Editore"s Note
Tilting at Windmills

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November 28, 2007
By: Kevin Drum

GOVERNMENT BY TEMPER TANTRUM....Pardon me for yet another rant about Arnold Schwarzenegger and the budget travails of my home state:

Next year's state budget, with no changes to current programs or revenues, will be $10 billion in the red, and similar shortfalls are projected for the following years.

....When the state budget has taken a turn for the worse in the past, some legislators resisted common-sense solutions to increase revenue alongside prudent cuts....And we end up with bad quick-fixes. The perfect example is the $15-billion bond issued in 2004 to cover the last major budget shortfall. Repayment on that debt now costs the budget $3 billion a year.

Democrats deserve blame for mismanaging California's budget in the early 00s, but it's hard to overstate just how irresponsible and infantile Schwarzenegger and California Republicans have been since then. In 2003, in the middle of an existing budget crisis, Schwarzenegger ran a demagogic and pandering campaign based on cutting California taxes by $4 billion. Then, to fix the shortfall this caused, he supported the 2004 bond measure. The net cost to the state of this GOP flight to fantasy now adds up to $7 billion per year.

If it weren't for Schwarzenegger and his fellow GOP tax fanatics, next year's projected shortfall would be $3 billion — or possibly even less. That would have been manageable. Instead we careen from crisis to crisis thanks to the government-by-temper-tantrum practiced by modern California Republicans. Thanks a lot, guys.

Kevin Drum 12:53 PM Permalink | Trackbacks | Comments (47)

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Comments

The public gets as much blame as anyone for this. Californians have proven unable to vote for tax increases or against tax cuts. The Republicans just exploit that. The only thing that has kept them from being even more successful at it is that their base is prone to nominate pro-life candidates who can't win statewide instead of pro-choicers like Schwarzenegger who can.

Posted by: Dilan Esper on November 28, 2007 at 12:59 PM | PERMALINK

Don't forget the nine trillion dollars of debt run up by Reagan and the Bushes.

But we must turn over Social Security to Wall Street!

Posted by: Gore/Edwards 08 on November 28, 2007 at 1:06 PM | PERMALINK

So how are the Californians any different from the rest of the U.S.? Irresponsible tax-cutting and borrowing is what Republicans do... and it seems to be what Americans (and apparently Californians, who I had thought knew better) want!

Posted by: Jim G on November 28, 2007 at 1:10 PM | PERMALINK

No Kevin, the REALLY frustrating thing is that if you went up to the average Californian on the street and asked them how they think the Gropenfuhrer has done as governor, they would most likely respond that he's gone a great job.

Posted by: danno on November 28, 2007 at 1:11 PM | PERMALINK

As a former Californian -- someone who voted for progressive candidates in SF, including Tom Ammiano -- I actually think Ahnold has been good for the state. And the left in Berkeley and Oakland. Including against Brown for a more progressive candidate.

But as Dilan suggested, part of the problem is that no one since Jerry Brown has been able to tell the voters in California what they need to hear: that you can't have it all. That you need to lower expectations. And Dems and well as Reps have as much been at fault for this since at least the end of the WWII.

I remember during the Davis's budget crisis -- and suggesting to California friends that Davis just say what governors and other states were saying: no picking sides, no politics -- just a 10% cut across the board on everything. And the look of horror on people's faces -- like that would never happen in California. Everything has to be a battle and pain cannot be distributed evenly -- it's some core California belief that some people are more unequal than others. This is why you have such a concentration of taxes on just a few people and industries: and why the boom and bust cycle continues on.

I thought Arnold would make the hard choices and be able to tell the voters a little better that California can't keep spending and borrowing. He's just followed in the footsteps of everyone else in that state. Zero planning for the future -- an ethos of constantly living in the present. I see the same thing across the political spectrum in California. Arnold just fell into the same trap. So that has been a disappointment. But I don't blame him for the culture.

Posted by: Inaudible Nonsense on November 28, 2007 at 1:12 PM | PERMALINK

Don't underestimate the impact of the propostion system on the budget mess. Whole sections of the budget have been carved out by this process and are beyond the ability, (or stomach) of legislators to address. Not to mention Prop 13. It's a terrible way to run a goverment, as Madison famously laid out in Federalist # 10.

Posted by: Hebisner on November 28, 2007 at 1:14 PM | PERMALINK

Republicans have always been the biggest bad check artists in history - Reagan, Bush I and II, Schwarzenegger, etc. Irresponsible thieves who steal from children.

Posted by: The Conservative Deflator on November 28, 2007 at 1:15 PM | PERMALINK

Why do all of the bond measures on the ballot always seem to make us pay 100% interest? If you look at the fine print, a measure to borrow $5 billion ends up costing the state $10 billion by the time it's paid off.

Posted by: Speed on November 28, 2007 at 1:20 PM | PERMALINK

Y'know, Ahnold and the Republicans in California are weenies for sure, but, um, aren't the Dems in control of both houses out there? What, are they all Feinsteins?

Posted by: Glenn on November 28, 2007 at 1:22 PM | PERMALINK

I am like, totally with Hebisner.

While we're at it, can we also get rid of the initiative process (many really bad laws get passed this way) and proposition 13 (the 2/3 supermajority to raise taxes - which actually contributes to more pork and mismanagement).

Posted by: adlsad on November 28, 2007 at 1:23 PM | PERMALINK

All part of the plan. Watch for Schwarzenegger to propose getting by for another year by selling off state assets to private interests; asset sales can provide a one-time cash infusion, leave us all poorer, and enrich Arnold's friends and contributors.

Posted by: Joe Buck on November 28, 2007 at 1:27 PM | PERMALINK

My friend Hebisner is right, but Kevin's complaint about the inanity of California Republicans is mostly on the nailhead. Where I differ with both is that I don't think the Republicans are engaged in a "flight to fantasy" at all. Crisis politics is good for radical factions, and the crisis of government breakdown is good for radical Republicans who want to drown the State in the bathtub.

So, Kevin... how come your state assemblyman is a Republican?

Posted by: s9 on November 28, 2007 at 1:28 PM | PERMALINK

Glenn,

I believe (and correct me if I am wrong) that in order to raise revenue in California (ie. raise taxes) there needs to be a 2/3 supermajority (66%) of both legislatures. This was due to Proposition 13 and the "tax revolution" of the late 1970's. So, yes, the Democrats may control both legislatures, but they do not have a 2/3 majority (they also don't have the Governor too). And a small minority (Republicans) in CA has much greater control over raising taxes. And this small minority is very, very, very against raising taxes for any purpose.

Ironically, this has led to MORE pork and more spending because in order to convince these "anti-tax, anti-pork, anti-big government" Republican legislators to go along with moderate tax increases, you have to give them some pork projects in their home districts.

Posted by: adlsad on November 28, 2007 at 1:33 PM | PERMALINK

Gotta ditto up on the initiative process in CA. So many of the budget issues are tied up with initiatives passed in past years, it becomes nearly unmanageable. And nobody gets elected on the 'eat your vegetables' platform.

Posted by: MobiusKlein on November 28, 2007 at 1:37 PM | PERMALINK

If you look at the fine print, a measure to borrow $5 billion ends up costing the state $10 billion by the time it's paid off.

Look at your mortgage to see how much your home really costs. A lot of people look at short-term things like monthly payments rather than long-term things like how much something will really cost over time.

Posted by: AJ on November 28, 2007 at 1:38 PM | PERMALINK

Gotta agree with Kevin on this one. Arnie has taxed like a Republican and spent like a Democrat. That's a recipe for fiscal disaster.

Posted by: ex-liberal on November 28, 2007 at 1:38 PM | PERMALINK

don't forget that Feinstein actively campaigned for the bond as the only solution. shameful.

Posted by: halle on November 28, 2007 at 1:45 PM | PERMALINK

And will any of this stop people from proposing that we amend the Constitution so that we can elect Arnold president?
Gosh, I can't wait until every freeway is a toll road and every school a for-profit venture.

Posted by: Jim 7 on November 28, 2007 at 1:48 PM | PERMALINK

Working as designed. Someone's making oodles of money on those interest payments. Betcha they're the folks that paid for Arnold's coup.

Posted by: G.Kerby on November 28, 2007 at 2:05 PM | PERMALINK

Gotta agree with Kevin on this one. Arnie has taxed like a Republican and spent like a Democrat. That's a recipe for fiscal disaster.

Posted by: ex-liberal on November 28, 2007 at 1:38 PM |

How true ex-liberal. It is exactly the same thing that happened to Bush and the D.C. Reps. that led to the loss of Congress in 06. Had Bush and the GOP Congress kept federal spending in check (to some reasonable level like one, two or three times inflation instead of the 30%+ increases), we still be running surpluses. It would be the GOP that would be looking at a 60 seat Senate and the permanent Republican Majority that Rove envisioned. Meanwhile the Dems would be religated to a coastal regional party and the 08 nomination would be more of a allout street brawl to the death between the Left and the DLCers over the direction the Dems should take to avoid political extinction.

Yep, spending like Dems is never a good idea.

Posted by: Chicounsel on November 28, 2007 at 2:11 PM | PERMALINK

What taxes were cut in California other than the car licensing fee?

And what was the magnitude of the cut?

Posted by: Yancey Ward on November 28, 2007 at 2:12 PM | PERMALINK

Federalist # 10 is an unmitigated rant against democracy and for aristocracy. Every argument that Madison makes against popular rule (and the same thing holds for arguments against California's proposition system) can be leveled against any body of legislation.

Why should two people be more vulnerable than one to propaganda? Hell, why should 114 people or, for that matter, 535 people be less vulnerable to snazzy propaganda campaigns than 37,700,000, or 301,139,947?

There is no basis in fact that the number of people making any political decision is inversely related to the quality of that decision. And given the behavior of both legislative bodies there is plenty of evidence that members of California's legislation and members of Congress are MORE susceptible to such than the population in general (and I'm talking about lobbyests).

And please, don't make that weak argument that members of Congress or the California State Legislature are more experienced either. There is more chance of an expert on any given subject to be in the general population than a specialized population like a legislative body.

Finally, any argument against direct democracy can be leveled against letting the People choose their representative in the first place! If the general population is vulnerable to whomever can put together the snazziest media campaign about a proposition, aren't they equally as vulnerable to such campaigns when deciding on whom to elect?

Why bother to have elections at all then? It reminds me of a movie about the Mexican Revolution I saw a long time ago where the Emperor of Mexico was making the argument that they needed a king because they needed someone who could rise above the petty disputes of the crowd. The people who rail against direct democracy are making the exact same argument whether they realize it or not.

Finally, the argument that the people of California have made some stupid decisions in the past is no argument. Every legislative body in the history of humanity has done so. Every legislative body of the future will continue to do so. If the people of California have made a bad decision to require a super majority to raise taxes and will suffer for it, let them. How else can anyone learn to make better decisions unless they face the consequences of those decisions?

Posted by: Dr. Morpheus on November 28, 2007 at 2:13 PM | PERMALINK

Hebisner: It's a terrible way to run a goverment, as Madison famously laid out in Federalist # 10.

Actually, in Federalist #10, Madison seems to have thought the existence of factions was a reason for having a strong central government. He says that in a national government, the factions would play off against each other, and no one faction would gain too much sway, whereas the states were smaller, and one faction could take over.

Dr. Morpheus, it's not that 525 people are less susceptible to propaganda than 114 but that factions fight each other, so no one is able to take over.

Posted by: anandine on November 28, 2007 at 2:29 PM | PERMALINK

Cutting illegal aliens should do the trick.

Posted by: Luther on November 28, 2007 at 2:30 PM | PERMALINK

(shrug) People deserve what they vote for.

Posted by: sherifffruitfly on November 28, 2007 at 3:04 PM | PERMALINK

Ahnold sounds terrific. When can we fiddle with the Constitution and get him on a prez ballot? We need this kind of borrow and spend thinking at the federal level... Oh, wait a minute.

Posted by: ckelly on November 28, 2007 at 3:32 PM | PERMALINK

My point in raising the theory of factions issue in this context was to point out how easily wealthy persons or groups can hijack the intiative process and through marketing campaigns, carve up large parts of the state budget and limit the ability of elected representives to do the jobs we elect them to do. It's exactly what Madison argues democratic societies like are are susceptible to, the threat posed by well organized groups with narrow interess that do not condider the broader public interest.

Dr. Morpheus is misrepresenting # 10. Madison's goal there was to recognize the legitimate threat factions pose to republican goverment and how a strong national goverment elected by a broad and diverse electorate was the best answer available, as opposed to the strong states option under the Articles of Confederation.

Posted by: Hebisner on November 28, 2007 at 3:34 PM | PERMALINK

A major problem in California is the legislative district boundaries. Nearly every seat in both houses is safe, resulting in both parties edging to the extremes each year. Legislators have little fear of losing their seat in a general election -- the primary is where the action is, and where the die hards in each party show up -- so there is little incentive to make tough choices.

Too bad the redistricting proposals have been so lousy so far.

Posted by: meander on November 28, 2007 at 3:35 PM | PERMALINK

By the way S9, that was a nice shot about Kevin's assemblymen.

Posted by: Hebisner on November 28, 2007 at 3:35 PM | PERMALINK

Arnie has taxed like a Republican and spent like a Democrat.

Bullshit ex-liberal, Arnold has taxed like an imbecile, borrowed like a Republican, spent like a Republican and sabotaged future generations - exactly like a Republican

Posted by: ckelly on November 28, 2007 at 3:37 PM | PERMALINK

we still be running surpluses.

You mean like when Clinton was President?

Posted by: ckelly on November 28, 2007 at 3:41 PM | PERMALINK

Thanks for saying this for me. Over at Angrybear, all I could add was asking why did we recall Gray Davis again? Why did we give ARNOLD a new full term?

Posted by: pgl on November 28, 2007 at 3:43 PM | PERMALINK

The tax burden in California is absurdly high already. Suggesting that additional taxes is the answer is borderline nuts. If the Democrats in Sac can't be bothered to cut some of our useless government program, why should the Gov. agree to raise taxes? Why don't you criticize the Democrats who refuse to cut government spending?

I moved here from Texas. There are many things I prefer about California, but Texas managed to offer better government service, better roads, and similarly lousy education for at a far lower price tag. Until Democrats learn to stop flushing money down the toilet, I'm glad to have a governor who will at least try to keep taxes from going further through the roof.

Posted by: Brian on November 28, 2007 at 3:44 PM | PERMALINK

um, aren't the Dems in control of both houses out there?

Yep, but to confirm what others have said, it takes a TWO-THIRDS majority to pass a budget in California. This is just to pass it, regardless of its form. This past cycle, the legislature was only one or two votes away from passing the budget, but the repubs, with only one or two brave exceptions, refused to budge. I know I studied political science for a really long time, but I don't recall anyone defining a "majority" as "one third plus one."

Posted by: Art Smith on November 28, 2007 at 3:47 PM | PERMALINK

Californians voted to make their state ungovernable. Why are they complaining now that they have an ungovernable state. Their mad proposition process is destroying a truly great state and it is every single voter's fault.

Posted by: freelunch on November 28, 2007 at 3:55 PM | PERMALINK

We are being told to expect a 10% cut across the board in the CSU system, on top of yet another 10% increase in student fees. Arnold is undermining higher education by failing to provide a reasonable budget each year. In addition to selling off public resources, privatization means that the universities will no longer offer low-cost public education, something that will have a strong negative impact long-term on California's employers. They expect corporations to take up the slack, but I don't see that happening without quid pro quo. When education is subsidized by corporations, we will become just another advertising and consumer indoctrination source, with proprietary research done to benefit economic interests of corporations. Starvation is one way to stifle dissent from academia.

Posted by: Perry on November 28, 2007 at 4:11 PM | PERMALINK

Yep, but to confirm what others have said, it takes a TWO-THIRDS majority to pass a budget in California.

OK, I didn't know that, so thanks for the info. But doesn't this sound awfully like our Dems in the Senate? I.e., oh, it takes 60 votes to do anything, and we don't have 60, so we just have to capitulate. I'm sorry, but bullshit. Dems are still in control. Nothing happens without their consent. So withhold it, dammit! Find something Arnold wants, or the Republicans want, and say you don't get it until you agree to an intelligent budget. Or shut the whole frickin' state down if that's what it takes. Same with Bush: you want your war money, you don't get it without what we want. I'm really tired of these weak-kneed Dems who can't use the legislative power they have and can only whine about how they don't have enough. Christ.

Posted by: Glenn on November 28, 2007 at 4:23 PM | PERMALINK

Kevin

This is perfect game theory.

With a constitution that says 2/3rds to pass a tax increase, and gerrymandered districts that say your only real threat is a primary challenge (normally from the right)

a rational Republican legislator would block any and all tax rises. The non-cooperative strategy is optimal.

His or her job is safe as long as he does so, and the chaos only looks bad on the ruling party. Any crisis plays to the Republican advantage, as the minority party.

It's an open secret Arnold would never have been selected by his own party as candidate, he only did so because of the recall vote. So they don't owe him anything-- my God, he's married to a *Kennedy* and his chief advisor (?) is a Democrat. And he hangs around with Hollywood Liberals.

So refusing to cooperate is always the Republicans best strategy.

And so tax rises never happen.

If civic infrastructure falls apart, so what? Ditto state universities and public programmes.

You can bet schools in Republican districts, locally funded, will still get funding. Also since the average Republican voter is older, and white, the issues about schools or welfare programmes or aid for immigrants are of less interest/ importance.

I would say the only way out (besides changing the state Constitution and ditching Proposition 13-- how likely is that?) is privatization of state functions: roads, bridges, airports, universities etc.

Already in Europe we are going down that route, and the pension fund and institutional appetite for private infrastructure is huge (because these are long term assets whose revenues tend to grow with inflation).

In this way, as in so many others, California will lead the nation.

Posted by: Valuethinker on November 28, 2007 at 4:40 PM | PERMALINK

The perfect example is the $15-billion bond issued in 2004 to cover the last major budget shortfall. Repayment on that debt now costs the budget $3 billion a year.

If we're paying 20% interest on our bonds, that's a separate problem. Something's wrong with the math here.

Posted by: wahoofive on November 28, 2007 at 4:54 PM | PERMALINK

we still be running surpluses.

You mean like when Clinton was President?

Posted by: ckelly on November 28, 2007 at 3:41 PM

Yes, but only after the GOP took control of both Houses of Congress in 1994.

Posted by: Chicounsel on November 28, 2007 at 5:10 PM | PERMALINK

The initiative process is an awful way to budget. Negotiation between factions is nearly impossible, and ridiculously slow. The regular legislative process is far better at solving continuous problems like budgeting. The voter approval process is better, where the legislature develops a plan and submits it to voters for approval, but is probably way too slow budgeting anything but long term infrastructure packages.

"You can bet schools in Republican districts, locally funded, will still get funding. "

This is a game of chicken. In games of chicken the most reckless often win. Democrats don't want to cut funding for the education of children in republican districts. Republicans barely care about the children in their own district of their own race and class and actually revel in the misery of children in designated outgroups. Democrats don't want the infrastructure of rural areas neglected, Republicans constantly gloat over infrastructure problems in the cities from which they leech tax money.

I think the democrats in California, Washington, and similar states ought to start using the initiative process for their own ends. Run an initiative requiring area equity in state budgeting. The fools in republican districts will vote for it overwhelmingly and be absolutely flabbergasted to find their local government budgets slashed without massive subsidization from the urban areas.

Posted by: jefff on November 28, 2007 at 5:29 PM | PERMALINK

"The voter approval process is better..."
Better than the initiative process, I still doubt it is better than the regular legislative budgeting process in most cases.

Posted by: jefff on November 28, 2007 at 5:30 PM | PERMALINK

As no less an authority that former Nixon administration chief counsel John Dean has said, today's Republicans are inherently unfit for governance.

Posted by: Donald from Hawaii, & currently in Chicago on November 28, 2007 at 6:48 PM | PERMALINK

Chicounsel: "Yes, but only after the GOP took control of both Houses of Congress in 1994."

Considering that the GOP Congress went along with $400 billion average annual budget deficits after George W. Bush took office (which don't include the supplmental war appropriations), it's rather painfully obvious that Bill Clinton was the controlling factor in the '90s budget negotiations.

Posted by: Donald from Hawaii, & currently in Chicago on November 28, 2007 at 6:53 PM | PERMALINK

Kevin... come on! This is what the republican party has been about since Reagan.. massive transfers of wealth from you and I to those people with enough wealth to buy the debt and reap the tax-free interest resulting from these follies.

The police action in Iraq and Afghanistan is just another (biggest) song from this hymnal. 'Schwarzenegger and his fellow GOP tax fanatics' are just practicing a policy that has yielded very good returns at the federal level. Sell bonds to the upper 10% to fund regular government operations and it's the gift that keeps on giving.

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