Democrats to Rell: Jump

speakout

by Don Pesci

The National Conference of State Legislatures’ report on how well drafters of state budgets read the recession’s economic tea-leaves is now in.
 
The results are disappointing, according to a report in the New York Times.

“Thirty-one states said estimates about personal income taxes had been overly optimistic, and 25 said that all three major tax categories — sales taxes, personal income taxes and corporate taxes — were not keeping up with projections.
 
“Three states, for example — Alabama, Colorado and North Dakota — said personal income taxes were coming in higher than expected. But they said they had seen declines in other tax categories, like corporate taxes (down 33 percent in North Dakota), severance taxes from oil and gas (down 51.8 percent in Colorado) or sales tax (down 8.5 percent in Alabama.)
“Hardest hit on the income tax collection front was New York, where revenues were off 48.9 percent compared with the last fiscal year. Corporate income taxes plummeted most in Oregon, down 44 percent, while sales taxes fell most in Washington, down 14.1 percent.”

Connecticut, of course, is contiguous to New York. Gov. Jodi Rell recently cautioned Democrats in Connecticut’s hard-of-hearing legislature against raising corporate taxes – the Democrat controlled legislature wants to raise the state’s corporate tax a whopping 30 percent – because she thought that if her state could resist the temptation endemic in the North East to raise business taxes in order to plug holes in deficits, Connecticut might be well positioned to capture some businesses from New York.
 
It is also possible that Rell had chuckled over George Will’s line about governor of California Arnold Schwarzenegger, about whom Will wrote that he was “the best governor the states contiguous to California ever had.”
 
So far, Rell has resisted California’s’s leap into the void, but in the extended session now upon us, Democrats will be romancing Rell to defenestrate herself.
 
Though the numbers of seats captured in the last election by Democrats suggest otherwise, the party of Chris Dodd, who has half a dozen arrows piercing his Achilles heel, Speaker of the House Chris Donovan, who worked part time as a union organizer for the Congress of Connecticut Community Colleges and is presumed to be much further left on the political spectrum than his predecessor Jim Amann, and President Pro Tem of the Senate Don Williams is not prospering — because Connecticut is not prospering. Indeed, it is the slowdown in business activity that has blown a hole in budgets throughout the North East. Democrats in Connecticut hope to fill that hole with a thirty percent corporate tax increase on businesses that have no more money to surrender to a rapacious government.
 
You cannot make lemonade from lemons that have been squeezed dry.
 
The Donovan-Williams attempt to put the squeeze on Connecticut’s hard pressed businesses is likely to be met by the only possible response: Businesses that cannot afford the new imposition will go out of business, throwing their unemployed workers on the mercy of a state deeply in debt, and businesses that can afford to sidestep the pain by moving to greener pastures elsewhere will do so, diminishing the state’s already diminished revenue.
 
Bloomberg News Recently reported that Steven Ballmer, Chief Executive Officer of Microsoft Corp., the largest software company in the United States, would move some employees offshore if the U.S. Congress enacts President Barack Obama’s plans to impose higher taxes on U.S. companies’ foreign profits.
 
“It makes U.S. jobs more expensive,” Ballmer said in an interview. “We’re better off taking lots of people and moving them out of the U.S. as opposed to keeping them inside the U.S.”
 
Squeezed businesses, unlike squeezed lemons, have resources. The tendency of any business is to use its own resources to advance its real interests. Businesses that cannot make profits – newspapers lately have fallen into this unfortunate category – go out of business, at which point both employees and stockholders suffer the loss. Given the fact that stockholders and employees are bound together by the same fate, it is both errant nonsense and a false dichotomy to say that in punishing the stockholders we are not similarly punishing the employees.
 
Gov. Rell gets this. The Donovan-Williams combine does not.

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29 responses to “Democrats to Rell: Jump

  1. AndersonScooper

    Your alternative is what? Massive lay-offs into a recession?

    What the Democrats are proposing is precisely what was done last time we were in such a deep hole. It worked.

    Against this what is the CT GOP proposing? Rell “balanced” her friggin’ budget by forgetting about a $2 Billion gap.

  2. Against this what is the CT GOP proposing? Rell “balanced” her friggin’ budget by forgetting about a $2 Billion gap.

    Memo to PoopyScoopy: It’s June, now. Your talking point about the February budget is more than dog-eared. It was lame to begin with and now … is that really all you’ve got?

    It would seem that it is. What a shame.

    Since then, just to refresh the ol’ noggin, Rell has proposed four more deficit redeuction plans and a second budget.

    The Democraps? One budget from Appropriations they were too shame-faced to vote on. (Understandably so. But an epic fail nonetheless.)

    Think of it this way, if it helps: It’s June. Relatively few voters are paying attention yet. Dems can do the right thing (for everyone but their special interest masters) and still slink away, tail between their legs, without everyone in the state knowing what curs they truly are.

    Stretch this out much longer — past July, for instance — and Dems are going to look back at their abject failure to pass the current Appropriations Committee budget with something approaching nostalgia. Because when voters do notice — ask Donovan about his job offer to Amann — their wrath is not suffered lightly.

  3. Your alternative is what? Massive lay-offs into a recession?

    Yes. Our government is too large, and beyond our means.

    What the Democrats are proposing is precisely what was done last time we were in such a deep hole. It worked.

    No, it didn’t. After raising the income tax by 11% in 2003, Connecticut saw increased income tax revenues, but only because of the increase in the GDP created by the Bush tax cuts which were approved that same year.

    At the time that Connecticut increased its income tax rates on everyone from 4.5% to 5.0%, the federal government slashed taxes and created growth in the GDP. THAT was what caused income tax revenue to grow in Connecticut. Since then, we’ve seen the nation’s fourth-smallest growth in the wealthy population (the ones who pay the largest portion of the State’s tax revenue). We would have seen more growth in our tax base had we not enacted that tax increase.

  4. AS,

    Here’s my alternative: Cut spending; any tax increase must be sunsetted.

  5. As,

    I’m sure here’s a lesson in here for you somewhere:

    President Barack Obama has now left a Europe that is becoming more conservative under the lash of the recent economic difficulties and returned home to change the economy of the United States so that it becomes more like the Europe now being rejected by voters.

    According to an Associated Press report, conservatives are racing towards victory “in some of Europe’s largest economies Sunday as initial results and exit polls showed voters punishing left-leaning parties in European parliament elections in France, Germany and elsewhere.”

    Not to worry, Europeans dissatisfied with Europe’s turn to the right can always move to the United States, the land of the subsidized and the home of bailed out.

  6. According to an Associated Press report, conservatives are racing towards victory “in some of Europe’s largest economies Sunday as initial results and exit polls showed voters punishing left-leaning parties in European parliament elections in France, Germany and elsewhere.”

    It’s hard to draw broad conclusions about Europe’s actual state of mind from the European parliamentary elections, mainly because turnout was abysmal, the worst ever at something like 43%–and apathy is often high. If you look at the vote carefully, it seems more of a victory for alienated fringe groups than anyone else. For example, the nationalist BNP won a seat. Interestingly, left-wing fringe parties like the Greens and others also did much better than usual.

    The fact of the matter is that most people in Europe, including Britain, don’t care about the European parliament. However, these elections can foretell what may happen in upcoming national elections–and the result in Britain, which shows Labour losing big to the Conservatives, is almost certainly a harbinger of things to come next year. If we suppose that support for center-left coalitions like Labour is draining away, then governments in Spain and Britain, among others, may change out relatively soon.

    Interestingly, it seems that the right wing parties that seemed to do best were nationalist or eurosceptic outfits like UKIP and the Austrian Freedom Party (a lovely anti-Semitic and anti-Muslim bunch). Center-right parties also lost ground, though not as much as center-left parties did. There seems to be a move away from the center towards the fringe instead of a clear left-right shift. After all, the center-right already controlled the European parliament beforehand.

    Plus, it’s always worth remembering that these “conservatives,” especially on the center-right, would probably be labeled big-government economic liberals over here. I don’t think we’ll see any sort of huge shifts on regulation or trade, at least not for the foreseeable future.

  7. Ghengis,

    This is what the Euroshift means: They like Obama, dislike his policies, possibly because in Europe they have been put into practice and have been found wanting.

    “Some right-leaning parties said the results vindicated their reluctance to spend more on company bailouts and fiscal stimulus amid the global economic crisis.”

  8. Those policies have not worked in Europe, and they will not work here: They will prolong the recession and contribute to a ruinous inflation.

    Here in Connecticut, the state can only make lemonade out of this lemon by refusing to adopt measures that punish entrepreurial capital, cutting spending and, if necessary, raising taxes that self elapse; so that when the recovery hits, we will be better positioned than our sister states to sustain future growth.

  9. “Some right-leaning parties said the results vindicated their reluctance to spend more on company bailouts and fiscal stimulus amid the global economic crisis.”

    That’s nice that they said that (which they would, surprise), but point me to the evidence that suggests that that’s why European voters voted the way they did–or why center-left parties lost votes not necessarily to right-leaning parties, but to far more fringe left parties.

  10. Brown’s government in Britain will fall for the same reason Marie Antoinette lost her head and John Rowland lost his job.

  11. “That’s nice that they said that (which they would, surprise), but point me to the evidence that suggests that that’s why European voters voted the way they did–or why center-left parties lost votes not necessarily to right-leaning parties, but to far more fringe left parties.”

    I don’t have to. It’s self evident. And it will become more self evident as Europe discovers that Obama’s prescriptions, very much like the ones Europe has been following all along, will be less successful in combating business down turns than, say, the prescriptions of Ludwig von Mises, who was German, like Merkel, who has been resisting command economies all along.

    By the way, all labels in Europe to not translate automatically to American lingo.

  12. I don’t have to. It’s self evident.

    The last refuge of someone who has nothing. 🙂

  13. We are dealing with two phenomena here: The first is a quite healthy reaction on the part of workers to idiot businessmen. Myself? I say bring back the guillotine; that does not make me a socialist. I just don’t like stupid businessmen. The second is a growing realization that whatever the problem is, it cannot be helped by idiot politicians. I say bring back the guillotine. This does not make me an anarchist.

    Putting all this aside, economics really is a science, which is to say it operates according to certain observable laws – one of which is this: wealth is not created through the redistribution of wealth. It’s created by people who make products that other people want to buy. That transaction is distorted by idiot politicians some of whom are convincing demagogues. Europe is full of them. And, you will forgive me, I am beginning to think that the guillotine is not a half bad solution to more than half of our problems.

    Most American do not want a government that pats their cheek, provides them with free aspirin when they have a headache, gives them a free lunch (ain’t no such thing) and tucks them to bed at night after reading them a soporific fairy tale. Europe likes this sort of thing – has liked it for a long while.

    On this side of the water, we prize virtues other than sloth and helplessness, or at least we used to.

    But, alas, we grow older, feebler and more Europeanized every day.

    I don’t know about you, but I stand with the revolutionist and, if necessary, the guillotine.

    Gotta be true to your roots.

  14. Ptrick Henry didn’t same: Give me a caretaker or give me death Ghengis.

  15. By the way, when Johnson said “Patriotism is the last refuge of scoundrels” he was talking about Thomas Paine, no scoundrel in my book, and considerably more revolutionary than you.

  16. Putting all this aside, economics really is a science, which is to say it operates according to certain observable laws

    LOL, it is no such thing. It is social science at best, and I don’t think it’s even that.

    I won’t address the guillotine comment, I find it abhorrent.

  17. Ghengis,

    Come on! Will’ya!!! If economics is a social science, and social science is a science, then economics is a science. Right? A science is a body of laws. You’ve of Says law, right, and the law of supply and demand? You don’t want to lose your sense of humor around me Ghengis. “Guillotine,” as I’m using it is a metonymy that means, roughly, “throw the bums out.” But perhaps this expression offends as well.

    Abhorent? Sheesh.

    Not on good term with revolution are’ye?

    What about Jefferson, a metonymist who thought there should be a revolution every generation? Abhorent? What about Abby Hoffman? Abhorent?

    I’m ready for the revolution. Suggest you get prepared.

  18. Come on! Will’ya!!! If economics is a social science, and social science is a science, then economics is a science. Right?

    Wrong. Economics really is less of a hard numeric science than its proponents like to believe. It’s much more like history, or sociology, which are far less absolute. There is a spectrum.

  19. Bruce Rubenstein

    I’m ready for the revolution. Suggest you get

    prepared.

    LOL Don let me send you a SDS and Weaterman application….j/k

  20. Bruce Rubenstein

    i meant Weathermen

  21. Wolcottboy

    Don and Genghis,

    You two should go on Shelly Sindland’s program together. I’m enjoying this.

    Don, good piece.

  22. Weaterman application…

    Geoff Fox is leaving WTNH?

    Say it ain’t so!

  23. Speaking of the laws of science – I stumbled across this where I get most of my hard hitting serious news; craigslist rants & raves (of course I generally stop by both The Onion and Borowitz as well)

    Obama to repeal laws of physics as no longer needed.

    There was a team of Obama people speaking to Mr. Cole (Engineer, automotive experience 40+ years, Chairman of CAR). They were explaining to Mr. Cole that the auto companies needed to make a car that was electric and liquid natural gas (LNG) with enough combined fuel to go 500 miles so we wouldn’t “need” so many gas stations (A whole other topic). They were quoting BTUs of LNG and battery life that they had looked up on some website.

    Mr. Cole explained that to do this you would need a trunk FULL of batteries and a LNG tank at big as a car to make that happen and that there were problems related to the laws of physics that prevented them from…

    The Obama person interrupted and said (and I am quoting here) “These laws of physics? Who’s rules are those, we need to change that. (Some of the others wrote down the law name so they could look it up) We have the congress and the administration. We can repeal that law, amend it, or use an executive order to get rid of that problem. That’s why we are here, to fix these sort of issues”.

  24. LOL Don let me send you a SDS and Weaterman application….j/k

    Bruce,

    Is there a hat with a logo of some kind? That would be nice.

  25. Ghengis,

    “Wrong. Economics really is less of a hard numeric science than its proponents like to believe. It’s much more like history, or sociology, which are far less absolute. There is a spectrum.”

    So, I guess Milton Friedman will have to surrender this prize: The Sveriges Riksbank Prize in Economic SCIENCES in Memory of Alfred Nobel 1976.

    Bruce,

    And I don’t want any hand-me-downs from your closet either. It’s gtta be a new one.

  26. ARC,

    Leave it to you…

  27. Ghengis,

    Even worse, from your point of view, Robert Kuttner, the anti-Friedmanite, will have to surrender his Nobel Memorial Prize in Economic SCIENCE.

  28. Bruce Rubenstein

    Don….so much for my political memorabilia….I will see what I can do with the reformed SDS, for you…..Bruce

  29. Bruce,

    If you really want to revisit your SDS days, take a trip to Iran. Check out the clips; bunch of rowdy Abby Hoffmans: http://donpesci.blogspot.com/2009/06/iran-elections-hope-change.html

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