Ellis Goldberg
Northern CA Field Director
Californians For Democracy
http://www.trivalleydems.com/CA4D.htm
925 451 4303 cell
925 831 8355 office
EllisG237@aol.com

Now it’s all deadlocked government, payrolls that can’t be met, and fires burning everything up.

I have to say that I don’t understand the 2/3 majority thing. Those are supposed to be reserved for particularly important decisions, like amending the constitution and such.

One poster above made an important point. It’s not about the absolute cost of government; it’s whether you get your money’s worth that matters. And while the private sector has efficiency going for it, you have to ask the following: If the private sector simply won’t deliver, then maybe it’s worth some government inefficiency to achieve your objectives.

I cannot fathom certain quarters who blanket reject government action. I worked in government and know the problems from close up. However look at the Global Positioning System. Would the private sector have delivered that? Maybe for paying customers, but it wouldn’t be global, there would be multiple incompatible systems and it wouldn’t be cheap to use either. I think a valid comparison would be the current situation with cell carriers.

And it appears our governor has started to get the message: no cuts to education, including higher ed.

Dan Mitchell (#68 above) you have absolutely, positively lost your flippin’ mind.

Simply unbelieveable. I am at a loss for words.

It is important not to forget the institutional arrangements that enabled this. The current situation in Washington with e.g. health care and climate change, as well as California’s problems, show that government by a super-majority is not feasible.

Jim@46 wrote:
“Libertarians, addicted as they are to deductive reasoning, have a hard time learning from experience. They simply “know” that free markets will bring the Age of Aquarius just as traditional Marxists simply “know” that capitalism bears the seeds of its own demise, etc.”

You don’t know the half of it. Libertarians are often devotees of the Austrian School of economics, which explicitly rejects empirical inquiry on the grounds that the data might not confirm their theories. They even have a word for it: “praxeology.” This means deductions from “self-evident” truths, which is in their opinion the only valid method of economic investigation.

It was opined above:
“John: Are you a climatologist? You ignore the report because of its source? “My god, its a libertarian think-tank report! It *has* to be wrong. ”

The brilliant Daniel “dsquared” Davies has lamented the lack of a fancy Latin term meaning “the fallacy of giving credence to known liars.”
Ad hominem argument is logically insufficient, but in practice, in a world of limited time and information saturation, it’s a virtually indispensable heuristic, with a very high success rate. It certainly worked well here.

I’m really amazed that so many more supposedly smart Californians who stayed in CA still haven’t figured out how the place got so screwed up as it now is.

And can’t fix it.

Time to sell Oregon and California to Hugo Chavez. Californians have already done all the hard work for him.

California is a case study in what happens when demagogues pull a fast one on the electorate, and what happens when the electorate isn’t careful – and the end result is what happens when simple-minded approaches to complex questions win out. While some like to imagine that “California has gotten worse as spending on public institutions has gone up,” the reality is mostly the opposite. Few of these folks would argue that the state is better now than it was in the past. But if you look at that past you find that – in the context of the current discussion – funding for education from K12 through graduate school in California used to be much better and much more coherent. The state master plan for higher education – the model for an integrated approach to developing a successful and educated citizenry – came from those “good old days” that these folks imagine were so wonderful. The education system was “more wonderful” then in many ways – but not because the taxpayers of the state felt that they were not worth supporting. In fact, the exact opposite was the case.

To those who think that spending on education is wasted I like to point out that the experiment has already been run and the results are in. The time when education funding was at its best in the state was also the time when the state prospered the most. The time during which the state gradually began to dismantle public support of education has not demonstrated any improvement – in fact, the opposite is true.

California’s problem is simple to understand though it will be politically very complex to fix:

1. The requirement for a 2/3 vote to pass budgets has led to an undemocratic minority rule in the state. (It could even be argued that this is “un-American” since the federal government doesn’t give budgetary veto power to the minority nor do almost any other states.)

2. Redistricting has led to safe districts for the most radical candidates, especially on the right-wing side. (There is some hope that this may diminish soon.)

3. Term limits have ensured that few legislators have a thorough understanding of and dedication to the issues of education – and that many begin campaigning for their next office as soon as they join the legislature. (Here we now live in a world where “experience” implies only that one has been elected to a second term.)

4. Proposition 13 has shifted the tax base away from relatively stable and progressive property taxes and towards unstable and regressive sales and other taxes and fees. In addition, it has shifted the remaining property tax burden more towards individual property owners (read “home owners”) and away from the traditional corporate property owners.

5. The state refuses to implement logical and obvious revenue sources such as oil severance taxes. There is plenty of precedent for this being a no-brainer – it is done in George Bush’s Texas and Sarah Palin’s Alaska!

Combine these realities and even though almost everyone in California who understands effective government understands what is going on it becomes almost impossible to stop the descent into budgetary and infrastructure chaos, at least as long as the minority party seems happy to see the state self-destruct.

The state budget is almost totally dominated by personnel costs. The number of personnel for education, health and human services, business and transportation, legislative and judicial services, etc. all scale with the amount of economic activity, which is highly correlated with population. This is far from a specious argument, it’s simply a fact.

I think it is imperative to look to the root causes of the present financial crisis in the state. Failure to plan for the inevitable economic downturns is one main one, which I did not address in my post. But allowing our incarceration rate and the cost per inmate (nearly 30% above the national average) to balloon out of control is another, and giving huge corporations a free ride that no other state does is simply stupid.

Anyway I am always willing to consider alternative arguments – but they have to actually make sense or I tend to ignore them. Libertarians’ overly simplistic approach, and the utter coldness of the whole Ayn-Randian philosophy have turned me off for many years now. But, as they say, if you aren’t conservative at some point in your life you don’t have a brain, and if you aren’t liberal at some point, you don’t have a heart. I guess I consider myself a fiscally conservative progressive.

Lets take a look at your source, in particular the charst 9 and 10 which claims real spending has only grown 18% over the period 1998/99 thru 08/09. the 128.8B total for 08/09 compares to “On August 21, 1998, the Governor signed the 1998-99 Budget Act, which along with various implementing measures (trailer bills), comprise a budget package that authorizes total state spending of $72 billion” or 1.79X. higher What inflation rate does that give? 128.8=72*e^11r or a 5.3% compounded rate. Or you could use any inflation calculator on the web to get: “What cost $72 in 1998 would cost $94.69 in 2008. ” NOT 128.8B. (in fact, bls.gov says that same 72 in 98 is worth 95. 6 in 09)

Looking a population growth, 1998: 32.987M, 2008: 36.757M or 11.4% which is still well below their claimed 18% REAL growth.

You have also made the specious argument that the budget should scale in a linear manner with population. That is in effect, to put it on business terms, to say all costs are variable and none fixed.

As a scientist I expected a little better – at least a willingness to look at other arguments concerning the root causes of problems in California.

Because discovering the universal law ‘simple majority rules’, for a state of 30m+ people, claimed to be educated and civilized, is indeed a discovery of historic proportion.

Next on the discovery agenda: The people and government of California discover prudence, sense, balance and rationale in matters of society!! Since these are 4 things to discover, given education cuts, it would probably take 2 decades to happen.

That’s bogus. There is a lot of economic theory that argues for raising taxes on high income individuals who save rather than spend to prime the economic pump during recessions. In fact, this strategy has worked well in the past, so there is not only a theory, but a fair bit of evidence for its effectiveness.

“My understanding is that businesses and high-income individuals are fleeing CA like the Okies fled the dust bowl.”

Actually, high income individuals flock to high tax states. People pay a premium to live in high tax areas, probably because those are also areas with better business opportunities. If you plot housing costs against tax burden, you can see that this is a hard and fast economic relationship. Taxes are lower in Mexico, but there are a lot more Mexicans heading north than Californians heading south.

—

Like physics, a lot of economics is counter-intuitive. Yes, light has both a wave and particle nature, and yes, higher taxes cause economic growth.

“Alaska is one of the most republican states in the Union. And thanks to its resource tax there is:
a. no sales tax.
b. no income tax
c. a $1000 check is mailed to each and every resident each year.”

I would just like to point out that the vast majority of that tax, that provides checks to every Alaska resident whether they had anything to so with energy extraction or not, is paid by people in OTHER states. Everyone who uses petroleum from Alaska, no matter where they live, pays part of the price to someone in Alaska. Now, this model might be a reasonable way for California to get out of the financial hole it’s in, or it might not, but participants in the discussion ought not try to hide the fact that it’s a tax on residents of other states.

And look at the source – the Reason Foundation, the Libertarian/Objectivist/Ayn-Randian outfit…are we surprised?

If you want a truly rational look at state funding, take a look at the state of Califonia’s Legislative Analyst’s Office (sort of like the CBO is to Congress). There you will learn that, in fact, adjusted for inflation, the state budget has been pretty damned flat at about 9% of personal income for the past twenty years.