How Murf can deliver pie in the sky
It’s time now for a “fairer economy,” said Philip Dunton Murphy — “Murf” — upon taking over as governor of New Jersey. By that, he explained, he meant an economy “that works for every family.”
Now the hotshot financier says so, having already amassed a gazillionaire’s fortune at Goldman Sachs under what was, presumably, the unfair economy.
Goldman Sachs, in case you haven’t heard, was never in the business of redistributing wealth and isn’t now, despite the vast sums it has donated to Democratic Party candidates.
But Murf sounds determined to try his hand at divvying up the wealth in more equitable portions, now that he’s secured his own fortune and the Governor’s Office as a retirement gig. If his “New Way for NJ” agenda can’t be attained by tax hikes, it’ll be attained by borrowing and public expenditures calculated to advance the status of the toiling proletariat. “Free” community college, for example.
It’ll be fascinating to see, in time, what kind of success Murf, the ex-capitalist, achieves with his Menshevikish agenda. (The Mensheviks, let us recall, were the somewhat less hardcore partners of the Bolsheviks in Russia’s Social Democratic Party.)
Can Murf — Jon Corzine redux — make the numbers do magic the way he did back when he was a Master of the Universe on Wall Street? If you rate his chances of success by the sums of dough he racked up for himself in the private arena, you’d have to hesitate before dismissing his chances in the public arena.
Yet, the fiscal deck does seem stacked against him. The easy-to-pick, low-hanging fruit of taxation was long ago harvested, making the Garden State among the most aggressive of all states when it comes to exacting taxpayer tributes from income, purchases, real estate, business, gambling, drinking, smoking and assorted other human activity.
Can Murf devise a scheme for outcompeting the cartels and replenishing the state’s coffers with a cut of the legalized weed market? Seems like a probable “duster,” as the oil drillers say of a dry hole.
Meanwhile, the public employee pension system cornucopia is yielding an echoing, empty sound — a dire status requiring vast additional infusions of billions of tax dollars, now and on into the coming years.
Murf, alas, seems limited in his politically allowable responses. Penny-pinching is out of the question. Murf is a caring, altruistic Democrat, not one of those coldhearted, parsimonious Republicans.
His party — consisting in no small measure of those who make the public payrolls their habitats — can hardly allow him to go the route of cutting back programs or trimming employee numbers. Murf’s party expects him to attend to a robust public sector, not to be its undertaker. But the traditional Democratic route of “revenue enhancement” seems, as noted, all but closed off to him.
The best Murf can do, perhaps, is come up with a political marketable scapegoat — an easy target, a “they” to blame for keeping the state mired in the muck of a stagnant status quo: Trump, Russians, rightwing extremists, racists, xenophobes, homophobes, Islamophobes, misogynists, climate deniers, fascists, white supremacists, cissexists, NRA ogres, etc., etc.
At this Murf’s party excels, so let’s not sell it short. Murf’s predecessor, Chris Christie, was not saddled with the political obligation of appeasing public employees and their unions. Yet, even though he managed to impose some significant restraints on state government, it continued to operate in the realm of high finance, indeed, stratospheric finance. This fact may only complicate Murf’s challenge.
Up to now, the state juggernaut has kept rolling onward, seemingly in accordance with Newton’s First Law. (A body in motion tends to remain in motion.) But how much more, if anything more, can Murf wring out of momentum?
Momentum finally may have been wrung dry under previous regimes.
Squint at the fine print of New Jersey’s fiscal records. You’ll see that from fiscal year 2013 through fiscal year 2017, the state’s total annual expenditures, including its allotment of federal funds, formed an upward-trending line on the graph, even amid fretful talk of an impending era of fiscal reckoning.
Spending during that period, though not out of line with the rate of inflation, was fixed by the extravagance of past administrations at a level that math nerds describe as tento-the-ninth-power numbers, i.e., numbers with lots of commas and zeros — from $51,751,400,000 to $56,800,400,000 billion, according to the state’s obscure “Comprehensive Annual Financial Report.”
Meanwhile, the number of state government employees drawing salaries of $100,000 or more a year rose 12.6 percent, 20122016, with 65 percent of that total being employees under union contract. Such numbers point to even more stressed public pension plan finances in a state that has pledged $243.6 billion in future retirement checks but has current means to cover just 31 cents on the dollar, according to the Pew Research Foundation.
New Jersey is now a solidly blue state, Democrats as far as the eye can behold, fields and fields and whole vistas of nothing but Democrats. Presidential candidates of both parties can now skip the place, knowing the outcome well in advance.
Yet the state is, by some metrics, one of the nation’s most prosperous, a status traditionally associated with conservative instincts. Those having taxable annual incomes over $100,000 constitute an elite 20 percent of taxpayers who command over two-thirds of the state’s total gross income, according to the state Treasury Dept.’s figures.
Whatever exactly a “fair share” of taxes is, this group surely pays a lion’s share — almost 87 percent of the total collected. (“Statistics of Income, 2015 Income Tax Returns,” N.J. Dept. of the Treasury.)
Although the New Jersey Democratic Party has made it its life mission to horn in on this affluence and share it with itself — to coercively strip away ever larger chunks of this affluence to satisfy the “needs” of a Leviathan bureaucracy — the Garden State’s affluent nevertheless demonstrate a peculiarly strong affinity with the party that persists in tapping it like it’s a keg of beer.
This privileged constituency seems not to mind the grabby fiscal importunities of government as long as government goes on providing such “virtuesignaling” distractions as tweaking the NRA’s nose or imagining that humankind possess the godlike knowledge and finesse to regulate the planetary thermostat.
But this seems to be no anomaly. The party that once boasted of being the tribune of the hourly wage schlepper is now nationally the party of college “snowflakes,” of university faculty, of entertainment industry nouveau riche, of government bureaucrats, of tech and social media plutocrats and fabulously pecunious oligarchs such as George Soros and Tom Steyer and Warren Buffett and Jeff Bezos — of people who are way smarter and more sophisticated than, say, the “deplorable” and “irredeemable” cohorts, the mouth-breathers in red MAGA caps tooling along in F-150s, as the progressive bien-pensant visualize it.
But New Jersey’s most affluent demographic may be near the point, politically if not also economically, of being tapped out. Which leaves Murf drilling dry holes while his legislative majority looks on with increasing unease.
Aside from finding scapegoats, Murf may have to resort to finagling numbers. There’s a risk in such recourse, but maybe not too much of a one for New Jersey politics.
Sen. Robert Menendez won reelection in a cake walk even though a bipartisan Senate ethics panel “severely admonished” him for his sleazy relationship with Dr. Salomon Melgen, a Florida doctor convicted of a Brinks-heist-scale theft of $90 million from the financially stressed Medicare program.
Menendez tried to intercede with Medicare investigators on the larcenous physician’s behalf. The ethics panel ordered Menendez to repay unreported gifts he had accepted from the doctor. According to the Obama Justice Dept., those gifts amounted to $1 million in value.
Menendez says he has repaid $58,500 and has suggested that the sum satisfies his obligation. A flaccid congressional ethics apparatus seems inclined to take his word for it. Menendez’ cake-walk reelection indicates that the New Jersey GOP has now gone the way of the state’s once thriving oyster industry, except the GOP seems left without even a municipal scrap like Bivalve or Shellpile.
Murf might ultimately game the numbers simply by labelling all taxation and expenditures as earmarked for the benefit of “the children.” A ballot question so labelled recently won voter approval in the same election Menendez did, adding possibly $2 billion of longterm borrowing costs to the state’s current annual multi-billion-dollar credit card bill.
Even if Murf got caught fudging the figures, the Menendez cake-walk reelection suggests New Jersey’s voters might nevertheless find it in their generous hearts to be of a forgiving frame of mind. Not recommending hanky-panky here, mind you.
Just saying.