The Murphy Pass and the Zen Gap

One could only imagine what might have happened at the Hartford Courant’s editorial board offices if one of their investigative journalists had discovered that former Governor John Rowland, now a radio talk show host, had failed to pay his mortgage “several times,” having been sued by a bank anxious to recover mortgage payments from a dead-beat politician.

Brains would have exploded.

Eat The Rich, A Secular Sermon

Just because President Barrack Obama wants to skin the millionaires, this does not mean that he counts no millionaires among his campaign contributors.

The same fat cat one per centers upon whom Mr. Obama is prepared to shower crony capitalist bucks will undoubtedly contribute lavishly to national Democratic campaigns. And even those who are not so favored will be happy to throw a few hundred thousand into the collection basket as a down payment on Mr. Obama’s elephant ears.

Over the years, the purchasing power of the dollar has declined precipitously, the result of inflation brought on by the unwillingness of presidents and congresses to pay down the national debt with tax increases and spending cuts. For this reason, it takes more worthless greenback to buy ear time and a place at the table.

A million bucks ain’t what it used to be.

Even if all the millionaires in the United States were by some swish of the magic wand to become as greedy, selfish and slothful as Mr. Obama and Connecticut’s Democratic congressional delegation imagine them to be, rivers of campaign contributions from the one percenters would continue to flow into Democratic coffers. Even if Mr. Obama and the three Democratic millionaires in Connecticut’s congressional delegation – U.S. Representatives Rosa DeLauro, among the ten richest legislators in the U.S. House; U.S. Representative Jim Himes, who made his big bucks on Wall Street working for a firm that profited mightily from the sub-prime mortgage collapse; and Senator Richard Blumenthal, who married well – were to invite millionaires to the next Jefferson, Jackson, Bailey fete and cannibalize their assets, campaign funds still would swell the feeder streams that lead to Democratic victories Washington D.C.

Connecticut, as everyone knows, has an abundance of millionaires. Mr. Obama intends to make the eating of millionaires a central part of his political strategy through the eponymous “Buffet Rule,” so named after Warren Buffett, whose secretary is said to have paid more in taxes than the billionaire one percenter. The Buffet Rule, co-sponsored by Mr. Blumenthal, would impose a 30 percent tax rate on all income earned by Americans making more than $1 million a year. This Damoclean sword is not expected to fall upon the necks of the rich anytime soon. A lean and hungry Congress is thinking on it.

Mr. Obama this year escaped flogging as a millionaire because he has been too busy flogging millionaires to write one of his bestselling books, which in the past had pushed him over the edge. Embarrassingly, Mr. Obama’s secretary this year paid more in taxes than the president, according to figures supplied by ABC News.

As a general rule, Americans brought up on the malisons of St. Luke upon the rich – “Woe to you who are rich, for you have received your consolation; woe to you who are full, for you shall hunger” – would be happy enough during our long and agonizing “Made in Washington and Wall Street” crony capitalist recession to see the rich hanging on hooks in Hell.

Demagogic politicians have strummed Luke’s chord for decades. Mr. Obama has been much in the habit of affirming the more recent malisons of President Teddy Roosevelt and his fifth cousin Franklin, both of whom were progressives, one an aspiring and the other a born to the purple millionaire.

“Eat the rich” is politically titillating both as a political platform and a bumper sticker. However, appropriating all the riches of Buffet and other one percenters in the United States would not make a scratch in the country’s National, State and Municipal obligations. When operative, the Buffet Rule is expected to bring in $47 billion to the U.S. Treasury, a drop in an ocean of debt.

Total national debt in dollar terms is expected to double between 2008 and 2015 and will grow to nearly 100% of Gross Domestic Product (GDP), a measure of the value of everything produced in the United States. Not included in this projection are Fannie Mae and Freddie Mac obligations; obligations arising from direct investments made in response to the 2000 financial crisis until such time as there is a call on them, and payouts for Medicaid, Social Security and Medicare. Payouts to Medicare Part A (hospital insurance) over the next 75 years will significantly exceed tax revenues and consequently require funding from borrowing or other tax resources.

The eat the rich demagoguery, to be sure, will draw public attention away from a suicidal spending death spiral, and that is its chief purpose. Winning public office is an irresistible consolation for the lean and hungry politician Shakespeare’s Cesar warns us to be wary of.

The members of Connecticut’s progressive congressional delegation, all Democrats, seem content to spout Mr. Obama’s party line in their own election campaigns, seemingly unaware that the bulk of revenue flowing into Connecticut’s coffers has been supplied by the very hedge fund managers they and the president so easily condemn.

Mr. Blumenthal, who seems to be having a difficult time transitioning from his previous position as Connecticut’s Attorney General to Congress, waxes enthusiastic over the Buffet Rule: “This legislation would ensure that people with the highest income -- including millionaires and billionaires -- pay their fair share of taxes. They should pay the same rates as hard-working, middle-class Americans. Unconscionably, current tax loopholes allow the wealthiest Americans who make most of their income from investments to pay a lower tax rate than middle-class families."

A Connecticut Post reporter notes in his story that the bill, “widely seen as a political device that will enable Democrats who vote for the measure to accuse Republicans who vote against it of coddling millionaires,” will be useful as a campaign instrument.

Eat the rich and their taxable income disappears, at which point Main Street is left holding the tax bag. In the absence of spending cuts, it did not take long for the Woodrow Wilson 1913 income tax, a 1 to 7 percent progressive tax levied to reduce crippling tariffs, initially affecting only one percent of the population, to spread from those favored by Wall Street to those taxed on Main Street.

The Resistance, A Self Interview

Q: Whither the Connecticut Republican Party?

A: It’s good question. I put up a blog recently that was a review of a Chris Shays interview with Dennis House on “Face the State.”

Mr. House asked Mr. Shays whether he thought Connecticut had drifted so far to the left as to make it impossible for Republicans to win a seat in the U.S. Congress. Mr. Shays is running as a Republican for Senator Joe Lieberman’s seat. Mr. Shays said “Absolutely,” he thought the state had moved very far to the left.

The blog produced a response from Jon Kantrowitz, a liberal commentator who is himself an articulate unabashed progressive. “By the way,” Mr. Kantrowitz wrote, “it's true - the state has gone too far to the left to elect a Republican - and thank goodness for that!”

There are some few Republicans about who are not as thankful as Mr. Kantrowitz, though it is difficult to disagree with the major premise of his proposition -- namely that the state has moved very far to the left. The entire U.S. congressional delegation is Democratic. The state’s safer districts are occupied by unapologetic progressives like Mr. Kantrowitz, now moving up within the national Democratic caucus food chain. U.S. Reps Rosa DeLauro and John Larson are both pull-no-punches progressives. In what used to be called swing districts, congressional Democrats are a bit more cautious. In the General Assembly, state Democrats had until just recently a veto proof margin in both houses. And during the last election cycle, the Democrats captured the gubernatorial office, previously held by moderate Republicans and one ex-maverick Republican, former senator and governor Lowell Weicker, the father of Connecticut’s income tax. In addition, all the state’s constitutional officers are Democratic. So, I think it is safe to agree, along with Mr. Kantrowitz, that Democrats pretty much own the whole political kit and caboodle, while disagreeing with him sharply that we ought to thank God for this turn of events. While God may not be a Republican, one likes to believe He is no political plutocrat.

Q: Where does that leave Republicans?

A: In a resistance posture. The point of a party surely is to offer resistance to the reigning power. History has not dealt kindly with parties that have cooperated with the prevailing regime. The one party state, like a rolling stone, gathers no moss, but the single party state is an invitation to corruption; which is why, come to think of it, God created the two party system.

Q: Why haven’t Republicans been able to offer effective resistance to what you have characterized repeatedly in your Connecticut Commentary as Connecticut’s one party state?

A: Because Republicans have too often cooperated with the prevailing regime. You cannot cooperate without being coopted. It is important to understand that Mr. Kantrowitz is partly right. The Republican resistance has been washed away in Connecticut. Here and there, one finds brave blades of grass shooting through the concrete. During the last elections, two Republican conservatives – state senators Len Suzio and Joe Markley -- won office, both of whom may be considered part of a resistance vanguard. When Bill Buckley, who used to live in Stamford, started National Review, he proclaimed that the mission of the magazine would be to stand athwart history yelling “Stop!” Rolling stones don’t like that sort of thing.

I’ll give an example. Len Suzio, a conservative Republican who won his seat in a special election, has lately come out against deal made between Mr. Malloy and Jackson Laboratory. The Laboratory is to be attached to the UConn Health Center (UCHC), a business black hole that has absorbed millions of dollars in tax bailouts. Shortly after his budget passed muster with SEBAC, Mr. Malloy handsomely rewarded UCHC by giving it about a billion dollars.

The laboratory, apparently a successful non-profit enterprise that will itself generate no tax revenue, will absorb tax money from both federal and state grants. Mr. Suzio’s objection to the deal was forceful: “This is a lose-lose situation for Connecticut taxpayers. All the risk money is coming from the state of Connecticut. ... We don't get a nickel of interest in the technology that they develop. That is stupid."

Senior advisor and chief spokesman for the governor Roy Occhiogrosso responded that the project was a solid investment in personalized medicine and bioscience. This was a smart rather than a dumb risk: “There's a difference between taking a smart risk and a dumb risk. This is a smart risk. Taking a risk that 10 football games a year will turn the economy around is not that smart. The next thing you know, Senator Suzio will go on the radio to try and convince the people of Connecticut of his view on the flatness of the world. No matter how he tries to spin it, this is the best thing to happen to Connecticut in a long, long time.''

Mr. Suzio did not mention the “B” word on this occasion: Connecticut is broke, broke, broke. But the important political point is this: Even if Mr. Suzio is right, it will not matter – because Mr. Malloy has the votes in the General Assembly to do whatever he likes. If Mr. Malloy wanted to build a Ziggerat in Farmington – which, by the way, would produce a momentary spurt of jobs – he could do it, because the Republican resistance has no battalions. Napoleon’s quip to a pope who offered him a mild resistance was to ask: How many battalions has the pope? Answer: Not enough to resist the prevailing power of the day.

And THAT is the problem for Connecticut.

Mr. Malloy passed his budget through the General Assembly without being put to the inconvenience of discussing the matter with leading Republicans who, unlike union representatives, were wholly shut out of the process. The governor’s budget figures were such as to produce what I have called in the blog and in columns an artificial surplus of about a billion dollars. Real surpluses are produced when taxes are not increased but the state never-the-less realizes an increase in revenue owing mostly to increased business activity. Mr. Malloy’s artificial surplus is now flowing into a series of crony capitalist projects. Mr. Suzio is right about the UConn Health Center: It’s a budget busting black hole the state – which is broke, broke, broke -- can little afford to support. Attaching a non-profit, non-tax generating research center to the UCHC does not make the combination more profitable. This may be the first time in Connecticut’s history that a serviceable neck has been draped around an albatross.

Q: So, What’s wrong with crony capitalism?

A: Glad you asked. Anyone who is a proponent of the free market must be an anti-monopolist. I am here using the word “monopoly” to indicate existing monopolies, many of them stamped “Made in Washington D.C.” – Fannie Mae and Freddie Mac come to mind -- as well as political systems that tend towards monopoly. This is why the free marketer must be an anti-monopolist: Monopolies, which are cornered markets, frustrate competition, and competition is the economic virtue par excellence of a truly liberal society.

In the modern period, monopolies have been facilitated by governments. In a truly free market that fosters competition, cornered markets are less possible. It is when companies are given an opportunity to use government as a tool to gain an advantage over their natural competitors that monopolies flourish.

The process that produces state sponsored monopolies is called “crony capitalism.” The crony capitalist and his facilitators tilt the playing field in favor of large monopolistic enterprises by using presidents, governors and legislators to gain an advantage denied them in a free and fair competition.

This unfair advantage has its analogue in the sports arena. Americans, who like to see the best man or team rise to the top in a fair competition, would react disapprovingly, I like to think, to any “fixed” competition in which the presumed impartial judgment of a referee has been purchased by one side or another; and yet this is precisely what happens when a single political party has captured control of a congress or an executive department or a city or a state or a town.

There are signs all about us that singe party states and governments are infested with corruption. Alert politicians and – as I like to think -- wide awake journalist will be able to read the signs of the times. There is no reason to suppose that reporters, editors and commentators in the legacy media are comfortable with monopolies of any kind, political or economic.

There is an old biblical saying: By their fruits shall ye know them. We are familiar with the bitter fruits of crony capitalism. What applies to business monopolies applies as well to political monopolies.

The government of China, for example, is as much a political monopoly as – just to reach for an example – the government of, say, Bridgeport Connecticut. Of course, the consequences of corruption in China are more severe because there are in that country no mediating democratic institutions, such as a critical press, to soften the iron fist of an unquestioned authoritative regime. The arc of monopolistic political regimes bends towards fascism; they corrupt absolutely because they needn’t worry that their political customers will be able effectively to demand a better service or a better product. Within the one party state, any hope of political competition has been effectively abolished. Political monopolies are nursery beds of corruption, because they permit governments to rent to favored groups instruments of government power that ought to be used for the benefit of all.

The legislature is overwhelmingly Democratic. And it may seem to some who are paying attention that the remarks made several times by Governor Dannel Malloy to unions to the effect that he will never forsake them – “Oh, my darling” -- indicate that unions need not tailor their interests to the general interest, so long as both the governor and the General Assembly have their back. Indeed, it seems that unions were not made for the state; the state, rather, was made for unions. The very last party to sign off on Connecticut’s budget was not the legislature, the preeminent organ of government in democracies and republics, but SEBAC, a coalition of state unions that one commentator has called Connecticut’s fourth branch of government.

So then, we have in Connecticut a Democratic governor, a General Assembly dominated by Democrats – one of whom, Speaker of the House Chris Donovan, himself unusually friendly to union interests, is running for the U.S. House in the 5th District – a media blithely undisturbed by the prospect of a one party state, and a U.S. congressional delegation composed entirely of Democrats.

That is a recipe for, among other things, crony capitalism and its attendant corruptions.

In connection with politicians – the crony capitalist makers – the age old question arises: Qui Bono? Or to put it in the modern idiom: What’s in it for them?

Lots. They are given an edge on their competitors, usually smaller fry, and they have arranged with the politicians to share sacrifices: Taxpayers will share in the paying of their debts when their companies fail; and they will take the lion’s share of profits. Given these arrangements, is it any wonder that the public has soured on businesses too big to fail and those politicians who have contributed their mites to the creation of monopolistic enterprises?

I’ve been amused by the notion that Republicans have a lock on millionaires. Within the Democratic Party, we are invited to think, there are no millionaires: no Dick Blumenthals or Rosa DeLauros, both of whom are millionaire Democrats coasting along in seemingly impregnable Democratic districts.

According to the myth peddled by Democrats, businesses in the United States prop up Republicans with generous campaign contributions – but rarely Democrats. Nothing could be further from the truth. The late Senator Ted Kennedy could depend on regular infusions of campaign cash from captains of industries in the United States: Ditto former Senator Chris Dodd, showered for years by financial groups that he was supposed to be regulating as chairman of the banking committee. Mr. Dodd has now cashed in on his many years of experience in the U.S. Senate by becoming a lobbyist for Tinsletown. Mr. Dodd’s Hollywood adventure began only a few weeks after he had shaken the dust of the U.S. Congress from his feet, about a month after he had told his supporters on the left that he would never, ever become a lobbyist.

Money continues to be the Mother’s Milk of politics, and mouths are everywhere. So long as crony capitalists feel that they can be assisted in cornering markets by politicians, they will continue to buy politicians. In the last Republican-Democratic campaign in the 1st District, the incumbent Democrat, John Larson raised $2.7 million, much of it from financial interests; his Republican competitor, Ann Brickley, managed to get along with a slender $250,000.

If one may be so bold as to measure the wealth of a politician by the contributions he receives, we should conclude that Mr. Larson was the millionaire, while poor Mrs. Brickley was in financial campaign rags. Mr. Larson was in this race – and indeed, in all his races – the Mr. Bumble of the Democratic workhouse, while Mrs. Brickley was Oliver Twist, begging for more workhouse gruel. It’s wonderful – to me anyway – how desperately people who have been writing about politics in the state most of their adult lives cling to these myths, the work, for the most part, of ideological ad-men and Orwellian spin-masters.

In late September, as FBI agents were carting boxes of information from Solyndra -- the environmentally friendly, technologically advanced, politically correct, and now bankrupt company into which the Obama administration had poured its heart, soul and taxpayer money – administration officials, including the president, were avoiding comment. We may wonder why. The media, so far, has focused its attention on the vast sum of money “invested” in the now bankrupted solar panel producer. That focus is not misplaced. But we ought not to forget several other important points.

The e-mails now pouring out of the scandal suggest that the whole business was an improperly vetted photo opportunity for the president and vice president. Any kid selling lemonade from a lemonade stand might have told any one of the financiers in the Obama administration now busing themselves with ending a seemingly intractable recession that when a product’s cost of production exceeds the amount of money one expects to receive through sales, the company is incurring a risk of bankruptcy. In an S-1 filing a year ago, Solyndra reported its average sales price was over $3.20 a watt, about 65% more than leading crystalline-silicon PV manufacturers. Its cost of manufacturing was an astounding $6 a watt. These figures are irreconcilable.

Solyndra was not one of those companies in the United States deemed too big to fail, and so it failed – which means, a bankruptcy judge will be assessing the company’s assets and selling them off, parceling out a portion of redeemed value to the company’s investors. In Solyndra’s case, about a half billion dollars of tax money was frontloaded into the collapse. The Solyndra loan was part of a $38.6 billion program to aid green energy that the Washington Post says has created exactly 3,545 jobs, about $10,888,575 in loans per job – all vanished. Perhaps, with the FBI on the case, someone will go to jail. In the case of Fannie Mae and Freddie Mac, the tax money was both frontloaded and backloaded; the company is now bigger than ever, and no one went to jail.

The government financing of select companies it chooses as prospective winners in a competitive market place is wrong for multiple reasons. Government intervention in decisions generally made by consumers distorts demand signals and creates moral hazards for investors. Government is notoriously inept at choosing winners; increases in the price of stamps have not prevented the U.S. Post Office from painful consolidations. But the most objectionable feature of Crony capitalism is this: It funnels profits to private investors and shifts debts to taxpayers.

Somehow, something in my bones tells me that millionaire Democrats in safe districts like Mr. Larson, or private business- punishing former attorneys general like Senator Dick Blumenthal or tax the millionaire proponents, who continually deny that our country and state are beset with a spending rather than a revenue problem, do not pass their days worrying about such things. But the people of Connecticut should – because we are living in a time in which our problems will kick in our front doors if we ignore them. They are coming to sleep with us in our beds; they will be sitting in a chair next to us at our work sites. They will be sitting in the passenger seats of our cars.

We no longer have the comfort of ignoring them.

The chief difference between Republicans and Democrats in the coming campaign will be this: Republicans are interested in increasing prosperity through a series of painful but necessary reforms. They want small, efficient and responsive federal, state and municipal governments and an expanding economy. Democrats want to expand the range of influence the government has over our lives. One party would shrink the private sphere and expand the public sphere; the other would do the opposite. We must never forget that in democracies and republics the citizenry gets the kind of government it votes for. Having crossed the bar to the 21st century, we should wonder and worry whether the challenge thrown down by Ben Franklin at the founding of the republic will be properly answered. When asked by a woman what kind of government the founders at the close of the Constitutional Convention of 1787 had given to the country, Franklin said, “A republic madam – if you can keep it.”

We are under a moral obligation to those who came before us and to those who will succeed us – to keep it.

Mr. Dodd's Valedictory Speech

“The evil that men do lives after them; The good is oft interred with their bones."

So said Mark Anthony in William Shakespeare’s “Julius Cesar” during Cesar’s funeral oration. Anthony, who took no part in the assassination of Cesar, the bloody work of Brutus and others, all honorable men, was determined that the good Cesar did should not be buried with his bones and that the evil done by his assassins should not outlive them.

U.S. Sen. Chris Dodd’s farewell speech before the senate serves a like purpose. Farewell speeches by senators of long standing and exit interviews recorded in newspapers are like brief autobiographies, and there never yet was an autobiographer who was not the hero of his own reminiscences. Eventually, the encomiums are overwritten by sober historians far removed from the partisan atmosphere that colors all the deeds, evil and good, of their subjects.

Mr. Dodd’s errors in office lie just beneath memory’s skin. His three decades in the senate are hardly ancient history. It may be recalled – though not of course by Mr. Dodd, and especially not in a farewell address to his colleagues in the U.S. Senate -- that Mr. Dodd was the senator who, to speak metaphorically, assassinated the Roosevelt era Glass Steagall Act, a measure that prevented rapacious financial institutions from meddling with the bankbooks of Mr. Dodd’s constituents, as noted by Managing Editor of the Journal Inquirer Chris Powell:

“I suspect,” Mr. Powell noted in an interview a little over a year ago, “that Connecticut's Senate election will be determined more by doubts about Dodd's personal integrity than by doubts about his record, particularly his long subservience to Wall Street. That will be too bad, since, in providing what turned out to be the crucial support for the repeal of the Glass-Steagall Act and thereby letting commercial banks and investment houses merge, Dodd bears as much responsibility as anyone for the collapse of the world financial system. His Irish "cottage" and the terms of his mortgages are trivial by comparison, not that those things don't imply his having lost touch with Connecticut, a sense of entitlement as part of the ruling class.”

The crushing Dodd-Frank regulatory bill  may be Mr. Dodd’s feeble attempt at repentance.

It will not be long before the regulations in that bill are offset by exceptions awarded by the commanders of the nation’s new command economy in Washington. Companies too big to fail – Fannie Mae and Freddie Mac, for instance, both Government Sponsored Entities (GSEs) responsible for the swelling housing bubble the bursting of which preceded the collapse of the mortgage industry in the United States – always have been able to purchase the ears of congressmen prepared to dole out tax dollars to favored failing enterprises.

Before Mr. Mr. Dodd decided not to run for re-election, the Chairman of the Banking committee, always attentive to opportunities, was hauling in campaign dough from major financial institutions, among them Countrywide, the now bankrupt GSE whose CEO, the odious Angelo Mozillo, regarded Mr. Dodd as a “Friend Of Angelo.” Mr. Dodd recently pointed to a lack of reform in Fannie and Freddie as one of the biggest gaps in the new legislation.

In his Senate Swan Song, Mr. Dodd also lamented that “Powerful financial interests, free to throw money about with little transparency, have corrupted the basic principles underlying our representative democracy. And, as a result, our political system at the federal level is completely dysfunctional."

He signed off by quoting from 2 Timothy 4:1 – “I have fought the good fight, I have finished the race, I have kept the faith.”

The author of those words, concerned that Christians following him in later years would “turn away their ears from the truth and will turn aside to myths,” earned his crown of suffering and kept the faith by dying for it. St. Paul suffered martyrdom near Rome at a place called Aquae Salviae (now Tre Fontane), somewhat east of the Ostian Way, about two miles from the splendid Basilica of San Paolo fuori le mura, which marks his burial place.

Mr. Dodd, no doubt, will enjoy a more pleasant end. It has been rumored that Mr. Dodd has been offered a job as chairman of the Motion Picture Association of America. Should Mr. Dodd accept the position, he will earn a handsome salary of a little over a million a year. Should he decline the offer, his future still promises to be more remunerative than that of St. Paul -- and his final years less agonizing.

Fannie, Freddie, Dodd, Blumenthal And Government Supported Entities

Even the New York Times, a publication that can hardly be accused of harboring black thoughts about the usual culprits in the U.S. Congress, referred last August in a news story to Fannie Mae and Freddie Mac, two quasi-private business enterprises cosseted by the Democratic Congress, as “wards of the state.” Previously, each had been designated a Government Supported Entity (GSE).

In a news story – the editorial board of the Times, predictably listing left, has already predictably endorsed Connecticut’s attorney General Richard Blumenthal for Congress – reporter Gretchen Morgenson snickered that Fannie and Freddie, now become wards of the state sucking the blood from taxpayers, “got just two mentions in the 1,500-page law known as Dodd-Frank: first, when it ordered the Treasury to produce a study on ending the taxpayer-owned status of the companies and, second, in a ‘sense of the Congress’ passage stating that efforts to improve the nation’s mortgage credit system ‘would be incomplete without enactment of meaningful structural reforms’ of Fannie and Freddie.”

“Fannie and Freddie amplified the housing boom by buying mortgages from lenders, allowing them to originate even more loans. They grew into behemoths because they lobbied aggressively and played the Washington political game to a T. But after both companies bought boatloads of risky mortgages, they required a federal rescue…

“Outwardly, Fannie and Freddie wrapped themselves in the American flag and the dream of homeownership. But internally, they were relentless in their pursuit of profits from partners in the mortgage boom. One of their biggest and most steadfast collaborators was Countrywide, the subprime lending machine run by Angelo R. Mozilo.”

OhMyGod!!! as the kids sometimes say. There it is – “Countrywide,” somewhat in the news these days largely owing to an ad recently released by the Linda McMahon campaign that mentions Blumenthal, according to recent polls the heir apparent to Dodd’s seat.

The McMahon ad was put under the microscope a few days ago by Hartford Courant scrutinizers and found wanting. The ad touches an important point, gently but inadequately. The Courant misses the critical point entirely -- this point: All the so called GSEs have failed miserably. But they failed upwards – because they were Government Backed Entities. Fannie, Freddie and Countrywide were too well connected with Washington insiders to fail. In the private marketplace, failure means bankruptcy, scowling judges, ransacked investors and, at the margin, possible jail terms for CEO frauds. In a command business structure in which Washington decides what business are to succeed or fail, GSEs, underwritten by taxpayers, are resuscitated when they fail -- by taxpayers. That is what a bailout is: It involves a taxpayer infusion of funds to politically connected businesses that are too big to fail engineered by a paternalistic government committed to a command economy that has become too big to fail.

This should be the issue in all Connecticut’s congressional campaigns: How long can any administration in Washington continue to shuttle the wealth of the nation to failed enterprises before the wealth is depleted?

Angelo Mozilo, the CEO of Countrywide, it should be noted, is not in jail. A settlement was made in his case, with the energetic assistance of more than a dozen state attorneys general, Blumenthal prominent among them. The settlement having been made, Blumenthal, who should have been monitoring his settlement, was distressed, we discover from recent news reports – really distressed, and surprised too, very surprised, indeed shocked – that Mozilo’s patrons in Washington took care of Countrywide and other of its GSE co-conspirators such as the Bank of America, which purchased Countrywide’s fraudulent mortgages, by passing along the bill to taxpayers.

It turns out, after all the sleight of hand, that taxpayers who contribute to pension funds will be picking up the tab. Billing pensioners is nothing new in Connecticut where, under a Democratic regime that claims to represent the interests of teachers and firefighter and other public servants, pension funds are regularly raided by legislators and governors, while political benefactors such as John Larson and Blumenthal look the other way.

We should draw two indispensable lessons from the Countrywide-Fannie-Freddie-Bank of America affair: 1) Monopolies such as Countrywide, Fannie and Freddie cannot be formed without the willing participation of governing officials such as Dodd and Barney Frank who afford them privileges not enjoyed by their competitors in a diverse free market, and 2) Any business savvy enough to become a cosseted GSE has acquired enough friends in Congress and the Obama administration to pass along to others any comeuppance served up with great fanfare by Blumenthal and his cohorts.

Blumenthal’s response to Bank of America’s great escape from sanctions thought by Blumenthal to have been imposed on them by the attorneys general is further evidence that the people of Connecticut should vote someone other than him to send to Congress.