The attack on the Middle Class

The duplicity of Bob Menendez and the creation of Middle Class ghettos

During Bob Menendez’s first year in the U.S. Senate, 2006, there was a health care bill before the Senate designed to make insurance premiums more affordable for small businesses.  The bill would have allowed small businesses to join together as larger groups in order to enjoy the economies of scale in their insurance purchases that large corporations enjoy.  Chambers of commerce and other business associations would have been allowed to form groups to decrease the cost of health insurance so that more of the members could afford to insure the health of more of the employees and families.

At the time, I was a leader of the Northern Monmouth Chamber of Commerce and a member of the National Federation of Independent Business.  The company I owned was paying 100% of the insurance premiums of its employees.  Premiums were raising at about 13% per year.  It was getting difficult to continue to provide health insurance.  Potential hires who did not need insurance because their spouse’s employer provided it became the most attractive candidates to employ.  Increasing insurance premiums consumed what would have been raises to loyal employees.

NFIB was lobbying hard for the bill.  It had already passed the Republican House and President Bush had indicated he would sign the bill if it passed in the Senate.  The Republican Senate majority support for the bill but the Democrats were filibustering.  NFIP worked its members to contact their Democratic Senators asking that they stop the filibuster and allow the bill to be voted on.

I wrote Mendendez and Senator Frank Lautenberg asking that they support the bill.   As I expected, they didn’t and the bill never made it to the Senate floor vote. Lautenberg wrote back thanking me for contacting him.  Menendez wrote back telling me why he supported the bill that he voted to defeat.

Menendez’s reelection campaign is just as duplicitous as his letter to me in June of 2006.

The theme of our junior senator’s campaign is The Middle Class Is Under Attack.   He says he’s fighting for the Middle Class and wants to rebuild the economy from the “middle out.”

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Blame Hoover

By Jim Morford, cross posted at InTheLobby

When I was a youngster and things weren’t going well in the economy, the Democrats would always claim, “It’s Hoover’s fault.”  Republicans, on the other hand, blamed Democrats for “getting us into war” citing Wilson, Roosevelt (FDR) and Truman.

Today, things have changed. Democrats blame Bush for both the economy and for getting us into war.

But who really should bear the responsibility, if not the blame, for the problems facing our country today? To be sure, there is enough blame to be shared by both political parties for landing us in the deeply troubled economy that haunts us today. Politicians of all stripes and at all levels of government have, through fiscal irresponsibility, over taxed and over spent the public’s money. Truly, the blame can reach beyond politicians to include skillful labor unions who have negotiated benefits beyond the ability of governments and private sector employers to pay for them. Additionally, an apathetic public – perhaps the greatest cause of all our woes – has allowed corrupt politicians, avaricious businesses and organized labor to loot the public coffers.

Since the days of Theodore Roosevelt and Woodrow Wilson, our country has been on a Fabian path to statisim. Some are surprised that the Obama Administration has accelerated the pace.

In his most recent book, The Next Decade, geopolitical analyst and founder of Stratfor George Friedman presents a provocative and insightful look into the next decade. It’s a book well worth reading, as he sees a time of massive change and what the US will need to do to survive.

Before we jump headlong into speculation about the next decade, let’s take a look at the recent past to get some idea of whose policies and actions have put us where we find ourselves today.

From 1949 until 1995, the Democratic Party held majority control of the House of Representatives, thereby acting as a restraint on one-party dominance when Republicans sometimes had majorities in the US Senate and/or the White House. The philosophy of bigger and bigger government, embraced to greater and lesser degrees by both political parties, has dominated the country since the 1930s.

It was the relatively short period from 2003 to 2007 that the Republican Party controlled both houses of Congress and the White House. Even during the “conservative” presidency of Ronald Reagan, at least one house of Congress remained in the control of the Democratic Party and government continued to grow.

The current and dramatic shift in political dominance in Washington did not just take place on January 20, 2009 when President Obama was sworn into office. The shift actually began on January 3, 2007 when the Democrats recaptured control of the US Senate. At that time, the Dow closed at over 12,600; unemployment stood at 4.6% and the economy under George W. Bush set a record of 52 consecutive months of job growth.

It was on January 3, 2007 that Barney Frank (D) became Chairman of the House Financial Services Committee and Chris Dodd (D) took over the Senate Banking Committee. 15 months later a meltdown occurred in the banking and financial services sector of our economy, notwithstanding President Bush’s urging repeatedly that serious reform was needed.

One of the most important responsibilities that a member of Congress has is to enact an annual budget for the federal government. However, the US Senate under the leadership of Harry Reid (D) has failed to pass a budget since 2009. The House, under Republican control since 2011, has twice passed budgets and sent them to the Senate, which for purely partisan reasons has failed to enact a budget bill. Unfortunately, Majority Leader Reid and his Democratic colleagues believe that partisanship  is their primary responsibility, rather than fiscal stewardship and sound public policy.

The Federal budget cycle is governed mainly by six laws. Probably the most important of them is The Budget and Accounting Act of 1921 that governs the basic practices of federal budgeting and spending. Because of partisan irresponsibility in refusing to enact a budget and to avoid government shutdowns, Congress gets along by enacting continuing resolutions. Doing so fails the test of fiscal responsibility. However, public apathy (cited above) allows negligent politicians to get away with it.

President George W. Bush was no fiscal conservative or effective small government advocate. During his eight years in office, he increased the federal budget by 104% and the national debt grew by $3.3 trillion.

The Obama Administration has accelerated the pace of spending and debt to unsustainable levels. Today, the national debt stands at over $15 trillion. The debt is dismissed by some as just money we owe ourselves, but the interest on that debt has to be paid out of tax revenues, or borrowed and added to the debt. That interest so far in 2012 is nearly $4 trillion. There are those politicians who see increasing taxes as the only answer to any problem. Others contend that the problem is not that government has too little in revenue, but that it is spending far too much.

Whether it is the fault of Republicans, Democrats or both, it is a useless exercise to simply blame. Rather, we must reverse course and get our fiscal house in order if we are to survive as a nation that resembles anything we have known up until now.

There are solutions, but no easy solutions. Our apathetic and dependant population “served” by corrupt and power-grasping politicians may result in our becoming more like Greece than the affluent land of opportunity we once were.   

In a 2011 interview conducted by economist Donald Luskin, former Federal Reserve Chairman Alan Greenspan observed that he sees the United States as having crossed the threshold, a point of no return, at which we’ve taken on too great a government debt, and at the same time made too great a commitment to government control of the economy. Luskin wrote, “He told us that we won’t recognize America 20 years from now, and that we won’t like what we see.”

Jim  Morford is former Associate  Director of Government Relations for the NJ Education Association, former VP and chief lobbyist for the NJ Chamber of Commerce, former President of the NJ Food Council and is Executive Director Emeritus of the NJ Society for Environmental, Economic Development (NJ SEED). He is a partner in the Trenton-based consulting firm of Morford-Drulis Associates, LLC. The opinions expressed in this column are his and do not necessarily reflect the opinions of any clients or associates. 

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Exit Barney Frank

A National Review Online Editorial

Rep. Barney Frank will be remembered for three things: First, he was not only the first openly gay member of Congress but the first involved in a gay-prostitution scandal. Second, he said, “I do not want the same kind of focus on safety and soundness” regarding Fannie Mae and Freddie Mac as exercised with regard to other government-affiliated agencies, preferring, as he memorably put  it, to “roll the dice a little bit.” Third, he was co-author of the Frank-Dodd financial-reform legislation. Which is to say, Representative Frank will be remembered as an embarrassment, a reckless gambler, and a legislative malefactor.

Representative Frank was not much of a crusader on gay-rights issues, which was just as well. On the substance of those issues, he was on the wrong side. As a symbol, he was toxic — a powerful politician whose homosexual orientation was hardly the most remarkable feature of his private life, which included involvement with a gay hustler and convicted drug dealer whom the congressman was paying for sex, and who ended up running a prostitution operation out of the congressman’s home. Representative Frank was reprimanded by the House for making misleading statements to a Virginia prosecutor on behalf of the prostitute — whom the congressman eventually put on his own payroll — and for having fixed dozens of parking tickets on his behalf. Americans are broadly tolerant of homosexuality; they are rightly less tolerant of prostitution and political corruption. The congressman’s self-pitying account of the episode made the bad situation worse.

But though his private life spilled over into his public duties, it is as a champion of a different kind of pay-for-play operation, Fannie Mae and Freddie Mac, that the congressman did the most damage to the country. The government-backed mortgage giants were at the center of the housing bubble and the subsequent financial crisis. Representative Frank was a stalwart defender of the organizations, even after the government uncovered “extensive” fraud at Fannie Mae and found that Freddie Mac had illegally channeled funds to its political benefactors. Again, Representative Frank’s personal life intruded into the story: He was sexually involved with a Fannie Mae executive during a time when he was voting on laws affecting the organization. The final cost of the Fannie/Freddie bailouts will run into the hundreds of billions of dollars, and the real damage that the organizations did to the U.S. economy — and the world economy, for that matter — probably is incalculable.

In response to a financial crisis in which he was a significant figure, Representative Frank helped to craft a financial-reform law that bears his name. The drafting of Dodd-Frank began as a punitive measure, evolved into a dispensary of political favors, and in the end did little or nothing to address the problems that led to the 2008–09 crisis or to prevent similar crises in the future. Which means that we may have Barney Frank partly to thank not only for the last financial crisis but for the next one.

From his relatively petty transgressions related to his personal life to his more consequential role in enabling Fannie and Freddie, Representative Frank personifies a great deal of what is wrong with American public life. Though a highly intelligent man, he made the wrong decisions at every turn, and compounded his policy errors with the petty and vindictive style of his politics. Republicans will not miss him. Neither should his Democratic colleagues, his constituents, or the American public that will be paying off the cost of his errors and those of his allies, with interest, for a great many years. We hope that he will find in the obscurity of retirement the grace and wisdom that eluded him as an elected official, but we do not assume that it will be so.

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Naming Public Facilities

The Assembly Transportation Committee released a bill yesterday that if passed will rename Route 19 in Passaic County after Congressman Bill Pascrell.

Now Pascrell, 74, should announce his retirement and save the New Jersey Congressional Redistricting Commission a lot of work.  Doing so would eliminate all controversy over naming a state highway after him.

Barney Frank, 71, the Massachusetts Congressman from Bayonne, announced his retirement after the Bay State announced their new congressional districts.  Frank said he didn’t want to raise the money or do the electioneering necessary to get elected in his new district. 

Pascrell announcing his retirement prior to the new congressional districts being determined would be a selfless act of public service.  The rest of New Jersey’s congressional delegation would want to name a more prominent road after him.  The Resdistricting Commission’s work would become easy and appropriate, as the district to be eliminated should be from North Jersey where the population has declined vis-a-vis the rest of the state.

If Pascrell announced his retirement, the bill to name Route 19 after him could be fast tracked in the lame duck legislative session.  Governor Christie might even sign it, despite the fact that Pascrell was a Corzine caddy, second only to Frank Pallone, during the 2009 gubernatorial campaign.

If Pascrell does not take this opportunity to retire, the question of the appropriateness of naming public facilities after sitting office holders should be hotly debated.  Every member of the Assembly Transportation committee except Burlington County Assemblyman Scott Rudder voted to release the Pascrell naming bill to the full Assembly. Rudder said that naming a road after a sitting office holder was hypocritical and that the state has more pressing issues. 

Rudder is right, but there is a stronger argument against giving away the names of public facilities.  In these difficult economic times, we should sell and resell the names of our roads, bridges and buildings, with all of the proceeds going to either retire debt or build new facilities, thereby avoiding new debt.

There is precedent for this type of revenue generation.  Former Governor Brendan Byrne’s name was taken off the Meadowlands Arena in favor of Continental Airlines and later Izod who both paid handsomely for the naming rights.

Glassboro State College was renamed Rowan University after Mr. Rowan donated $100 million.

The State and New Jersey’s counties and municipalities could benefit greatly by selling naming rights to businesses and philanthropists.

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