Is Legal Plunder About to Explode Under Corzine?

Murray Sabrin

If you were one of the brave souls to participate in “black” Friday’s shopping frenzy, you had the opportunity to express your consumer preferences. Your preferences in turn are in fact society’s direct democracy—the marketplace. Every purchase you make is a vote cast on behalf of both a retailer and the manufacturers of goods. The more “votes” (dollars) they receive, the more successful they will become.

In the economic marketplace, both buyers and sellers engage in voluntary exchange to achieve their objectives. The consumer wants to obtain satisfaction, and the seller wants to obtain revenue to pay his expenses and hopefully generate a profit.

In the economic marketplace, in short, every market participant must not engage in plunder, i.e., a coercive act against his fellow human beings. Otherwise, he would be committing fraud or plundering his fellow citizens.

Contrast the economic marketplace with the political marketplace. In the political marketplace, legal plunder, is the hallmark of virtually all “transactions.” Taxes, regulations, mandates, profligate spending, and onerous debt, all in the name of creating a “great society” is supposed to lift the poor, provide security for the middle class while taxing (plundering) all income groups but primarily upper income individuals and families to pay for the welfare state. The main culprit is the “progressive” income tax that taxes higher incomes at greater rates.

In fact, there is substantial evidence that the welfare state plunders everybody, except for the political class and their well connected allies in the private sector. More about this in future columns.

In the meantime, as reported in the Star-Ledger yesterday (November 27), 11 of the Abbott districts are requesting another $6.5 billion to complete the construction of new schools on top of the $2.55 billion they have already spent. Other Abbott school districts requests could lift the total request to $14 billion on top of the already $6 billion spent in the first round of school construction.

The failure of the School Construction Corporation to complete its assigned task in the Abbott school district with the original $6 billion reveals the utter and complete incompetence, corruption, misfeasance and malfeasance of state government bureaucrats.

We do not need a lengthy analysis of the way government functions. Government is the least competent institution in society. The private sector provides us with goods and services we want, and the nonprofit sector does a better job than government in helping people who are in need. Remember the incompetence of FEMA, while companies and nonprofits did a superb job of getting supplies and assistance to the victims of Hurricane Katrina.

In the Garden State, the urban school districts are expensive, bloated bureaucracies which do not improve the performance of its students as more and more money is thrown at them.

Governor-elect Corzine will be faced with a major choice when he takes office on January 17, 2006. Will he continue the urban school construction program? This would mean more debt for the state and higher interest and principal payments for years to come? Or will he challenge the Supreme Court’s ruling that the state’s “poorest” districts need to be bailed out by state taxpayers?

The way governor-elect Corzine responds to the urban school construction debacle will speak volumes about how he will govern. The people of New Jersey need straight answers from the incoming Corzine administration about the alleged fraud and misappropriations in the School Construction Corporation. In addition, we need a debate once-and-for-all about the role of government in education. Otherwise, legal plunder will accelerate under a Corzine regime as he tries to save the failing urban public schools from imploding.

Murray Sabrin, Ph.D., is professor of finance in the School of Business, Ramapo College of New Jersey, where he is also executive director of the Center for Business and Public Policy, www.ramapo.edu/cbpp.