Tripping the Snare

My wife is currently editing a massive volume detailing the official tax code for American corporations and individuals. It is something so voluminous, so intricate, it bears updating every six months. In her estimation, it is impossible for any one individual to know the entirety of legislation that governs it. As such, it is entirely possible that the majority of people charged with complying with these laws, even after having taken utmost care, can still run afoul of them in some obscure way. As such, we all have become guilty of some arcane transgression. As such, we all are guilty of crimes should someone take the trouble to embark on a witch hunt (for oversights we may have committed) for the sole purpose of laying us low.

It's a bit like the speed limits on NJ highways which no one observes precisely. And even those who do are now suspected of running drugs or guns, or driving without documentation. In short, if someone has it in for us, they could in theory trip the snare any time they wanted to.

Take Governor Patterson (NY), for instance. He was said to have intervened for a friend in a domestic violence case. For this he is being hounded out of office (by the very man who wants to unseat him). I would say, if Patterson hadn't intervened, it would indicate a problem (of character). What are friends for if they are straight-jacketed and kept from executing normal responses?

Only our president and those in his favor seem to be immune from scrutiny. You are already well aware of the litany of transgressions of which this president is guilty. But he is the president; he holds the reigns. This, sadly, is roughly the definition of a third world nation.

Socialism Works - Not

Been hearing a lot of talk on local radio by the governors of what is referred to here as the tri-state region: New York, New Jersey and Connecticut. All the governors are facing tremendous shortfalls in revenue. Christie in NJ promised that he would not raise taxes because he knows that raising taxes gets people nervous and drives business out of state. He concedes that taxes are too high already and businesses are either leaving or not expanding. Even if he were to lower taxes now, it would take considerable time for a turn-around to kick in. In the meantime, the state is tapped out. It has to cut expenses. This means lay-offs, service cuts and efficiencies. Yet, there are so many basic and federally mandated costs that even the most stripped-down, bare-bones budget would run in excess of the ever shrinking revenue pool. Governor Christie will need Washington’s help in the form of bail-outs (at least until the overall economy improves).

New York’s Patterson is facing a similar dilemma. Plummeting revenues have put the State in a real bind. Patterson has the additional problem of Albany’s legislature having been utterly dysfunctional for many years now. Wrangling over budgets has not only produced red ink, but also bad blood. New Yorkers who can afford it are more than likely to leave the State for lower tax states if they haven’t done so already.

Ditto Connecticut…

One of the biggest problems the states have is unions. As most state workers are unionized, their wages and benefits are not subject to market conditions. Most can expect automatic raises which creates a situation where in these difficult times state workers on average make more than workers in the private sector. As money from the private sector is diverted to the public sector, both public and private sectors can expect at some point to go belly-up.

What you have here in the North-East is the mechanics of a classic tail spin. People are desperately hoping for a deus ex machina intervention. They are hoping for the economy to turn around. Only a growing and vibrant economy can avert the disaster that everyone envisions. Obama promises to turn the economy around; he promises jobs; he promises health care… New York, New Jersey and Connecticut lawmakers’ hopes, all are dangling by a single thread: federal bailouts. They know they are too big to fail and only Washington can print money.

New York’s Bloomberg is upset. He knows that printing money only hastens the fall. His sole hope is a revival on Wall Street. He’s heard the latest Obama proposal of cutting the banks down to size. He knows this would kill any hope of stemming the red ink tsunami that is clearly on its way.

The architecture now in place that predicts what most likely lies ahead is not likely to change for at least the next three years. Insolvency and the electoral process has become a horserace. Insolvency currently has the edge. Ironically, this architecture contains a wild card as well. It’s the people’s resolve to deliberately slow down their horses – not to consume, not to trade, not to expand, not to do anything to advance this crazy system that seems to operate entirely for the benefit of our present political leadership; that seems intent on bleeding us dry for the purpose of advancing some global Utopian hell. The harder they squeeze, the less they can expect to get from us. The end result may turn out to the same, but at least we’ve denied them the right to say, “Socialism works.”