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Blame Maryland's income inequality on O'Malley

Economic InequalityExecutive BranchBarack ObamaPersonal IncomeMichael E. Busch

Democrats are pushing “income inequality” and raising the minimum wage as priorities at the national and state levels. President Barack Obama addressed them in his State of the Union Speech, and both issues are centerpieces of Gov. Martin O’Malley’s legislative agenda during this session. 

O’Malley said this in response to President Obama’s speech

"President Obama’s focus on strengthening and growing our middle class tonight was right-on. In Maryland, we share many of the President’s priorities, including expanding opportunity, creating high-paid and high-skilled jobs, and lifting more people out of poverty by raising the minimum wage.”

O’Malley wants to raise the state’s minimum wage to $10.10 an hour.

As usual, the Democrats need a straw man/villain at which to direct their ire and hold up to the public as the enemy of all good things.  Nationally it’s House Republicans, “the rich,” big corporations,” and of course the Koch brothers. 

(Quick aside: Those evil Koch brothers support decriminalization of drugs, gay marriage, cutting defense spending, and repealing the Patriot Act, and make generous charitable donations to the arts and cancer research.  But these libertarian leaning threats to American democracy must be stopped at all costs.)

Here in Democratically controlled Maryland, who is the villain? 

Governor O’Malley would likely blame George W. Bush. Here, six years into the Obama presidency, he's still calling it the "Bush recession." In fact, all Governor O’Malley needs to do to find the enemy is look in a mirror.  

According to data from the Census Bureau’s American Community Survey, as compiled by the Washington Post, Maryland’s middle class has shrunk significantly during the O’Malley era. A Post graphic shows that the number of households earning between $25,000 and $100,000 a year shrunk by nearly 38,000 between the 2007-2009 three-year period and 2010-2012.

Another way to measure income inequality is through the Gini coefficient. The calculation measures income distribution.  A rating of zero means total equality, and rating of 1 means maximum inequality.  Maryland’s income distribution has increased under O’Malley.

Maryland Gini Coefficients 2007-2012

2007: 0.442

2008: 0.438

2009: 0.448

2010: 0.443

2011: 0.447

2012: 0.447

“One Maryland” is a rhetorical convention O’Malley loves to use to say “we’re all in this together.”  The reality however, is that under his watch there are Two Marylands.

In no other place is this more evident than O’Malley’s home city of Baltimore, where he mayor for 8 years.

Baltimore: where politically connected developers get taxpayer subsidies to build boondoggle developments, like the Baltimore Hilton, State Center and Harbor Point, while the rest of the city struggles and crumbles. 

The suburban counties of the I-95 corridor prosper, while Western Maryland and the Eastern Shore struggle, thanks to the economic strictures of O’Malley’s central planning under the thinly veiled disguise of “sustainability” i.e., Plan Maryland and the septic ban.

Increased personal income taxes, regressive sin and sales taxes, and all manner of fee increases -- all to fuel $10 billion increased spending have characterized the top-down, government-managed O’Malley era. 

Approximately 6,500 small businesses have disappeared and 90,000 more Marylanders are unemployed than when Governor O’Malley first took office in 2007.

The obvious solution to building and strengthening Maryland’s middle class is robust economic growth. 

To that end Senate President Thomas V. Mike Miller and House Speaker Michael E. Busch issued proposals to create a business climate only government could love

In other words it’s more of the same warmed over, progressive, government-directed economic development we’ve seen over the last seven years.

Save for recoupling Maryland to the federal estate tax, Miller and Busch propose the same types of subsidies and preferences for politically favored industries we’ve come to expect from the Democratic machine.  The ideas of special tax break zones, state venture capital, and research endowments represents a policy that serves the interests of the state, i.e., political interests, rather than creating a robust, broad based, organic economy.  

And, as with all of these government directed policies of handing out goodies, comes lobbying by the rent seekers, who must hire all the right lobbyists -- who just happened to be former staffers for Miller and Busch, or former O’Malley aides.

It is not that these are inherently bad ideas, leveraging the state’s strengths is good policy, but what about those industries outside the favor of our public rulers? 

What about fracking in economically depressed Western Maryland?  Nope, the state’s powerful environmental lobby has bogged down the prospect of unleashing the economic benefits of Maryland’s natural gas in a special commission, and if they had their druthers, they would see the practice banned.

Perhaps Maryland’s manufacturing sector, which has shed 26,000 jobs since O’Malley took office, can take solace, in the consolation prize of having the month of October all to itself.

O’Malley’s progressive, top down, centralized, government-directed corporatist approach created the very problem he purports to address. And what is the plan to fix it? More top-down, centralized, corporatism.  

During the O’Malley era, the Democratic political machine has been picking the winners and losers of our state’s economy. 

The clear loser has been the middle class. 

--Mark Newgent has contributed commentary to The Washington Examiner and National Review Online, and he is an frequent guest on WBAL Radio. His posts appear here regularly via Red Maryland, which has strived to be the premier blog and radio network of conservative and Republican politics and ideas in the free state since 2007.

Copyright © 2014, The Baltimore Sun
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Economic InequalityExecutive BranchBarack ObamaPersonal IncomeMichael E. Busch
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