Skip to main content

The Shape Of Things To Come

"The esthete stands in the same relation to beauty as the pornographer stands to love, and the politician stands to life” – Karl Kraus.

It’s a great puzzle for those who think seriously about getting and spending. During his second winning campaign for governor, Dannel Malloy took tax increases – but not increases in borrowing, the last refuge of spending scoundrels -- off the table. Echoing George H.W. Bush’s boast at the 1988 Republican National Convention, Mr. Malloy invited Connecticut voters in so many words to read his lips: NO NEW TAXES.

And yet, even Mr. Malloy’s own Office of Policy Management guru, Ben Barnes, has told us that we shall have to get used to sluggish tax receipts, at least for the foreseeable future. Mr. Malloy has pledged to hold Connecticut’s Municipalities harmless, and so it will be difficult for him to pass the state’s budget woes to towns by reducing their revenue allotments. He has pledged not to renegotiate state contracts; no spending cuts there. He plans to increase or maintain educational spending at its current levels. For progressives – and we are all progressives now – education is a near sacred fetish. Nothing must be done to deprive even those who are ill prepared for college of an increasingly expensive education. No savings there.

On the matter of spending cuts, Mr. Malloy’s program is beginning to resemble the much criticized program offered by his Republican opponent during the recently concluded election. Mr. Foley, some may recall, was mercilessly battered about the ears by most editorial boards in the state because he had promised during his campaign not to increase taxes, not to renegotiate state contracts, not to lay off state workers, a series of “nots” that suggested Mr. Foley was not seriously interested in manfully confronting Connecticut’s very serious spending problems.

Mr. Barnes may be prudent in anticipating an ongoing “stagflation” in Connecticut. Revenue streams are not what they were when Connecticut’s economy was robust. State spending increased rapidly, tripling in the space of three governors, following the imposition of the Lowell P. Weicker Jr. income tax, which was followed by disappearing surpluses that trailed off into deficits, which was followed by the Dannel Malloy tax increase, the largest in state history. Connecticut taxpayers, whose assets have been depleted by a near depression followed by pocket-emptying tax increases, are now looking down the barrel of a four year deficit amounting to, depending upon whose accounting principles are applied, about $4 billion. State pension and other liabilities amount to about $65 billion, not the rosiest of dawns.  

Gas tax receipts, to take but one example, are bound to go down because the price of oil has gone down. The price of energy is included in the costs of all products and services in the United States, not merely at the gas pump. As much as it may please consumers that some energy prices have dipped, the news cannot be glad tidings for governors and others who need high energy prices to maintain a level of spending that does not move them outside their comfort zones. The worldwide reduction in oil prices very quickly made a sourpuss of the usually affable President of Russia, Vladimir Putin, because the Russian economy is heavily dependent on its chief European export. In Moscow just now, anxious buyers are emptying the shelves in anticipation of Russia’s coming monetary crisis. Things are not quite so bad in Hartford’s Capitol, where politicians work their wonders.

In Connecticut, we are told, we should count our blessings. We have Mr. Malloy’s word for it  that he has “righted the ship,” that he is “working on a Big Vision,” that tax policy will in the second Malloy administration “be driven by what we need to do to have a great state that we all desire,” that as governor he was imbued with the rare courage to “do what I felt was right, even if it would cost me an election, which it did not,” that we must “make sure we have the right projects to be funded to drive our investments.” If these bumper sticker bites should strike anyone as stale campaign left-overs, it is because that is exactly what they are.

The economic climate in Connecticut will not improve because Mr. Malloy, the state’s investor-in-chief, has decided to take a tax dollar from Citizen Smith and give it, as an “investment,” to the CEO of a large international Connecticut based company who has decided to play Mr. Malloy’s crony capitalist monopoly game. Companies that accept handouts from Mr. Malloy are, almost by definition, "risky investments." If they did NOT need the handout, they would be "prudent investments.”

The great Austrian writer and social critic Karl Kraus acerbically defined psychoanalysis as “the disease it purports to cure.” It is a definition that might more appropriately be applied to Mr. Malloy’s crony capitalist schemes, which cannot be financed without surpluses created by over taxation or excessive borrowing at a time when Connecticut’s economy is stressed by high taxes and burdensome regulations, both chronic problems neither of which will engage the interest of Mr. Malloy during his next term.


Comments

peter brush said…
“the disease it purports to cure.”
-------------
The main complaint heard before Obama and Malloy took control was that health insurance was too expensive. But the pols decided to use the political energy represented by this populist complaint to construct an elaborate redistributionist rig whose ultimate failure they hoped might be finessed into a "single-payer" system. The Party of Chuck Schumer and Dan Mal-loy says it's for the middle class, but it's for the managers and beneficiaries of the welfare state. (It is with a chuckle that we read that Edith Prague is having difficulties with the State pension bureaucracy.) Health insurance under the Affordable Care regime will be both more expensive and less effective for people who work for a living.
-------------
Pete Spain knew he and his wife would have to find a new health plan for 2015 since their current policy is being discontinued at the end of the year. But the letter explaining it still contained a surprise: Buying a comparable plan next year would cost the Bridgeport couple nearly 58 percent more.

“That’s just a bigger hit than we expected,” he said.

The Spains are among more than 60,000 Connecticut residents with health plans that don’t meet the requirements of the federal health law. Many of them are receiving notices that their plans are being discontinued and that comparable, Obamacare-compliant plans will cost significantly more.

“I’m seeing in some cases 100 percent increases,” said Tim Tracy Jr., a Fairfield insurance broker and president of the Connecticut Chapter of the National Association of Health Underwriters...
Pete Spain looked at other options and figures they could buy a plan from another carrier for less money, but it would still be an increase. The lowest-cost standard plan sold through the exchange would cost them about $120 per month more than they pay now.

Spain is quick to note that he’s a Democrat who made more than 1,500 phone calls for Obama before the 2008 election. He thinks the health law will help to contain health care costs overall in the future. But he was surprised by the financial hit he and his wife will be facing next year.

“This is just kind of drastic,” he said. “And we’re lucky…We’ll figure something out. But I just feel bad for people who aren’t doing as well," who fall just above the limit for discounted coverage.
http://ctmirror.org/obamacare-discontinued-plans-and-sticker-shock-round-2/
Don Pesci said…
PB,

You hit gold on your comment there.

Popular posts from this blog

The Blumenthal Burisma Connection

Steve Hilton , a Fox News commentator who over the weekend had connected some Burisma corruption dots, had this to say about Connecticut U.S. Senator Dick Blumenthal’s association with the tangled knot of corruption in Ukraine: “We cross-referenced the Senate co-sponsors of Ed Markey's Ukraine gas bill with the list of Democrats whom Burisma lobbyist, David Leiter, routinely gave money to and found another one -- one of the most sanctimonious of them all, actually -- Sen. Richard Blumenthal."

Powell, the JI, And Economic literacy

Powell, Pesci Substack The Journal Inquirer (JI), one of the last independent newspapers in Connecticut, is now a part of the Hearst Media chain. Hearst has been growing by leaps and bounds in the state during the last decade. At the same time, many newspapers in Connecticut have shrunk in size, the result, some people seem to think, of ad revenue smaller newspapers have lost to internet sites and a declining newspaper reading public. Surviving papers are now seeking to recover the lost revenue by erecting “pay walls.” Like most besieged businesses, newspapers also are attempting to recoup lost revenue through staff reductions, reductions in the size of the product – both candy bars and newspapers are much smaller than they had been in the past – and sell-offs to larger chains that operate according to the social Darwinian principles of monopolistic “red in tooth and claw” giant corporations. The first principle of the successful mega-firm is: Buy out your predator before he swallows

Down The Rabbit Hole, A Book Review

Down the Rabbit Hole How the Culture of Corrections Encourages Crime by Brent McCall & Michael Liebowitz Available at Amazon Price: $12.95/softcover, 337 pages   “ Down the Rabbit Hole: How the Culture of Corrections Encourages Crime ,” a penological eye-opener, is written by two Connecticut prisoners, Brent McCall and Michael Liebowitz. Their book is an analytical work, not merely a page-turner prison drama, and it provides serious answers to the question: Why is reoffending a more likely outcome than rehabilitation in the wake of a prison sentence? The multiple answers to this central question are not at all obvious. Before picking up the book, the reader would be well advised to shed his preconceptions and also slough off the highly misleading claims of prison officials concerning the efficacy of programs developed by dusty old experts who have never had an honest discussion with a real convict. Some of the experts are more convincing cons than the cons, p