“I don't give reasons. I give orders!” -- Captain Ahab, Moby Dick
It seems only yesterday that Governor Chris Christie of New Jersey was threatening to hold a net on the borders of Connecticut and catch companies as they fled a tax prone Democratic Governor and majority Democrats in the state’s General Assembly. Governor Malloy derided the notion. Christie, a blustery Republican, was an easy punching bag. Not so Governor Andrew Cuomo, who recently met with CEO of General Electric Jeff Immelt to discuss moving GE business from Connecticut to New York.
Mr. Cuomo is a Democrat, which makes him both more lethal and less vulnerable to attack from Connecticut’s Democratic governor. Mr. Malloy does not relish spitting in the Democratic Party soup, particularly since he soon will occupy the august position of Chairman of the Democratic Governors Association. One can only imagine what the cloakroom discussion between Mr. Malloy and Mr. Cuomo might be like at the first Democratic Governors Association meeting following Mr. Malloy's installation as Chairman.
This is a tousle crony capitalist progressive Democrats have brought upon themselves. The progressive idea is to tax the rich – read, large corporations – at a progressive rate, collect someone else’s money and distribute it, Robin Hood-like, to the victims of capitalism. The difficulty with the idea is, as the late Maggie Thatcher memorably said, “sooner or later, you run out of other people’s money.”
Connecticut, which has suffered stoically through two massive tax increases – not counting former Maverick Governor Lowell Weicker’s punishing income tax – is running out of revenue options. At the same time, Connecticut’s one party Democratic state is loathed to cut spending; majority Democrats would rather cut taxpayers' throats than cut union benefits and salaries. Since spendthrift Democrats cannot impose “shared sacrifice” on the very people upon whom they depend for re-election to office, and have at the same time exhausted their tax revenue resources, there are only three courses open to them: impose crippling taxes on large businesses in the state, stand outside the crony capitalist White House with a tin cup in your hand hoping for a generous federal handout, or fob off on someone else the real-world consequences of your own problem-ridden policies.
The two most prominent progressive Democratic leaders in the General Assembly, Speaker of the House Brendan Sharkey and President Pro Tem of the Senate Martin Looney, have strenuously attempted to wring more tax dollars from large Connecticut businesses by imposing upon them a so called unitary tax. Mr. Malloy, who sent to the General Assembly a budget that was not in balance, assented to the scheme by signing off on sizable business tax increases, after which GE, among other companies, began to look for the exit signs. When Mr. Immelt protested that his company would begin scouting out a better tax climate elsewhere, he was derided by Mr. Sharkey as a tax scofflaw. Tax increases, the brier patch of Connecticut’s regulations and Mr. Sharkey’s derisive remarks have opened the door to Mr. Cuomo, not the only GE suitor.
By the time Mr. Malloy and the progressive leaders of the Democratic dominated General Assembly nipped nearly a billion dollar tax increase by a few millions and postponed imposition of the unitary tax, Mr. Immelt and other CEOs of large Connecticut companies were footloose. Every business, in or out of state, knows that Connecticut cannot control its spending and is therefore doomed to meet inescapable budget deficits through ever-mounting tax increases.
Bottom line: When you cannot raise revenue from a tax-flogged middle class, when large Connecticut insurance companies are cannibalizing each other in response to profit-reducing Obamacare regulations, when the federal government itself is paring back donations to states, there is only one course open to you: change the subject and blame all the difficulties that flow from your own reckless policies on the opposition party. But here too, one confronts a difficult and stubborn reality: There are NO Republican fingerprints on any of Mr. Malloy’s budgets, nor have Republicans been successful in altering the progressive forward motion of the state under the direction of Captain Malloy and his first and second mates Sharkey and Looney. It’s their ship, their course, their ocean.
Off in the distance one catches a glimpse of a whale’s white spout. As if in answer to the captain’s curse – “Speak not to me of blasphemy man; I’d strike the sun if it dared insult me!” – Moby Dick cleaves the waves.