to unionized state workers are addicted to reflexive spending. So long as the General Assembly’s table sags with surpluses, crapulous senators and house members will continue to feast on fare taken from the more modest tables of productive workers. Surpluses, which are tax overcharges, are anti-stimulants for anyone who is not a tax consumer. While prudent tax cuts – a prospect far beyond the intention of the average spendthrift politician – stimulate the economy, wealth transfers stimulate the ungovernable appetite of spendthrift politicians who, unlike the fascists of a bygone day, lack in a functioning democracy the means of making the trains run on time.
A handful of legislators in the General Assembly, Sen. Joe Markley of Southington among them, get all this.
“The enormous tax hike,” said Sen. Joe Markley of Mr. Malloy’s tax boost, “was the sad result of our addiction to spending, which we still haven’t kicked. The bigger the tax increase, the more dire its affect will be on our state economy. I’d love to see Malloy call us back and undo some of the new taxes in light of this surplus, but I don’t expect it – big-government types generally celebrate such surpluses, rather than feel ashamed of them.”
A few more Markleys in the General Assembly may save Connecticut the embarrassment of a rapid decline, followed by default.
Monday, August 1, 2011
In the course of the conversation, someone mentioned a prominent Irish atheist, astonishing Mr. Buckley, who asked, “Do you mean to tell me there are atheists in Ireland?”
“There are, indeed,” he was informed. “But you must understand that in Ireland there are two kinds of atheists – Protestant and Catholic.”
Mr. Buckley is rightly credited with having launched and shaped the modern American conservative movement. Within the conservative movement, there are now many mansions: traditional conservatives, neo-conservatives, paleo-conservatives, fiscal conservatives, religious conservatives, bio-conservatives, social conservatives, libertarian conservatives, and more.
Over the course of the last half century, conservativism has transformed the Republican Party, and that transformation has changed the meaning of some political terms. We think of the terms left, right and center as ideological constants. But these terms also evolve. Unfortunately for some, memory does not evolve.
Just as the modern Republican Party is not your daddy’s Republican Party, so the center of Republicanism is not what it was in your daddy’s day. Within the modern Republican Party today – even here in a reliably left of center state – there are different kinds of moderates, but nearly all the moderates are conservative moderates.
The same general evolution has occurred within the Democratic Party. The steady drift of the party towards progressivism has moved the traditional center of the party to the left. When Senator Joe Lieberman's term expires, Connecticut will have bid goodbye to its last moderate or centrist congressional Democrat. Within Democratic Party precincts, the center has moved to the left. Within the Democratic Party in Connecticut, nearly all moderates are progressive moderates.
The distance between the party ships passing in the night is greater than it was in your daddy’s day. When a modern progressive Democrat thinks of a moderate, Mr. Lieberman, a Scoop Jackson Democrat, does not come to mind. When a modern conservative Republican thinks of a moderate, former Senator and Governor Lowell Weicker, a self described “Jacob Javitts Republican,” does not come to mind.
Commentators within Connecticut’s left of center media, bowing and scraping before the idol of centrism, the holy and imperishable “vital center,” sometimes forget to tell their ideological parishioners that even centers move.
That is why Republicans in Connecticut should take Mr. Weicker’s advice with a ton of salt – and not just because Mr. Weicker during his day was a left of center Republican who shamelessly used his party as a political foil to curry favor with the more numerous Democrats in his state.
During a recent gathering of independent centrists in Hartford, Mr. Weicker cautioned Republicans that they must move to the center if they hoped to win elections. Connecticut, Mr. Weicker said, is a blue state. He might have said, more clearly, that the Connecticut Republican Party must become more like the Democratic Party to win elections; that strategy was, after all, the secret of Mr. Weicker’s own success in politics, until both Democratic and Republican centrists tired of Weicker and voted for his Democratic Party opponent, Mr. Lieberman, who fancied himself, like Mr. Weicker, a centrist.
It should surprise no one when members of the ancient regime are smitten with nostalgia for the familiar ancient order of things. But the order of things has changed. Mr. Weicker’s cast off party little resembles Connecticut’s new Republican Party – because the center of things has changed. Had the center not changed to allow for changed circumstances, it could not hold.