Monday, August 31, 2009

Grasshoppers Sang All Summer.

To What Tune Will They Dance

When Autumnal Zephyrs Blow?

By Henry J. Stern
August 28, 2009

For several months, starting with the June 8 coup, we have written about the iniquities and deficiencies of the State Senate, a gerrymandered legislative body in which, for the first time since the 1964 Johnson landslide over Barry Goldwater, a Democratic majority was elected in 2008.. The selection, by each party, of majority and minority leaders is usually made before the legislature assembles during the first week in January. This year the process went down to the wire as the newly empowered Democrats squabbled over leadership positions, which are accompanied by substantial lulus and extra staff.

An uneasy truce held for five months, during which Senator Espada made substantial financial demands for newly-created agencies in his district. When Malcolm Smith, the elected Democratic leader balked at the two million dollars that Espada wanted for his neonatal satrapies, Pedro Espada and his co-conspirator Hiram Monserrate (whose trial for allegedly slashing his girlfriend is now scheduled to begin September 14 in Queens) converted to Republicanism and created a 32-30 GOP majority.

Smith was dumped, Espada was made president pro tempore, which made him the immediate successor to Governor Paterson should a vacancy occur, and Dean Skelos, a Nassau County Republican, was made majority leader, a post he held in the previous Senate after the resignation of Senator Joseph Bruno on June 24, 2008. Twenty-four days later, Bruno quit the Senate, since his former lulus were no longer available to boost his salary for pension purposes.

Having deposed Smith, Espada exulted and Monserrate returned to the Democrats, where his lulus and chairmanship were promptly restored. His leap created a 31-31 Senate tie, so no quorum could be assembled nor any business transacted. To take action requires 32 votes, a simple majority, which neither party could assemble.

On July 9, Espada returned to the fold and was richly rewarded for his epiphany in discovering that he was a Democrat after all. By this time, Governor Paterson had purported to appoint Richard Ravitch, a private citizen, as Lieutenant Governor who could theoretically break the Senate deadlock. This ingenious stratagem has so far been rejected by a trial and an appellate court, the Court of Appeals will consider the matter September 11.

The significant issues that the state faces, particularly the mounting budget deficit, have not yet been addressed seriously by either the governor or the legislature. Like Pauline, star of the eponymous movie serial who was periodically tied to a busy railroad track, the legislature could rely on a white knight, possibly the U.S. Treasury, arriving, like the cavalry, just before the day comes when New York will be unable to pay its employees because it has no money in the bank. In the past, the state has managed to escape insolvency by various fiscal devices. There is always hope that those who juggle the books will succeed again in postponing the crisis.

It is political tradition to take unpopular actions in non-election years, so that by the time the people vote they will have forgotten about the tax increases and service cuts that were required to balance the budget because labor, pension and interest costs increase each year. We are approaching September of the non-election year, and so far there is not a glimmer of agreement on any plan to deal with the crisis.

Can a situation be a crisis if it occurs each year? A river in China, or the Nile before the construction of high dams, may flood each year, and each flood is critical to those who live or work on the swollen river. It is a recurring crisis, but must be dealt with at each recurrence.

We are quite curious to discover how the legislature, which appears barely capable of deciding anything, even electing their own leadership, is going to handle the deficit for the 2009-10 fiscal year, which for the state ends on March 31, 2010. The bottom line has less to do with what services can be maintained at what levels than the question of who will be laid off.

It is the usual intention of elected officials to keep as many voters on the payroll as possible. Men and women who have lost their jobs are highly unlikely to cast their votes for the administration that fired them. That is human nature, and it is entirely understandable.

Sadly, these circumstances lead to fiscal subterfuge and uncontrolled borrowing. This has been the case for many years, since Governor Pataki's first budget in 1995. He abandoned his resistance to spending in his eleven subsequent budgets. We have learned that, in a capitalist economy, government revenues rise and fall, depending on business activity and profitability.

Government expenses, however, rise almost all the time, faster in good times and slower in bad times. The result is that the perennial and structural gap between income and outgo increases almost every year. This has led to ever more ingenious schemes to conceal the shortfall from the public, the press, and the state's creditors.

There is a certain resemblance here to the Madoff and Enron cases, as well as many lesser examples of manipulation or fraud. However, as this fiscal flim-flam is the work of lawmakers, their actions are presumed to be legal under the laws they write.. The only illegality that may be found lies in the legislature's disinclination to give reasonable pay increases to the judiciary, and who do you think will make that finding?

At this point, the kettle is merely simmering. With the expectation of rational behavior, the pot will still come to a boil, or at least start to bubble, in a month or so. But there is so much abnormal behavior just waiting to be acted out in Albany that no one, at least not we, can predict what will take place when impending insolvency intrudes in the palace of pork and privilege.

StarQuest #589 08.28.2009 975 wds

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