By Linda Stamato
In the wake of “Bridgegate,” press coverage shifted from near adulation of Chris Christie to embarrassed incredulity; the artful politician, poised to become a presidential contender, was reduced in a heartbeat to a tarnished pretender. The phrase, “He can’t lose,” morphed into “He can’t win.”
Well, we’re witnessing a shift back and for no apparent reason other than the limited attention span of the public and the press (not to mention the effective spin of state and national political machines.) “’Bridgegate’ is SO over, let’s move on.” about sums up the message.
But, it’s never been just about the massive tie-up of the traffic at the GWB and the antics of Christie’s side-kicks in this particular political adventure. What the scandal opened up, or gave folks comfort in scrutinizing, openly, is far more important than that caper, however significant and probably, for the acts of some, illegal that it was.
It is about these things too:
. Corrupting the Port of New York and New Jersey Authority in a multitude of ways that have been recounted over and over in the press (and some of which are under investigation by the SEC and the Manhattan District Attorney in New York State and the US Attorney in New Jersey, not to mention the subject of continuing legislative hearings);
. Mismanaging the public’s money in ways that advantage him and his supporters by, among other things, cutting payments to the pension funds; diverting earmarked funds from federal projects to state projects–to avoid having New Jersey responsible for essential infrastructure spending (requiring funds that he’d have to raise and, of course, taxes are anathema to aspiring Republican presidential candidates); questionable diversion of Hurricane Sandy funds to projects associated with political supporters barely touched by the storm, etc., etc., etc.; and disadvantaging those unlikely to provide support to him in future campaigns, including those from whom he removed the unearned income tax credit. But, you know, if it costs you more in what you pay the state, you can call it anything you like but the impact is the same; you’re paying more with the ending of the unearned income tax credit than you were paying when it was in force. The tax credit ended, thanks to Christie, in 2010, and every effort to restore it, he has vetoed, along with other programs that are deserving of crucial state support: women’s health services; cancer research; legal services for the poor, and on and on.
. Efforts to undermine affordable housing construction, to develop clean energy alternatives, and to replenish the transportation fund, for which some resources exist or did, have been and are being diverted to balance his budgets. That’s governance, Christie-style, sort of like robbing Peter to pay Paul (where Peter represents public needs and Paul, well, private and political interests of course.)
. The state’s economy has not recovered, not by a long shot while neighboring states are doing well, so, so much for Christie’s touting of the “Great NJ Comeback.” It has “come back” for some, though, those who already on the high end, accumulating wealth.
Things could have been worse, of course, as Christie sought to provide generous tax cuts to the wealthy. The folks behind the economic thinking that tax cuts promote growth, Christie among them, cling to magical thinking despite being shown how excruciatingly wrong they are, over and over—a phenomenon that Nobel-prize winner Paul Krugman, in the latest evidence regarding the Kansas tax-cutting disaster, describes as “the enduring power of bad ideas.”
The New Jersey Legislature, fortunately, turned him down.
No Tax Credits for the Poor but Ample Subsidies to the Wealthy
Chris Christie pressed on, however, to help a distinct subset of the wealthy anyway, the corporate elites that he relies on for political support. How? Through the state’s Economic Development Authority and legislation that gave him his way.
Let us dwell on that aspect a bit.
Given the sum of money involved–$4 billion in tax subsidies during Christie’s years—and the lack of transparency with respect to how it’s determined who gets and who doesn’t and the indirect pay-to-play dimension, well, clearly, scrutiny is the order of the day. It’s also yet another example of how those who already have, get more.
Despite evidence to the contrary, the lie–that subsidies secure jobs–keeps being told. But, just last week, another major report from the Guardian confirms what we know: the subsidy program doesn’t work.
Read it and weep. It’s not the first assessment that questions the wisdom and efficacy of these hand-outs to elites. New Jersey Policy Perspective certainly has. Its latest reportcovers the recent surge in state largesse; national economic reports confirm the obvious, and various bloggers, myself included, have raised questions about the propriety and efficacy as well.
Since they don’t work, why, fundamentally, do we provide these subsidies? For the answer, glance at the list of those who support the Republican Governors Association, directly, and, too, through their own corporate PACs, and you get a feel for the cozy relationship. And, take a look at an earlier Guardian take on the public subsidy–$106 million–to a particular friend and financial backer of the governor. You get the message. One hand helping the other. Big hands, though, on both sides of the equation.
Since we hear a lot about how the heart of New Jersey is its small businesses, one can’t help but ask how they fare in any this business of providing subsidies. Are incentives reaching smaller companies — the backbone of the state’s economy? Well, let’s put it this way, only about 1 percent of New Jersey’s businesses are reaping rewards from tax breaks. They include Prudential; Panasonic; Goldman Sachs; JPMorgan Chase; Forbes; American Dream Meadowlands; RBC Capital; Honeywell; Celgene; Goya Foods. The other 99 percent lose out. Guess who they are?
And, in some cases, these small businesses are being hurt by the expansions of the giants–a double whammy. Consider the case of Prudential. Prudential Insurance obtained $250.8 million to move a few blocks to a new tower in Newark (creating vacant space in its existing location and generating a lawsuit).
The impact of its construction, noted by Barry Carter, in the Star Ledger, was closing off access to local businesses, producing plummeting sales, lost jobs, and mounting concerns that lively, successful small businesses would be forced to close-up shop.
Carter’s column led me to question a program that could give public money to a business on the one hand and negatively impact the operations of another. Projects with substantial public tax abatements, that cause disruptions to local commerce and lead to direct economic losses (short-term or sustained) on small businesses, ought to be acknowledged, measured, and compensated. Given the large size of the awards in many cases, is it asking too much of an awardee, say Prudential, to cover such compensation? It may be a complex and difficult undertaking but it is also the right thing to do. Tax breaks extended to businesses increase the pressure on other taxpayers, after all, including those businesses that are interrupted by these projects. However much business they lose, they still pay their property taxes or their rent and they still have to stay open and operating.
Carter’s column ends with Linda Jumah, proprietor of Luxe Boutique on Halsey Street:
“Newark needs small businesses. They hire locally. They patronize each other and keep customers in the city…And on Halsey Street, they create a neighborhood vibe and culture that feels right.”
That counts for something, too, doesn’t it? How do we rebuild, revitalize, save our cities if we don’t care about the small businesses that are trying to make it?
And, when all is said and done, shouldn’t the right hand know what the left hand is doing? The state’s tax incentive programs, whether current or revised, are about creating and sustaining jobs. The big players, with public tax incentives, ought not to be driving out the small businesses that have none, or hurting those that remain. Public policy ought to reflect that view. Creating jobs and saving jobs, on a small or a large scale, is the objective is it not? And, for our cities, it’s really that simple!
In the end, these incentives fall too short of accomplishing their alleged objectives and are entirely too ripe for abuse. During a recession and fiscal crisis, when the public sector can barely afford to maintain essential services, shouldn’t we be questioning the wisdom of giving away tax revenues by the millions to individual companies — especially very large, wealthy corporations — instead of investing in public services and transportation infrastructure that would benefit all companies and citizens?
And, remember, this is a state, as the governor has declared, that can’t afford to provide tax credits to the poor.
Consider, too, just what we are spending money on as a result of his “governing style:” Legal expenses relating to all the investigations, those he launched to show how politically out-of-touch he was—well beyond a million—and those the legislature has undertaken—yet to be documented for starters.
And so, “Bridgegate” is not over. But, we need to better understand what we mean when we talk about it. Our governor, seeking the presidency, has put the citizens of New Jersey, those in the middle and below, that is, the other-than-the one-percent, on the low rung. He has all along, of course, but we were unable to summon up the will, in some cases, or find the way, in others, to challenge his governing, his priorities—in education, primary/secondary and higher education; in energy; in health care; in transportation, in housing. His spin machine—his town meetings, his YoutTube clips, his love affair with the rude and crude, the put-downs that seem to thrill the ignorant and score political points—has worked wonders for him.
The same guy who just months ago was described as a winner, a political wizard capable of crossing the aisle, saving the shore and talking straight and tough to the people, well, because of “Bridegate,” we’re seeing him more clearly or we’re acknowledging what we know. Now, we see the bosses, the contracts for cronies, the efforts to manufacture an image, the questionable crowd trying to craft a viable presidential contender; we’re following where the money is really going.
We need to stay the course, not to be put off by those who say ‘Bridgegate is over.’ Yes, we’re looking back. And, to be sure, we should have looked a lot harder earlier. But for “Bridgegate,” though, we might not be looking at all.
If we don’t, if we won’t, then, there is another story here, I’d say, and it’s not about Christie, it’s about us. Pogo could be right after all.
Linda Stamato is co-director of the Center for Negotiation and Conflict Resolution at Rutgers University.