California Scheming

There was a good article in yesterday’s Wall Street Journal on Governor Schwarzenegger’s apparent turnaround in fiscal policy, and it is now available online.

Arnold Schwarzenegger is following the wrong script. After taking over as governor in 2003, he was expected to vanquish business-as-usual politicians in Sacramento--and pull California from the brink of fiscal ruin. Instead, he has decided to put his own political future ahead of the economic survival of his beloved Golden State. How else to interpret his recent move to join ranks with his opponents in Sacramento to put a pork-heavy $37 billion bond infrastructure proposal on the November ballot? Mr. Schwarzenegger's move officially marks the end of his grand plans to reform Sacramento, earning him kudos from many California Democrats.

The author of the article, Shikha Dalmia, does a good job at digging into the details at the pork behind the alleged infrastructure proposals. Even the parts of the proposals that truly try to address the issues simply throw money at the problems. Doing the same thing over and over and expecting different results…I believe that is the definition of something. Many will profit from these proposals, but it won’t be the state in general.

I think Dalmia’s conclusion fails for one very important reason that she only glosses over earlier in the article. Here’s the conclusion:

But the bond proposal suggests that Mr. Schwarzenegger has given up on even trying to put California's fiscal house in order--his core promise when he took office. Instead, he has flipped the script, deciding to buy off special-interest groups by throwing even more money at their pet causes.

Yes, that was his core promise when he took office. But what has happened since then? Several reform initiatives were on the ballot last year and the public voted down every one of them. These initiatives struck at everything that is screwed up with California politics. As Dalmia put it, “That's when the state's public unions accused him of right-wing partisanship, and defeated the bold reform initiatives he put on the ballot to curtail their influence on state government and politics.” The spending of opponents of all the propositions on last November’s ballot is estimated to be over $250 million. I’ll say that again because we get numb to big numbers: $250 million. The state unions and others hit hard, hit often, and mislead about everything in the initiatives. Arnold waited until too late to make his pitch and took it as a personal rebuke.

So what has he been doing different since then? His first ad for this year’s governor’s race came out only days after his Democratic nominee was decided. We’ve had to put up with ads for November’s election for several months already. Schwarzenegger has also tried to cozy up to the power brokers in Sacramento—if they can command that sort of firepower and money, you don’t automatically want them on the other side.

Arnold has read the unfortunate mood of the state correctly. The public finally realized the legislature was spending them into oblivion and had a governor that couldn’t say “no.” So Davis was recalled and Schwarzenegger elected as governor. Then when Arnold came before the public with initiatives that would actually address the structural issues of how the state got into that mess, the public said “No, we didn’t really mean it when we wanted reform. Reform’s hard and we want it easy.”

So to stay in power he will have to pander to those that are happy just bumbling along from crisis to crisis. Will he actually try to further reforms once back in office? Unfortunately it almost doesn’t matter because his opponent is a ‘lite’ version of former Governor Gray Davis, without any of the personality. To say Phil Angelides is an empty suit that will simply spend the state into further debt is to malign suits everywhere. Pity the state. Or feel free to gloat. California has gotten what it deserves.