Free Markets, Free People

The New Jersey model

An interesting article in the Wall Street Journal about newly elected NJ governor Chis Christie.  The Republican, elected in a traditionally blue state, ran as if he’d be a one-termer and laid out the distasteful medicine necessary to put the state’s fiscal house in order.  To the surprise of many, he won.  He’s now engaged in doing what he said he’d do.

His assessment and conclusion are solid:

“We are, I think, the failed experiment in America—the best example of a failed experiment in America—on taxes and bigger government. Over the last eight years, New Jersey increased taxes and fees 115 times.”

And what has NJ gotten for that?

New Jersey’s residents now suffer under the nation’s highest tax burden. Yet the tax hikes haven’t come close to matching increases in spending. Mr. Christie recently introduced a $29.3 billion state budget to eliminate a projected $11 billion deficit for fiscal year 2011.

Obviously, as must be done in a state which has the nation’s highest tax burden, Christie has laid out a very aggressive plan that cuts spending to eliminate that deficit. And, as you might imagine, the entrenched interests which will see their budget’s cut are almost unanimous in their opposition. Most the opposition comes from government unions, and especially from New Jersey Education Association, the state’s teacher’s union.

And Christie is using a little of the left’s favorite tactics against them:

“I’m a product of public schools in New Jersey,” Mr. Christie explains, “and I have great admiration for people who commit their lives to teaching, but this isn’t about them. This is about a union president who makes $265,000 a year, and her executive director who makes $550,000 a year. This is about a union that has been used to getting its way every time. And they have intimidated governors for the last 30 years.”

Christie is obviously not going to be intimidated. And he’s got the numbers and, apparently, the public behind his effort to pare the educational establishment down to a manageable and affordable size:

While the state lost 121,000 jobs last year, education jobs in local school districts soared by more than 11,000. Over the past eight years, according to Mr. Christie, K-12 student enrollment has increased 3% while education jobs have risen by more than 16%. The governor believes cuts in aid to local schools in his budget could be entirely offset if existing teachers would forgo scheduled raises and agree to pay 1.5% of their medical insurance bill for one year, just as new state employees will be required to do every year. A new Rasmussen poll found that 65% of New Jersey voters agree with him about a one-year pay freeze for teachers.

The union, of course, has it’s own favored solution and I assume you can guess what it involves:

But the teachers union wants to close the budget gap by raising the income tax rate on individuals and small businesses making over $400,000 per year to 10.75% from its current 8.97%.

Obviously he has a lot of other fights within the state on his hands, such as cutting the onerous regulation regime the state has built, but he has a primary goal and desire to return the state to fiscal sanity. And he also knows that to do that he has to lower overall taxes – if he wants to again attract business and those who earn enough to provide a solid tax base.

The governor aims to move tax rates back to the glory days before 2004, when politicians lifted the top income tax rate to its current level of almost 9% from roughly 6%. Piled on top of the country’s highest property taxes, as well as sales and business income taxes, the increase brought the state to a tipping point where the affluent started to flee in droves. A Boston College study recently noted the outflow of wealthy people from the state in the period 2004-2008. The state has lately been in a vicious spiral of new taxes and fees to make up for the lost revenue, which in turn causes more high-income residents to leave, further reducing tax revenues.

So here’s a governor who understands that what has been heaped on the back of the taxpayers that are left is too much and is looking at other real ways of reducing the cost of government – i.e. actually seeking out where it has become bloated, putting some of the costs of the benefits government workers receive back on them, cutting unnecessary spending all with a goal of eliminating the deficit the state faces. And, by the way, planning on reducing the tax rate with an eye toward luring back the affluent and businesses with an eventual goal of actually increasing tax-revenues, and jobs, and all the other benefits such an influx would bring.

“What I hope it will do in the end is first and foremost fix New Jersey, and end this myth that you can’t take these people on,” he says. “I just hope it shows people who have similar ideas to mine that they can do it. You just have to stand up and grit your teeth and know your poll numbers are going to go down—and mine have—but you gotta grit it out because the alternative is unacceptable.” He also strongly believes that voters elected him specifically to fight this fight. “They’re fed up. They’ve had enough. In normal circumstances I wouldn’t win,” he says.

He’s probably right about that. He probably wouldn’t have won 3 or so years ago.  And he’s right that the voters, as his election demonstrates, are “fed up”.  But, once the cuts start to hit, nothing says Christie will be given the continued support necessary to accomplish his goals.  But he seems to be a man who is going to do all he can to accomplish them. I call it the New Jersey model because if successful, Gov. Christie will provide both the blueprint and the success story which small government/fiscally conservative types can point to when discussing what must -and can – be done at both a state and national level. I’ll be watching the NJ saga develop with great interest over the years, and wishing Gov. Christie the best of luck in attaining his goals.

~McQ

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14 Responses to The New Jersey model

  • http://www.nationaljournal.com/njmagazine/nj_20100414_3015.php

    “And, by the way, planning on reducing the tax rate with an eye toward luring back the affluent and businesses with an eventual goal of actually increasing tax-revenues, and jobs, and all the other benefits such an influx would bring.”

     
    HaH!  Cutting taxes will simply cause hardship to the poor and further exacerbate our economic problems!  McQ is just repeating the narrative that Republicans are pushing these days.  It’s not true!*
     
    I am not a student of Alinsky, but just reading blog comments these days gives one a pretty good understanding of who he is (was?) and what he recommended.  One of his tenets was that one should adopt the successful ideas of one’s opponent.  I am afraid that has happened in the case of the Liberal Narrative.  I could go on about that subject (and have!) but will try to limit my comment to the simple fact that, seeing the success the right has had in attacking the Progressives citing the concept of the Liberal Narrative, the above article delineates a “Republican Narrative” (RN) and claims that it is as phony as the right claims about the LN.  Here is the supposed RN from the (very interesting) article:
     
    “The Republicans’ “narrative” about Obama’s economic agenda… has been straightforward and unrelenting. In their telling, Obama is transforming the United States into a sclerotic European social-welfare state; forcing the strained middle class to fund both a “crony capitalism” of bailouts for the powerful… and handouts for the poor (through health care reform); and impeding recovery by smothering the economy beneath stultifying federal spending, taxes, and regulation.”
     
    Recognize it?  Ever thought of it as a “narrative” (a simple, cohesive story made up in think tanks without regard to the truth, to support desired political action;  which is repeated, again without regard for the truth,  in a coordinated manner to “drive by“ voters who lack the motivation or understanding to determine the truth for themselves)?
     
    As intelligent voters, the first thing we should do is ask ourselves if the Democratic think tank tactic of (what is that very popular word starting with “co” that means treating them the same?) treating the “RN” the same as the LN in order to discredit it, is valid.  I think not.  The above RN is based on facts and the truth, which can be verified and is consistent within itself without the need to invent any “facts“.
    Of course, the LN does not completely disregard the truth and great pains are taken, I am sure, to include in it as much truth as is possible, consistent with the overriding need to support Progressive political desires.  Where a “fact” is needed to smooth over an inconsistency or to deal with some inconvenient fact, it is invented and all true believers are charged with ignoring the fact that the needed “fact” is not true.  And they do, to a remarkable degree.  Do Republicans do this?  Ask yourself;  do you ignore mis-statements of fact if doing so supports the outcome you desire?  I rest my case.
    Which is not to say that we cannot find some unmotivated voters who lack understanding who fail to do their homework and simply follow the Republican narrative in their political thinking.  Unlike Democrats who fall for the LN, however, most of the time they are professing belief in things that are true or based on truth.
    Yes, I know, the Professor Erbs will conflate (I got it!) the RN with the LN and in their inimical way claim equivalency and that there are no truths, only differing opinions.
    Sigh.  We know better.  That “there are no truths” is part of the LN “facts“, by the way.
    Which is why the concept of the existence of the RN effort by the Progressives is doomed in the long run.  It is not based on fact.  Oh, it may have a run;  and it is sure to be accepted into the LN as a “fact” if it proves useful, but being based on a lie, it will not last long.  Democrats are hoping that it will last long enough.  I can hear them now:  “Hey, we fooled ‘em in 2008 and we can do it again!”
     
    *What is not true is this statement.

    • what the hell are you talking about

      • Rhetorical question, I presume.

        • No, I’d guess it’s a straight question. I can’t gather what your point was either.

          • If I knew that these questioners were Progressives, I would first advise them to read the cite given in my comment to help clarify my meaning.*  If one doesn’t read the cited article, one probably cannot make sense of my comment.  I will attempt to elucidate.  The article says:
             

            “When Democracy, a center-left journal, recently asked leading liberal thinkers to assess President Obama’s performance, a recurrent theme was fear that he had lost control of the economic debate. Robert Reich, President Clinton’s Labor secretary, lamented that Obama’s failure to provide “a larger narrative” to explain the causes of the crash and his response to it had left the public “susceptible to [conservative] arguments that its problems were founded in ‘Big Government.’
            The Republicans’ “narrative” about Obama’s economic agenda — articulated again in Senate Republican Leader Mitch McConnell’s attack on financial reform — has been straightforward and unrelenting. In their telling, Obama is transforming the United States into a sclerotic European social-welfare state;”…[etc.]
             

            “A center-left journal“ (in this context “Pavda“ would be the center) is asking “leading liberal thinkers”  (Democratic think tank folks) to provide “a larger narrative“ that would neatly explain why President Obama was no less than the second coming of Christ with regard to fixing the economy.  In other words, there is a big hole in the current LN and the Republicans have filled it by copying our methods and crafting their own Republican Narrative that makes what we want seem pretty terrible.  So get on the stick and craft a new section for the LN that we can trumpet loudly enough to drive out the Republican narrative. What’s that you say?  The truth?  You’re new here, aren’t you.  Next question.
             
            Coming full circle to the meaning of my comment in this context:  Having the updated LN that the cited article requests, Progressives can easily check with the NYT and respond to posts like McQs by simply quoting the updated LN on how the Republican narrative is wrong.  All by simply reading the LN in the NYT.  No thinking or judgement required.  Got it?
             
             
            * Progressives “don’t need no cites” having been encouraged and trained by the purveyors of the LN that spending time pinning down actual facts is time that could better be used to consume lattes.  ‘Just rely on the NYT to do the thinking’.  Besides, doesn’t what they say (the LN) always make perfect sense?  Not like the confusion and lack of clarity and consistency (requiring thinking and judgement) one often finds when checking actual sources.

  • You’ve probably seen Erb try to bait me here as the “crank who shows up at school board meetings to blah blah.” It was never clear exactly what his point was.

    But in my town upstate New York, my blog comments (and my comments at another decidedly more local blog) ruffled serious feathers by going after the ridiculous school budget and the inflated salaries of the teachers in the district. Perhaps Erb had read some of my posts on that. (Although the truth is I wouldn’t waste five minutes going to a school board meeting.)

    Anyway, back in February the school district tried to throw the fastball past local taxpayers and get quick approval of a $50 million bond to “renovate” the middle school building. But this time the taxpayers were waiting for them.

    Generally the school budgets pass by about 900 to 400. It has been almost automatic since I’ve been up here. For this bond question, once again, the school district got its 900 votes (983, to be precise). But the folks turned it into something else entirely: the bond was defeated by 2561 to 983.

    The lines at the voting place were out the door from the opening at noon to the close at 9:00 p.m. And from the grim, stern looks I saw on the faces of the people on those lines, this was no one-time matter. It’s a new world.

    Beyond that, I now think that the entire public school model is a dinosaur. Fossil might be the better term. Cyberspace has made school districts and school buildings irrelevant as anything more than expensive babysitting operations. “Learning networks” is the blanket term for what should be taking over for the education of kids, and doing so at a fraction of the cost. But wait: the public employee unions will do everything they can to stifle that transition. They will be forcing their corsets on taxpayers for at least another generation. That’s the world of no market forces.

  • Here’s a video of Christie appearing on MSNBC.  I love this guy.
     
    http://anotherblackconservative.blogspot.com/2010/04/chris-christie-reagan-comes-to-new.html
     

    • Great video. Shows the difficulty of even attempting baby steps in trying to deal with public employee unions.

      Once those unions get full control of the situation, with power in the state legislatures and power in the local school districts, they can pretty much write themselves however big a check they want.

  • I would like to see a group of like minded upstart politicians band together in one of the states. They would not run individual campaigns but a joint campaign. A governor and many state reps. Their campaign would highlight “We need to be elected as a whole in order to fix the financial mess in the state. We can’t do it with just a new governor or a new rep. the establishment would block any fixes we make. We need to be elected together. We will probably become unpopular since we will be slashing non-essential government jobs and spending. We accept that.”
     
    Let the chips fall were they may.

  • The burden of proof is not on Christie (a smart fella with good ideas and an attitude we need to see infect the GOP) but on the voters of NJ.

    ” But, once the cuts start to hit, nothing says Christie will be given the continued support necessary to accomplish his goals”

    Exactly right. And if the voters of NJ wimp out and decide they don’t want to swallow the medicine, we can basically write off northeastern blue states entirely. It’s easy to elect a Scott Brown, a Chris Christie. It’s a wee bit harder to actually follow up with what is needed.

    • One of the problems with this public school situation is that parents are guilted into wanting to believe that their children need to get the very best, and that the very best is very expensive, and how much they pay for it, and how good it looks on paper, is the proof that it really really is the very best.

      That’s the result of excellent PR and marketing by the teachers unions and the school bureaucrats and the school districts that those unions effectively control.

      The guilt comes from the parents complying with the compulsory education laws and sending their kids to these schools with very few questions asked. Send off a very bright kid at age five, get back a relative idiot at 18, is often the way it goes. Why and how that happens, I believe, is via the expanding power of peer cultures inside the schools. In other words, whoever thought that it was a really great idea to put hundreds of teenagers in the same place at the same time five days a week ten months a year must have had the single worst idea in the history of the West. This became particularly troublesome as the ordinary social institutions of marriage, family and church came under increasing pressure and began to disintegrate.

      The schools pretend to organize the lives of the kids, and to some extent they do, but mostly for their own purposes. On the other side of the looking glass the kids have organized their own culture and it is a juvenile culture from which adults are excluded.

      This was something that I experience growing up, but it was way less dominant than it is now. Even then, though, it was believed to be “normal socialization.” It’s not “normal socialization.” It’s hideously artificial socialization. In fact, it’s institutionalization. Smart parents know how to counteract its worst effects, but they have to be quick because the school systems know that more dependency on them is good business.

      And that’s before the political indoctrination gets added to the mix.