Chris Powell: Lamont cheerleading belies damage to Conn. economy; Yellen made a killing out of office

MANCHESTER, Conn.

Few may begrudge Connecticut Gov. Ned Lamont the cheerfulness of his "state of the state" address upon the opening of the General Assembly last week. As he noted, since last March Connecticut has produced much heroism in confronting the virus epidemic. That heroism includes the governor's own.

For nobody runs for governor to preside over the destruction of the state's economy amid mass sickness and death. The epidemic has been overwhelming, and even Lincoln acknowledged being overwhelmed in office. "I claim not to have controlled events," the president wrote, "but confess plainly that events have controlled me." They have controlled the governor too.

But the governor's pep talk conflicted a bit too much with reality. He boasted that the attractiveness of Connecticut is so great that many people have been moving here in recent months. Of course some people have relocated here from New York City and thereabouts, but just days before the governor spoke, the Census Bureau and a moving company reported a net exodus from Connecticut for the year just ended. For many years the state has been losing population relative to the rest of the country.

Responding to the governor's address, Senate President Pro Tem Martin M. Looney, D-New Haven, and the Senate's Democratic majority leader, Bob Duff, of Norwalk, avoided cheerleading. The epidemic, the senators said in a joint statement, "has impacted everyone in our state, caused untold loss, and fundamentally changed daily life. The 2021 legislative session will be like no other and our focus will be to protect the public's health and help people recover economically, physically, and mentally."

The agenda of the legislature's Democratic majorities, enlarged by the November election, likely will include raising taxes. Last week government employee unions rallied at the state Capitol in support of taxing the rich more to reduce pressure to economize with government employees.

The governor's address said nothing about raising taxes, and he lately has opposed raising taxes except when they can be hidden in wholesale gasoline prices. But the governor spoke favorably about legalizing marijuana and sports and Internet gambling, which would be heavily taxed. Legal marijuana and more gambling, the governor noted in justification, are happening throughout the country. But these things are less signs of human progress than of the financial desperation of state government as it lacks the courage necessary to control costs.

Amid his cheerleading the governor could manage only a single reference to the thousands of state residents who for months have been lining up for free food. Meanwhile business closings and bankruptcies have been increasing.

Maybe the new national administration will send the states trillions more dollars in remediation, but there are serious risks in that, since the dollar's international value is already falling sharply and some experts are musing about hyperinflation, which will harm the working class most even as property owners profit from it. Restoring the economy is likely to take a long time.

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THE NEW OLD BOSS: Anyone hoping for a big change in the federal government's economic and market regulation policies should take a close look at President-elect Biden's nomination of former Federal Reserve Chair Janet Yellen for U.S. Treasury secretary.

The nomination has raised concerns because it seems like a merger between the Treasury Department and the central bank, whose independence of the frankly political side of the government long has been touted as a principle of central banking.

But it turns out that in the three years since Yellen resigned from the Fed she has been paid at least $7 million in speaking fees by the big banks and investment houses that the Fed and Treasury regulate and occasionally rescue financially. Yellen probably received more than $7 million, since it appears that she has not yet fully reported her income from banking and investment interests.

Rejoicing in what seems to be their party's capture of a narrow majority in the U.S. Senate, some Democratic congressmen are promising to enact another cash bonus to every citizen of as much as $2,000. But with Yellen at Treasury, will the big banks and investment houses already have assured themselves of far more than that?

Chris Powell is a columnist for the Journal Inquirer, in Manchester.

Take cover when experts say another financial crisis likely won't happen 'in our lifetime'

The bursting of the South Sea Bubble  in 1720 is regarded as the first modern financial crisis.

From Robert Whitcomb's "Digital Diary'' in GoLocal24.com:

In what could presage a horror movie, Fed Chairwoman Janet Yellen, 70, commented the other day that another financial crisis like 2008’s was not likely “in our lifetime’’  because of banking and related reforms implemented in response to the crash.

Fasten your seatbelts when any leading figure in the money world says that things look safe. Consider the optimistic remarks of former Fed Chairmen Alan Greenspan and Ben Bernanke before the 2008 crash; Council of Economic Advisers Chairman Walter Heller’s projections  of steady growth and low inflation out to the horizon in the ‘60s, and famed economist Irving Fisher’s predictions, just before the Great Crash of 1929, that prosperity would continue indefinitely. The fact is that there are far too many variables in the world economy (and the universe)  to make such predictions. Among them: war (including the current cyber war being waged by Russia againstthe West); disease, and natural disasters