Symbolism or Substance? The Real State of the State of California
Introduction
Despite the flowery rhetoric and awkward humor in Governor Jerry Brown’s short-on-words and short-on-ideas January 31, 2011 State of the State address, California is actually in dire condition. We are mired in a $25 billion budget deficit, 12.5% unemployment, one of the worst housing markets in the state’s history, increased prices and cost-of-living, and $650 billion-plus in bond and pension obligations that weigh heavily on our future. Earlier today Moodys changed their way of treating our pension obligations so that it’s the same as our bond debt, which will further lower California’s already very poor A1 debt rating. (ref: Moodys, below)
The current January 26 Public Policy Institute of California poll indicates that 61% of voters think California is not moving in the right direction. (ref: PPIC, below) There is no indication that this perception will improve anytime soon as the deficit continues, unemployment remains too high, consumer prices keep increasing, and the housing market still has not hit bottom. We are facing the biggest decline in Califonians’ standard of living since the Great Depression, and 58% of voters disapprove of the Legislature and have no confidence in them to solve the problems. (PPIC)
But most important, the proposals that the Governor has been putting forward will not even scratch the surface of the problem. They are symbolic rather than substantial, words rather than deeds, and are effectively meaningless.
The Governor has asked for solutions. He will get plenty of ideas, but none of them will solve the problems.
The Libertarian Party of California, however, offers the single solution that will work to correct our state’s failing economy. It’s a solution that Sacramento is afraid to try for purely political reasons, proving once again that Democrats and Republicans in office place partisan politics over what is best for the people of California. That solution is to ditch the symbolism and get to the substance. That means getting back to basics, cutting government, not raising taxes, and doing a few things well instead of everything badly.
Style vs. Substance
The overall problem in California government is a state government trying to be everything to everyone, and failing at it. As a result, nothing is done well, costs are out of control, and the state government becomes nothing to anyone! Too many programs cause too much government and expense. The common fallacy employed as a solution is that throwing more money at the problem solves it, but that encourages waste and inefficiency instead. Then, when real cuts are needed, our legislators give superficial, symbolic cuts for media consumption, not actual cuts of real substance, and the problems continue. For example, consider the recent decisions to cut the government-issued cell phones and reduce the state’s vehicle fleet. Those cuts save millions, but when the deficit is billions and the debt is hundreds of billions, they are not even a penny per dollar.
All of this is Sacramento’s fault.
Fiscal Irresponsibility
Under the surface, the problems continue. Government programs are given automatic spending increases regardless of the economy, such as Prop 98, and the result is a budget that cannot be balanced, deficits that explode, and an annual budget process laden with partisan politics, accounting gimmicks, and projections that are nothing more than wild guesses.
Meanwhile, the Legislature has been trying to legislate about Mylar balloons in power lines.
All of this is Sacramento’s fault, too.
Over-Regulation of the State
At the same time, business-hostile regulations continue, such as AB32, which continue to depress job creation. Businesses leave California for states with better employment environments, taking jobs and resulting tax revenues with them. That job loss, combined with even more regulations imposed on private citizens, reduces everyone’s standard of living, and the downward spiral compounds itself.
Meanwhile, the state has been trying to dictate the color of our car’s paint and what kind of television we can or can’t buy.
All of this is Sacramento’s fault, too.
Over-Taxation
California’s sales tax is the highest in the nation, and its income taxes are among the highest in the nation, too. In hard economic times, paychecks get leaner, and that cascades into less consumer spending, job losses, and a vicious cycle that burdens everyone. And the problems continue, because the problem isn’t lack of income, but far too much spending. That was lost on the Legislature in 2008 when they passed the largest state income tax increase in American history.
The pattern is clear: the Legislature and the Governor fiddle while California burns. Their priorities are wrong, their focus is misdirected, and their results are intolerable and unworkable. The people understand that, and they want substance over symbolism, not more playacting.
Substance Needed
The substance needed to fix the problems in California is to get back to basics. The state government does not need to be, nor should it try to be, everything to everyone. Rather, it should deliver only certain high quality services to everyone. Those things are:
- Highways
- Prisons
- Higher Education
- National Guard
The first three can also be put out to study for privatization and should be privatized.
All other state government functions can be addressed locally or simply abolished.
The path back to those basics requires a lot of reform, both constitutionally and legislatively. It requires a lot of political self-sacrifice for the betterment of all Californians. It requires a major overhaul of the budgeting process from the current system of wild guesses and pay-go to pay-forward. It requires repealing Prop 25 and Prop 98.
Retirement Reform
Retirement reform for state employees is essential, and it must be equitable to both the employees and the taxpayers, and not unfavorable to either. To that end, the current retirement plans must be set aside and renegotiated to match current private sector plans, including 401K plans, paying into benefits, and pensions that are realistic and not in the numbers area of the City of Bell, California. The governor joked about how his statement was “ambiguous” to pension reform. There is no ambiguity in the fact that the growing liability threatens to devour the California General Fund. It’s no joking matter, either.
NO NEW TAXES!
But one thing it does NOT require is any tax increases.
The people of California emphatically insisted that they wanted no new taxes when 65% rejected Props 1A-E in 2008. The proposal by Governor Brown to bring back those taxes again is a non-starter, and it indicates he is out of touch with what Californians want: (PPIC)
- 54% of voters oppose new taxes or extending the old ones
- Only 8% of voters say raise taxes
- 70% of voters say no new income taxes
- 64% of voters say no new sales taxes
- 62% of voters say no new vehicle taxes
Any special election to raise taxes again is clearly a waste of time and taxpayer dollars, despite the disingenuous spin of the Governor that it would deny the vote of the people. The people already have spoken, and resoundingly said NO! These continued special elections to have to repeat that “NO” message are disrespectful and unnecessary!
Prop 13 should be left alone as well. The Gann Amendment should be resurrected, too.
Other reforms are necessary, including:
- A part-time legislature
- Decentralization of the government to autonomous county and local levels
- A massive rollback of the stifling state regulations, including abolishing redevelopment agencies, which we applaud the Governor for proposing—an effort far beyond what his predecessor would have attempted
- Fixing the pension mess
- Electoral reform, including repealing Prop 14
Conclusion
The experiment of big government in California has failed. It is past time to cut back state government to live within the people’s means. It is past time to move government closer to the local levels. It is past time for our elected officials and our Governor to be responsive to the people of California and their empty wallets.
It is past time to make California fiscally sane again.
The road is painful, the hangover from too much binging for too long. It is doable with courage and common sense.
Jobs and revenue are created by getting government out of the way, rather than by imposing more of it. We can’t tax, spend and regulate out way to prosperity.
The Libertarian Party of California offers real, substantial solutions to the problems that face the Golden State. The question is, will our Governor and our Legislature do the right thing for the people of California and embrace that solution of substance? Or will they continue to embrace symbolism to maintain their own power at the expense of everything else? Time will tell, and the choice is theirs for now. We, the people of California, will be watching.
We implore the Governor and the Legislature to look through our proposals and adopt them. If they disregard our entreaty or our suggestions, we stand ready to elect new leadership to make better choices in Sacramento.
Sources
Moodys: http://calpensions.com/2011/01/31/moodys-begins-treating-pensions-like-bond-debt/
PPIC: http://www.ppic.org/main/publication.asp?I=967
MK, you don’t understand basic economics. You should read up a little on that before spouting off fallacies.
I second post 14. Without all the profanity.
“Normally when you issue a white paper in response to someone’s request, you don’t insult that person four times in the first sentence.”
You didn’t hear his bumbling speech, did you? If you had, you would have realized that the first sentence is not insulting, but dead-on accurate.
But if you insist on thinking otherwise, Brown is an insult to all Californians. He gets what he gives.
To MK:
““Privatization” is actually more expensive than government-run services, BECA– USE IT ADDS A PROFIT MARGIN TO THE COST.”
Reducto ad absurdum:
So, then, the most cost-efficient way is to simply have government monopoly take over everything, have no profit margin or motive, all centrally planned and executed for us, no say by us, no choice by us, and everything will be all flowers and fluffy bunnies.
Reality:
See also California, the federal government, and their respective debts and bloated governments.
Bullshit. It doesn’t work.
“What you would end up with is a series of solutions that would only grow MORE EXPENSIVE AND PROVIDE FEWER SERVICES OVER TIME. ”
THAT is the entire point! Government with fewer services, more self-reliance, more personal responsibility, more choice and more freedom. THAT’S WHAT WE WANT!
So what if the government has more expensive services and less of them? The more expensive the service, the less likely people are to engage in it, or find alternatives around it, and the more likely it is to fail. Exhibit A is public education.
Besides, the assumption that privatized services would be all done by for-profit companies assumes facts not in evidence, namely that non-profits need not apply. Private charities immediately disprove that assumption.
“Highway builders might decide that tollways were the way to go and lobby for those.”
Believe it or not, there are tollways out there that are far better maintained at a profit than most freeways. For example: The Indiana Toll Road/Ohio Turnpike/Pennsylvania Turnpike, the Kansas Turnpike, any Oklahoma Turnpike, Colorado’s C-470, Illinois’ East-West Tollway. What is plainly obvious to anyone who has driven these fine roads, as I have, and compared them to the LA Freeways, as I have, is that the profit motivation makes the toll roads need to lure traffic, and to do that they need to provide a superior road, and they do EXACTLY that. Conversely, the freeways have no such incentive and they get funded by taxes no matter what, so their motivation for quality and corresponding results are less.
“Go look at the countries like New Zealand that discovered that privatization of their phone company (a) deprived their government of revenues that the government phone company had generated (b) reduced the quality of service and (c) reduced the tax revenues from the wages of the telephone operators that fed into the economy across the country.”
New Zealand also made the mistake of making the phone system into a single-source utility instead of introducing competition when they privatized it. When AT&T was broken up, the regional Bells had the same situation, and it is only in the past few years with the cellular revolution that problem was broken and now service is the best it’s ever been. The example is simply one of bad transition planning and neglecting the competition factor of the market.
“Every one of these PRIVATIZED solutions would begin secretly looking for new ways to expand its MANDATED services.”
Forgetting the market again, I see. Take auto insurance. Mandated by the state to drive on their roads (another argument for private roads–the insurance costs will decrease!). Yet there are a plethora of private insurance companies in competition for consumer dollars to provide that mandated service, beyond the mandated minimums. That competition keeps rates lower than if the privatization was single-sourced.
“THE WAY TO FIX THINGS IS NOT TO DESTROY AND PRIVATIZE. The way to fix things is to actually decide what the base level of services should exist in order to maintain a civil society. ”
To get to that base level, it is necessary to destroy or privatize the excess. Else the base level becomes the unsustainable progressive utopian mantra of “everything to everyone.”
“What California really needs is a thorough reexamination of its regulations,…”
Agreed.
“… a streamlining of its courts system, …”
How, short of a reduction in laws to reduce case loads and shorten case times? That would be welcome.
“…a repeal of the VOTED-IN JUDICIARY statutes so that judges are appointed for a specific amount of time from a pool selected by a similar mechanism to the review boards…”
The judges are not voted in, just retained by votes. They are appointed by elected officials.
“… and a reduction of the size of the city governments across the state.”
Once again, to get there, you have to destroy or privatize. But you don’t want to do that. So what’s the alternative to achieve the base level of government without doing that or without becoming everything to everyone?
“FOR GOODNESS SAKES PEOPLE, THINK THESE ISSUES THROUGH. This entire buzzword-filled piece of crap not only doesn’t offer good solutions, if it were actually used to base policy on, it would create a military state run by private investors. ”
It isn’t “buzzword-filled” or a “piece of crap.” had you actually read it and thought it out yourself, you would see that. It is actually a listing of serious problems, how they came about, and government reforms to fix it that not only would work, but would also make things fiscally sane again. It establishes a base level of state government, proposes reforms to keep it that way, and respects the people instead of ignoring and stomping on them.
Funny, MK, you bitch and moan about cutting back to a base level, the response by the LPC does exactly that, yet you call it “crap”.
Methinks you simply are complaining for the sake of complaining, have no ideas yourself, and like Gains above, are simply full of shit.
I am so tired of people just spouting crap from Cato.
“Privatization” is actually more expensive than government-run services, BECA– USE IT ADDS A PROFIT MARGIN TO THE COST. Additionally, it creates a service provider with completely different motivations, internal incentives and goals than that of a government-controlled entity.
Privatized service providers want to provide the least amount of service at the highest possible margins. How is that compatible with the interest of the citizenry? In addition, the private company doesn’t have the same requirements on them that government agencies do.
What you would end up with is a series of solutions that would only grow MORE EXPENSIVE AND PROVIDE FEWER SERVICES OVER TIME. Go look at the countries like New Zealand that discovered that privatization of their phone company (a) deprived their government of revenues that the government phone company had generated (b) reduced the quality of service and (c) reduced the tax revenues from the wages of the telephone operators that fed into the economy across the country.
FOR GOODNESS SAKES PEOPLE, THINK THESE ISSUES THROUGH. This entire buzzword-filled piece of crap not only doesn’t offer good solutions, if it were actually used to base policy on, it would create a military state run by private investors.
Did not see that coming, did you? Well, think about it. How does a for-profit company grow? By creating more need for its services or discovering new services. A private military therefore must find more soldiering to do…
Highway builders might decide that tollways were the way to go and lobby for those.
Every one of these PRIVATIZED solutions would begin secretly looking for new ways to expand its MANDATED services.
THE WAY TO FIX THINGS IS NOT TO DESTROY AND PRIVATIZE. The way to fix things is to actually decide what the base level of services should exist in order to maintain a civil society.
THEN THE BUDGET IS SHAPED ACCORDINGLY. Civilian review boards that are selected at random from the voter pool could be in charge of reviewing the services being provided etc.
What California really needs is a thorough reexamination of its regulations, a streamlining of its courts system, a repeal of the VOTED-IN JUDICIARY statutes so that judges are appointed for a specific amount of time from a pool selected by a similar mechanism to the review boards and a reduction of the size of the city governments across the state.
Right now, the state is completely at the mercy of special interests, has a judiciary corrupted by the need to raise money for elections and similar problems with its elected officials. Getting laws passed by petition is not the smartest idea as the citizens are giving highly biased and not very helpful information on the propositions, but seldom any good long-term analysis of the ramifications of those decisions.
June @8:
Many on the California ExCom were not elected but rather appointed or were elected under very peculiar circumstances. Several do not have a very strong understanding of liberty, but do owe their position to the person who appointed them and are good cut-outs and torpedoes for skulduggery.
There is a pandemic of control freaks in California. Oversight is gone because they will attack the personal lives of anyone who complains. They hide their decisions by not posting minutes, and they spend the year not working on politics but rather in setting up scenarios to manipulate the membership:
1. Disrupt inter-party communication. The newsletter is gone, replaced by nothing that is membership contributed. The Freebook web project that might have replaced it, appears to be turning into a control mechanism where content will be censored and criticism quashed and local counties will lose control of their own websites. Try it now:
http://ca.lp.org/
Then try one of the county links under “contact” or “connect”. It has been that way all year. Local counties asking that the links to their websites be restored have been met with silence, and recently threats of disciplinary action.
The new system usurps the local parties sites and puts up state content. Contacts are no longer followed up on. Several counties were getting inquiry emails and following up on them, growing their ranks. Counties with members mean a larger less controllable delegate pool, and that scares some who view their position of trust as a position of command.
2. Alienate the local parties. At least in the south, party officers have had several disturbing (including implied threats of violence) outbursts in local meetings that seem more to do with their personal agendas than their duties. One thing is for sure, it has not been easy for some counties to explain to new people why a state officer is such a weenie.
3. Create by-law changes that would be repugnant to members then create false emergencies to justify them. For a couple of years the by-laws were held with more respect than previous, but those days are over. California can expect a by-laws report that is longer than the original document this year. The real shame is the machinations of the by-laws trolls. Self generated “emergencies” will be the inspiration for several purge enabling resolutions as well as other power consolidation moves. Some more major changes that usurp self determination away from the counties and oversight from the ExCom are also hidden as “unsubstantial changes”.
This was the model that shrank the party and broke off large groups of members previous to 2007 that California was beginning to rebuild from. It is a crying shame. California had been recovering from a line of faith breaking administrative machinations, had several growing local organizations, and others beginning to follow suit, just to fall back into the same self0destructive routine.
While some members may celebrate Machiavellian maneuvering, it is probably important to note, that in the end, the Republic of Florence was brought down by those games played out by agents of the papacy.
Freedom cannot exist in an environment of violence and fear. When your political skills set lacks making friends and being a reliable ally, destruction and fear are usually all you have left at your disposal for influence.
The secret to success is coalition building. There are local parties that have libertarians of all stripes existing peacefully even cooperating on a large scale. These organizations that are growing have done so by decentralization. Their officers do not try and control their members or their members activities, they enable and empower them and keep the organization concentrated on developing a network. It is a good formula.
To me, the main problem with this is that in the LPC’s press release, it was advertised as a “white paper” in response to Brown’s request for “solutions.”
Normally when you issue a white paper in response to someone’s request, you don’t insult that person four times in the first sentence.
@ 8, 9
+10
re 8. Agreed!
Higher education is a proper function of the state?! What has the LPC come to. For shame.
I’m sure that after 30 years the Cal LP has many contacts with newspapers in California and many will see fit to run this rebuttal as an op ed.
Or am I too optimistic?
meh
I agree with Observer, it’s great to have this out so soon after the speech.
OTOH, if the authors wish was to have people actually read it, it is way too long for the average newspaper @ nearly 1500 words.
Even if printed in the CA LP newsletter, it is doubtful that a reader will get to the end of this article.
I’d give it an A+ for timeliness and substance, but a C+ for style and a D for length.
PEACE
I’ll bet VV didn’t even bother to listen to the speech or read what was written in this article about it. He just likes to complain.
OK, VV, put out your own proposal and see how it measures up.
This article falls short. It does not ‘measure up’ to any sort of way forward as it stands.
Yes! I’m glad to see this fine article so soon after Governor Moonbeam’s speech!