Wikinvest Wire

California: "The poster child for dysfunction"

Monday, May 18, 2009

This story from The Economist has a nice summary of the six ballot initiatives that California voters will decide on tomorrow. The situation is comical when viewed in these terms.
IMAGE Of course, it probably won't be that funny come Wednesday morning if massive ad campaigns fail to turn things around, presenting the state with a $6 billion larger budget gap than the one legislators were counting on when an agreement was finally reached in February.

Then again, considering that the state is falling further behind at a rate of somewhere around $3 billion a month, in the scheme of things, the extra $6 billion may not be that significant.

The LA Times reports that Gubernator Arnold Schwarzenegger is out pressing the flesh in the run up to tomorrow's special election, hoping to avoid the dubious distinction of confirming what much of the rest of the country already knows - without either a technology bubble or a housing bubble, the state is ungovernable and completely dysfunctional.

Battling anger and indifference on the part of California voters, Gov. Arnold Schwarzenegger implored them Sunday not to make the state "the poster child for dysfunction" by defeating a host of measures on Tuesday's ballot that seek to restructure the state's bleak finances.
...
"We are at a crossroads," he told congregants at West Angeles Church of God in Christ. "Do we want to go . . . down the road of financial disaster or do we want to go and get up, dust ourselves off and slowly march back toward prosperity? That is the question on Tuesday."
...
The propositions not only have been complicated for voters to understand but also fragmented the state's typical electoral architecture. Republicans were forced to choose whether a spending cap that they have long sought outweighed a temporary extension of taxes. Democrats were pinched between a spending cap they have abhorred and the fact that if it fails, the money taken in the past from education would not be repaid. Labor groups that have marched in lock step for years, often against Schwarzenegger, were suddenly split, with many of the more prominent ones allied with their former foe.
Perhaps lawmakers would meet with greater success with their many ballot initiatives if they would swiftly move to divide the state up into three parts as suggested by the curent electoral map - liberal West California, conservative East California, and the greater Los Angeles area that would become liberal Southern California, as long as the folks in conservative Orange County don't mind being part of East California.
IMAGE Chart courtesy of The California Minority Report.

5 comments:

Nick said...

I wrote my 2c on part of what I think California should do, specific to the budget process: here. It is, in large part, a mechanism designed to overcome the partisan bickering which is a permanent fixture in California's government, without the usual asinine half-hearted non-solutions (eg: raising taxes, borrowing against future revenue, etc.).

In general, though, I agree with the article: California is a governmental disaster created by its own politics which would be near-impossible to fix. If they ever re-write the Constitution, they'd better find some more competent people than are currently in the legislature, though: no matter how bad it is now, it can always be worse, even if I can't see how.

Tim said...

I agree with what appears on the WSJ op-ed pages less than half the time, but it's hard to find fault with this one - California Reckoning .

California politicians have operated for years as if the purpose of government is not to provide reliable public services at low cost, but to feed public employee unions.
...
If the voters do reject these false fixes, there will be wails of despair in Sacramento. Assembly Speaker Karen Bass, who never saw a spending or tax increase she didn't like, says "California, frankly, is going to be in a world of hurt." Mr. Schwarzenegger says he will be forced to release 30,000 criminals from jail..."

Nick said...

I'm also totally with the op-ed. I don't see how there could possibly be enough will in the electorate to oppose the forces in Sacramento, but it's obvious that the state would need some fairly radical changes to get out of its self-imposed death spiral. That's the primary reason I don't see myself staying in California much longer.

John S said...

Pay close attention. What happens in California will happen at the national level in a year or so. Who will bail out Uncle Sam with a stimulus when the government is threatens default?

Dorcas' Daddy said...

I forget where I first read it (here?) but the problem in California is structural--it takes a simple majority to increase spending but a 2/3 majority to raise taxes.

This makes spending outpace taxes no matter which party is in power.

I'll be glad when we go bankrupt--the sooner we void all those pensions and outrageous contracts the sooner we can recover.

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