Friday, January 15, 2016

Don't Let Florida Become Another Connecticut

My wife and I come from Connecticut, by way of Illinois and West Virginia.

What do Connecticut, Illinois and West Virginia all have in common? They are three of only four states in the country where the population is declining, where people are moving out. They are three very blue states, with high taxes and repressive, anti-business governments.

Why bring this up? Connecticut made the news this week with the announcement that General Electric is leaving the state and moving its headquarters to Boston. That’s a body blow. GE, a beacon of American business, has been a major employer in Fairfield County for 42 years.

Why is it leaving Connecticut? Taxes, of course. The insatiable state government – Democrats and Republicans alike – has raised corporate taxes for years and recently tacked on a 20% corporate surtax. GE took a huge hit last year, its fifth tax increase since 2011. It finally said enough’s enough.

The fact that GE is moving to Massachusetts (we used to call it Taxachusetts) says something in itself. But the commonwealth has the lowest taxes in the northeast outside of New Hampshire. And the Boston area offers, besides urban delights, an expanding and technically savvy workforce.

Where does that leave Connecticut? On the skids. Since 2010 it has recorded zero GDP growth. Only Louisiana and Maine have fared worse. Its corporate tax rate is now 9% and its top income tax rate is 7% -- this on top of federal taxes. The Tax Foundation says Connecticut’s business climate is ranked 44th in the country. (Florida’s is ranked fifth.) And according to the Wall Street Journal, Connecticut’s state pensions are only 48% funded, third worst in the country. The state is a financial disaster.

I take no joy is seeing Connecticut go down the tubes. I lived there with my family for 30 years. My former employer, Pfizer, still has a presence there. My daughter and her family live there now. In fact, her children go to Fairfield County schools. (With GE leaving, her taxes will probably go up –  again.) I have a granddaughter enrolled at the University of Connecticut, where my older son got his dental degree some years ago. Our family has strong ties with the state.

And Connecticut has a lot going for it. It’s a beautiful state, with a hilly interior and a long coastline. There are few better places for weekend sailing. New York City is a manageable drive away, as is Boston. And it has the wonderful UConn women’s basketball team, the best on this or any other planet.

Yet it’s hemorrhaging businesses, and people are leaving in droves. The sad truth is that Connecticut is a case history on how to screw things up, on how to choke off business and mismanage an economy.

The GE exodus should be a lesson for Florida: Keep taxes low and regulations lower. A good business climate means growth and prosperity. A bad one means, well, going the way of Connecticut.

Sunday, January 3, 2016

The Biggest Lie of 2015

In looking back over 2015, I’m struck by the number of sleights-of-hand and misrepresentations and downright lies foisted on the American public.

There was the Iran nuclear deal, based the absurd notion that Iran’s barbaric behavior would suddenly change for the better.

There was hand wringing over drug prices, with little mention of the crushing costs for bringing new medicines to market.

There was the barrage of self-congratulations for Obamacare, while premiums soared and hatred for the measure grew.

There was the strange sight of Hillary Clinton chiding Republicans for their war on women, while the ghosts of Monica Lewinsky, Paula Jones and Gennifer Flowers danced in the background.

There was the myth that U.S. drones and aerial bombardment would obliterate ISIS, while our reluctant surrogates did the dirty work on the ground.

But all of that pales compared to the climate-change summit in Paris – the meeting that was supposed to bring global warming to heel. It was a complete bust. The claim that the conference somehow slowed climate change was the biggest lie of 2015.

The outcome was a collective promise to hold the rise of global temperatures to “well below” 2 degrees Celsius over preindustrial levels by 2100. That would be enough, the experts said, to arrest warming, stop sea level rise and even out weather extremes.

It won’t happen. Here’s why.

·      People won’t comply. Despite past promises, the world is not moving away from fossil fuels. For every additional unit of solar consumed in 2014, the world added 325 units of hydrocarbons – coal, oil and natural gas. Since 1984, carbon dioxide levels have increased in straight-line fashion and show no sign of slowing.

·      The Paris commitments are not enough. To get consensus among the nearly 200 nations, the conference had to rely on self-imposed goals, with each country or region settings its own targets. For example, the U.S. and European Union promised big cutbacks in carbon emissions by 2030, while China and India promised big increases. Japan, Mexico, Australia and Russia promised to stay even. Taken together, the commitments of 167 countries responsible for 94% of global emissions would result in the temperature rising 3 degrees Celsius by 2100. And that’s if all commitments are met.

·      Nothing is legally binding. There are no penalties if countries miss their goals. It’s the honor system on a global scale. Even the U.S. doesn’t have to do anything. To avoid congressional scrutiny, the Obama administration jiggled the wording to read countries “should” commit to reducing emissions. (I “should” drink less Scotch, but I probably won’t.)

·      Coal, the main polluter, won’t go away easily. China agreed to peak carbon emissions by 2030 but is building more coal plants every year. India needs cheap electricity from coal to lift millions out of poverty. In the aftermath of Fukushima, Japan is building scores of new coal plants. The Philippines is set to open 23 new coal-fired facilities by 2020.

·      Throwing money at it isn’t the answer. The U.S. and EU have pledged hundreds of billions to help poor countries fight climate change. But many countries want even more. It’s extortion on an international scale, but still not enough to offset the high cost of green energy. The Indian environmental minister said, “The cost of action is trillions. $100 billion is just a reparation.” It’s a bottomless money hole.

·      Most people just don’t care. Global warming is a low priority in the U.S. A recent poll showed climate change to be seventh on the list of national concerns, well behind the economy, jobs, terrorism – things that matter today, not a hundred years from now.

The Paris conference, however well-intentioned, was little more than an international kumbaya. It produced an agreement saying there is a problem and admitting, based on what we know today, there is no practical solution.