What Is The Bipartisan Compromise Between Ever-Expanding Government And Shrinking Government?

There wasn't a lot very specific in President Obama's State of the Union speech last night; mostly it was vague generalities with little that could be pinned down.  And much was about foreign policy, which I'm not going to comment on here.  But considering the domestic side, even though it was all very general, an overall vision still comes through.  A good summary of that vision is what I wrote on my ABOUT page as the basics of the Manhattan/progressive orthodoxy:

The central tenet of [the] orthodoxy is that all personal problems of the people in society can be solved by government taxing and spending. . . .   A few subsidiary tenets of the orthodoxy . . .  include:  the government has infinite capacity to tax and spend and does not need to make any choices about spending priorities; the government has an infinite ability to borrow; an appropriate function of government is to take on all down-side risk of life so that no individual ever needs to worry about loss of anything. . . .  

So early in the speech we got a typical pie-in-the-sky list of how the government should take on and pay for some laundry list of new things that you might find difficult or expensive in your life.  No costs were mentioned, of course; nor was there mention that we may have any priorities that may come before any of these things; nor that anything else in the budget might ever have to be cut; nor that the government's ability to tax and borrow and spend is anything other than infinite and free and costless to the individual citizen.  And, of course, the concept that it might not be such a great idea to replace individual responsibility for many things with collective responsibility for everything -- that concept is just beyond considering in polite company.  Here is an excerpt:

[W]e should build on [the] progress [of No Child Left Behind], by providing Pre-K for all and offering every student offering every student the hands-on computer science and math classes that make them job-ready on day one. We should recruit and support more great teachers for our kids.  And — and we have to make college affordable for every American.  No hardworking student should be stuck in the red. We’ve already reduced student loan payments by — to 10 percent of a borrower’s income. And that’s good. But now we’ve actually got to cut the cost of college.  Providing two years of community college at no cost for every responsible student is one of the best ways to do that, and I’m going to keep fighting to get that started this year. It’s the right thing to do.  But a great education isn’t all we need in this new economy. We also need benefits, and protections that provide a basic measure of security. . . .  That’s why Social Security and Medicare are more important than ever, we shouldn’t weaken them, we should strengthen them.

And on from there.  But you get the picture.  Somewhere along the line he also promised a whole new approach to eliminating poverty (no specifics, but is there really any chance that he would ever agree to cut a dime of the current trillion +/- per year -- that never reduces poverty by a single soul -- before launching the raft of new programs?); plus a transformation of our entire energy economy in a ridiculous attempt to influence the weather; and, best of all, a cure for cancer!  Hey, government can do anything and everything, and it's just a question of spending enough of the infinite money!  And then, toward the end of the speech, came the usual call to end the "rancor" in Washington and "work together" and "compromise" (all, of course, to accomplish his agenda of infinite activist government):

[Democracy] doesn’t work if we think the people who disagree with us are all motivated by malice. . . .  Democracy grinds to a halt without a willingness to compromise or when even basic facts are contested or when we listen only to those who agree with us. . . .  It’s one of the few regrets of my presidency — that the rancor and suspicion between the parties has gotten worse instead of better. . . .    

So how about this business of "thinking the people who disagree with us are all motivated by malice"?  That phenomenon may be a big part of what's behind what many are seeing as a high current level of voter anger in this cycle.

My observation is that, at least in my lifetime, anger has been far more characteristic of the Democrat/progressive side than of the Republican/libertarian side.  After all, if you think that all human problems (poverty, inequality, hunger, healthcare, bad weather, cancer, expensive college education, etc.) are easily solved with government spending, then it's a short logical leap to the conclusion that those who stand in the way of the obvious solutions are immoral and evil.  And it's an even shorter leap from there to anger.  How could these evil people be OK with seeing children starve?

Over on the Republican side, there have long been some (such as myself) who thought that the endless list of progressive spending programs accomplish nothing other than to make everyone a lot poorer while only worsening the problems they are supposedly intended to solve.  But, at least until recently, few questioned the progressives' sincerity in advocating the spending.  Thus, there was generally little serious anger.  But suddenly, the existence of a high degree of anger on the Republican side is the theory most often advanced to explain the rise of Donald Trump, as well as to explain the morphing of the pitches of other candidates to tap into this perceived deep vein of animosity.  

This anger may be about many things, one example being immigration.  But near if not at the top of the list is the ongoing metastasizing growth of the oppressive and incompetent federal government.  Note that anger from this particular source may be directed by the Republican base of voters as much or more toward their own "establishment" as toward Obama and the progressives.   Without doubt, many Republican voters are frustrated by the continuing failure of their Congressional delegation to mount any kind of effective  push back against the endless addition of more and yet more government programs to fix everything in your life.  Republicans control both houses of Congress, they supposedly have the "power of the purse," and yet they can't manage to shrink the federal budget by even a dime, and can't manage to eliminate even one single agency or program.  John Boehner's only real job was to push back against the growth of the government.  We got rid of him for failing at that, and replaced him with Paul Ryan, who gives the appearance of being a much more principled small-government guy and not just a Washington deal-maker.  And next thing you know we get a federal budget that is barely an improvement from what the previous regime would have delivered.  They even re-authorized the Ex-Im Bank -- with plenty of Republican support!  (I'm not meaning to be overly critical of Ryan, who was doing his best to play a mediocre hand.  I'm just trying to explain the frustration, and thus the anger, of the Republican voter.)

But to return to Obama's call for bipartisanship and "compromise," the fundamental question remains, what is the "compromise" between those who want to grow the government and then grow it some more with infinite spending and a program for every human need and want, and those who think the government should be shrunk dramatically?  Obama's idea is simple: we'll "compromise" and just grow the government a little more slowly than I would prefer.  Instead of free junior college for all next year, we'll phase it in over a few years.  Well, how about the compromise of, instead of shrinking the government by 50% (as I would like), instead we shrink it by 5% per year for the next ten years?  Yes, this is not what Obama has in mind at all.  His interest in real compromise is zero.

Friedrichs And The Ability To Push Back Against The Progressive Vision

Earlier today the Supreme Court heard arguments in the case of Friedrichs v. California Teachers Association.  You have probably heard of the case.  Rebecca Friedrichs and several other public school teachers in California are suing to stop forced payment of dues by them to the teachers union.  Under prior Supreme Court precedent these dissenting teachers have been entitled to a refund of a portion of their dues (about a third) that the union concedes to be devoted to explicitly political activities, such as lobbying or contributions to candidates or parties.  But the union contends that the remainder of the dues go to supposedly core union functions of collective bargaining and employee representation, which are non-political and outside First Amendment protection under prior Supreme Court precedent.  A Supreme Court case from the 70s (Abood) supports the union's position that it can compel payment of most of the dues; but a more recent Supreme Court case from 2014 (Harris) questioned that proposition without explicitly overruling Abood.

Friedrichs now directly takes on the issue of whether the subjects of collective bargaining and employee representation are so clearly and obviously political and public policy issues that they must come within First Amendment protections that prevent forced speech and forced association.  Here is an excerpt from Petitioners' brief on that subject:

[P]ublic-sector bargaining involves countless matters “relating to education policy.” . . .  In California, for example, state law authorizes teachers unions to bargain over “class size,” CAL. GOV’T CODE § 3543.2(a), a hotly debated policy issue. Unions also collectively bargain for seniority preferences in transferring and reassigning teachers. Id.; see also, e.g., JA129 (“seniority ... will be the deciding factor” in filling vacant positions). Such policies have an important—and, many believe, detrimental—effect on education policy. . . .

The same is true nationally. One recent study analyzed the collective-bargaining agreements in the nation’s 50 largest school districts and found that unions have generally bargained for:

• teachers to be “paid on a rigid salary scale that evinces little regard for individual competence,” . . . 

• “extensive labor rules” that “hobble[]” managers from efficiently assigning and terminating teachers, . . . ; and

• “contracts” that “routinely stipulate the number of students a teacher will instruct, the number of preparations (i.e., courses) a teacher may have, the number of parent conferences that a teacher will hold, what time they will leave school at day’s end, what duties they can be asked to perform, and even how and how often they will evaluate students’ written work,” . . . .   

In my naiveté, those things seem to me among the highest public policy concerns in today's political debate, on which people of differing political persuasions hotly disagree.  Could it really be that people who honestly think that things like strict hours limitations and seniority restrictions for teachers are bad for the students are forced in our system to pay billions of dollars to support the opposite viewpoint?  To me, it seems amazing both that the Supreme Court could have made such a terrible mistake, and also that it has taken until now to get the issue back before the Court for correcting.

Reports from this morning's argument express the strong view that the Court is likely to overrule Abood.  For example, here is the lede from the USA Today story:

The Supreme Court left little doubt Monday where it stands on forcing teachers and government workers to contribute to public employee unions against their will: It's ready to strike the requirement down.

But it's by no means unanimous.  Instead, it's very likely to be the usual five-to-four conservative/liberal split, with the "liberal" justices Ginsburg, Breyer, Kagan and Sotomayor in dissent.  From Lyle Denniston at ScotusBlog:

The four Justices who were in dissent in the Harris case appeared to be headed toward dissent again, even as they made no headway in shaking [Petitioners' lawyer] Carvin’s assault on the teachers’ union as a state-compelled advocate for workplace policies that the non-union members appear to find objectionable.  Those four appeared to be clinging to the Court’s usual reluctance to overturn a constitutional precedent that had been followed for nearly four decades.  

Well, stare decisis can be a strong argument in many circumstances, but it's rather unusual when it's the only argument; usually one would expect at least some principled basis to support the prior decision.  

Obviously this case is of substantial political importance to the Democratic Party, since nationally the teachers unions are their single biggest contributors, with the large part of that money coming from compelled dues.  A very discouraging phenomenon is that the four "liberal" justices almost always vote as a bloc on any issue that is politically important to the Democratic Party and its allies.   

The ultimate question is, how can it be possible to push back against the failed progressive vision of governance if that vision is backed by billions of dollars of compelled contributions from those who fundamentally disagree? 

Can Somebody Explain The Loathing Of The Successful To Me?

Back in September I wrote a four-part series about trying to understand the support for Bernie Sanders, particularly among those who seem to be upscale and well-educated.  The first article in the series was titled "Can Somebody Explain The Bernie Sanders Phenomenon To Me?"   Nobody succeeded, although a few took on the challenge.  More recently Bernie seems to be fading in the face of the Hillary! juggernaut.  But in places where I hang out, which include Manhattan's West Village and, at times, New Haven, Connecticut, a vote taken today would very likely give Bernie the edge.

Recently I have reviewed statements by and about Sanders, looking for overarching themes in Bernie's message.  One recurring theme stands out above all others: loathing of the successful.  The theme is so strong in Bernie's messaging that one has to believe that his followers overwhelmingly share the loathing.  Given that the followers are largely an upscale bunch, this raises an interesting question: Is the loathing of the successful a reflection of the phenomenon often noted here of the intense jealously felt by percents 2, 3 and 4 of the income distribution against percent 1?  Or is the loathing a reflection of self-loathing and guilt by many at the very top?  Or is it a combination of both?

Consider for a moment a list of the most successful cities in the world.  New York, London, Hong Kong, Singapore, Tokyo.  What do they have in common?  The answer is that these are the homes of the world's financial markets.  Pay in the financial industry in New York is far higher than in other industries.  (A report from New York State Comptroller Thomas DiNapoli in October put the average pay in the securities industry in New York at $404,800.)  The same premium pay phenomenon applies in the other major centers of finance.  Major cities that lack large financial markets (in the U.S. these include the likes of Los Angeles, Chicago, Houston and Philadelphia) would dearly love to have them.

But to Sanders and others on the Left (another example is Elizabeth Warren), the financial business is the embodiment of evil.  Here is the Washington Post yesterday, quoting a Sanders campaign speech:

Democratic presidential hopeful Bernie Sanders took aim at the nation’s financial sector in a fiery speech Tuesday, declaring that “fraud is the business model of Wall Street” and calling for regulatory reforms to address “a lot more illegal behavior than we know of."  Speaking just blocks from Wall Street, Sanders vowed to break up banks that are “too big to fail,” jail unscrupulous Wall Street executives and provide an array of new protections for consumers.    

"Fraud is the business model of Wall Street" -- where does he come up with that?  He is accusing multiple hundreds of thousands of people of systematic illegal conduct.  Does he have any evidence to point to?  What I know is that the Justice Department and U.S. Attorneys spent billions in the aftermath of the 2008/9 financial crisis in a lawless political quest to pin the crisis on Wall Street scapegoats, and they came up almost entirely empty handed.  Yes there was a series of shakedowns of the big banks, in which those banks seriatim paid a billion or two or five to settle some endless phony investigation, in almost every case without any actual individual getting charged with wrongdoing.  And there was Preet Bharara's insider trading jihad, which substantially fell apart when the Second Circuit finally ruled that a huge part of it did not represent a violation of the law at all.  

And how about that business about "a lot more illegal behavior than we know of"?  It's an explicit allegation of systematic illegal behavior immediately coupled with an admission that he doesn't have any evidence to back it up.  This, from a man running for President of the United States.  

So even though he has no evidence whatsoever to support his charges, Bernie just knows that these guys are evil because they make too much money and he loathes them so much.  And he has just the answer for how to put the evil guys in their place -- lots more laws and regulations: 

During his 48-minute speech, Sanders suggested sweeping reforms would be necessary to curtail “the greed of Wall Street and corporate America.”  “We will no longer tolerate an economy and a political system that has been rigged by Wall Street to benefit the wealthiest Americans in this country at the expense of everyone else,” Sanders told a crowd of about 1,300 in a packed theater in Manhattan, where enthusiastic supporters repeatedly interrupted him with applause and even finished some lines of his speech before he spoke them.

 "Sweeping reforms"?  Pray tell, what would those be?  As far as I know, in 2010 -- the aftermath of the financial crisis and with Democrats in control of both houses of Congress and the Presidency -- we got the Dodd-Frank law, otherwise known as a gigantic multi-thousand page grab bag of every good, bad and terrible idea for incremental regulation of the financial industry that anyone on the Left had ever thought of.  The whole idea was to rein in the evil Wall Street guys once and for all.  For years I kept a copy of this monstrosity on my desk just to remind me of how enormous it was -- it weighed about 10 pounds.  Is it really possible that in that gigantic mishmash they forgot all of the important stuff?  In the speech, Sanders gave next-to-no specification as to what additional reforms he had in mind, beyond limitations on credit card interest rates and ATM fees.

And I should have mentioned that this Sanders speech was in none other than Manhattan, in a "packed theater."  This is the Manhattan where wealth generated in the financial industry is fundamentally what supports the theater, the universities, the museums, the opera and symphony, and other cultural institutions of all kinds.  But the official position is that we loathe these "Wall Street" guys and the whole financial system, and they should be regulated to death if not prosecuted and put in jail (except of course for the few I know personally, who are really pretty nice guys, and by the way will you kindly give me some money for my charity?).

Meanwhile, down in Greenwich Village, with its stock of beautiful historic buildings, you will find literally every third such building undergoing some kind of renovation or restoration, again largely paid for with wealth generated in the financial business.  But again the official position is that we loathe the upgrading of our neighborhood and the people behind it, and we support Bernie for President.  The current issue of our local paper West View News has a big article supporting Bernie on the front page.  The author is Arthur Z. Schwartz, who is New York counsel to the Sander campaign.  Yes, it's the Arthur Schwartz who was once General Counsel of the disgraced ACORN.

Do Bernie's supporters ever stop to think of whether it would really be a good idea to stomp out the prospects for outsize success in our society?  They have accomplished that in places like Cuba, Venezuela and North Korea, but it didn't work out too well for the citizenry.      

Here We Are At Al Gore's Climate "Tipping Point"

A favorite game of the climate alarmist movement is predicting that we are on the verge of the climate "tipping point," that is, the moment at which human carbon emissions push the planet over the brink and climate armageddon becomes unstoppable.  

But when will that "tipping point" be reached?  Or have we already passed it?  Many in the alarmism movement are clever enough to avoid ever putting out a specific date that can then be falsified.  For example, former NASA chief catastrophist James Hansen is famous for serial declarations of "tipping points," and has announced their imminence on multiple occasions, but always with a cover of vagueness as to the precise timing.  It's always just around the corner!  Here is his 2008 screed titled "Tipping Point: Perspective of a Climatologist."  Excerpt:

The warming that has already occurred, the positive feedbacks that have been set in motion, and the additional warming in the pipeline together have brought us to the precipice of a planetary tipping point. We are at the tipping point because the climate state includes large, ready positive feedbacks provided by the Arctic sea ice, the West Antarctic ice sheet, and much of Greenland’s ice. Little additional forcing is needed to trigger these feedbacks and magnify global warming. If we go over the edge, we will transition to an environment far outside the range that has been experienced by humanity, and there will be no return within any foreseeable future generation. Casualties would include more than the loss of indigenous ways of life in the Arctic and swamping of coastal cities.  

But does being on the "precipice" of a "planetary tipping point" mean that we will go over the brink tomorrow, a year from now, ten years from now, or a hundred years from now?  Note that Hansen is way too clever to get pinned down on this one.  And when nothing much had happened on his 2008 "tipping point" prediction, nonetheless he was back in 2013 with new and even more catastrophic predictions of a precipice, still at some seemingly imminent but unspecified time in the near future.  As the Guardian reported on July 10 of that year:

[A] new paper by James Hansen is just the latest confirming that we are on the verge of crossing a tipping point into catastrophic climate change.      

But of course no specifics on when the infamous moment would occur.  However, not all in the alarmism movement are quite so careful to keep their bets hedged.  Take, for example, Al Gore.  It seems that at the screening of his movie "An Inconvenient Truth" at the Sundance Film Festival back on January 25, 2006 (was it really that long ago???) Gore made the huge mistake of putting a precise 10-year time clock on the dreaded tipping point.  Gore was quoted by CBS News as follows:

[U]nless drastic measures to reduce greenhouse gases are taken within the next 10 years, the world will reach a point of no return, Gore said.  He sees the situation as “a true planetary emergency.”  “If you accept the truth of that, then nothing else really matters that much,” Gore said in an interview with The Associated Press. “We have to organize quickly to come up with a coherent and really strong response, and that’s what I’m devoting myself to.”            

And now here we are, just about three weeks away from the horrific deadline.  How have things gone?  Well, one thing we know is that there have been none of the "drastic measures to reduce greenhouse gases" that Gore said were so absolutely essential.  Here is a summary chart put out by Europe's Emissions Database for Global Atmospheric Research ("EDGAR"):

Yes, emissions in the U.S. and the EU have declined marginally in the intervening ten years.  In the case of the U.S., that has not at all been because of "drastic measures" taken by the government (cap-and-trade, for example, went down to defeat in Congress), but rather because the "fracking" revolution has caused the substitution of now-cheaper natural gas for some coal.  In Europe, comparable marginal declines in emissions have been achieved by governments' artificially driving up the cost of energy and impoverishing their people.  And meanwhile, emissions in China have exploded, while those in India have also dramatically increased, together swamping the marginal reductions in the U.S. and the EU.  Overall emissions are up, and by a lot.

So Al, is armageddon upon us?  Funny, but the guy seems to be strangely quiet these days.  One thing we know for sure is that global lower troposphere temperatures have been basically flat not just for the ten years since Gore's prediction, but going all the way back to 1997.  Here is the latest UAH satellite temperature record:

Looks like that record of high temperatures from 1997-98 is not too close to falling, despite China and India building literally hundreds of coal-fired power plants in the interim.  So, is this the "tipping point"?  If not, how will we know when we hit it?

Ongoing Explosion Of Lawlessness At The Justice Department

I seem to remember a time when the Justice Department of the United States was an organization that had earned a high reputation for respect of the citizenry and behaving within the law.   It's amazing how fast these things can be lost.

Buried at page A17 of the print version of today's New York Times is an article by Stephanie Clifford headlined "Secrecy Orders By Prosecutors On Subpoenas Draw Criticism."   The article reports on a recent decision by Judge Raymond Dearie of the Eastern District of New York in the case of United States v. Gigliotti, in which Dearie was highly critical of prosecutors for ignoring their constitutional obligations.  I cannot find a publicly-available version of the opinion, so I will rely on the excerpts quoted in the Times.

It seems that the government was investigating the Gigliotti family for involvement in drug dealing or other illegal activities.  On March 11, 2015, the prosecutors of the Eastern District of New York issued a subpoena seeking information from the Gigliottis' accounting firm, Zuccarello, Zerillo & Co.  Here is a copy of the cover page of the subpoena.  The cover page contains the following legend in all capital letters:

YOU ARE HEREBY DIRECTED NOT TO DISCLOSE THE EXISTENCE OF THIS SUBPOENA, AS IT MAY IMPEDE AN ONGOING INVESTIGATION.

Now, where exactly do federal prosecutors come off throwing a line like that into their subpoenas?  For those unaware, here is a brief summary of the law on this subject:  Prosecutors and members of grand juries are sworn to secrecy as to their activities, but members of the public who receive a subpoena or are otherwise asked for information are under no duty of confidentiality, and have a First Amendment right to speak as they may see fit.  The prosecutors may request citizens to keep quiet to assist the investigation, but that is only a request.

There's plenty of case law on this subject that makes it absolutely clear that the prosecutors do not have the right to direct citizens to remain silent about government investigations.  In most parts of the criminal law, Congress has not purported to legislate on this subject.  But then there is the area of so-called "National Security Letters," in which Congress by statute has purported not only to authorize the FBI, in cases involving "national security," to demand information from citizens, but also to compel the citizens to remain silent and not tell the subject or anyone else that the request has been received.  Does that sound to you like it's OK under the First Amendment?  The Second Circuit certainly didn't think so.  In a 2008 case called Doe v. Mukasey, 549 F.3d 861, the Second Circuit ruled that the statutory provisions authorizing the FBI to compel such non-disclosure were unconstitutional, and that if a citizen who received a National Security Letter declined to keep it confidential, the burden would be on the government to obtain a court order requiring confidentiality, absent which the citizen would be free to speak.

So the Gigliotti subpoena did not by any means come against a blank slate.  The prosecutors were completely aware that their "direction" to Zuccarello Zarillo was completely lawless, but they just went ahead and issued it anyway because they thought they could get away with it.  What's the chance that some little accounting firm in Queens reads all the Second Circuit opinions and knows what their rights are?

Needless to say, Judge Dearie (by the way, himself a former U.S. Attorney for the Eastern District of New York -- during the Reagan administration) was not happy.  According to the Times article, Judge Dearie in October instructed the prosecutors to "explain how and why the language was added to the subpoenas."  But in response the prosecutors declined to set out "the scope of the problem or how they planned to address it," and instead merely said that the language was "inadvertent" and "improper."  Well, I can tell you the scope of the problem.  Take a look at the cover page of that subpoena.  It's their form.  In other words, they were putting this language on essentially all the subpoenas.  There was nothing "inadvertent" about this.  They were engaging in systemic intentionally lawless conduct, and now they have lied about it to a judge.

Oh, and who was the U.S. Attorney for the Eastern District of New York when this subpoena was issued back in March, and when this improper language somehow crept "inadvertently" into the Eastern District's subpoena form?  That would be Loretta Lynch.  A few weeks later, on April 23, she was confirmed as Attorney General of the United States.  Her confirmation was somewhat controversial, for reasons that included her support for Obama's immigration enforcement regime (or lack thereof), but as far as I can find, the subject of her issuing unconstitutional gag orders to the citizenry did not come up.

And in other news about the "Justice" Department, we learn from the Washington Post on November 23 that so-called "civil forfeitures" to the federal government have exploded to the point that in 2014 they exceeded all losses from burglaries in the United States.   Here is their chart:

Notice that as recently as 2008 (end of the Bush administration) asset forfeitures to the federal government were well under $2 billion annually, and only about a third as much as burglary losses.  But somehow under Obama the asset forfeitures to the federal government have exploded to well over $5 billion per year.  What's going on?  Law enforcement has turned to predation upon the citizenry, with the poor and the marginal most at risk.  From a Washington Post investigatory report in September 2014:

[A]n aggressive brand of policing [is spreading] that has spurred the seizure of hundreds of millions of dollars in cash from motorists and others not charged with crimes...Thousands of people have been forced to fight legal battles that can last more than a year to get their money back.  Behind the rise in seizures is a little-known cottage industry of private police-training firms…  A thriving subculture of road officers…now competes to see who can seize the most cash and contraband, describing their exploits in the network’s chat rooms and sharing “trophy shots” of money and drugs. Some police advocate highway interdiction as a way of raising revenue for cash-strapped municipalities.

That quote deals mostly with state and local law enforcement, but the explosion in the federal seizures shows that they are doing the same or very similar things.  Here is a summary from the Institute of Justice on the scope of the problem.  Or read my article from April 5 on how the feds systematically steal luxury cars from people who try to sell them to buyers in China.

I can't say that I expect much in the way of better behavior from Justice during the term of the current administration.  The question is, will a new administration bring about any reform, or is the formerly respected "Justice" Department now corrupted beyond hope of recovery?

Is Connecticut Self-Destructing?

Checking in on the most popular stories of the year on RealClearPolicy, I find that one of them is "Why Connecticut Is Self-Destructing," by Lewis Andrews.  The story dates from June 9.

"Self-Destructing" is a rather strong term.  Is it a fair characterization of the situation in Connecticut?  I'd say it's an exaggeration, but not by much.  Without doubt, Connecticut should serve as a warning to other states of where the blue state model of governance leads.

The immediate inspiration for Andrews' article was the passage of Connecticut's budget in June.  That budget included major tax increases, particularly on corporate entities, notably a permanent 20% surcharge on the corporate income tax and a new rule imposing taxation on corporations' foreign earnings.  According to Andrews, those changes brought Connecticut's tax burden to the third highest in the nation (although he doesn't say where he gets that figure; a Tax Foundation study from November 15 ranks Connecticut 44th of 50, or 7th worst, for "business tax climate").  The changes also brought threats to leave from several of the state's largest corporate employers, among them General Electric, Aetna and Travelers.  So far none of those has left, but then these things don't happen overnight.  So Andrews asks:

How did Connecticut, which just over two decades ago had no income tax and was widely known as "the Switzerland of New England," so quickly become the third highest-taxing state in the nation, the most indebted on a per capita basis, and, according to Barron's, the worst managed?       

Are things really that bad in Connecticut?  It's still at or near the top in the state rankings by  income.  In this ranking based on 2010 - 2013 U.S. Census data, Connecticut ranks first by per capita income (although D.C. is substantially higher) and fourth by median household income.   But its top income position has been gradually eroding.  According to data from the Connecticut Department of Labor here, the number of jobs in the state has been almost perfectly stagnant for 25 years:  1,640,000 jobs in 1990 and 1,690,000 jobs in 2015.  That would be "growth" of about 0.1% per year.  1990 would be just before the enactment of the state's first income tax in 1992.  It started at 1.5%.  Today the top rate is 6.7%, just a hair shy of New York's top rate. 

Remarkable about Connecticut is the concentration of the wealth in the New York suburbs in the southwest area of the state, and the simultaneous abject poverty of all the cities.  Among the states, Mississippi has the lowest per capita income at $20,618 (2014 data).  Here are the per capita income numbers for the main Connecticut cities:  Hartford, $16,798; Bridgeport, $19,854; New London, $21,110; Waterbury, $21,545; and New Haven, $21,789.  Whatever they are doing to ameliorate the income inequality is completely falling on its face.

So how is the new budget working out?  On November 10 the Hartford Courant reported that the tax revenue from the newly increased taxes was running some $600 million below projections (over two years), on a total annual budget of about $26 billion.  An emergency legislative session earlier this month claims to have fixed the problem, for the moment.  The big employers in Stamford all seem to be in a Perils-of-Pauline game of downsizing and/or departure.  Pitney Bowes has just sold its headquarters building and downsized its operation substantially.  The big banks with operations in Stamford, notably UBS and RBS, repeatedly threaten to close and move away, although maybe they'll stay a little while longer for a big enough bribe from the state.

Connecticut is a tremendous lost opportunity.  It has opted for high taxes and a period of gradual relative decline compared to other states.  The lost opportunity is particularly tragic for the basket case cities and their inhabitants.