Tuesday, August 5, 2008

Watch out for the wrecking ball Kal-ee-forn-ya

Do you get the impression that Governor Arnold Schwarzenegger has reached a level of flippant frustration in his efforts to “fix Kaleefornya”? The latest budget impasse may be the final insulting reality that blew away any illusion he had that the nation’s most populous state, and one of the world’s largest economies, can be rationally governed. His recent executive order to reduce state employees’ pay to the federal minimum wage level and to layoff thousands of part-time state employees might be an expression of peevish exasperation, but it does strike at the heart of California’s chronic budget problem, namely bloated staffing and overpaid government employees.

Not surprisingly, his actions were greeted with howling protests from the various International Brotherhoods of Public Treasury Pirates, i.e. public employee unions, as well as by the mutiny of the state’s controller and attorney general, both Democrats. The largest union has filed suit against the governor in an effort to reverse his decree, and thus demonstrate once again that it is the unions who control state government, not the governor or anyone else.
Because Schwarzenegger was rushed into the governorship on the shoulders of voters disgusted with his feckless predecessor, Gray Davis, whom they had abruptly fired in a recall election, it was reasonable for Schwarznegger to believe that he had a mandate to repair state government—returning it to some semblance of fiscal sanity and honest representative democracy. To that effect he correctly identified the state’s fundamental problems and, through four initiatives placed on the 2005 ballot, sought voter approval of government reforms to address those problems.
To control spending, he wanted a line item veto on the budget, something California governors had up until 1983. He wanted an independent panel of retired judges rather than self-interested politicians to determine legislative districts, which are now unscrupulously drawn to secure sinecures for Democrats and some Republicans. He wanted to improve the quality of education by improving the quality of teachers; awarding tenure after five years rather than just two. He proposed prudent budgetary restraints that would trigger spending cuts when necessary.
His ballot initiative to halt the growth of the outrageous public employee pension liability by converting these pensions to defined contribution plans—like those in the private sector—was withdrawn under heavy fire from the public employee unions. He also supported efforts to curtail the devious practice of public employee unions to make political contributions without the express consent of their dues paying members.
Yet, all of his ballot initiatives were defeated, and today, with the current budget impasse, and the usual partisan floundering in the legislature, polls indicate that the majority of Californians blame the governor. It is understandable, then, that Schwarzenegger might become grumpy and disillusioned with his job.
The real problem Schwarzenegger failed to identify was the neurotic capriciousness of California voters—a character flaw that makes them wholly unreliable in a struggle of the magnitude he was willing to lead. In 2005, he was counting on them to support his reform initiatives. He was disappointed.
And, so now, California has another budget lingering in limbo because Democrats and Republicans, the Shiites and Sunnis of California politics, cannot agree on how to address the irresponsible level of state spending that leaves California billions of dollars in debt every year. The Democrats want to increase taxes and keep spending, which will ensure that the state maintains its position as the highest taxed state in the union. Most Republicans want to reduce spending.
That the state is seriously in debt is due to the profligate, irresponsible levels of spending that were established well before Schwarzenegger became governor. In the three years before he came to office, California state government increased its spending by 36%—more than double the rate of inflation and of population growth over the same period.
The most favored recipients of legislated largesse are the state’s elected officials and government employees—the engineers of legal larceny. Thanks to the insidious symbiosis between these partners in piggery, public pay, benefits, and staffing continue to exceed prudent levels.
To accommodate its more than 200,000 employees, California state government is riddled with redundancy, inefficiency, and unnecessary bureaucracy. With many of these employees eligible for retirement soon, funding California’s generous public employee pension plans will become an even greater burden for California taxpayers to bear. Unscrupulous pension padding by some public employees only increases that burden.
All of this is what Governor Schwarzenegger has tried to confront, but neither he nor any governor will be able to fix Kaleefornya alone. Sometimes things must totally collapse before they can be rebuilt. I guess that is what Californians are going to let happen. Watch out for the wrecking ball.

1 comment:

Paul said...

Randy, you're right on target once again. Too bad CA doesn't own the printing presses like the Feds, because then they could just "print" their way out of this. Here's the real question: how will we know there is a collapse, and would we, as Californians be willing to sacrifice to fix it? On a side note, I wondered if there was any archived articles written by you? I know the paper has all of your stuff, but for simplicity, is it available on line in an easy to access format? Much appreciated. Keep up the the insightful writing.