The following appears in the March 23-29, 2012 issue of the Long Island Business News:

There has been much chatter among media talking heads about a study conducted by Cornell University psychologist David Dunning that concluded our democratic form of government is fatally flawed because voters are dumb.

According to Dunning, most people are not smart enough to pick the best candidates running for office or to make sound public-policy choices. Worse yet, the “Dunning Effect” alleges the dopey electorate suffers from “illusionary superiority” because they do not know they lack the mental capacity to make sound judgments. “To the extent you are incompetent; you are a worse judge of incompetence in other people. If you have gaps in your knowledge in a given area, then you’re not in a position to assess your own or the gaps of others,” Dunning has said.

Well, if the electorate is dumb, are the people they elect to federal, state and local offices dumb, too? They must be because they are not experts on every law they vote for or on every public policy they impose on the people they represent. For instance, during the ObamaCare debate, Speaker Nancy Pelosi admitted she had no idea what she was voting on. “We have to pass the bill so we can find out what’s in it,” she blurted in a news conference.

And what about judges? They certainly don’t have superior knowledge of every issue they rule on. Should the federal judge who complained in a ruling he made in January that the Medicare statute is an incompre-hensible “tortuous” text resign or be impeached?

If the voters and their elected representatives are not competent to govern, just who is? The answer for people like Dunning: managerial elites – that small, self-sufficient group who believe they have the training, special knowledge and expertise to rule.

Throughout the history of mankind, every society has had a subset of people who viewed themselves as superior to the rest of the population due to their self-perceived distinctive qualities: intelligence, breeding, class or wealth. These elites have generally held that because they are exceptional persons they are best-suited to conduct the affairs of state. The ideological formulas of these elites may vary but their ends have been the same – the domination of the common man. These self-proclaimed “managers of the collective life” expect the people to submit to their notions of the good society. For them, “government by the people” has been merely a slogan to humor the masses.

In the Age of Barack Obama, the economic crisis opened whole new vistas to these managerial types. The New York Times columnist David Brooks has claimed the new standards are being dictated by “Ward Three” bureaucrats. Ward Three is a neighborhood in northwest Washington, D.C., populated by regulators, staffers, lawyers and senior civil servants – the new managerial class.

The agenda of Obama’s professional governing class is not limited to economics. Obama czars and regulators are reaching into every home and church. Their significance in the world hinges on the transformation of America into a Ward Three nation. For them, liberty means obedience to the enlightened values of a managerial elite.

Frankly, I reject the Dunning Effect and subscribe to the view expressed in 1962 by the late William F. Buckley Jr., “I should sooner live in a society governed by the first two thousand names in the Boston telephone directory than in a society governed by the two thousand faculty members of Harvard University.”

I celebrate the common people who had the good sense to elect Jackson, Lincoln, Cleveland, two Roosevelts, Truman, Eisenhower and Reagan. And I honor the “Greatest Generation,” common people who willingly took up arms to defeat the forces of tyranny.

I’ll bet every time on the common sense of the ordinary Janes and Joes to set and observe the standards and policies for their neighborhoods over tin-eared, condescending, detached, arrogant, remote elites who believe they have a providential role and know what is best for all Americans.

The following appears in the March 9-15, 2012 issue of the Long Island Business News:

As Democrats and Republicans slug it out in the public square over the so-called “fairness” issue, the facts are every year fewer people pay federal income taxes and more people become dependent on government entitlement programs.

In 1984, the percentage of people who did not pay a dime in federal income taxes and were not claimed as a dependent by a person paying taxes was 14.8 percent. Since then the percentage has increased every year and in 2000 stood at 34.1 percent and by 2010 it had risen to 49.5 percent.

In terms of real numbers, 34.8 million filers paid zero taxes in 1984 and 151.7 million paid nothing in 2009. As the 2012 Index of Dependence on Government report compiled by the Heritage Foundation recently reported, “The country is now at a point where roughly one-half of ‘taxpayers’ do not pay federal income taxes and where most of that same population receives generous federal benefits.”

The declining number of taxpayers is forking over hard-earned dollars to fund dependence-creating programs – housing, health care, welfare, retirement, higher education, rural and agricultural services – that are growing by leaps and bounds. In 2010, these programs consumed 70.5 percent of federal spending, versus 28.3 percent in 1962 and 48.5 percent in 1990. The Cato Institute has estimated that the Feds fund more than 2,000 subsidy programs, up 200 percent since the early 1980s. This explains why total federal spending between 2000 and 2010 grew 62 times faster than inflation, and antipoverty spending jumped 89 percent faster than inflation.

Social Security and Medicare, for example, have an unfunded liability of $45.9 trillion – about $200,000 per citizen. The number is huge because during the next 25 years, 77 million baby boomers will begin drawing Social Security checks and will begin receiving Medicare benefits. Ten thousand boomers a day will be eligible to start collecting checks.

Since these two programs are mandatory government obligations and are not part of the federal budget process, all federal revenues must first go to fund them before a single dollar can go to fund budgetary priorities like the armed forces. In other words, to keep the government operating, trillions will have to be borrowed annually.

Welfare expenditures have also been rising. The highly successful 1996 Welfare Reform Act which brought down the number of case loads by 57.5 percent between 1996 and 2010 was emasculated by the Obama administration. In 2009, President Barack Obama signed into law legislation that reverted the welfare system to pre-1996 funding programs that encouraged the swelling of welfare rolls and eliminated many of the Clinton administration’s reforms that encouraged self-sufficiency.

As a result, the national welfare system now consists of 70 programs, six federal departments and scores of state agencies, and will cost about $900 billion this year. A typical welfare recipient receives assistance from a half-dozen programs including Medicaid, food stamps and public housing.

And don’t expect spending on poverty programs to decline after the United States gets through the recession. Obama in his proposed 2011 federal budget projected spending $10.3 trillion on welfare over the next 10 years.

Reviewing these spending trends, the Heritage Foundation rightly concludes that all Americans who support our Republican form of government should be concerned. “If the citizens’ representatives are elected by an increasing percentage of voters who pay no income tax, how long will it be before these representatives respond more to demands for yet more entitlements and subsidies from nonpayers than to the pleas of taxpayers to exercise greater spending prudence?”

If Washington politicians do not learn to say no, do not effectuate genuine tax and entitlement reform and start promoting opportunity, not dependence, our nation could be buried under an avalanche of debt and could experience an economic and fiscal meltdown similar to Greece, Spain and Italy.

 The following appears in the February 24-March 1, 2012 issue of the Long Island Business News:

 In a remarkable essay titled “The Once and Future Liberalism,” historian Walter Russell Mead explains why “the core institutions, ideas and expectations that shaped American life for the 60 years after the New Deal don’t work anymore.”

In the post-World War II era, the United States was the world’s richest, most powerful and most productive nation. We possessed half the world’s wealth and produced two-thirds of the world’s machinery. British historian Robert Payne, after touring the United States in 1949, rightfully concluded “the rest of the world lies in the shadow of American industry.”

To secure their slice of the American dream, the “Greatest Generation,” World War II veterans, embraced what liberal economist John Kenneth Galbraith called the “Iron Triangle”: Big Government, Big Business and Big Labor Unions. Taken together this “blue model,” as Mead calls it, permitted both blue-collar and white-collar workers to procure lifetime industrial and government jobs that provided defined benefit pensions, shorter work hours, more leisure time and earlier retirement.

In the “halcyon days of the blue model,” American industries, utilities, insurance companies and banks were so mighty and so protected by federal regulators they could easily afford the expense of these higher labor costs by simply passing them on to their captive customer base.

By the 1970s, however, the industrial blue model began to decay and today it is financially in extremis. New communication models, foreign competition, offshore financial markets and the environmental movement were the death knells for Ma Bell, the Detroit auto industry, regulated airlines and banks, and scores of manufacturing plants.

Private sector managers and their trade labor union employees that clung to the blue model (i.e., steel industry) experienced shrinking market shares and profitability, and eventually went out of business.

The few blue companies that have continued to limp along have needed government trade protection or direct subsidies to survive. In Mead’s judgment, however, “neither works very well or for very long. Both are unsustainably expensive given current levels of national debt … and using public resources to try to prop up the old system is a waste of those resources and a hurtful diversion from the need to figure out what we need to do next.”

The great American crisis today, Mead argues, “is the accelerating collapse of blue government, not blue private industry, which is a phenomenon largely behind us.” The costs of the blue system social contract – retirement and other social benefits – are exploding and it is unlikely that federal, state and local governments, “the last true blue employers,” will be able to fund these obligations at some future point. Voters, particularly those with insecure private-sector jobs, defined-contribution pension plans and incomes below public-sector workers, will refuse to be taxed to pay for the costs of blue government.

Concluding that most politicians and bureaucrats have refused to face fiscal realities, Mead gives this gloomy prognosis:

As long as the federal government can print money and find lenders to buy its bonds, it can bleed slowly. … But state and local governments increasingly need vast transfers of cash from the federal government to keep their blue noses above the rising tide. The stock market declines after September 2008 wiped out huge chunks of the wealth that state pension systems needed to have even a hope of paying the pensions promised to government retirees. … California and New York are headed over the cliff without federal bailouts, and others are following close behind. That is why a substantial share of the Obama administration “stimulus” spending was targeted less at New Deal-era infrastructure projects than at simply keeping unsustainable state bureaucracies and systems afloat for a few months or years longer.

Mead’s trenchant essay on the need to get beyond the dysfunctional and outdated ideas of 20th century liberalism is a must read particularly for delusional Long Island politicians who strive to “retrieve the irretrievable” blue government model.

This article I wrote appears in the New York Post on February 17, 2012.

 The following appears in the February 10-16, 2011 issue of the Long Island Business News:

Gov. Andrew Cuomo’s executive budget for the state’s fiscal year that begins on April 1 is an intriguing document that on the one hand addresses some fiscal and policy issues long ignored while on the other hand placates some special interests. Here’s my take on his proposals.

The all-funds budget calls for total spending to be about the same as last year, $132.5 billion. If enacted, this will be a major victory for taxpayers. It will be the first flat budget since 1996 when the nationally renowned Patti Woodworth was Gov. George Pataki’s budget director. Since she left Albany in 1997, annual state spending has increased on average about 2.5 times the inflation rate.

Cuomo’s claim that his budget will be balanced without raising taxes and fees is true but disingenuous. That’s because Albany raised state income taxes in December 2011. The so-called tax reform bill that was embraced by both the Democratic-controlled Assembly and the Republican Senate actually imposes higher taxes on top earners to the tune of $2 billion compared to what would have been paid under the permanent, pre-2009 tax rates.

The tax increases were necessary to fund Cuomo’s unfortunate 2011 pledge to raise school aid and Medicaid funding by 4 percent in this year’s budget. If, however, the 2 percent property tax cap law that municipalities and school districts must follow applied to state spending in these areas, there would have been no need for additional tax revenue.

According to a Tax Foundation study released in January, New York has the second highest combined income, sales, corporate and property tax rates of all the states. And the Cuomo tax increase won’t help improve our ranking next year.

Cuomo’s call for the state to take over Medicare local cost increases is a step in the right direction. But much more relief from unfunded state mandates is needed to prevent many municipalities from falling into a fiscal abyss.

The proposal to create a new pension tier that would offer future state and local government workers a 401(k)-style defined contribution pension plan as an option and would save state and municipal governments $113 billion over 30 years is a first bold step to contain unsustainable defined-benefit pension costs. (In New York City, for instance, pension contributions, which totaled $1 billion in 2000, will be $8 billion this year and are expected to continue increasing annually.) While the proposal, if enacted, will not be enough to contain the pension cost explosion, nevertheless, as the Manhattan Institute’s Ed McMahon stated, “Cuomo deserves credit for finally putting real reform on the table.”

Cuomo threw down the gauntlet to the United Federation of Teachers and the New York State United Teachers by demanding the unions drop in 30 days their lawsuit against the state Education Department concerning teacher evaluations that is imperiling $700 million in federal education aid. If they refuse, the governor will include his own evaluation plan in his revised budget resolution.

The governor also informed school districts that if tougher teacher performance standards are not implemented by January 2013, they will lose state aid increases in next year’s budget. “The equation is simple at the end of the day,” Cuomo said. “No evaluation, no money. Period.”

If he follows through by effectively using the powers of his office to implement his budget proposals, it will be a battlefield victory in the war to tame Albany’s entrenched special interests.

Nevertheless, if the Empire State is to become economically competitive and is to stop people from voting with their feet and moving to tax and job-friendly states, Cuomo will have to continue to contain spending and enact genuine reforms that slash taxes, regulatory burdens and unfunded mandates.