Wednesday, April 17, 2013

Malloy, No Jack Kennedy


Twice in the last 18 months, Governor Dannel Malloy has visited the Litchfield Area Business Association with a soothing message.

Mentioning two devastating storms and the Sandy Hook Elementary school slaughter, Mr. Malloy told the group that Connecticut had endured “very difficult circumstances,” and yet the resilient people of Connecticut “continue to demonstrate their great charity, their great willingness to work together and pull in the same direction. And I’m very thankful for all of that.”

Mr. Malloy then turned to the business at hand – the state of business in the state over which he presides as governor. Small businesses in Connecticut drive job growth, Mr. Malloy said. “Now, the area that we’re investing most of our time, at least, is small business. The bottom line is: I don’t want to be a governor who presides over years of job loss. I want to be a governor who presides over years of job gain.”

While 23 million jobs have been created nationally in 48 states, Mr. Malloy pointed out, Connecticut and Michigan stand out as glaring exceptions.

Job figures in Connecticut are indeed dispiriting. Employment in Connecticut peaked in March 2008 at 1,713,000. Since then, according to a May 2010 Current EmploymentStatistic (CES) and Current Population Survey (CPS), “72,600 jobs have been lost in Connecticut according to the employer survey. From a trough of 1,591,800 in February 2010, Connecticut has gained 48,600 jobs according to CES employment figures.  CPS employment in Connecticut reached a maximum of 1,771,718 in March 2008. 63,272 jobs have been lost in Connecticut since then according to the household survey.”

In Michigan, the auto industry had collapsed, but Connecticut, Mr. Malloy said in his usual eupeptic manner, had no excuse. The state had failed, Mr. Malloy said, to make “investments in change” so as to make it attractive to businesses outside the state while growing businesses in state at the same time.

“Those days are over. We’re going to move forward,” said Mr. Malloy, who financed his “investments in change” by imposing upon taxpayers and entrepreneurs in Connecticut the largest tax increase in state history accompanied by dubious “savings.”

The expression “move forward,” it should be noted was one fashioned in the smithy of President John Kennedy’s Camelot. Even then, it was an empty vessel: Whenever in history has time carried us back to the future? Nations have no choice but to “move forward” into a doubtful future that has either been made more or less prosperous by its governors.

Mr. Malloy’s plan, going forward, is to “invest” in education – a job producer, according to the governor – and to continue to distribute tax monies to those industries he favors.

Mr. Malloy is especially enthusiastic, to judge from his tax distributions, over the UConn HealthCenter, the home of John Dempsey Hospital, very nearly the worst teaching hospital in the nation, soon to be the home of the state financed Jackson Laboratories. In the course of his first term, Mr. Malloy has given preferments -- usually in the form of grants, low interest loans and tax write-offs – to the more than five businesses that formed the core of his “First Five” program. A separate program cares for the needs of smaller industries made needier by Mr. Malloy’s taxing and spending proclivities. 

Raising taxes and engaging in robust crony capitalism was not President John Kennedy’s way. Mr. Kennedy mapped out his program for rejuvenating a sluggish economy in an address he gave to the Economic Club of New York in 1962. A video of the speech may be found here.

“The final and best means of strengthening demands among consumers and business is to reduce the burden on private income and the deterrents to private initiative which are imposed by our present tax system – and this administration pledged itself last summer to an across-the-board, top-to-bottom cut in personal and corporate income taxes to be enacted and become effective in 1963.”

Mr. Kennedy was as good as his word. His program spurred the economy and led to predicted surpluses that were deployed after his assassination by President London Johnson as a down payment on his “Great Society” programs.

Democratic Vice Presidential candidate Lloyd Bentsen tauntingly said of Republican Vice Presidential candidate Dan Quayle during a debate in 1988, “Senator, I served with Jack Kennedy. I knew Jack Kennedy. Jack Kennedy was a friend of mine. Senator, you're no Jack Kennedy.”

Neither is Mr. Malloy Jack Kennedy. Does anyone doubt that Mr. Malloy seems to be aping Lyndon Johnson in his spending splurge? Mr. Malloy appears to be prematurely ushering in Connecticut’s new “Great Society” without benefit of the surpluses generated by Mr. Kennedy, whose program for restoring a sluggish post World War II era of high taxes and low growth might easily have been taken from the pages of Fredrick Hayek’s seminal work, “The Constitution of Liberty.”

Chapter 17 of Mr. Hayek’s book begins with a quote taken from Louis Brandeis, as fresh today as it was when first written:
 
“Experience should teach us to be most on our guard to protect liberty when the Government’s purposes are beneficent. Men born to freedom are naturally alert to repel invasion of their liberty evil minded rulers. The greatest dangers to liberty lay in insidious encroachments by men of zeal, well-meaning but without understanding.”

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