Thursday, June 06, 2019

Connecticut Down, Prologue

The reader will find below three self-interviews that are meant to serve as a prologue to a longer piece – “Connecticut Down.”  The first is set a little more than a month after Governor Ned Lamont had been sworn into office; the second is set just before Lamont presented his budget to the General Assembly; and the last is set a day after the Lamont/Looney/Aresimowicz budget was passed by the state Senate.


Q: It’s February 2019, only a few months after Ned Lamont has been sworn into office as governor, and I have lots of questions.

A: I’m sure I do not have lots of answers.

Q: I’ll ask the questions anyway.

A: You always were persistent, still a virtue among good reporters.

Q: You were a reporter once.

A: No, a columnist. Reporters dig up the truffles, columnists make use of them in their pâtés.

Q: When did you start publishing Connecticut Commentary?

A: About 2004, thirteen years after then Governor Lowell Weicker destroyed the character of Connecticut, once a magnet for companies seeking to escape the withering hand of autocratic government, by instituting his ill-advised income tax.

Q: And you were writing columns back then as well.

A: Before then. I’ve been fulminating for about forty years. The income tax, a new revenue stream saved the Democrat dominated General Assembly the necessity of pruning back spending over the long term. It has led to a catastrophic, uninterrupted increase in spending, the efficient cause of the recurring budget deficits from which we suffer today. State employee labor costs in Connecticut are punishing. Instate businesses have their eyes on the exit signs, and out-of-state businesses now treat Connecticut as if it had the pox.

Q:  As a political cynic, you believe there is no hope.

A: Well, not exactly. A political cynic is someone who believes that the path to Hell is strewn with false hopes. If your expenditures exceed your revenue, you are Mr. Micawber. You remember the Charles Dickens character in David Copperfield? I like to believe that Micawber was summarizing important points made by Adam Smith when he said, “Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery." Just now, Connecticut’s Governor Elect, Ned Lamont, is looking for a new revenue stream, and he appears to have found one in prospective tolls. We are told he met with Weicker to query how Weicker had pushed the income tax through a resistant General Assembly.

Q: And, having written for Connecticut papers for 40 years, well before Weicker became governor, you know how that happened.

A: Yes. Weicker pushed and shoved and offered tidbits to this or that politician, the usual polite bribery; then he vetoed three non-income tax balanced budgets presented to him by the General Assembly. The New York Times was obliged to cover the event on August 2, 1991. “Gov. Lowell P. Weicker Jr.,” the Times wrote, “vetoed a budget for the third time today, but in a scornful veto message he offered legislators no clear options except to override it or give up their opposition to an income tax. The whole Coalition III is a gimmick," he [Weicker] said, referring to the name given to the third budget without an income tax passed by a coalition of Republicans and Democrats. "Actually,’ he said, “’gimmick’ is the kind word for what is the shame and scandal of our generation."

We now know that the income tax, promoted by Weicker as a fix for the state’s recurring deficits, simply was a permission slip to shameless legislators to continue their spending – which, of course, produced further deficits and more tax increases.  The last no-income-tax budget under Weicker’s predecessor, Governor William O’Neil, was a modest $7.5 billion, and even the gargantuan size of that budget gave O’Neill’s predecessor, Governor Ella Grasso, many a sleepless night. The bottom line of the present biennial spending plan is about $24 billion, and climbing. And the present budget deficit is around $4 billion. The “scandal” to which Weicker referred, the budget deficit that prompted him to impose an income tax on Connecticut was, the Times reported, a little under $1 billion. Sorry to throw these figures at you. As is the case with many other reporters, you are math averse, something you share with most nutmeggers.   

Anyway, it was a shame and scandal to oppose the suicidal dictate of a puffed up neo-Republican. Prophetically, the Times noted, “Connecticut accumulated a $937 million deficit in the last fiscal year as spending continued to increase while the recession ate away at sales-tax and corporate-profits tax revenues. What has been clear for months is that a billion dollars in new and replacement revenues had to be found, in any budget, to avoid a similar deficit this fiscal year.”

Spending was then and is now the culprit. Weicker knew this. But, with the help of the Hartford Courant, the culprit wore a mask. It was only more than a decade later that the Courant was forced to acknowledge that Connecticut had a spending, not a revenue, problem. And from time to time, conscience stricken editorial writers at the Courant note, in passing and perfunctorily, that the spendthrift legislature dominated by Democrats for more than a half century perhaps should address itself to spending cuts.

Asked if he intended to propose an income tax during his campaign as an Independent, actually a repentant Republican in the fashion of Jacob Javits, Weicker forswore the tax. Implementing a permanent, long-term tax increase during a recession, he said, would be “like pouring gas on a fire.” It was clear that a majority in the state did not want an income tax. Bill Cibes, whom Weicker tapped to head his Office of Policy Management, ran for governor on an income tax platform and had been soundly defeated. A majority of legislators did not want an income tax and voted for a non-income tax budget three months in a row. The income tax, when passed, was the occasion of the largest rally in the nation.

Weicker got his tax – and we are left crying in the ashes. Following the third veto, Weicker appealed to the better natures of resistant politicians: With an income tax, they would not have to struggle with recurring budget deficits year after year. This prediction fell far short of expectations. The cost of government four governors after O’Neill tripled, and the budget deficit doubled, not an unmitigated success.

I recall, several years ago, attending a conference at which Weicker was present as a panelist. Someone mentioned the acceleration of spending and the appearance of recurring deficits, at which Weicker’s head drooped like a water deprived flower, and he muttered aloud, “Where did it all go?” Immediately after the imposition of the tax, the state had realized budget surpluses for a bit. A businessman sitting next to me, not yet a cynic, mumbled, not quite to himself, “They spent it all, you ninny.” That man today is likely a cynic or a Connecticut expat. We know what has happened in Connecticut and are fully aware of the consequences of stupid decisions. The only question is: Are we insane in Einstein’s sense?

Q: Incidentally, it was not Einstein who said “insanity is repeating the same mistakes and expecting different results.” The quote first appeared in 1981 in a Narcotics Anonymous document warning its members that continuing to use narcotic drugs and expecting to be able to stop on their own was folly.

A: Even more appropriate. Narcissistic behavior is a narcotic. Taken to an extreme, solipsism is sometimes fatal to everyone but the solipsist.

Q: I think you would agree that Lamont is not a solipsist.

A: Not yet. But we know power corrupts. Lincoln said, “Nearly all men can stand adversity, but if you want to test a man's character, give him power.” Some men adapt to the usufructs of power more quickly than others. The founders of the Republic may have thought they had created a system of government that would allow for a healthy turnover in legislators. Connecticut’s own Roger Sherman, the only founder of the Republic who had signed all four foundational documents – the Continental Association, the Declaration of Independence, the Articles of Confederation, and the Constitution -- held at least four different political positions before he died: Justice of the Superior Court of Connecticut from 1766 to 1789, treasurer of Yale College, professor of religion for many years, Mayor of New Haven from 1784 until his death in 1793.

Consider the path taken by his modern counterpart. U.S. Representative Rosa DeLauro leapt from college directly into politics. The Dean of Connecticut’s US Congressional delegation, DeLauro has clung to her position as “U.S. Rep. for life” since 1991 -- 27 years. And she is the rule, not the exception. Most members of Connecticut’s U.S. Congressional Delegation are well on their way to life sinecures.

Q: I sense a turn in the discussion towards term limits.

A:  I’m happy to oblige. Progressive politicians like DeLauro want change in everything but their own careers. I would hazard a guess that many of DeLauro’s constituents have suffered a number of changes in their work environments since they were first employed. It took 20 years and a crane to lift Attorney General Dick Blumenthal into the U.S. Senate. Unfortunately, he has carried few of his virtues and many of his vices into the new office with him.

Q: So, from your point of view, the election of Ned Lamont as governor is déjà vu all over again?

A: Republicans in the General Assembly might be forgiven for viewing it as a giant step backwards. They had made impressive gains in both houses of the General Assembly. The Senate had been tied 18-18, and Republicans were only a few seats from a tie in the House. This election returns the General Assembly back to Malloy’s ascendancy. Democrats now command all the Constitutional offices, the entire U.S. Senate delegation and the governor’s office, as complete a sweep as any hegemonic Democrat could desire.

Q: And the future is bleak?

A: If it resembles the past, yup.

Q: Will it?

A: I’ve been asked that very question numberless times by disappointed Republicans, joyous Democrats and bewildered non-affiliated, timorous cowards.

Q: And the answer is?

A: I wrote in a column just before Lamont was sworn into office that the only politician in the state who could  save Connecticut from a fate worse than deja vue all over again is Lamont, and he will have to buck his own party to do it. So, the answer to your question is the usual journalistic one: We’ll see.


Q: Why must Connecticut have tolls? And has Lamont bucked his own party?

A: The governmental apparatus needs tolls – essentially, a new revenue stream -- because it is running out of revenue, this despite massive tax increases. The state is running out of revenue because spendthrifts in the General Assembly, pushed forward by progressive Democrats, continue to spend revenue increases, which necessitates more taxes, which leads ineluctably to more deficits and higher taxes. The solution to this continuous escalation is permanent, long-term cuts in spending. Progressive governors and General Assembly members have so far declined to apply the obvious solution: If you make major cuts in spending, you needn’t raise taxes.  

Q: According to pro-toll Democrats, the state needs tolls to repair its crumbling transportation infrastructure.

A: The unanswered question is this: What happened to the tax funds dedicated to the repair of the state’s infrastructure? Initially, the gas tax was supposed to be used for infrastructure repairs. That fund has been ransacked by governors and members of the General Assembly. If Connecticut’s so called “dedicated funds” represent a black hole -- and they do -- why should we pour more scarce tax funds into a relabeled black hole? Transportation funding has for years been rerouted into the state’s General Fund, from which it is quickly allocated to Friends of the Democrat Party. Most recently, funds destined to arrive in a so-called transportation fund “lockbox” were diverted before they reached their destination. As the old adage has it: “Fool me once, shame on you; fool me twice, shame on me.” I recall saying in one of the columns that a lockbox has yet to be crafted in Connecticut that could not be picked with my grandmothers bent hairpin. No one trusts this government any longer – not even the people who voted it in.

Q: It’s been six months since Ned Lamont has been elected governor. During our last meeting, when I asked you to reflect on the future under a Lamont regime, you said “We’ll see.” What do you think now?

A: Lamont comes to us from the business world. He has had no direct experience in governing. What can this mean other than he will be the plaything of leaders of the Democrat Party? During the last election, eat-the-rich progressives gained an impressive foothold in the General Assembly; nearly half the members of the Democrat majority are progressives. President Pro Tem of the Senate Martin Looney is a big city New Haven progressive. Speaker of the House Joe Aresimowitz is a progressive employed by a major union. The great German social critic Karl Krauss used to say about psychiatry that it was the disease it purported to cure; the same may be said more justly of progressivism, which is timorous socialism. With Connecticut’s cast of characters, Lamont must row very hard if he wants to turn the state’s ship of state in a moderate direction. If Lamont were a John Bailey, the last boss of the Connecticut Democrat Party, he might be able successfully to defy what Lenin once called “the correlation of forces,” but Lamont is a business man from Greenwich, and the moment of decisive party bosses has passed us by.

Q: Greenwich used to be solidly Republican; not any longer it seems. And the same would seem to apply to other former Republican redoubts such as West Hartford.

A: Yes. The opposition from Republican towns always has been soft. There is a difference between opposition and resistance. To resist the forward thrust of progressivism in Connecticut, two conditions must be met: you must proceed from firm, tried and true principles, and you must be in power. Republicans in Connecticut meet neither of these conditions.

Democrats have commanded the four major cities in the state almost without interruption for a half century, and it is the tail – Democrat cities – that is wagging the Connecticut dog. With brief and unimportant interruptions, the General Assembly has been controlled by Democrats for as long a period; all the constitutional offices in the state have been in the hands of Democrats for many years; the seven members of the US Congressional Delegation are Democrats; major courts in Connecticut, including the Supreme Court, have been packed with Democrat appointments; the permanent bureaucracy – what Trump has called derisively “the swamp” – lies under the direction of Connecticut Democrat office holders. And, perhaps most importantly, Connecticut’s media has long been favorable to Democrats. Such is the correlation of forces in Connecticut. The media, partly for business reasons, has been floating on the Democrat stream for decades. It takes strength, courage and perseverance to buck the water’s flow. G. K. Chesterton warned against an enfeebling lack of media opposition when he said that a dead thing can easily go with the stream, but it takes a live thing to swim against the current.

Q: The Lamont budget was completed on May 31. It will soon be presented to the Democrat dominated General Assembly. The top of the fold, front page story on that day in the Hartford Courant reads: “Sides OK deal on $43B budget.” The “sides” that OKed the deal were not Republicans and Democrats; they were different hues of Democrats on the winning,  progressive side of the political barricades. There are three other stories of note on the same day: “Lamont support slips in new poll” and “Connecticut home sales, prices slump in April” and “University of Maine System hires Malloy.” Home prices have been slipping in Connecticut for some time. The lede in that story reads, “The Spring home buying market got off to a disappointing start in April, as sales spluttered and the state marked the ninth consecutive month of year-over-sale declines… So far in 2019, the four month trend for sales and prices paid is disappointing for the state’s housing market, which has struggled to recover from the last recession, which ended in March 2010.”

A: Yes. Former Governor Lowell Weicker did warn us during his campaign that raising taxes during a recession would be tantamount to pouring gas on a fire. Behold the real-estate fire.

Lamont’s slippage in the polls is not surprising. I did notice in reading the first story you mentioned that a new expression has made its way into Democrat oratory – “modernize” and its variants. Lamont said of his massive sales tax increases, “Look, we’re gonna try and modernize our sales tax structure… In fact, wanna know why sales tax revenues are already up compared to what we had expected? That’s cause of sales tax applying to e-commerce.”

First, Lamont is a graduate of high-priced colleges. So what’s all this business about “gonna” and “wanna”? Do Harvard and Yale lack speech teachers? The use of the word “modernize” is gonna become an Orwellian catch phrase for “increasing and broadening sales taxes.” I don’t doubt for a minute that this expression was hammered out by the smithies of Lamont’s campaign advisors; it has the odor about it of Malloy’s campaign coach Roy Occhiogrosso, the Vice President of Global Strategies. Ideas have consequences, and bad ideas have bad consequences.

There is nothing “modern” about tax increases in Connecticut. The state has done little else but raise taxes to discharge its repetitive budget deficits. There is no indication so far that this destructive process – raise revenue, spend revenue, raise revenue again – will not continue at an accelerated pace in the Lamont administration. Lamont’s apple did not far from Weicker’s tree. Weicker raised taxes; Malloy raised taxes – twice, cumulatively the largest tax increase of any administration in state history; Lamont has now raised taxes, though he boasts that he has not raised the income tax. In all three instances, tax increases have led to spending increases, which have led to budget deficits, which have led to further tax increases. Qui bono? Who benefits by his process? Surely not taxpayers. Who then?

Q: Don’t let me stop you…

A: The number one beneficiary is cowardly politicians, because increasing taxes is the least painless way leading to reelection. Spending cuts produce an adverse reaction among those groups, most prominently public employee unions, Democrats depend upon to retain their seats. I doubt anyone on the left in Connecticut would recognize real reform if it bit them on the bottom.

Q: What would real reform look like?

A: There are political problems best solved by politicians. The General Assembly has lost control of its budgets, owing mostly to what are called “fixed costs.” What is a fixed cost? It is a governmental cost that the government refuses to address in its biennial budgets, a cost that must be paid on a regular basis and cannot be adjusted through usual legislative means – by, for example, cutting the cost. Fixed costs comprise an over-large portion of Connecticut’s budgets. Here are some eye-popping figure for you taken from the Connecticut School Finance Project: “Connecticut's fixed costs have risen from 35 percent of General Fund expenditures in fiscal year 2000 to 49 percent of General Fund expenditures in fiscal year 2018, an increase of 14 percentage points. Additionally, fixed costs have risen in terms of total dollars, from $5.17 billion in fiscal year 2000 to $9.15 billion in fiscal year 2018. This is a 77 percent increase in the whole-dollar amount of fixed costs.” The Connecticut General Assembly has surrendered control of half of its budget to auto-pilot, a “77 percent increase in the whole-dollar amount of fixed costs” since 2000, according to figures supplied by Connecticut’s Office of Policy and Management and the General Assembly’s Office of Fiscal Analysis.

Now, it is true that little can be done to change the past, which is fixed. But, going forward, these conditions can be adjusted. One commentator, told that nothing could be done with fixed costs, said, “Well, unfix them.” The General Assembly absolutely must regain control of its future budgets. It does not help when the legislature pensions off its own constitutional obligations to unelected bodies such as union management arbitrators that decide money issues or, most recently, a “transportation commission” tasked with deciding toll rates in the future, assuming tolling has a future. In the future, all contracts involving dollars paid out by the state should be decided by the General Assembly alone; no more negotiations with unions.  Never again should a single dollar be appropriated or expended by the General; Assembly without a recorded vote in the legislature; no more voice votes on any measure that involves getting and spending. This is a Back-to-Bach reform that will re-constitutionalize state government and reestablish the vital connection between legislative measures and the small "d" democratic will of the people. Under a regimen of this kind, it would not be possible for the General Assembly to assign its own constitutional powers to unelected commissions, the devil in the details of tolling. There are lots of devils in there.


Q: The deed has been done. The Lamont budget has passed both houses of the General Assembly, Republicans and a handful of Democrats voting against the measure. Republican leader in the Senate Len Fasano said of Governor Ned Lamont, “He has been steamrolled by this legislature and this budget is proof of that. I'm very disappointed in the executive branch. This is about, supposed to be about business and growing business and families and I would argue this does the opposite." The Lamont budget plan, Fasano has said, does not reduce spending. Tax changes and new regulations will absolutely hurt small businesses.

Democrats, as you might imagine, are in a celebratory mood. Lamont appears to have escaped some snares laid for him by progressive Democrat legislators, but such measures can always be resurrected in the near future.

A: Yes, it’s an old political trick. If the warden tells a prisoner his execution has been postponed for a month, the prisoner is likely to be grateful. But time flies in such circumstances. Compared to what is Lamont’s budget a relief? Compared to the worst possible scenario, we may suppose. It is said Lamont has rebuffed millionaire-eating progressives, who make up almost 50 percent of the caucus. Fasano is probably right; so are Republican leader in the House Themis Klarides and Republican Representative Gail Lavielle. The analysis generated by the Yankee Institute is reliable, much more so than the usual left-slanted editorial commentary in the state. Long term costs saving measures are missing-in-action in the budget.

Tolling in Connecticut, a new revenue stream – which is to the Lamont regime what the income tax was to the Weicker regime, a method of escaping politically dangerous spending cuts – has been put off to a future date, probably because the Lamont tolling plan, if there is such a plan, may not pass muster with the federal government. Toll gantries going up in Connecticut must satisfy federal demands that tolling can only be collected to reduce congestion, the whole purpose of “congestion tolling.” Fifty gantries seem a lot. Massachusetts makes due with one toll highway, the Mass Pike. My wife and I just took a trip back and forth to New Hampshire, a no-income-tax state, and we paid a single manageable toll going and coming. In anticipation of tolling, Democrat "Solons" have nearly emptied the state’s transportation fund in violation of the old saw – don’t count your chickens before they hatch. Progressive Democrats are utopian optimists who don’t quite understand the dangers of unintended consequences. To every one of their actions, there can be only one consequence – the one they desire. You may tax millionaires and they will take no defensive measures. You may increase taxes without driving taxpayers into economic distress. There are no final straws that break the camel’s back. Governmental actions always benefit the public good, because government is always well-intentioned, and there are no fatal slips between the intent of a legislative act and its real-world consequences.

Q: The budget passed in the Senate by four votes, two Democrats dissenting. As in the past, Republican legislators were not given time enough to digest the 567-page budget that had already passed in the House two days earlier. Democrat legislators, one presumes, were acquainted with details in the budget during caucus meetings; they were herded to the floor by their legislative leaders and voted in favor of the bill. It must have been “deja vue all over again” for Republican leaders. Senator Len Fasano said after the vote, according to a Courant story, “Republicans were never invited to any formal budget talks, even though Democratic Gov. Ned Lamont had said repeatedly that his door was open in his initial months as the new governor.” By now, Republicans must be used to Democrat governors cuffing them in the neck and giving them the bum’s rush.

A: Yes. Malloy did it often, because he had the numbers in the General Assembly to push legislation through the sausage-making machine without Republican participation. Lamont’s budget, like Malloy’s, was a triumph of political tactics over common sense.

Q: Following passage of the budget, Lamont said this: “This budget is fair, balanced, promotes economic growth and support for working families, and was delivered on time, enabling our towns and cities to know what they can expect in their budgets over the coming biennium and plan accordingly. Most of all, it further stabilizes our state’s finances, sending a signal to residents and businesses alike that we are serious about getting our economy growing again.”

A: The communications maestro who prepared that statement for Lamont must have swallowed the tongue tucked in his cheek. I doubt anyone but the tight band of political brothers minding Lamont will agree with the bit about “sending a signal to residents and businesses alike that we are serious about getting our economy growing again.” The chief mistake made by Democrats is to suppose that the state is its governmental apparat; that they are the state, in the words attributed to Louis XIV, the king of France. That quote is attributed to him in legend. But on his deathbed, Louis was recorded by several people as having said "Je m'en vais, mais l'État demeurera toujours."  -- "I depart, but the State shall always remain." This is the secret of good governance. Every dollar taken by the government, presumably to advance the public good, is taken from the larger and more important state, which will remain after the lawgivers have departed. There is little doubt that this budget will improve the lot of legislators, but it is a fantasy to suppose that it will promote “economic growth and support for working families” or send “a signal to residents and businesses alike that we are serious about getting our economy growing again.” We know it will do neither because, in the past, moving entrepreneurial capital from the real state to state government  has retarded economic growth, prolonged Connecticut’s endless recession, and sent working families on the road to states that have not made the fatal error of conflating the real state with state government. You cannot make a garden grow by pumping from the well the water used to water the plants.

Q: There are some odd twists and turns in this budget, are there not.

A: Yes. Homer’s Odyssey begins with a description of Odysseus as “a man of twists and turns.”  He was said to be clever in his various responses to an implacable fate. The General Assembly has as many twists and turns in its course as Odysseus, but it lacks forethought. It is much too concerned with re-election to be sensible. For instance, toll revenues are subject to federal approval of congestion tolling gantries. In constructing its budget, dominant Democrats in the General Assembly are assuming that their tolling plan – if they have a plan – will be accepted “as is” by federal authorities. That may not be the case. Mercifully, the Lamont administration, in concert with Looney and Aresimowicz, has put off a vote on tolling for the time being.

State government -- mindful of Ben Barnes’ notion that the Malloy administration intended to levy a tax on hospitals because “that’s where the money is” -- has decided to tax hospitals an extra billion dollars, but not to worry; through complex accounting alchemy, the state will shuttle money received from the federal government back to the hospitals. “The total tax increase in the budget,” the Courant tells us, “is nearly $2 billion over two years, including more than $1 billion from taxes charged to hospitals in a complicated arrangement that involves increased federal funding and then sending some money back to the hospitals.” What could go wrong here?

The Lamont administration intends to leverage tolling so that it might acquire money from Wall Street, dumping it into a transportation “lockbox” that Democrats, having diverted the sale tax on cars to the general fund, nearly emptied. Does anyone remember the housing collapse, which occurred partly because clever politicians had turned houses into Wall Street poker chips? Does anyone recall it was only a few weeks ago the legislature intercepted funds destined to be tossed into the state’s transportation fund “lockbox” and diverted the money into the General Fund?

We don’t know at this point whether the Lamont budget is balanced, because budgets in Connecticut are constructed without reference to secondary consequences. One of consequences of massive tax increases is that people, perversely hanging on to their assets, tend to avoid all forms of plundering; they hide their assets, or they move away from the plunderers. The current budget seeks to imprison wealthy tax payers in the state by levying a tax on the sale of their houses when they sell their homes to move out of state. Senator Rob Sampson calls this ingenious device an “exit tax.” So then, high taxes tend to drive people who can do so to leave the state for less punishing states, and Connecticut’s Democratic controlled legislature proposes to retain such people through an additional tax, as if people were tax-wells rather than rational creatures who are able to devise ways to escape difficulties thrown at them by tax hungry legislators.

Q: None of that sounds very dependable.

A: Deceptive governments are never dependable.

No comments:

Featured Post

Occam’s Razor And The Middle East

The Middle East, we are told, is complex. That is true, but there is little point in making the complex more complex. We in the We...