August 26, 2012
The Comeback Skid
By PAUL KRUGMAN
There will be two big
stars at the Republican National Convention, and neither of them will be Mitt
Romney. One will, of course, be Paul Ryan, Mr. Romney’s running mate. The other
will be Chris Christie, the governor of New Jersey, who will give the keynote
address. And while the two men could hardly look or sound more different, they
are brothers under the skin.
How so? Both have
carefully cultivated public images as tough, fiscally responsible guys willing
to make hard choices. And both public images are completely false.
I’ve written a lot
lately deconstructing the Ryan myth, so let me turn today to Mr. Christie.
When Mr. Christie took
office in January 2010, New Jersey — like many other states — was in dire
fiscal straits thanks to the effects of a depressed economy. Unlike the federal
government, states are required by their constitutions to run more or less
balanced budgets every year (although there is room for accounting gimmicks),
so like other governors, Mr. Christie was forced to engage in belt-tightening.
So far so normal:
while Mr. Christie has made a lot of noise about his tough budget choices,
other governors have done much the same. Nor has he eschewed budget gimmicks:
like earlier New Jersey governors, Mr. Christie has closed budget gaps in part
by deferring required contributions to state pension funds, which is in effect
a form of borrowing against the future, and he has also sought to paper over
budget gaps by diverting money from places like the Transportation Trust Fund.
If there is a
distinctive feature to New Jersey’s belt-tightening under Mr. Christie, it is
its curiously selective nature. The governor was willing to cancel the
desperately needed project to build another rail tunnel linking the state to
Manhattan, but has invested state funds in a megamall in the Meadowlands and a
casino in Atlantic City.
Also, while much of
his program involves spending cuts, he has effectively raised taxes on
low-income workers and homeowners by slashing tax credits. But he vetoed a
temporary surcharge on millionaires while refusing to raise the state’s
gasoline tax, which is the third-lowest in America and far below tax rates in
neighboring states. Only some people, it seems, are expected to make
sacrifices.
But as I said, Mr.
Christie talks a good (and very loud) game about his willingness to make tough
choices, making big claims about spending cuts — claims, by the way, that
PolitiFact has unequivocally declared false. And for the past year he has been
touting what he claims is the result of those tough choices: the “Jersey
comeback,” the supposed recovery of his state’s economy.
Strange to say,
however, Mr. Christie has told reporters that he won’t use the term “Jersey
comeback” in his keynote address. And it’s not hard to see why: the comeback,
such as it was, has hit the skids. Indeed, the latest figures show his state
with the fourth-highest unemployment rate in the nation. Strikingly, New
Jersey’s 9.8 percent unemployment rate is now significantly higher than the
unemployment rate in long-suffering Michigan, which has had a true comeback
thanks to the G.O.P.-opposed auto bailout.
Now, state governors
don’t actually have much impact on short-run economic performance, so the
skidding New Jersey economy isn’t really Mr. Christie’s fault. Still, he was
the one who chose to make it an issue. And even more important, he’s still
pushing the policies the state’s recovery was supposed to justify.
You see, all that
boasting about the Jersey comeback wasn’t just big talk (although it was that,
too). It was, instead, supposed to demonstrate that good times were back,
revenue was on the upswing, and it was now time for what Mr. Christie really
wants: a major cut in income taxes.
Even if the comeback
were real, this would be a highly dubious idea. By all accounts, New Jersey
still has a significant structural deficit, that is, a deficit that will
persist even when the economy recovers. Furthermore, the Christie tax-cut
proposal would do very little for the middle class but give large breaks to the
wealthy.
But in any case, the
good times are by no means back, and neither is the revenue boom that was
supposed to justify a tax cut. So has the very responsible Mr. Christie
accepted the idea of at least delaying his tax-cut plan until the promised
revenue gains materialize? Of course not.
Which brings me back
to the comparison with Paul Ryan. Mr. Ryan, as people finally seem to be
realizing, is at heart a fiscal fraud, boasting about his commitment to deficit
reduction but actually placing a much higher priority on tax cuts for the
wealthy. Mr. Christie may have a different personal style, but he’s playing the
same game.
In other words, meet
the new boaster, same as the old boaster. And pray that we won’t get fooled
again.
