The deficit is back. Like an aging coquette, it appears and
disappears around corners, smiling fetchingly at us: Here today, gone tomorrow,
back again the next day.
It appears that the skeletons came out of the closet a few
days after Governor Dannel Malloy, the
seven members of Connecticut’s all Democratic
U.S. Congressional Delegation, members of the all-Democratic State
Constitutional Offices and Democrat legislators who dominate the General
Assembly were returned to office. Faced with an “unexpected” state deficit, Ben
Barnes, the Head of Governor Malloy's Office of Policy Management, said that
Connecticut should perhaps expect chronic deficits in the future, a thunderclap
that caught the notice of some papers.
Mr. Barnes may have been mistaken by some, if only for a
moment, for Jonathan Gruber, an MIT Don dripping with ivy and one of the
architects of President Barack Obama’s Health Care initiative. Mr. Gruber is on
record as having said in various venues that Obamacare was intentionally
deceiving -- necessarily so because most Americans, who are far less bright
than MIT professors, would have rejected Obamacare had its architects been more
honest than either Gruber or Obama.
It’s true that Henry Mencken once said no one ever lost money by underestimating the
intelligence of the great masses of the plain people, but one expects that sort
of thing from a scourge of democracy. One expects genuflections in the
direction of all things democratic from office holders, particularly Presidents
and their Ivy League factotums. Mr. Gruber is to be congratulated for blurting out
the truth about Obamacare. In a like manner, Barnes blurted out the truth about
Connecticut’s budgets when he said Connecticut’s deficits had become chronic.
They are chronic for the most part because governors and legislators past and
present have not cut spending sufficiently.
Days after the
elections, some voters may be asking themselves whether there should be a price
to pay for naked campaign fraudulence. Malloy said no, there would be no
deficits, and now we have a deficit in the current fiscal year approaching $100
million, perhaps more, according to Republicans. Further down the road, the
state is confronting a deficit of about $2.8 billion for the next biennial
budget. Only 42.3 percent of The State Employees' Retirement System (SERS)
was funded as of 2012 and 58 percent was unfunded. An 80 percent funded, 20 percent unfunded
ratio is considered healthy; Connecticut is one of only nine states that have a
ratio of less than 60 percent. The state’s long term debt, at around $65
billion, is daunting.
If justice and truth
were in perfect alignment, all political shift-shapers would hang. But that is
almost never the case. Sweet talking incumbents are rarely voted out of office.
In safe districts, their tenure is more secure, if such a thing can be
imagined, even than public school teachers. It’s hard not to feel a tinge of
compassion for Gruber and Barnes. Gruber’s dalliance with the truth will cost
him dearly. The bright side for him is that he will be paying less in taxes on
his future diminished income. Mr. Malloy won’t fire Barnes, but someone near to
the governor might well take him to the woodshed and spank his fanny. Likely,
someone already has got to Mr. Barnes with the message: In the future, be more
obscure!
Connecticut’s
recurring deficit is only dot 1 in a puzzling series of dots rarely connected
by the state’s perennially misled voters.
Consider dot 2:
More than three years ago, Gregory Hayes, United Technologies Corp.'s (UTC)
Chief Financial Officer (CFO), told a group of Wall Street investment analysts "Anyplace
outside of Connecticut is low-cost," which certainly is true enough.
Connecticut’s high taxes and its tar pit of regulations punish homegrown
entrepreneurs. Hayes added ominously, “Even if work has to stay in the U.S.,
there are opportunities to reduce cost by moving out of those high-cost
locations.”
Apparently, the CFO’s nod in the direction of what might be
called, with a bow towards Otto Von Bismarck, “business realpolitik” spooked crony
capitalists in the Malloy administration because, sometime later, UTC was added
to the list of companies in Connecticut given special deals that resulted in
tax abatements and other preferments. Pfizer pulled up stakes when its
preferment’s ran out, and UBS, petted and stroked by both former Governor Rell
and Malloy, has not met prior commitments, according to which the company was
to retain 2,000 employees in Stamford, reduced from 4,200 more than ten years
ago, in exchange for $20 million in tax funds that, some think, might have been better spent on Connecticut’s three social service agencies -- the Department
of Children and Families, the Department of Developmental Services and the
Department of Mental Health and Addiction Services – which assist Connecticut’s
orphaned and abused children as well as the state's mentally
retarded and mentally ill.
The operations of all three agencies were cut by the Malloy administration.
During his campaign for re-election Governor Dannel Malloy
boasted that, were it not for his speedy intervention last February, UTC might
well have taken flight to “anyplace outside Connecticut,” where business costs
are more manageable. In his campaign, Mr. Malloy flouted proudly the red
feather in his cap and allowed that a deal struck between himself and UTC head
honcho Chairman and Chief Executive Louis R. Chênevert would anchor certain
divisions of UTC in Connecticut for (ten) years at a cost of $400 million in
tax breaks .
Mr. Chenevert recently and unaccountably bumped himself off
as Chairman and CEO of UTC. His replacement is -- drum roll, please – Mr. Hayes.
Business experts have speculated that the chief area of disagreement between
the outgoing and incoming CEO centers on the question “whether to keep the
company's building systems and aerospace units together or to break them up. Chênevert,
once president of Pratt&Whitney in East Hartford, preferred to hold the
company together, and his resignation could be a sign that the board will pursue
a split." Based in Hartford, UTC
employs 26,000 workers in Connecticut, mostly at Pratt & Whitney, Sikorsky
and Hamilton Sundstrand.
Comments
Now we are getting much higher electric bills because of a shortage of pipeline capacity in New England (a truly astonishing number). The Governors had a plan that's being kneecapped by the environmentalists. High power prices along with high gasoline and diesel prices are just one more reason for businesses to move out.
You're right. It may be worse than you represent. UTC probably would do the state a favor in the long run if it quickly reneged on any private deal its former CEO had arranged with Malloy. Elsewhere I've pointed out that multi-billion dollar international companies like UTC generally do not adjust their prospective plans to satisfy the political ambitions of governors. Here are the links: http://donpesci.blogspot.com/search?q=UTC We'll see.
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Actually, I tend to forget the second part of Mencken's pronunciamento. It seems as true as the first. My sense is that our current state and federal Ruling Grubers have an accurate estimation of our collective intelligence. After all, we've voted for Mal-loy and Presidente Pen and Phone twice. How emphatically stupider can we get?
The issue is that we as a People once upon a time recognized our limitations, and attempted to control our appetites, seek justice through constitutions. We explicitly limited the powers we have over our neighbors and compatriots through government action. The Grubers swear their allegiance and duly note their duty to uphold, and have proceeded to govern for decades now through lies and deceit. At this point, I'm not sure they aren't overestimating the population. Dumbed down after decades of government education, it may not need to be deceived to go along with idiotic policies.
Speaking of the budget, what are we to make of the firing of the Labor Relations lady? All indications are that she is a straight shooter. I suppose that is the general problem. It's harder for a team to cheat if some players are unwilling. (God Bless Jonathan Turley.) What does it say about our State that we have to pay someone $170g/year simply to manage our government employee labor union contracts? Aside from the putative insult to our intelligence, what it says to me is that we are not remotely a self-governing republic.
Happy Thanksgiving, and thanks to you, Don, for your work.