California’s Schwarzenegger Hangover

by Chuck DeVore

A Schwarzenegger hangover saved California Democrats from a wipeout as the Tea Party wave washed harmlessly up the High Sierra’s eastern slope.  Democrats won eight of nine statewide offices, with the race for attorney general looking more Republican as the late ballots get tallied.  Democrats also racked up their largest State Assembly majority since the Watergate blowout year of 1974 (52 seats of 80).  And, the passage of union-sponsored Prop. 25 allows Democrats to enact a budget with a simple majority vote.  But for visual confirmation of this election’s connection to the failed “Republican” governor, one need only look at governor-elect Jerry Brown’s ad showing Arnold Schwarzenegger side-by-side with Meg Whitman uttering the same platitudinous inanities we’ve come to expect from self-funded dilettantes who neither have the time to vote nor the inclination to first seek a lesser office so as to gain political experience.

It isn’t hard to see where things went awry in California: just look back to the heady years of the historic 2003 recall of Gray Davis.  Davis was swept out of office due a massive deficit brought on by his rapid expansion of state government during the dot com economy combined with his mishandling of the state’s electricity crisis.  Candidate Schwarzenegger won on a platform of “blowing up the boxes” of bureaucracy while “cutting up” the state’s “credit cards” – Schwarzenegger did neither.  Instead, he gave California seven years of uneven leadership, veering from the right to the left while calling his erratic leadership “post-partisanship.” Schwarzenegger pushed through the largest state tax increase in U.S. history, expanded government spending, debt and regulatory hurdles while shrinking the sphere of liberty – curious actions for a self-avowed fan of the late Milton Friedman.  Schwarzenegger’s voter approval rating hit 22 percent this summer, matching Gray Davis’ recall-eve rating – something Davis, if he wishes to indulge in schadenfreude, might see as poetic symmetry.

While the Democrats had a great election night in the Golden State, there are some signs of hope for the majority of Californians who don’t take their ideological cues from San Francisco.

First of all, Prop. 26 passed.  Prop. 26 makes it nearly impossible for Democrats to pass higher taxes by disguising them as fees.  Taxes require a two-thirds majority vote to pass in California.  Fees, usually defined as a payment for a specific government service, just require a simple majority to enact.  The problem is, that prior to Prop. 26, Democrats got quite adept at changing the definition of a “fee” to cover just about anything they wanted it to.  Assuming that Prop. 25 doesn’t allow Democrats to raise taxes with a majority vote by simply inserting a tax increase into the budget bill, Prop. 26 will make it very tough for Democrats to raise enough revenue to pay for all that government they love.

Secondly, Prop. 20 passed and Prop. 27 went down in flames.  Thanks to the foresight and funding of Charles Munger, Jr., a longtime Republican activist and atom smasher (he’s an experimental physicist at the Stanford Linear Accelerator Center), Prop. 20 will extend the mandate of the independent redistricting commission (created by Munger’s Prop. 11 in 2008) to include congressional seats too.  Prop. 27 sought to repeal Prop. 11 and would have canceled out Prop. 20 if it had received more votes, returning the responsibility of redistricting to legislative Democrats.  That Prop. 20 won with 61.4 percent, the most “yes” votes of any of the propositions, shows that the public remains extremely wary of its politicians.  The practical impact of Prop. 20 is two-fold: first of all, Republicans will likely gain a few more congressional seats in the 2012 election as Democrats lose their gerrymander advantage in California; secondly, legislative districts will be more competitive, causing some currently safe districts, both Democrat and Republican, to be in play in future elections.  This, by itself, is a victory for representative democracy.

Thirdly, Steve Cooley looks set to win the very close race for attorney general. This will mark the first time in 12 years that a Republican has occupied California’s top law enforcement office.  Always an important post, now it is especially so.  First of all, Attorney General-elect Cooley will be able to investigate political corruption.  Given that corruption tends to flower when one party has a lock on power, Cooley will likely be very busy for the next four years.  Next, with the state budget deficit at $14 billion and growing and Prop. 26’s passage limiting Democrats’ ability to hike taxes, there is a looming threat of a massive prison inmate release.  The state prison budget is about $11 billion a year. Rather than cut the $49,000 per year that it costs to incarcerate an inmate in California, more than double the national average of $24,000, Democrats would likely just vote to release violent felons as a way to free up more money for welfare.

Lastly, Republicans showed strength in the hard-hit Central Valley, with Andy Vidak defeating Rep. Jim Costa and David Harmer locked in a tight race with Rep. Jerry McNerney in two widely watched congressional races.

So, what do the results portend?

A lot depends on Jerry Brown’s back-to-the-future act.  As governor in the 1970s, Brown dismantled the merit-based civil service system and erected the public sector employee union system in its place.  Ever since, state employee costs have increased almost as much as the rate of government union donations to politicians.  Gov. Brown has a chance to undo some of this damage, in an “only Nixon could go to China” sort of a way.  In interviews after the election, Brown has broadly hinted that voters showed their opposition to new taxes in their votes for Prop. 26 and against Props. 21 and 24.  The difficulty for Brown will be in finessing the majority’s new power to pass budgets without an single Republican vote with the fact that taxes will be very tough to increase. This in essence gives Democrats all the responsibility for the budget but none of the authority to balance it short of acting like Republicans (cutting spending) and / or irresponsibly releasing 50,000 violent inmates on largely Democrat-voting urban areas.

Of course, there is the possibility that Democrats will move to reopen the historically-late 2010-11 budget, as suggested by Senate President Pro-Tem Darrell Steinberg, and vote to increase spending.  Such an act would accelerate California’s date with insolvency.  In doing this, Democrats would seek to force the hand of Sacramento’s remaining band of legislative Republicans, trying to pin the blame of IOUs and bond defaults squarely on their shoulders unless they vote for a $20 billion tax increase.  This drive-the-car-off-the-cliff blackmail maneuver worked in February 2009 when Republican legislative leaders decided to “responsibly” raise taxes rather than allow California to go broke.

Gov. Brown may be reticent on taxes, knowing that there is little voter appetite for them and perhaps understanding that higher taxes won’t create jobs, but in the area of “green” policy, Brown appears ready to double down on Schwarzenegger’s errors.  A recent L.A. Times Op-Ed by 60s radical and Brown ally Tom Hayden illuminates Brown’s green path.  Hayden lauds California’s coming green era, seeing it as a long-awaited opportunity for centralized government planning to pump billions of dollars into “green” energy while at the same time using it as a mechanism “…to ensure that all Californians benefit from the state’s green energy push.”  Hayden says that this green push must benefit “black and brown” and warns that “the green future cannot be purely white.”  He then links these green jobs for minorities to the prison system, writing that “…it makes far more sense to employ at-risk youth weatherizing homes and installing solar collectors than locking them up in the largest mass incarceration system in the world.”

Given Spain’s utter failure to generate a cornucopia of green jobs – 2.2 old-fashioned, but paying, jobs were destroyed for every “green” job created at the cost of $774,000 per subsidized employee, it’s hard to see how Brown’s green effort will do anything other than serve as just another avenue for wealth redistribution.

The next two years will likely see California mired in recession, increasingly lagging behind the rest of America.  Texas will become the favored destination of hard-working Californians and their jobs-creating capital.  California’s continued economic pain will be compounded by liberal policymakers who never see a problem that government couldn’t make worse.  This will provide an opening for Republicans, but only if they have the moral courage to offer a bold break from the failed Democrat policies.

California remains America’s largest manufacturing state.  The Golden State generates a prodigious amount of new technology.  One of eight Americans call California home.  Should California not reform itself soon, it will remain the misfiring cylinder in America’s economic engine, acting to slow the national recovery.

In politics, nothing lasts forever – including the Democrats’ dominance of California. For California’s sake, and America’s, all Americans should hope California voters catch up with the rest of America in 2012.


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Posted Nov 9th 2010 at 5:48 am in Midterm Elections, Politics, State Government, State Politics, taxes | 45 Comments