Is it just me? Or have California politics and policy debates been reduced to little more than a series of predictions about what the stock market’s going to do?

This thought occurs while watching two big, related debates. The budget/tax debate. And the pension debate.

In the first debate, the legislative analyst, Mac Taylor, and Governor Jerry Brown’s state Department of Finance have brought forward very different estimates of the additional revenues that would be produced under Gov. Brown’s temporary tax initiative.

This dispute is being framed as some kind of budget question. But it’s really a dispute over the investment markets. Brown’s initiative raises taxes on income of the rich – income above a quarter million a year. And for such people, much of their income is related to investments, not wages. Investment income can be quite volatile. Brown’s team – and budget – assume that Californians will have about 50 percent more in capital gains than the legislative analyst does.

The pension debate is a different version of the same phenomenon. Each side makes moral claims (about what public employees are owed for their service), legal claims (what can you change about already promised retirement benefits), and fiscal estimates (about the long-term obligations posed by pensions.

But at heart, the question of pensions is a debate about the long-term performance of the markets. If the markets produce big, big returns for California pension funds, the pension problem – or at least the unfunded obligations – doesn’t seem scary. But if the markets are in a long-term decline (as many investors seem to think), then the pension problem looks like an existential threat to state and local government budgets.

This is an important debate. But it’s not really about policy or ideology. It’s about which way you like to bet.