Wednesday, November 28, 2012

Does “No” Mean Yes?

Governor Malloy has told the Appropriations and Finance, Revenue & Bonding committees through his Office of Policy and Management Secretary Ben Barnes that he will not resort to tax increases to backfill what Mr. Malloy calls a $365 million “shortfall” in his budget.

Mr. Malloy has been less assertive concerning “a deficit of as much as $1.2 billion projected for the coming fiscal year -- a shortfall of 6 percent-- saying only that he has ‘no intention of raising taxes,’" according to a story in CTMirror.

During his first budget, Mr. Malloy settled a budget deficit through massive broad based tax increases and anticipated “spending cuts” that fell short of the “shared sacrifice” from state workers that had been a hallmark of his gubernatorial campaign, which hoisted into the gubernatorial office the first Democratic governor since William O’Neill turned over the reins of government to Lowell Weicker, who settled his inherited deficit through the imposition of a state income tax, the second largest tax increase in state history. The Malloy tax increase is larger.

And here we are again – in deficit low dive.

The notion that Connecticut does not have a spending problem but rather a revenue problem that may always be solved through the expedient of tax increases seems now somehow quaint. That notion was, during the past four decades, much on the lips of politicians who did not wish unnecessarily to disturb their tax consuming constituencies, as well as lazy and thoughtless political commentators across the state who thought the good times of budget surpluses would never end, at least not here in Connecticut, in pre-income tax days thought to be one of the richest and most fiscally sound states in the union.

No more.

On a best (1) to worst (54) scale issued by Moody’s Analytics, Connecticut is near bottom (45) in economic growth. Connecticut’s economy has been flat ever since Mr. Weicker sought to solve the state’s revenue problem through a new income tax. The consequent revenue increases during the following decades opened a Pandora’s Box of spending.

It has now become settled opinion that Connecticut has a spending problem aggravated by an unwillingness on the part of successive governors and the Democratic dominated General Assembly to recognize the primary reason for the state’s woes –profligate spending -- even after all the red flags have gone up: Connecticut is number one in taxes and number one in pension obligations; the state has lost population from outmigration part of which has been caused by workers seeking employment opportunities in more business friendly states; young people armed with very expensive college educations paid by state taxpayers are taking their diplomas to greener economic pastures. And all this is simply the tip of a spending spree that has frozen the state’s forward movement.

It is against this depressing backdrop that Mr. Malloy has declared he “has no intention” of addressing the state’s current $365 million “shortfall” by increasing taxes, and it would be a refreshing sign of a return to fiscal sanity to suppose that one governor out of the last three has finally got the message.

State law permits the governor to address a shortfall in the budget by exercising his constitutionally limited rescission authority. Mr. Malloy already has announced that he will use his authority to cut between $150 and $160 million from the $365 million “shortfall,” leaving the remaining approximate $215 million balance to be addressed by the Democratic controlled General Assembly. The governor cannot rescission his way out of the deficit. Assuming Mr. Malloy is able to reduce the deficit as he wishes, the projected deficit the General Assembly must address for the coming fiscal year is approximately $1.2 billion plus $215 million – and growing.

The role that will be played by the General Assembly in liquidating the growing deficit introduces an uncertainty principle into Mr. Malloy’s repeated avowal that HE has no intention of increasing taxes. The Democratic dominated General Assembly may be of a different mind. Outgoing Speaker of the House Chris Donovan has in the past supported legislation that would increase state revenues by squeezing Gold Coast financial managers, and his successor, Brendan Sharkey, has not sworn off increasing tax rates progressively on the state’s entrepreneurial growth engines.

One supposes neither Mr. Malloy nor Mr. Barnes would be anxious to answer the question: Will the governor, who has pledged not to increase taxes, veto tax increase measures passed by his fellow Democrats in the legislature.

Time will tell. And time for the state’s recovery is running out.

Tuesday, November 27, 2012

Ideological Prisoners

Democrats, far more than Republicans in Connecticut, have shown themselves to be prisoners of their ideological convictions.

Some of these persuasions are mentioned in a recent column by Chris Powell, Managing Editor of the Journal Inquirer and a political columnist for the paper, who is often mistaken by politicians he has gored over the years as a conservative, an error Linda McMahon is not likely to make.

Mr. Powell begins his column by noting Governor Malloy’s colossal “‘shortfall’ of $365 million in the current year's state budget,”attributed by the governor to a poorly performing economy and increases in the Medicaid program, also springs from other more controllable causes.

Mr. Malloy has insisted that the state is suffering from a“shortfall” rather than a deficit. The chief difference between a “shortfall”and a “deficit” is this: A “shortfall” is a minor hole in the budget bucket caused by others, principally unforeseen circumstances; a “deficit” is a major hole in a budget that right thinking people attribute to imprudent policies.

Mr. Powell, who has an addiction for calling things by their right names, is very polite about Malloy’s rhetorical evasions. Hey, recessions happen. However, “the Malloy administration has never tried hard to economize. It just reduced the state budget's rate of increase a little. Indeed, the Malloy administration is most notable for a great expansion of the scope of state government, and its expansion of eligibility for Medicaid is just part of it.”

And the rest of the story?

It was the Malloy administration that “created a state version of the federal earned-income tax credit, cash payments to people who don't earn enough to pay state income tax,” and also “increased state grants to municipal education, which are mainly just subsidies for raises for teacher unions,” and also “created a program of corporate welfare dressed up as economic development, paying hundreds of millions of dollars to profitable businesses to stay or expand in Connecticut, including $115 million for the biggest hedge fund to relocate a few miles from Westport to Stamford, the governor's hometown,”and also undertook imprudent and “expensive public works projects for which there was no demand and little need, the bus highway between Hartford and New Britain and the high-speed railroad between New Haven and Springfield.”

And perhaps most strikingly, “The administration failed to obtain substantial concessions from the state employee unions [during its first budget], which gave up some but not all raises and received a four-year guarantee of job security. Amid the record tax increases he imposed, the governor described the union concessions as ‘shared sacrifice,’ but the taxpayers sacrificed far more than the unions did and municipal employee unions lost nothing -- and now the state employees will be exempt from any sacrifice at all for a few years no matter how much worse the economy gets.”

Mr. Malloy has pledged not to raise taxes or rely on layoffs to cover the deficit projected by State Comptroller Kevin Lembo. In view of the automatic salary and benefit raises for unionized state workers plugged into his first budget, the options available to the governor and the legislature to close the state deficit in a special session are varied: He could, as Mr. Powell points out, reduce the state income tax credit against residential property taxes; he might reduce educational financial grants, thus passing along to municipalities the state’s growing deficit and forcing towns to increase taxes for their employees, mostly teachers. No one expects the governor, who has appeared along with Lieutenant Governor Nancy Wyman on union picket lines, to give his internal assent to serious sacrifices made by union affiliated workers.

Now, the political theory driving this mad method revolves around a highly exaggerated and fantastical notion of the power and efficiency of government. No one who has a realistic operational understanding of government and the private economy would expect Mr. Malloy, or for that matter Mr. Obama, to micromanage free markets, which are far more efficient allocators of resources than government bureaucracies. Mr. Malloy’s “First Five” program is rooted in the perception that the governor can more reasonably direct the economic fate of Connecticut than the once invisible hand of the free market. Governments that seek to do everything – Mr. Malloy has several times said that he wishes to“re-invent” Connecticut -- do nothing well, which is why in a constitutional democracy the perimeters and powers of the three branches of government are carefully prescribed.

The real problem with defective ideologies is that they serve as blinders, preventing a view of reality that will bite your nose the longer you avoid recognizing it. Reality is a snarling tiger. Times of economic stress require maintenance chief executives, prudent cost conscious legislatures and independent appellate courts faithful to their mission, which includes preventing the executive and legislative departments from overrunning their constitutional banks.

Whether Connecticut has – or indeed wants – a government of prudent and modest means is a matter finally to be decided by what the founders used to call a “virtuous” public. When Ben Franklin emerged from the Constitutional Convention that had imposed a form on the government of the fledgling United States, he was asked by a woman what kind of government he had given us. “A Republic, madam,” said Franklin, “if you can keep it.” Implicit in Franklin’s reply is the unsettling notion that future less vigorous generations may not be able to KEEP the Republic at all.

Sunday, November 25, 2012

Cloutless Connecticut

Seniority equals clout in the U.S. Congress. New Senators and House members entering the portals of the U.S. Capitol are expected to be seen and not heard for their first year or so in office. Both Connecticut’s U.S. Senators are new arrivals.

Senator Richard Blumenthal, who appears to be having a problem shedding his past as Connecticut’s Attorney General, the state’s litigator-in-chief and consumer advocate, passed his first year blinking as the world slid chaotically by. With a couple of years in the Senate under his belt, Mr. Blumenthal may now be prepared to open his beak and sing a song.

Political watchers in his state are hoping the melody will not be freighted with bills he wished he had been able to enact as attorney general. The state’s soon to be Senior Senator, after a scant two years in Congress, has not favored his favorite newspapers with exhaustive opinions on a raft of recent nettlesome issues, including the destruction of the U.S. embassy in Benghazi, the murder of Libyan Ambassador Chris Stevens and other Americans, the growing U.S. deficit, the recent bombing by Israel of Hamas military emplacements in Gaza, an ordeal followed by an uneasy “peace” brokered by Egyptian President Mohamed Morsi, a Muslim Brotherhood fundamentalist who often has expressed his contempt of the West, hates Israel and wants to turn Egypt into a Salafist state, as well as other issues of moment much in the media. Perhaps after his year of sequestration Connecticut’s senior senator will be more forthcoming on, to mention just one pressure point, the economic collapse of Europe.

“Those two quarters of contraction put the euro zone's 9.4 trillion euro ($12 trillion) economy back into recession, although Italy and Spain have been contracting for a year already and Greece is suffering an outright depression.”

Connecticut’s newest U.S. Senator-elect, progressive Chris Murphy, will be forced by protocol to bite his cloutless tongue for about a year, after which the world will doubtless be his oyster.

Political science professor at the University of Connecticut Ron Schurin notes in a news story:
“In the next Congress, the senior senator will be Democrat Richard Blumenthal, elected to the Senate only two years ago. And its junior senator, also a Democrat, will be Chris Murphy, who is newly elected to the Senate. It's the least senior Senate delegation of any state.”

In a news conference following the recent elections,Governor Dannel Malloy noted that Connecticut’s economic future is tied inextricably to Europe’s fate. If Congress fails to reset the debt ceiling, the governor said, “with the weakness that Europe is currently demonstrating, we will see a worldwide depression.”

Republicans were perhaps thankful that the governor did not attempt to pin Connecticut’s growing post Malloy tax increase recession on Andrew Roraback, falsely reputed by his Democratic opponent, Congressman-elect Murphy, to be a Tea Party enthusiast.
“If we go off that cliff,” Mr. Malloy warned, “honestly, it is unthinkable." France, which elected in François Gérard Georges Nicolas Hollande (pronounced O-lend) its first socialist president since François Maurice Adrien Marie Mitterrand, the governor pointed out, is "our No. 1 trade partner."

Entering office as a snorting socialist bull, M. Hollande promised to tax rich millionaires at a 75 percent rate, but moderated his ambition somewhat, it is assumed by some fantasists in Connecticut, after having received a communique written in French from M. Malloy indicating that he, a la Governor Chris Christie of New Jersey, would be waiting at the border of Connecticut with a net to snag and relocate to Greenwich, CT French millionaire expats as they fled M. Hollande’s Bastille with their pants on fire.

Pointing out that he took over a state in financial distress during the Bush-Obama recession, Malloy said he accepted the challenge to turn the economy around.

Mr. Malloy vowed to "reshape my state -- I want to make it a better and stronger state."

To this end, Mr. Malloy told 300 credulous businessmen and women gathered at Fairfield University, he has given millions of tax dollars to a series of companies far richer than any single millionaire politician in Greenwich, with the possible exception of Mr. Blumenthal.

Such is Connecticut’s Crony capitalist future. Unlike the French in the days of Danton and Robespierre, American progressives do not lead the rich trembling in tumbrels to the guillotine; we shower upon them tax dollars wrested from the petite bourgeoisie.

Tuesday, November 20, 2012

How You Know When an Election Is Over

You know when an election in Connecticut is over when virtually all incumbent Democrats are re-elected to office, after having been fulsomely endorsed by much of the state’s left of center media, and when, several days after the election, bad news headlines begin to appear in Connecticut’s only state-wide newspaper:“State’s Medicaid Costs Soar, Projected Budget Deficit Attributed In Part to Expanded Coverage.” That headline appeared in a Hartford paper as a front page above the fold story a little less than two weeks after the election.

According to the story, we discover that the state’s $365 million budget deficit “dates, in part, to two years ago when Connecticut became the first state to expand medical coverage to low-income adults as an early adopter of federal health care reform.” The federal health care reform program is Obamacare. The architects of Obamacare were careful to front load the program with alluring benefits; payments for the alluring benefits were deferred until after the election.

That would be – now.

Two years ago, Connecticut was plowing the field in preparation for Obamacare. In 2010, we discover from the story: “Connecticut had the largest percentage increase of any state in Medicaid enrollment among low-income adults — a 32 percent jump, not an insignificant bump on the spending Richter scale.

Governor Dannel Malloy’s budget hawk Ben Barnes, secretary of the state's Office of Policy and Management, must have felt the tremors long ago. Asked to account for the Malloy $365 million budget deficit – the governor prefers to think of it as an easily backfilled “shortfall” – Mr. Barnes said, “The number of people enrolled in that program has shot up.” He also notes, “One, the economy has been poor. More people have been impoverished as a result of high unemployment, things of that nature."

How long ago did Mr. Barnes sense the economy was underperforming? Long, long ago. The economy was underperforming, President Barack Obama never tires of reminding us, since the Bush recession; that would be more than four years ago.

Under the enlightened leadership of Mr. Malloy, Connecticut had been stuffing the state’s revenue sock since the governor presented his first SEBAC inspired budget, which included a massive boost in taxes – the largest increase, in fact, in the state’s history. And a new healthcare exchange was inaugurated in the state long ago to prepare for Obamacare, promoted by Democrats during their campaigns as a more prudent less expensive health care instrument.

Tilling the field for Obamacare, Connecticut shelved its old heath care system, State Administered General Assistance (SAGA), and instituted a new Medicaid Low Income Adult program (HUSKY Part D) in 2010. Under the old system, SAGA serviced people from ages 21 to 64; under the new Medicaid Low Income Adult program the eligibility age was lowered two years to19, thus increasing the number of health care consumers. Under SAGA, benefits were extended only to people who held less than $1,000 in assets, though beneficiaries were permitted to own a home and a car worth $4,500 or less. As Mr. Barnes put it, “You could essentially have one crummy, old car and no money in the bank, or a couple hundred dollars in the bank, and still qualify. But if you had any assets at all [apart from the crummy old car and a house] then you didn't qualify. You had to spend down those assets on medical services before you were eligible. So, that ruled some people out of eligibility."

Under the Obama-Malloy-Barnes new health care system, limits on assets were eliminated – would Linda McMahon qualify? – benefits are more“robust” (translation: more expensive) and the program kicks in at an earlier age. These “improvements” necessarily increase the cost of the program. Connecticut has not yet received from Washington a waiver filed last summer that would impose a $10,000 asset eligibility test for the Medicaid program for low-income adults, and the federal government, currently reimbursing Connecticut for 50 percent of the program, will not reimburse the state fully under the Affordable Care Act until 2014.

Why then, should anyone be surprised that the new Medicaid Low Income Adult program has kicked a hole in Connecticut’s budget bucket?

The post-election story in the Hartford paper helpfully provided the relevant statistics: “In two years, Medicaid enrollment by low-income adults has grown from fewer than 50,000 to more than 83,000, greatly outpacing the state's expectations, according to state figures. Total Medicaid enrollment was 588,488 at the end of the last fiscal year in June, up 13,676 in a year.”

Surely the state figures were available to both Mr. Malloy and Mr. Barnes. Two years is 730 days, a little less than 105 weeks, 8,760 hours in which to ponder projected costs, Mr. Barnes’ specialty.

Here is the truth: Everybody knew, much before the elections, that Obamacare would cost the states millions of dollars. Mr. Obama knew, Mr. Malloy knew, Mr. Barnes knew, all the Democrats in both national and state legislatures knew, publishers of newspapers knew, newspaper editors who endorsed here in Connecticut every single incumbent Democrat in the state’s congressional delegation knew. Everyone but voters -- prior to the election -- knew that Connecticut was marching lemming-like towards the edge of a fiscal cliff, piped in that direction by sweet talking politicians with more curves in their courses than a slinky.

And now -- after all Connecticut incumbent Democrats have been tucked into their comfortable sinecures -- the rest of us are, at long last, permitted to know.

Should a media that allows itself to be so misused any longer be permitted to call itself free – or even useful?

Saturday, November 17, 2012

Malloy, a Utopian Twinkie?

To a certain degree, all utopianists are eternal optimists –Panglossian optimists. The world may be crumbling about them, but their lively imaginations lift them above the debris.

Realists will agree that the future does not seem sparkling for Europe just now. The latest news is that ALL of Europe, with the possible exception of stout Germany, has entered a second, double dip recession.

In Greece, Spain and perhaps Italy a depression has sunk its teeth into Europe’s soft underbelly. Greece, the home of democracy, bid democracy goodbye as it tumbled into a depression, overloaded with accumulative debt and unsustainable social programs. Euro-technocrats now direct its future. In Italy, Spain and perhaps France, the same stern number crunchers are waiting in the wings for the inevitable collapse of European Social Democracy.

Here in the United States, voters from sea to shining sea have just reelected as president the most progressive, European oriented chief executive in the country’s history. Mr. Obama has been steering the political ship of state in the direction of the European model for the past four years, at a time when Europe -- weighted down with, to mention only two straws breaking democracy’s back, an expensive universal health care system and unsustainable pensions -- appears ready to pitch over the cliff.

Not to worry. Forward!

Panglossian Connecticut marches forward with a ragged future at its elbow. Another day has been tucked into bed, and the state has received yet another “F” from yet another rating service; this one, Conning Inc., a Hartford-based asset manager that does financial research for insurers and institutional investors. Among all 50 states, the Conning report advises, Connecticut is dead last in credit quality.

The managing director of the company, Paul Mansour, writes that while Connecticut does not make most listings of states in fiscal stress,“… the reality is quite alarming. The state is among the worst in job creation, tax revenue growth, and has not yet seen a recovery in home prices. It has very high debt and retirement obligations, little budget flexibility and no rainy day fund balance.”

Job creation has been stagnant in Connecticut even since former Governor Lowell Weicker instituted his income tax to discharge a $2 billion deficit. In the blink of an eye, Connecticut’s government went on a spending spree, which ought to have convinced members of the General Assembly that the spending thigh bone is connected to the revenue shin bone in such a way that when revenues increase spending also increases. Connecticut’s current budget is about three times as large as the last pre-income tax budget presented to the legislature by former Governor Bill O’Neill. Larger state revenues, we now know from painful experience, do not translate into deficitless budgets. The current deficit – the size of which depends upon which political shyster one asks – has also kept pace with increasing revenues. After the Weicker income tax and the Malloy tax increase, the largest in state history, the state budget has reverted to the status quo ante in the pre-income tax days of O’Neill. This is the opposite of progress.
Once a magnet for business growth owing to its low taxes, budget hawking business-friendly General Assembly and modest regulatory environment, Connecticut has become an entrepreneurial pariah. The governor now bribes companies to remain in the state by offering to a preferred few a raft of crony capitalist inducements-- tax credits, low interest loans and free buildings -- on condition that the captive companies produce a set number of jobs within a predetermined time frame. 
Eyes outside the state are watching and taking note of Connecticut’s regression. Graduates from Connecticut’s very expensive institutions of higher learning are carrying their diplomas to more prosperous states. On holidays, our sons, nephews, nieces, brothers and sisters arrive “home” from the Carolinas, Texas or Florida. Made in Connecticut companies are fleeing high business costs for more profitable states, and even our plunderable millionaires are beginning to look over their shoulders at better prospects elsewhere. Since 1991, the state has not been negotiating with prospective businesses from a position of strength.

The utopianist, imprisoned in his own walnut shell and counting himself the king of infinite space, usually identifies “the state”with state government. They are entirely different entities. Having identified the state with the ruling satrapy he is pleased to serve, he takes the matter a step further and identifies the state with himself in the manner of the Sun King, Louis XlV, who famously said, “L’etate, c’est moi” (I AM the state).

Thus the governor’s acerbic mouthpiece and Malloyalist-in-chief Roy Occhiogrosso persists in arguing that “the state” is better off than it was before Malloy extracted from hard pressed Connecticut taxpayers the largest tax increase in state history.

Really? If a thief were to extract the gold from Mr. Occhiogrosso’s teeth, the thief might well argue that HE was better off after the tooth pulling. But it takes a special sort of preening arrogance for the thief to argue plausibly that Mr. Occhiogrosso had benefited from the extraction; and only a utopian robber far gone in conceit would argue that he is his robbery victim. Occhiogrosso to Malloy:“L’etate, c’est vous.”

Lawyers call improbable defenses of the kind urged by Occhiogrosso – “You’re better off” -- twinkie defenses. Speaking of Twinkies, the latest Connecticut company to throw in the white flag – after a dead-end negotiation with a greedy union – is Hostess of Wonder Bread and Twinkie fame. After the union induced shutdown, twinkies will be available only in the Malloy administration; when budget time rolls around, one may hope Mr. Malloy will have better luck with SEBAC than Hostess did with its unions.

Thursday, November 15, 2012

The New Budget Gimmickry

It’s extremely important for politicians to hide horrors before elections. One shudders to think how voting in Connecticut for the General Assembly might have changed if Connecticut’s eminently dupable citizens had known before they entered the polling booths that their state was running a deficit of $365-million.

The admission that Connecticut was running a deficit large enough to require Governor Dannel Malloy to submit a deficit mitigation plan to the General Assembly came nine days after votes were tallied in Connecticut. State law requires the governor to submit to the General Assembly a deficit mitigation plan whenever a budget deficit reaches 1 percent of general fund spending.

State statute requires Mr. Malloy to submit to State Comptroller Kevin Lembo a deficit mitigation plan. After Mr. Lembo certifies the deficit on December 1, the governor is required to present his plan to the Democratic dominated General Assembly.

Members of the General Assembly no doubt were –SHOCKED!!! -- to hear the governor’s budget chief Ben Barnes, Secretary of the State of Connecticut Office of Policy and Management (OPM), tell the members of the Appropriations Committee on November 14 that the deficit was indeed a startling $365-million.

Mr. Lembo had an intimation, possibly before the elections had been concluded, that the deficit was big. But this big? How could anyone know?

Mr. Barnes assured the committee that he had not dozed off before the election vote tally. He was fully awake: “Please know that my office has already begun work on this plan, and while I’m not prepared today to address any elements that might or might not be included in that plan, you can expect that we will announce specifics as soon as possible.”

The governor, who in the past had accused his Republican predecessors of engaging in budget gimmickry, was surprised, we are to suppose, by the size of the deficit, a good portion of which, $260 million, was attributed by Mr. Barnes to an unanticipated increase in the Medicaid caseload. “The enacted budget,” Mr. Barnes told the members of the Appropriations Committee, “did not assume the current caseload of 83,827 would be reached until August 2013,” Barnes said.

But of course: Budget figures are only as good as the assumptions made by those compiling budgets. Who knew?

If there is a single reporter in the state who did not suspect Connecticut’s budget was hugely out of whack before Mr. Barnes' belated admission on Wednesday, he or she should be fired by their Managing Editors.

Before Mr. Barnes' reluctant and tardy admission, Mr. Malloy was corralled by a reporter and asked to dilate on what precisely he planned to cut in order to bring his budget into balance.

These are decisions, Mr. Malloy said, yet to be made. The governor, the architect of the largest tax increase in state history, had told reporters days earlier – three times in a single interview no less – that he would not raise taxes to balance his budget, recalling earlier professions by other chief executives, the most memorable of which was former President George H. W. Bush’s pledge: “Read my lips -- no new taxes.”

“What would really be nice,” the governor confided to the reporters, “is if they would settle some of these issues in Washington so that the budget I present in February actually builds in whatever changes” are made.

Asked the same question – what was to be cut in the coming budget -- Mr. Barnes offered coyly, “Government spending. State government spending. That’s about as specific as I’m going to get ... You act as if I have in my mind a full list of what we’re going to do and I don’t yet. We’re working hard to do that. Until we get through that process and work with the governor and make sure we’re right on what the deficit is going to be, it’s way (sic) premature for me to discuss what any kind of plan in the future’s going to be.”

However dark the deficit cloud, a ray of sunshine, one CTNewsJunkie reporter noted, pierced through: "Malloy and Barnes both expressed hope that the state may benefit from a one-time revenue spike generated by people selling off capital gains this year in an effort to avoid new federal taxes next year (emphasis mine)."

To put the matter clearly, Mr. Barnes and Mr. Malloy hoped to receive a mini-bonanza from the quarter millionaires taxed by a newly re-elected President Barack Obama, who claims to have received from the people a mandate to increase the capital gains tax on business producers. The business producers are expected by Mr. Barnes and Mr. Malloy to sell off their capital gains to avoid paying Mr. Obama’s onerous anti-entrepreneurial tax, but Connecticut will reap additional revenues from the selloff that then may be applied to reduce the state’s equally burdensome $365-million deficit.

This budgetary persiflage is, of course, a one time, temporary patch – precisely the sort of “fix” Mr. Malloy charged against his Republican gubernatorial predecessors.

And after the fix?

Comes yet another deluge of taxes –either higher state taxes imposed by Mr. Malloy or pass-alongs, cuts in state revenue sharing directed at municipalities which, of course, will require increased municipal taxes to plug state induced gaps in municipal budgets.

Or – a modest suggestion from the vastly outnumbered Republican loyal opposition in the General Assembly -- the governor can just cut spending like other prudent cost conscious governors, many of whom are Republicans.

Tuesday, November 13, 2012

Connecticut s Fiscal Cliff

Newly re-elected U.S. Representative Jim Himes, a moderate Democrat operating out of Connecticut’s 4th District, has said concerning the nation’s so called fiscal cliff, “Washington understands how severe the consequences of the fiscal cliff are. When I saw House Speaker (John) Boehner speak two days ago, I thought he was conciliatory and traced the outlines of a deal."

Of course, the perceived severity of fiscal cliffs depends to some extent on one’s political vulnerability. Not all severity is created equal, and Democrats ensconced in Connecticut’s safe districts, such as U.S. Representatives John Larson and Rosa DeLauro, are apt to confront the fiscal cliff with less trepidation than Mr. Himes.

A recent study conducted by the Defense Technology Initiative should serve the members of Connecticut’s all Democratic Congressional delegation as a splash of cold water in the face. The study presents a sobering picture of Connecticut’s own fiscal cliff that should give vertigo to all freethinking and rational politicians in the state.

We learn that the amount of defense contracting in Connecticut has increased by 51 percent since 2003. The state’s defense contracting represents 5.1 percent of its economic output, not a negligible figure.

Should a lack of agreement between President Barack Obama, Democrats who control the U.S. Senate and Republicans who control the U.S. House trigger the automatic cuts implanted in the Budget Control Act of 2011, the effect on Connecticut would be severe, resulting in a loss of 36,000 to 50,000 jobs at a time when Connecticut is losing jobs to other states that are more business friendly.

The state treasury, presently more than $300 million in arrears according to a story in CTMirror or $690 million to $1 billion for each of the next two years according to a Bristol Today story, would also be hard hit as the state tumbles off the national fiscal cliff, since the defense industry contributes about $860 million towards Governor Dannel Malloy’s yet unbalanced budget. No one seems to know whether Malloy’s budget has EVER been in balance. According to Comptroller Kevin Lembo’s most recent report, the state has recovered only “31,400 (just over one quarter) of the 117,500 total nonfarm jobs lost in the March 2008 - February 2010 recessionary downturn.”Of the funds received by Connecticut from the federal government and parceled out to contractors, approximately $9.5 billion is spent on customary defense products: Virginia Class submarines, Black Hawk Helicopters, jet engines, turbines, other military components and the like. The spin-off economic activity generated by the contracts is even larger, about $22.4 billion, which affects about 101,000 jobs, according to the Defense Technology Initiative report.

Of the funds received by Connecticut from the federal government and parceled out to contractors, approximately $9.5 billion is spent on customary defense products: Virginia Class submarines, Black Hawk Helicopters, jet engines, turbines, other military components and the like. The spin-off economic activity generated by the contracts is even larger, about $22.4 billion, which affects about 101,000 jobs, according to the Defense Technology Initiative report.

Of course, the depth of the national “fiscal cliff” may be reduced if the president, the Democratic controlled U.S. Senate and the Republican controlled U.S. House are able to reach a satisfactory compromise on the self-elapsing Bush era tax cuts, otherwise known as tax increases.

But even assuming an end to the game of chicken, there must be defense cuts. Obama– who won the election -- needs the defense cuts to apply as a continuing payment on the Democrat’s new and expensive social programs, primarily Obamacare. And Connecticut’s all Democratic congressional delegation, having pledged its troth to Obama’s vision of the future in recently concluded state campaigns, is hardly in a position to offer at the alter a strenuous opposition to either Obama’s proposed defense cuts or increased taxes on quarter-millionaires or the increases in spending that will be plugged into a future Obama budget – presuming the president surprises everyone and offers a passable budget in his second term.

Unfortunately, Connecticut’s congressional delegation may not be ideally positioned to rescue the state from severe defense cuts. Its two U.S. Senators are relatively new arrivals and do not have enough political chits in the game – unlike departed U.S. Senator Chris Dodd and the departing U.S. Senator Joe Lieberman – to affect spending priorities in their state’s favor; and Connecticut’s House members will be joining an assembly controlled by Republicans averse to a crippling regulatory environment and increased business taxes that may, they predict, lead to a double dip recession and adversely impact an agonizingly slow recovery.

All of which leaves Connecticut in limbo, not to be confused with Lembo, who appears to be able to forecast deficits much more ably than the Malloyalists surrounding the governor, or indeed the governor himself – who recently promised no fewer than three times in one media availability that there will be no new tax increases in the coming budget – a dubious cry that recalls George H. W. Bush’s no new tax pledge and former Governor and Spendthrift Lowell “The Maverick” Weicker’s prophetic insistence that a state income tax would incinerate to Connecticut’s economic infrastructure .

Monday, November 12, 2012

The Perpetual Progressive Campaign

So, the elections are over -- for a too brief interlude.

The grumps who have been complaining all along that there is no longer a breathing space between elections are right. Forward! as they say in the progressive Beltway. In our time, politics itself has become a form of electioneering. That’s what is wrong with it. President John Kennedy governed; President Barack Obama campaigns.

Campaign finance reform was supposed to settle some of these problems.

Karl Kraus, a great German critic and a contemporary of Sigmund Freud, use to say that psychoanalysis WAS the disease it purported to cure; so with campaign finance reform and other political bromides. There are only two ways to shorten the political season. The first is borrowed from Shakespeare, with an important revision: “First thing we do is shoot all the lawyers,” Shakespeare’s Dick the Butcher said. A modern Butcher might be inclined to say the same of politicians, a good number of whom are lawyers. The second less dramatic solution is to term-limit politicians. While this more practical measure may not eliminate political corruption –neither does campaign finance reform, by the way – it will distribute political corruption more fairly among yet uncorrupted new political recruits and weaken the stranglehold incumbents have on political office.

One reporter wrote in a story about Mitt Romney’s failed campaign that the campaign for governor of Connecticut begins the day after Romney’s concession speech. And so it has. Governor Dannel Malloy has claimed that Obama’s victory in some sense vindicates his own political program.

That is a weak argument. In Connecticut, there was little to no turn-over in the General Assembly following the election, although Republicans in the state made some of Malloy’s questionable initiatives the center piece of their own campaigns. Actually, Republicans have been too cautious in their criticisms, and programs are vindicated, ultimately, by their consequences.
Mike Lawlor’s early release program, for instance, is a ticking time bomb. Once a prosecutor for the State's Attorney Office in New Haven and later co-chairman of the General Assembly's Judiciary Committee from 1995 to 2011, Lawlor is Malloy’s undersecretary for criminal justice policy and the chief architect of Connecticut’s early release Earned Risk Reduction Credits program.

It’s only a matter of days, weeks and months before another violent criminal let loose early under Lawlor’s ill-conceived program murders another store clerk: So far, that has happened twice since the program was launched, ineptly and without proper political vetting. Republicans are right to insist that early release should apply only to non-violent criminals. But Malloyalists operating under a one party regime tend to be hard-headed about their palliatives. Like most politicians, they are effectively reproved only after the plane has crashed into the mountain.

Some parallels may legitimately be drawn between Malloy and Obama.

Both are chief executives; both are progressive Democrats. During the early part of Obama’s first term, Democrats controlled the White House and both Houses of Congress. Malloy, the first Democrat elected governor in more than twenty years, presides over a General Assembly controlled by Democrats. Obama has yet to produce a budget, and this has alarmed some people who believe that state and national budgets define both political programs and the nation’s destiny. Malloy stiffed Republicans during his first budget negotiations, as did Obama, and hammered out a budget in collusion with SEBAC, the union organization charged with negotiating contract terms with the governor and Connecticut’s ex officio third party. Malloy, the Malloyalists, the Democratic dominated General Assembly and union representatives pushed through a “fair share” budget that relied – unfairly, say its critics – on the largest tax increase in state history, following close on the heels of the second largest tax increase in state history, the Lowell Weicker income tax. Obama is promising a “fair share” budget as well. So far, he has not been able to pass any budget. Both in Connecticut and in the nation, recent elections have not substantially changed political configurations. These are the obvious parallels.

There are important differences as well.

Here and there, one glimpses hints, foggy intimations, that Malloy is not willing to surrender the WHOLE of Connecticut’s government to progressive sans culottes who favor the despoliation of the rich, the one percent of those in the state who believe in a kind of egalitarianism that differs only in degree from that of Sylvain Marechal, the utopian socialist who declared in his Manifeste des Égaux (Manifesto of Equals, 1801) "Let the arts perish if needs be. But let us have real equality!" Antoine Lavoisier, the "father of modern chemistry," was executed during the French Revolution in 1794. The revolutionary judge who sentenced Lavoisier to death proclaimed, "The Republic has no need of chemists." Such was the purity of egalitarianism, a modern construct, at its headwaters.

Here in Connecticut, we yet tremble before such perfection. Hope and change beckons.

Thursday, November 8, 2012

What Republicans Can Do

Nationally, most Republican election analysts called it wrong. Moments following the election,Dick Morris repented in sackcloth and ashes. He had missed something that one might call the New Democratic Majority, which is on the order of missing Gibraltar while sailing the southern end of the Iberian Peninsula:
“By the time you finish with the various demographic groups the Democrats win, you almost have a majority in their corner. Count them: Blacks cast 13% of the vote and Obama won them 12-1. Latinos cast 10% and Obama carried them by 7-3. Under 30 voters cast 19% of the vote and Obama swept them by 12-7. Single white women cast 18% of the total vote and Obama won them by 12-6. There is some overlap among these groups, of course, but without allowing for any, Obama won 43-17 before the first married white woman or man over 30 cast their vote. (Lets guess that if we eliminate duplication, the Obama margin would be 35-13) Having conceded these votes, Romney would have had to win over two-thirds of the rest of the vote to win. He almost did. But not quite.”

Behold the New Democratic Majority – Blacks, Latinos, voters under 30 and single white women allured by Obama’s promise of a Planned Parenthood abortion center in every pot.
Sean Trende’s analysis in Real Clear Politics is much different than Morse’s. Trende does not deny the importance of capturing neglected minorities but, he points out, Romney’s challenge suffered most from a lack of white voters.
The imminent arrival of what Republicans used to call, a note of disapproval in their tone, the Nanny State -- a federal government octopus that wipes every tear with dollars taken from the idle rich while directing the flow of business in what has been quaintly called the private economy -- is supposed to hold this alliance together.

Parts of the alliance will fall away as the country limps along on crutches that date from the election of 1912, the high tide of the Progressive assault on common sense and the entrepreneurial spirit of the country. One likes to think that the powers of resistance of the average American to warmed over socialist schemes floating in the brain of Eugene Debs will survive the next four years in good repair; we are not Venezuela yet, even though Hugo Chavez, along with the progressive President of Russia Vladimir Putin, has given the thumbs up to Obama, Nancy Pelosi and Harry Reid, all promoters of the New Democratic Majority. The New Democratic Majority has been forged in the crucible of Chicago politics. Whether all or some of its component parts will survive after Mr. Obama and Mr. Axelrod leave the scene is very much an open question.

On the home front, Connecticut, far more than the national government, has become a one-party state. The template for the one party state may be found both in Venezuela and Connecticut’s major cities, Bridgeport serving as the state’s Ohio. As Connecticut’s major cities go, so goes the state.

Polls show that Dannel Malloy, the first Democratic governor in Connecticut since the administration of former Governor William O’Neill and the architect of the largest tax increase in state history, remains unpopular. However, voters who prefer an“Anyone but Malloy” candidate in 2014 may be looking at a “No Exit” sign. The governor has put together his own “New Connecticut Democratic Majority.” And the way in which his last budget was passed leaves little room for doubt that Mr. Malloy can cobble together a tax and spending plan without including the state’s Republican minority in the General Assembly. The architects of Connecticut’s last budget were Malloy and his Malloyalists, a Democratic majority in the General Assembly that pre-approved Mr. Malloy’s first budget and then invested the governor with plenipotentiary powers to readjust it, and state unions, dubbed by this writer at the time as Connecticut’s “third political party.”

Connecticut Democrats need surpluses to keep tax consumers well fed and to convince those unfamiliar with the way economies actually perform in the real world that the governor can easily create jobs by giving away millions in tax dollars to large profitable companies adept at crony capitalist bribery.

The jobs Mr. Malloy has claimed to produce in Connecticut do not grow on a jobs tree in the governor’s mansion adjacent to the money tree from which the governor, the Malloyalists and Democratic progressives in the state legislature pluck their millions to support grateful crony capitalists. Every dollar consumed in Connecticut taxes is a bucket of water taken from the deep end of the pool and poured into the shallow end by political shysters who hope to convince a majority of voters that the operation will increase the net amount of water in the pool, thus opening the door to unparalleled prosperity.

The surpluses Democrats will need to perpetuate this political fraud must come from somewhere, and taxpayers in Connecticut, already saddled with the largest tax increase in state history, cannot afford further increases – which means Mr. Malloy and the Democrats will do one of two things come budget time: either slash spending deeply, not likely, or pass on the tax burden to municipalities by cutting state support.

The loyal opposition in the General Assembly should begin soon to confront the imposture. They have only their chains to lose, and a world to win.

Wednesday, November 7, 2012

The Mop Up

It looks as if Republicans, once again, did not bring home the bacon in Connecticut. Campaign analysts are asking why.

This is an easy one. Republicans are outnumbered in the state roughly by a ratio of two to one, a very steep hill to climb. And, considering the historic nature of journalism in Connecticut, they cannot expect a leg up from the state’s left of center media. The Hartford Courant’s election eve endorsement editorial for instance looked as if it had been dictated to the paper’s publisher and editorial board by David Axelrod, and the paper’s endorsement of Democrat Elizabeth Esty over moderate Republican Andrew Roraback was particularly self-serving.

The paper endorsed all Democrats, at least two of whom are congresspersons for life, U. S. Representatives Rosa DeLauro and John Larson. If it is the mission of journalism to comfort the afflicted and afflict the comfortable, that editorial is a frank admission that the mission has been abandoned. Mr. Larson and Mrs. DeLauro are very comfortable indeed; not so their opponents, who are discomforted by massive spending gaps.

Linda McMahon spent a hundred million dollars in two attempts to win a vacant U.S. Senatorial position and lost both times. Is there a message there?

There is: Money alone can’t buy you a Senate seat. Mrs. McMahon spent $41,474,257 on her campaign, while her Democratic opponent Chris Murphy spent $9,345,243, a ratio of 4.5 to 1. Most journalists, and not a few voters on the receiving end of her mailers, were horrified by the imbalance; however, it was impossible to help but notice that the McMahon-Murphy spending gap was much smaller than that in two other races.

John Larson spent $1,961,468 defending himself from his Republican challenger, John Decker, who spent $47,005, a 41 to 1 gap. And Rosa DeLauro spent $1,039,238 defending herself against Republican Wayne Winsley, who spent $51,668, a gap of 20 to 1. Mr. Larson is operating within a gerrymandered district that makes ANY campaign fundraising redundant, and Mrs. DeLauro’s district fairly assures her a lifetime sinecure. Yet these imbalances, obvious for many years in their campaigns, hardly raised an eyebrow among the state’s left of center media.

There were no great numerical losses for Republicans in the General Assembly; the numbers remain similar, though some seats changed.

Republican conservatives lost at least one valiant soldier in state Senator Len Suzio, who was targeted by the Malloy administration for having discomforted Mike Lawlor, Governor Dannel Malloy’s Under Secretary for Criminal Justice and the architect of a problem plagued early release program. The thin-skinned Malloy administration is nettled by its gadflies and punishes them ruthlessly whenever possible. Suzio, a man of honor, lost by a heart stopping 221 votes out of nearly 40,000 cast in his overwhelmingly Democratic District after his opponent had imported many of his views into her campaign. The Malloy administration targeted other nettlesome conservative legislators but, for the most part, the few conservatives in the General Assembly acquitted themselves well.

What part was played in Connecticut elections by the Tea Party?

Tea Party members withdrew their participation, discreetly for the most part.

Is the Tea Party, some wonder, still a force to be reckoned with?

Though the Tea Party is not a party but rather a movement, some leaders within the movement recall General Ulysses Grant’s response after a humiliating counter attack by Confederate forces at Fort Donelson, “Dig in, we will get’em tomorrow.”

Tea Party members were not sought as campaign recruits by either McMahon or Roraback, who lost his race to Esty by a relatively slim margin. The Democrats, of course, used the Tea Party as a foil in their races, a stratagem devised by President Barack Obama’s Chicago shakers and movers, although it was clear that most Tea Party members in Connecticut were not animated by the Republican offerings this year. Mr. Murphy, the Planned Parenthood candidate, deployed the Chicago rhetoric to some effect against Mrs. McMahon. But generally, Tea Party folk were disengaged. There was not enough libertarian-conservative pollen among Republican candidates this year to attract the bees.

Looking to the future, what’s the most important take away for Republican candidates?

Both Mr. Roraback and Mrs. McMahon, who positioned themselves in their races as demi-Democrats, have demonstrated that Weickerism doesn’t work anymore. Mothball it; try something different. The Republican Party needs more Grants and fewer McClellans.

Thursday, November 1, 2012

Journalists Fiddle While Benghazi Burns

It would be a disgrace to journalism in Connecticut if questions concerning the murder of a U.S. ambassador attached to the consulate in Benghazi were not put to all the members of Connecticut’s congressional delegation, preferably before Connecticut voters march to the polls to decide who among the candidates for Congress this year are best fitted to represent them.
Among candidates who may find themselves in Congress after November has come and gone are Representatives John Larson and Rosa DeLauro, both of whom occupy safe districts that, so it would seem, likely will not fall to Republicans. Other Congressional seats are more competitive. On the Democratic side in the U.S. House, incumbent U.S. Representatives Joe Courtney in the 2nd District and Jim Himes in the 4th District are defending their seats against Republicans Paul Formica and Steve Obsitnik. The 5th District race, an open seat, pits Democrat Elizabeth Esty against Republican Andrew Roraback and could go either way. In the U.S. Senate race, current Democratic U.S. Representative Chris Murphy has a slight edge over Republican Linda McMahon.
The attack on the consulate in Libya has been a tar baby for President Barrack Obama, largely because the president and members of his administration took the view immediately following attacks by terrorists associated with al-Qaida in the African Maghreb that the murderous assault on U.S. Ambassador Ted Stevens and his much reduced band of security defenders sprang from a spontaneous protest against an amateurish film trailer defaming the prophet Mohammed. Within a short time of the assault, it became clear there was no protest near the consulate during an attack that lasted several hours. The security force protecting the consulate had earlier been reduced after assaults on the British ambassador.An earlier attack destroyed part of perimeter wall surrounding the consulate, and thus far no one in the Obama administration has sufficiently accounted for the reduction in security staff prior to 9/11, a date often exploited by al-Qaida terrorists.
Had Sherlock Holmes been on the scene, he would have reminded Dr. Watson, somewhat curtly, that the absence of a protest preceding the terrorist attack would strongly suggest that the ensuing mayhem could not have arisen spontaneously from a film that had enraged non-existent protesters. Elementary, my dear Watson.
In addition, the assault on the embassy appeared to be a well-coordinated attack on the ambassador and other brave military operatives two of whom, disregarding repeated orders from the CIA to “stand down,” rushed to the consulate from the annex in an attempt to extract Ambassador Stevens and ferry him to the annex where both, overcome by superior force, died.
The death of Navy Seal Tyrone Woods is morally nettlesome: Involved in two shootouts with terrorists at the consulate and the annex, Mr. Woods expired on the annex rooftop where he lay mortally injured, having repeatedly called for help that never materialized. Though the White House might have ordered an extraction of the ambassador-- help during the long ordealcould have been dispatched in a few hours – that order remained stillborn.
The attack on the consulate and the annex a mile distant was captured by two drones circling overhead, an evidentiary record sent in real time to Langley Air Force Base and members of the Obama administration. In view of persistent misrepresentations made by Obama officials who implausibly claimed that the murders of Ambassador Stevens others were connected with a film supposed to have sparked the assault, the drone record is a must-see.
Yet, if any journalist in Connecticut has asked Mr. Murphy, who sits on the Committee on Foreign Affairs and the Subcommittee on the Middle East and South Asia, to intercede with the Obama administration and demand the release of the drones' real time record, his answer is not readily apparent from anything he has said in debates or on the campaign stump. The remaining members of Connecticut’s congressional delegation -- Mr. Larson, who serves on the Committee on Ways and Means, which controls tax writing, Mrs. DeLauro, who serves on the Committee on Appropriations, and Mr. Himes, who sits on the House Banking Committee, all positions or power and authority – have maintained a discreet and deadly silence as the Benghazi ordeal has progressed from political incompetence to what may be a cover-up of major proportions in an administration that early on had pledged itself to an extraordinary degree of transparency.
This suffocating silence rolling over the bodies of four Americans – every one a hero – stems either from inexcusable ignorance, mendacious incompetence or the overriding campaign concerns of the Obama administration. This winding shroud of silence smothering a cry of help never answered even now could be shattered by journalists in Connecticut and elsewhere who are not asleep at their keyboards.