Tuesday, February 14, 2017

Real Reforms And Willful Blindness



Forbes magazine asked last March “Can Connecticut Be Saved?” The bone-crushing statistics provided were telling: “Connecticut’s job-growth rate is a meager 1.1%, compared with the national average of 5.1%. According to the Connecticut Department of Labor, the state’s unemployment rate is 5.5%, compared with a national average of 4.9%. Connecticut ranks among the top 10 states for net out-migration, losing 140,571 taxpayers in that same 10-year time period. And this trend can be tracked over several decades. Between 1992 and 2014, Connecticut lost $12.36 billion in annual adjusted gross income (AGI).”

Last July the Mercatus Center placed Connecticut number one among states having the worst fiscal conditions in the nation. So then, what can be done to pull Connecticut from its tailspin?


Some solutions are national; others may best be applied by states and municipalities. We can begin by rethinking political solutions that solve nothing for people and everything for politicians. In the “politicians” category, we should include, in addition to lean and hungry active politicians, those who operate on the borderlines of politics. That subgroup would include Big Unions and Big Business, the hobgoblin of progressive Senator Elizabeth Warren’s progressive mind. Big Business has been able to escape the prehensile claw of the tax man by hiring Harvard educated accountants and lawyers to mitigate tax impositions by taking advantage of loopholes in what must be the most complex tax code in history.

One of the richest men in America, Warren Buffett, announced several years ago he had paid less in taxes than his secretary. Although capital gains taxes went up for Buffett and others in his asset class in 2013 from 15 to 20 percent, he still paid less than his secretary. The answer to this embarrassing disparity is simplicity itself. “Simplify,” said Henry David Thoreau after he had spent some time at Walden Pond; it was his personal flag, his answer to a world that had become needlessly complex – simplify!

Revert to a flat or fair tax, eliminate all the tax write-offs, and tell all the tax dodging professionals and their accomplices in the national legislature to pay their fair share or go to jail. In a system in which everyone pays the same rate, tax scofflaws are more easily identified; a progressive note can then be introduced at the distribution end: social security for Buffet’s secretary, but none for him.

On the other side of the political barricades, unions are lighting political bonfires. Here in progressive Connecticut especially, powerful unions have exerted an inordinate influence on left of center politicians. Connecticut over the years has provided a political safe-space for public employee unions. Solution: enact right to work laws; cut salaries and benefits for new hires until parity is achieved with private sector employment; end binding arbitration, which has obscenely inflated public employee benefits; and refuse to allow union leaders to hold Connecticut budgets hostage to contract negotiations between Governor Dannel Malloy, a zealous union supporter who has marched on union picket lines, and union leaders whose efforts in contract negotiations do not and cannot enhance the public good.

How do we know state employee salaries and benefits are disproportionally high?

Many of us, even politicians who operate across partisan lines, are pretending not to know. More than two years ago, the Yankee Institute commissioned a comparative study of private and public compensation in Connecticut, “Unequal Pay: Public vs. Private Compensation in Connecticut."

Here is a key finding of the study, according to a story in the Hartford Courant: “A key finding: although the average private-sector worker in Connecticut earned a slightly higher salary, the average state employee received benefits worth nearly twice that offered to workers not on the government payroll.”

It’s a safe bet that the Courant story had been widely distributed among politicians in the General Assembly who are blissfully and purposely ignorant of any study commissioned by the Yankee Institute, however enlightening. Their ears full of progressive wax; they are insensible to this kind of bad news, because hearing it creates a disposition to reduce inequities by reducing public employee benefits for new hires, thus saving the state about $1.44 billion to $2.48 billion annually, according to the study. Here is a more recent communique from Yankee on overtime pay for public employees: “CT Overtime Likely to Reach $240 Million.


At some point, wise heads must learn to read the writing on the wall; that is half the battle. Foolish men and women always give themselves permission to indulge in foolishness. The beginning of wisdom in these and other matters begins with a revocation of that permission. No one in the wide and wicked would has a right to impose his foolishness on those easily seduced by fools.
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