A special master appointed by the Obama administration says 17 banks handed out “excess compensation” at a time they were receiving bailout money to keep their firms afloat. Translation: Taxpayer money paid executives at failing firms for their failures. Beautiful.
I’m thinking the Pentagon budget needs more than a trim. How about a full-on buzz cut?
Gov. Chris Christie was elected promising a rebirth of the state’s economy, a promise it was clear he couldn’t keep given the structural changes that have helped to gut the state’s private-sector workforce over the last couple of decades.
According to the Federal Reserve, “a slow jobs recovery and a shrinking manufacturing sector mean the Garden State, which entered the recession six months before the rest of the nation in June 2007, could also be one of the last to emerge.”
“Economic conditions in New Jersey remain essentially flat,” William Dudley, the Fed’s president and CEO, said during a quarterly press briefing on New York, New Jersey and Puerto Rico. “Although activity there is no longer declining, New Jersey has yet to establish a sustained recovery.”
Dudley cited several key issues facing the state — consolidation in the pharmacutical industry and a dying manufacturing sector — that will make it difficult for New Jersey to rebound. What he did not say was that the state was particularly hard hit by the Wall Street crisis, which dried up credit and stalled the housing boom here and also resulted in a chunk of jobs being eliminated both in Hudson County, where financial firms had started settling following 9/11, and in Manhattan, which affected New Jersey commuters.
The governor has blamed the state’s faltering economy on high taxes and red tape, but it is not all clear that tax reform and deregulation will keep companies in New Jersey or attract new ones — especially if services and infrastructure in the state continue to decline.
In the past, the state could point with pride to its roads, but over the last decade-plus, they have fallen into disrepair, as have the state’s bridges and rail network. Schools remain our jewel, at least those in the suburbs, but the assault by the governor on teachers and the uncalled for cuts in state aid for education are likely to create a downward death spiral there, as well.
Fed economists added another factor to the state’s economic woes: “weak job growth in the public sector” (i.e., police officers, teachers, environmental regulators, etc.). Gov. Jon Corzine cut 7,000 jobs from the state payrolls; Gov. Christie has doubled down on that, and is pushing through reforms that have forced and will continue to force local governments to slash jobs, as well.
Reducing the number of public employees may make over-taxed residents happy and could have some short-term fiscal impacts (i.e., balancing local budgets), but it does nothing to aid in the state’s economic recovery. Adding thousands of formerly employed people to the unemployment rolls means that there will be less money being spent by New Jerseyans on consumer goods and services, ultimately spreaading the economic pain beyond that felt by ex-teachers and firefighters.
This is not Christie’s fault and, in many ways, it is not Corzine’s fault either. We have been undergoing an economic restructuring for years that was hidden from view by stock-market and housing bubbles, regulatory changes and a belief that we could live on our credit cards without consequence. As this was happening, governors and legislators of both parties ignored the consequences of their own profligacy, kept spending like drunken sailors and used an assortment of accounting tricks to avoid asking taxpayers to pay the bill that was being rung up.
Now that the bill has come due, we find out we are broke and have no prospect of raising the needed cash to make the payments.
If New Jersey was a household, the bank would be foreclosing.
Here is the letter U.S. Rep. Rush Holt, who represents South Brunswick and several other municipalities in Central Jersey, wrote to President Barack Obama urging him to nominate Elizabeth Warren as the head of the new consumer financial watch dog agency:
Dear Mr. President,
We are writing to ask that you nominate Dr. Elizabeth Warren as Director of the newly created Consumer Financial Protection Bureau (CFPB).
A consumer financial protection body was Dr. Warren’s idea, first expressed in a journal article in 2007, and we can think of no better person to be its first Director. As a professor at Harvard Law School since 1982, she has risen to national prominence in the area of economics of the middle class. Even before the financial crisis, Professor Warren was warning of risky financial products and of lenders who “deliberately built tricks and traps into some credit products so they can ensnare families in a cycle of high-cost debt.” As Chair of the Congressional Oversight Panel she has been an essential voice of reason in the wake of the financial crisis– and an ardent supporter of the Wall Street Reform and Consumer Protection Act.
In her original conception, Dr. Warren modeled the Consumer Finance Protection body after the Consumer Product Safety Commission, describing the main functions of the agency “to establish guidelines for consumer disclosure, collect and report data about the uses of different financial products, review new financial products for safety, and require modification of dangerous products before they can be marketed to the public.” She foresaw the new Bureau as being able to evaluate these products to eliminate the gimmicks that made some far more dangerous than others.
At a time when the nation is still coping with the aftermath of a decade of a hands-off regulatory approach that brought the nation the worst financial crisis in three generations, with mortgage foreclosures still occurring at a rate of one million a year, with nearly one in five Americans either unemployed, under-employed, or who have given up looking for work altogether (while still trying to cope with a mountain of consumer debt), we need a CFPB Director who truly understands the burden that American families are coping with today, and the mission of this new body.
Dr. Warren is simply the perfect choice for that post. We hope you will act quickly to appoint her as its Director.
He’s right.
As anyone who has read this blog knows by now, I am a dog owner and a dog lover. I have two crazy mutts — Rosie and Sophie — and have had dogs for about 25 years. They are like family.
I also think dog parks can be great for some dog owners (my dogs, however, might not do so well — Rosie is not very friendly to other dogs).
This brings me to South Brunswick’s proposed purchase of a private dog park in the Little Rocky Hill section of town. The plan, which gets a final vote on Tuesday, calls for the council to
purchase the privately owned Rocky Top Dog Park, 4106 Route 27, for $360,000, which would come out of the open space fund.
”The plan is to try and generate revenue so the park pays for itself with maintenance, but also to replenish the Open Space Trust Fund,” said Ron Schmalz, public affairs coordinator.
The 5.75-acre dog park currently generates between $60,000 to $90,000 in revenue each year, Mr. Schmalz said.
The plan appears to have majority support — only Republican John O’Sullivan voted against it — because council members view it as a revenue-generator that would increase the money available for future open space purchases.
But, as Frank Chrinko, a former member of the Township Committee and a longtime gadfly in town, writes in this letter, it is a dangerous gamble and “does not meet the test of an essential municipal function.”
And that seems key to me. I am not a small-goverment conservative. I believe government has a role in providing for our well-being, and I don’t see how getting into the dog park business does this. This is the kind of spending we should be targeting — as with the governor’s proposal on the horse-racing industry. A dog park is not essential any more than state-subsidized horse racing or a sports stadium.
Let a private firm buy Rocky Top if it wants.
