Monday, December 29, 2014

What The New Year May Hold: More Malloyalism

Democrats in Connecticut do not have an identity crisis. If it is proper to judge a political party by its programs, they are progressives. Some Democrats, of course, are more progressive than others, but what Generalissimo Richard Nixon said of the Republican Party of his day – “We are all  now” – is certainly true of the Democratic Party in the northeast.

The essence of Keynesianism is government control of the economy, usually through regulations that large enterprises may avoid by beseeching the government for special favors and deferments. What former President Dwight Eisenhower used to decry as “the military industrial complex” has been broadened in our day to include a convoluted collusion between large capital rich firms and/or state and federal governments made possible through regulations that may be waved for a fee or a consideration.

The consideration may include any benefice: The favored company may hire a relative of the politician, or it may contribute directly or indirectly to the political benefactor’s campaign, or it may, at the end of the politician’s successful career, hire him or her for the purpose of padding the politician’s pension. This is the kind of widely accepted corruption of government officials that is never prosecuted by any of the multifarious governmental agencies whose business it is to look the other way when political backs are being scratched. Connecticut may be waiting until Hell freezes over before Republicans, the state's soft opposition party, demand a re-institution of  its abolished Inspector General's office.   

The phrase “We are all Keynesians now “was coined by Milton Friedman – no Keynesian – to describe a lamentable turn in economic policy towards government interventionism, which almost always is the key that opens the door to corruption. Having taken the United States off the gold standard in 1971, Mr. Nixon offered the following justification: “I am now a Keynesian in economics.” Initially attributed to Mr. Friedman in a 1965 edition of Time Magazine, the phrase was a bastardization of his actual quote: “In one sense, we are all Keynesians now; in another, nobody is any longer a Keynesian."

Nowadays the phrase “We are all (fill in the blank) now” is used to describe positional or ideological views in politics. This columnist has re-adapted the phrase to describe the leftist movement of Connecticut’s Democratic Party: “We are all Malloyalists now.”

To be a Malloyalist is to embrace a sort of newfangled progressivism that is, unlike the old variant that rose to prominence between 1880 and 1920, unattached to post-Civil War populist Protestantism.

Mr. Malloy’s most serious problem – though the Malloyalists will never publicly admit it – is a steadily shrinking revenue pot. Ben Barnes, head of Mr. Malloy’s Office of Policy Management (OPM), off-offhandedly alluded to this problem when he told reporters, in a rare candid moment, that Connecticut should get used to chronic deficits for the foreseeable future. If deficits persist, as seems likely – the state, almost alone in the nation, is still in a recessionary mode -- and if Mr. Malloy remains faithful to his campaign promise not to raise taxes, where will he get the walking around cash he has in the past lavishly dispensed to select companies and unions and corrupt Democrat dominated cities, the political campaign tails that appear to be wagging the whole of Connecticut? To vary a phrase of Maggie Thatcher, progressivism stops when the progressive “runs out of other people’s money.”

There are hints here and there that Mr. Malloy will be able to increase state revenue without increasing "taxes.”  One does this, through a magician’s trick, by defining a tax so narrowly as to exclude other “revenue enhancers” such as fees that almost certainly will be increased; or one “borrows money” – i.e. taxes the upcoming generation -- to repair long deferred capital projects such as crumbling bridges, moving the funds as necessary from a targeted funding pot to the general fund in order to patch gaps in future budgets. Connecticut is, after all, staring down the barrel of a four year three or four billion dollar deficit. Where the political will is fixed on revenue enhancement rather than cuts in spending, progressive leaders in the General Assembly such as Brendan Sharkey in the House and Martin Looney in the Senate will find a way. Republican leaders once again will be tied and gagged and banished from any serious negotiation that involves getting and spending.

So then, absent a relentless and politically remorseless Republican opposition, Connecticut’s New Year will involve more Democratic chicanery, more spending, more union coddling, increased revenue enhancers, more aggressive demands coming from favored interests groups and – the list is by no means complete – more business flight, fewer jobs for minorities in cities, more educational handouts that do not improve education, and a complicit media that will have less and less influence the more it retreats behind paywalls.

Happy New Year. 
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