Thursday, September 29, 2016

The Fruits Of Crony Capitalism Are Bribery And Extortion

There is only one Republican State Senator who voted against the Malloy-Sikorsky-Lockheed Martin-Governor Dannel Malloy deal, pompously called “Connecticut Strategic Investment Act.” That would be Senator Joe Markley, who most certainly is not against strategic investment. Like many conservatives, Markley believes that production should be directed by the needs of the market place – not by politicians operating hand in glove with mega companies to arrange deals profitable to both.

Senator Markley thinks crony capitalism, not at all the same thing as strategic investment, is a bell sounding the death knell of business in Connecticut. Crony capitalism is at best a polite form of bribery.

Governor Dannel Malloy and his co-conspirators in the state’s General Assembly having imposed on all businesses and taxpayers in Connecticut a brutal regulatory scheme and higher taxes – which, President John Kennedy told us a year before he was assassinated, reduce government revenues in the long run – large businesses in the state that could afford to push back by demanding special exemptions did so rather insistently. The hearts and minds of legislators who had been the architects of said crippling high taxes and the regulatory miasma that suffocates entrepreneurial activity in Connecticut almost instantly melted after one large company, General Electric, whose entreaties were spurned by the Governor and leaders in the Democratic dominated General Assembly, shook the dust of Connecticut from its feet and moved to Boston, Massachusetts, where the political weather was more to the taste of GE’s CEO, the irascible Jeffrey Immelt.

The proximity of an election and Malloy’s warm embrace of crony capitalism convinced his Democratic comrades in the General Assembly that they should go whole-hog. Consequently, the Democratic leaders in the General Assembly awhile back “invested” $25 million dollars of tax money in Bridgewater, the largest hedge fund in the world. More than four years ago, Connecticut Commentary panned that deal: “The architecture of Mr. Malloy’s ‘Next Five’ program virtually assures that capital investment cash provided by taxpayers will flow to mega-businesses such as Bridgewater, thus giving too-large-to-fail corporations a leg up over their smaller competitors, who are left to struggle in the usual Darwinian economic universe that rewards free enterprisers who have earned their own success without battening on the teat of Trust enablers.”

The crony capitalist Democratic Party of fairness and equity is here collecting taxes from cleaning women and giving it to a company whose CEO, Ray Dalio, is paid $3.9 billion per annum. The tax payment was to assist Mr. Dalio in moving his company from Westport to Stamford, and to assure nervous politicians that Mr. Dalio would continue to do business in a high tax, high regulatory state, until such time as he, consulting his investors, decides not to continue to do business in Connecticut.

Very early on, Markley discovered that crony capitalism is not a solution to Connecticut's slide into penury – it is the problem. At some point, bribery on such a large scale becomes extortion. Apologists for the crony capitalist Connecticut Strategic Investment Act have told us as much in rather flowery, self-serving language. Governor Malloy dubbed the measure a "bold, forward-thinking agreement" that would produce thousands of jobs at Sikorsky and have a positive impact on hundreds of Connecticut’s small businesses.

In a celebratory mood, a story in the Harford Courant tells us, “Ryan Rogers, a Democrat opposing Markley in the 16th District, criticized Markley's stance.

"There is no doubt that this deal will benefit both businesses and taxpayers — and the only person who seems to disagree is Joe Markley,” to which Markley replied “We have created a terrible business climate in Connecticut. Companies are now coming to us and saying, 'You have to pay us to keep us in your state.'"

Their backs against a wall, most Republicans in the General Assembly voted in favor of the measure after Democrats once again had nixed a Republican effort to use the special session to strengthen Connecticut’s anemic economy. This is familiar ground for Republicans. On entering the Governor’s office for the first time, Malloy and Democrats in the General Assembly expelled Republicans from the room when they shaped their budget, which included measures – two massive tax increases – that has caused the economic anemia and business flight.

Representative Rob Sampson addressed the measure in the House:

When one has one’s back to the wall, there are two possible responses one may adopt: 1) give up the struggle and remain helpless on the spot, 2) climb the wall, always a bruising ordeal. Connecticut has now sunk to a level below bribery. Having bowed to this newest extortion, what will leaders in the General Assembly do when the next mega company in Connecticut queues up for its fair share?

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