A Lesson in Ethics

Pity poor Bob Menendez. While the adage runs that the only bad publicity is an obituary, political obituaries sometimes commence with headlines like: "Menendez Denies Role in Alleged Shakedown." And it must all come as an utter shock, a complete surprise; after all, isn’t steering contracts to friends, relatives, and lovers what politics is all about? Why else would one run for office in Hudson County?

This latest news – that Menedez’s strong right arm gently "suggested" to a county contractor that those contracts might cease if His will not be done – comes atop a heap of other "scandals", all of which pass for business-as-usual among urban Dems throughout the state, and in Hudson County in particular. Earlier this year, the newspapers reported that Menendez steered hundreds of thousands of dollars worth of contracts to his reputed girlfriend (at least those contracts had the virtue of being private dollars, one from Goldman Sachs, in 2003; can’t imagine what benefit a firm like that might have seen in hiring a powerful Congressman’s alleged girlfriend.)

Then came the infamous rental agreement with a Hudson County "charity". Apparently, no record exists of any variance having been issued to as to permit then-Mayor Menendez’s residentially zoned property to be rented for commercial use. He received rents which clearly appear hugely above market from a tenant with a lease clause which permitted it to leave if federal funding ever dried up. The principals of that tenant raked in huge salaries – at public expense – while allegedly serving the needs of the poor, while making repeated and substantial contributions to Menendez’s campaigns.

Poor Bob. Absolutely none of this so much as raises an eyebrow in Hudson County. Politics in urban areas is all about money – getting somebody else’s, that is. Bob went to the mat for the same lawyer presently implicated in the "shakedown" when Rudy Garcia, the Congressman’s successor as Mayor of Union City, DARED to suggest that less expensive counsel might better serve the interests of the taxpayers. That’s what being a boss means; taking care of your friends, and keeping the boodle flowing.

Even the late Glenn Cunningham understood, calling Menendez "a big, bad boss" and "little Fidel". Curiously, when the fight between Menendez and Cunningham – Mayor of Jersey City – first erupted, the Dems in Trenton – who never cut spending on ANYTHING, let alone a reliably Democratic city – suddenly cut aid to Jersey City by $8 million. Just a coincidence, right?

But that’s how Menendez plays the game. Politics is all about lining your pockets, and the pockets of your friends and supporters. Astonishingly, given all the boodle flowing around, some Dems get greedy and actually steal. (Witness John Lynch) Assuming that nothing Menendez did actually violates a criminal statute, he is simply yet another example of the Democrats using other people’s money, funneled through government, for themselves and their friends. How many other states have urban Mayors who drive Rolls Royces and own yachts?

"How can this be happening," Menendez probably asks himself every day? "This is just the way things are DONE."

Alas for the poor Senator, what passes muster in Hudson County and in urban New Jersey looks damn unsavory to real people. Urban Dems routinely hold multiple public jobs, waxing fat at taxpayer expense. They secure large grants for benign sounding purposes, only to provide huge paychecks to the politically connected apparatchiks who run them; talk about doing well while doing good. And they incestuously recycle money from public contracts into campaigns supporting officeholders who keep the gravy train chugging along, at massive taxpayer expense.

In short, even if it’s legal, it looks rotten to the core.

To anyone who doesn’t live in Hudson County, anyway.

In Morris County, the Dems are passing out a door hanger, one bullet point in which promises to end the Republican "culture of corruption". Coming from Democrats who run the most corrupt state in the union, this represents the epitome of chutzpah. And Menendez is the poster boy for this official corruption. Not – necessarily – the kind that can send you to jail, but the kind which lets the well-connected grow rich on taxpayer dollars. The kind that sees government as an employment agency. Tammany Hall.

It probably puzzles the good Senator mightily, that such which is "legal" and routine in Hudson produces such an uproar when offered statewide. It’s no surprise that the three of the last four Dems to win Senate seats came from outside: Lauternberg, Bradley, and Corzine. None played Dem politics before getting elected, let alone in a seamy locale like Hudson. With Torricelli and, now, with Menendez, the people are getting a good, hard look at how REAL Democratic pols behave. And they don’t like what they see.

Coupled with the complete train wreck the Dems have masterminded in Trenton these past five years, it’s just possible that the people will finally awaken to the fact that these folks are simply not on their side.

The best that the Dems have been able to concoct, by way of a response, is, essentially, name calling. It’s a "smear" to point out that Hudson County is a cesspool and that Bob Menendez rules the roost. Or, perhaps, that several Republicans have been caught feathering their own nests. But, again, the point is not that Menendez is a crook, or that either Party possesses a monopoly on individual virtue. Rather, it’s to demonstrate the essential distinction between the philosophy of Bob Menendez – that his power exists to provide goodies for himself, his friends, and his associates – and Tom Kean – that governmental power must never be wielded for personal advantage.

Political Pirates

In today’s column, Tom Moran laments the latest in a never ending stream of convictions of influential Democrats for massive corruption.

Most serious political corruption tends to be an urban problem. And a Democrat problem. Not because Republicans are inherently more virtuous, but because they tend to approach government from a different perspective than do Democrats. Dems see government as an engine for legally stealing from A to benefit B. Republicans, contrariwise, see government as a bulwark to prevent B from stealing from A.

The Dem mentality inevitably gives rise to corruption, both of the illegal and legal sort.

First, victims of theft tend to object, but if the thief is playing Robin Hood, he creates a substantial constituency for theft. If the beneficiaries of the theft are the residents of a particular district, while the victims live somewhere else, Robin will repeatedly win office in a landslide, even if he’s not exactly pure of heart, and takes a cut for himself and his band of merry maruaders.

Consider Sharpe James and Wayne Bryant, the poster boys for (apparently) "legal" corruption. If one lived in Newark or Camden, and benefitted from the huge amount of boodle these two legislators managed to secure for their constituencies, how would one vote? Put another way, if Sharpe delivers hundreds of millions in pork each year – goodies that his constituents enjoy at someone else’s expense – are yachts, a Rolls, and trips to Rio too high a price to pay? If Camden gets billions due to Bryant’s efforts, are governmental jobs for his entire family unreasonable compensation? Why should the voters of Newark or Camden care? They aren’t paying the bills.

Or consider public employee unions. While it’s a mistake to scapegoat public employees – they’re not doing anything any other folks wouldn’t do, to wit, trying to maximize their wages and benefits – their interests are distinct from the rest of society, in that they directly benefit from higher taxes and greater spending. If the unions can buy off 41 Assemblyman and 21 Senators, the interests of the taxpayers can be subordinated to the interests of public employees. Or, indeed, if they simply use their concentrated political muscle generally (whereas that of the taxpayers’ tends to be diffuse and unfocused) they can secure unwarranted benefits from frightened legislators.

Disproportionately, the Dems rake in huge sums of public employee union cash and support, then vote in a manner contrary to the taxpayer interest.

While Tom’s a personable bloke, he likes the idea of a government which robs from A to give to B. Hence, it’s somewhat amusing to watch him suffer when the champions of his favored policies employ government, in part, for their own ends. Such results are inevitable so long as government acts as a transfer agency, taking from A to give to B.

If we adopted a simple policy – no governmental employee may participate in partisan politics – that, right there, solves much of the problem. Many of the present dual office holders – undersheriffs, tax collectors, teachers, school administrators – would be instantly evicted from the Legislature. Too, those folks with an particular personal interest in employing the political system for their own benefit would find it much more difficult to do so if neither they nor their unions could overtly affect political campaigns, with either cash or troops.

And much of the balance of the problem could be addressed simply by making lines on a map mean something. That is: NO PORK. If legislators could not pillage A for B’s benefit – if B had to pay himself for the benefits he receives – B would have a huge incentive to vote for responsible representatives rather than pirates. If, for instance, the State were constitutionally proscribed from giving money to Newark, and if the people in Newark were confronted with the consequences of electing rogues, they might tend to vote differently.

Put another way, and to paraphrase Charles Peters, that which is illegal is NOT the scandal; there will always be criminals in any profession, even politics. No, that which is PERFECTLY LEGAL needs to be changed, so that folks cannot enrich themselves, their friends, their families, or their constituencies at the expense of others. The people of Newark – or of Morris Township, for that matter – might occasionally elect a scoundrel, but the consequences of that foolish electoral choice will fall upon the backs of those who cast the vote, not upon their neighbors, who bear no portion of the blame.

Chris Christie, in his news conference, points out the necessity for the people to exercise their franchise carefully. But for elections to function properly, the consequences of foolish electoral choices must be visited upon those who made them. It will not do to lament poor choices and, yet, create a system which provides huge incentives for the residents of particular districts to ignore the obvious piracy of their elected officials.

For the antiseptic of elections to work as designed, the people must be informed and involved, and elections must mean something. On each level of government, the people who benefit from spending MUST be the same folks who pay the underlying taxes. In that fashion, the people will promptly evict representatives who feather their own nests at collective expense, because that particular electorate will be paying the bills. Eliminating "corruption" – defined as employing the mechanisms of government to benefit oneself, one’s friends, or one’s constituency at the expense of others – requires responsibility. If the consequences of bad electoral choices can be foisted off on others, what incentive exists for the voters to care?

Prohibiting the political piracy of pork and evicting those with a vested interest in higher taxes and greater spending from the political process would do much to reform government, reduce corruption, and make elections meaningful.

Business Plans

Comes now Hizonor, with an "economic development" plan for the State of New Jersey.

Let’s assume that one owns a smallish business – doing well, thank you very much – which requires a new facility. One looks around at the various northeastern states – we’ll leave the Carolinas and off-shore out of the picture for the moment, as that would make the competition totally unfair – to see which state provides the most welcoming – read, profitable – environment.

First, you wish to construct a new building. Under the Gov’s proposal, you’d be offered a subsidy (of some sort) to relocate to Newark or Camden. But you’d prefer the sort of scenic site readily available along Routes 78 or 80 in PA, so you look in the Highlands. BUZZZ, stop, sorry, you lose, but thanks for playing. However suitable a particular site might be for development – let's say one right next to an existing, similar structure in Mount Olive -- you simply can’t build.
Or you find a site 6" outside of the Highlands preservation area, but, alas, a stream runs 299' from its boundaries. Too bad.

Assuming that you’ve made it this far, and haven’t already fallen into the welcoming arms of a competitor state, after much effort, you locate a suitable lot which the locals think suits your needs and probably won’t trigger the wrath of scores of DEP bureaucrats, and you begin to assess the economics.

One of the aspects of the Governor’s plan is to improve the math scores of New Jersey children. Proving that you’ve taken this admonition to heart, you start adding the taxes New Jersey throws at a business and its employees, and you compare them to Delaware or Pennsylvania. Coming up with a seemingly absurd answer, you put down the pencil and pick up a calculator, just to confirm your math. Sure enough, you find you were right. Highest property taxes in the nation; highest sales tax in the nation; highest marginal income tax in the region, among the highest in the nation; huge corporate taxes, doubled under the last administration.

And if you, the Boss, want to live near where you work, and make more than half a million a year, the state wants about 9%. PA takes a little over 3%. DE none at all.

How long does it take you to choose to locate somewhere -- anywhere -- other than New Jersey?

Now, the Governor proposes to "invest" – read, tax and spend – a tad over $300 million to attract new businesses, but let’s assume that you don’t envision manipulating stem cells and don’t want to move to Newark. (At least until such time as the new Mayor proves himself better than the last one). When you open for business – assuming you finally do find a location on which construction is permitted – you and your employees are looking at a tax burden, some portion of which goes to support subsidies to competitors who moved to different locations in the same state.

Senator Lance observed, delicately, that if the Administration really wants to improve the business climate, increasing the sales tax and increasing spending by 12% represented a truly idiotic way to convey that message. While many business organizations LIKE the idea of subsidies (who doesn’t like "free" cash?), they assist only an infinitesimal number of favored businesses, not enough to make any serious dent in NJ’s overall image as a tax hell to be avoided at all costs.

Let us consider a much more effective, much less complicated program of economic development. Instead of spending $350 million or so on pork next year, or $300 million on subsidies to selected businesses, or $500 million on stem cell centers, take that billion and cut taxes. Start by repealing the fraudulently named "millionaire’s tax", to be followed by a repeal of the increase in the CBT. Effect a complete freeze on the state budget for the next five years, spending not one vershnagel more. Assuming that tax revenues will continue to rise as conditions improve, use every additional dollar to slash tax rates even further, especially on business and "the wealthy", such that, at the end of the process, we have a low, flat income tax and, preferably, no taxes on business at all. Repeal of the death tax will also help keep retirees here. With five years of stable state spending, we could seriously shrink the overall tax burden. Tied in with property tax reform proposals, a Governor with vision could transform NJ from a tax hell into a business Mecca, with companies pounding on the door to get in rather than wearing out Route 78 to escape. One wouldn’t need to subsidize Newark or Camden; business would be attracted there naturally by relatively low costs.

This will require some public explanation by the Governor. (As a businessman, he understands that corporations NEVER pay taxes; they simply include whatever taxes government levies in the prices they charge to their customers) It means foregoing the politics of envy and refusing to surrender to the spending interests.

While it’s nice to see a Governor who at least professes to be friendly to business (I seem to recall one recent Governor throwing a hissy fit and making threats when a business or two displayed the temerity to disagree with him), and there will likely be some high-profile, press conference successes, at which the political pooh bahs brag about capturing or retaining a particular firm with a particularly juicy taxpayer subsidy, most economic growth occurs away from the klieg lights, in small, unsubsidized companies, making decisions based upon real world conditions. Subsidies produce few effects; a generalized low tax, business friendly climate will produce prosperity.

Labor Pains

Labor union leaders write to the Chairman of the State Democratic Party, concerned about the possibility that the Legislature might actually display some moxie and address public employee benefits, hours, wages, etc.

While miracles happen, the odds of the Democrats acting in the interests of the taxpayer when it comes to state employee wages and benefits approaches zero. Oh, perhaps a little bit around the edges, like marginally higher co-pays on prescriptions and the like. But nothing truly serious. That for precisely the reason expressed in the Bosses’ letter:

"... many of us that have supported, and worked tirelessly on behalf of New Jersey Democrats, year after year, election after election..."

Truer words were never spoken. Public employees represent the single largest, richest element of the Democratic Party constituency. Democrats believe in Big Government, which requires quite a few folks to staff it. Republicans – theoretically – support smaller government. Hence, although one finds individual Republicans in the ranks for unionized public employees, collectively, public employees and Democrats make common cause, as the latter believe in hiring lots of the former at good wages, a portion of which wages gets kicked back to the Dems in the form of massive campaign contributions. The taxpayers groan under the weight of the resulting bill.

And Jon Corzine, who generally displays about as much emotion as a dead flounder, displayed true passion precisely once since taking office: when addressing a rally of public employees, and promising to fight for a "fair" contract. If he meant "fair" in the sense his listeners understood, and his emotion implied, the taxpayers are in trouble, and the union Bosses need not worry.

On one point, though, the hypocrisy alarm sounded. The Bosses wrote:

"...some democratic (sic) leaders in Trenton have set out an agenda that undermines the basic tenets of collective bargaining ... The collective bargaining process must be honored both in fact and in spirit not dictated through legislative action or debated in the media."

OK, fair enough; the terms and conditions of employment, within broad limits, should be the subject of negotiations. So, how about a modest proposal, then, to simply eliminate those benefits and perks established by statute, such as the nine percent pension gift bestowed a few years back? I don’t remember these labor Bosses objecting back then that benefits ought not to be set by statute.

In short, if the Bosses want to bargain, that's great. But, then, they should stop with the political pressure on the Legislature to obtain advantages they cannot win at the bargaining table, and make no objection to the elimination of the benefits thus obtained.

The Elephant Smiles

An op-ed piece in today’s Times caught my attention, purporting, as it does, to explain why the GOP consistently does so poorly in New Jersey.

The author’s concludes, in effect, that NJ residents want more services and bigger government, even if that results in higher taxes. He writes:

"As counties like Mercer, Bergen and Middlesex, along with suburban Essex, Passaic and Union, become more densely populated as the housing stock ages, voter expectations for government services are growing. These expectations, coupled with an increasingly diverse population — the 2000 census showed that New Jersey had the largest number of new immigrants of any state — trump concerns about rising taxes.

"As a result, it is no surprise that these counties are now reliably Democratic at all levels of government. Add the vote in these areas to the Democratic core vote in Hudson County and the cities of Camden, Essex, Union, Passaic, Mercer and Middlesex Counties, and it becomes difficult to see where the Republican Party can rebuild its strength."

If the voters in suburban counties want bigger government and higher taxes, they’ve come to the right place. The Dems have delivered the most expensive government in the country. Since the turn of the century, a time in which private sector employment stagnated, government has added 50,000 well paid jobs. Taxes have increased by leaps and bounds in every year since the Democrats took control, as has borrowing. Spending is out of control and the future looks bleak.

If this makes the common folk in Bergen County happy, what can a poor Republican do?

Except, maybe, move.

While the author notes that NJ leads the nation in immigration, he fails to note that it also leads the nation – or is damn close – in emigration, as relatively well off, well educated, taxaphobic folks leave, taking their wallets with them, to be replaced by relatively low income, often illegal immigrants, the latter costing the state hundreds of millions, if not billions, in services.

The author arrives at the conclusion that "most voters recognize the relative importance of government services compared to taxes and have supported increasing the services offered by the public sector."

If he’s correct, the GOP cannot hope to prevail, until the inevitable implosion. Chasing away 350,000 of your wealthiest, most productive citizens constitutes horrible policy. But that’s precisely what the state has achieved over the course of the past 15 years.

Put simply, if the people want massive government with staggering taxes, the Democrats deliver.

Which again calls to mind the wonderful quote from H.L. Mencken, defining democracy as "the theory that the common people know what they want, and deserve to get it good and hard."

Not coincidentally, the Record reports today that New Jersey economic growth is the lowest in five years. Five years of governmental irresponsibility WILL take their toll. While the rest of the nation prospers, New Jersey sinks ever deeper. Productive people leave, replaced by governmental workers.

If that’s what the people want, God bless – and God help – them.

Some encouraging signs exist. As taxes – especially property taxes – continue to mushroom uncontrollably, the same suburban voters who elected Democrats are increasingly forced to wrestle with the consequences of such foolish electoral choices. Modern Democrats exist to create coalitions of voters whose sole uniting interest lies in getting someone else to pay their bills. Increasingly, though, the targets of ever increasing taxation refuse to stay still and be taxed, escaping to less avaricious states. And the "progressive" folks who love the services government provides progressively find that they don’t love paying the resulting taxes themselves.

The inevitable consequence of a high tax, big government state is economic collapse. New Jersey continues to explore new vistas of governmental irresponsibility and its economy continues to sag. As government produces nothing of value, it cannot sustain itself without productive folks to tax. But taxing productive folks drives them away in droves, increasing the costs for the stalwart souls remaining behind. And, increasingly, they’re beginning to ask whether the costs of the governmental services they receive are worth the cost.

All the GOP need do it bide its time. One can believe in "social justice" as much as one wants, and live that philosophy in one’s own life. But as soon as one tries to impose the costs of that philosophy upon society collectively, if an escape hatch exists, people will flee in droves. An economically free society will eat the lunch of a less free society, just as PA, DE, the Carolinas and FL are doing to NJ. The more government tries to do, the less competitive the economy will be. People who believe in "social justice" should attend to it on their own time.

Sooner or later, the people will figure it out. Or, if they don’t...

Well, PA IS a lovely location, full of erstwhile New Jersey Republicans. NJ may get bluer – and more impoverished – but that’s PA’s gain.