California, Golden State of Constant Crisis

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

California, the media like to tell us, faces an unprecedented fiscal crisis. The budget deficit is $40 billion and growing. The state is so short of cash that, within days, it may issue IOUs, rather than checks, to pay its bills. The Legislature, bitterly divided, seems unable to agree on a way out. The governor warns of “financial Armageddon.”

How should we prepare for apocalypse?

Before you hide under your bed, check out a few books by some of California’s leading journalistic interpreters of the last 160 years.

You probably won’t have to read very long before you’re reminded that big deficits and threats of fiscal crisis aren’t exactly new here. In fact, the notion of California as a place where current resources don’t meet present needs is at least as old as the Donner Party. And the state’s leaders have always been — in the eyes of journalists — fools and knaves, unable to resolve persistent financial problems.

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The Fiction of Business’ ‘Secret Ballot’ Argument

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

It’s still early in 2009, but my award for the most disingenuous p.r. campaign of the year goes to the national, business-backed effort to fight the labor-backed Employee Free Choice Act. The campaign has a deceptively simple message: preserve the “secret ballot” in union elections.

I’m for all secret ballots. Ideally, union elections would be conducted via secret ballots just like an election for governor or mayor; voters would make their decisions freely and fairly and no one knows how they voted. The problem is this: we don’t have anything like secret ballots in union elections. And the business leaders of the effort to discredit EFCA know this.

The truth about union elections is much more complicated. There are two ways that workplaces go union. The first, now favored by labor, is “card check.” In these cases, workers sign cards saying they want to join a union. When workers have a majority, employers agree to recognize the union. Oftentimes, card check recognition comes after months or even years of pressure and/or negotiations between the union, workers and employers. There can be hard feelings, but the process also can be a cooperative one. Security guards in Los Angeles office buildings were recently organized this way.

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A Southern California Test of Obama Promises

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

The president elect has promised change, we all know that. He’s promised to get beyond old disputes and divides. And he’s pledged to rebuild the country’s infrastructure and stimulate the economy. That all sounds great, but I’ll believe these promises when I see them. And there’s a perfect place for Southern Californians to test whether Obama means any of this.

It’s called the 710- aka the Long Beach Freeway.

For a half-century, the 710 has been unfinished. It was supposed to go all the way from the Port of Long Beach up to Pasadena, where it would connect to the 210 Freeway, allowing drivers and truckers to skirt downtown LA on their way northwest (to the San Fernando Valley, Santa Clarita, the Antelope Valley or even the Central Valley). But the highway stops 6 miles short of the 210 in Pasadena, dumping drivers onto the surface streets of Alhambra. Why? The power of one very well organized special interest: the residents and city fathers of South Pasadena.

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The ‘I Got Nothing’ Speech

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

Watching Gov. Schwarzenegger brief state-of-the-state speech Thursday morning, only one question came to mind. (The speech wasn’t long enough for more than one). Why did he bother making the speech at all?

Perhaps it was merely tradition. But tradition had been blown when the speech was scheduled for a morning in mid-January. It’s usually early evening a week earlier. The timing alone – during the workday, at a moment when those who follow government and politics are focused on President-Elect Obama and his incoming administration –offers plenty of evidence that the governor didn’t want much public attention on what he had to say.

And perhaps it was out of some sense of constitutional duty, though a state of the state speech is not a constitutional requirement. Article V, Sec. 3 of the California constitution says only: “The Governor shall report to the Legislature each calendar year on the condition of the State and may make recommendations.” There’s nothing there about a speech. By my reading of the constitution, Schwarzenegger could have sent Tom Arnold over to the Assembly with a bugle, take-out from Frank Fat’s, and suggestions for preventing a Screen Actors Guild walkout. A state of the state message like that would have been entertaining, at least — and it might have even qualified as economic stimulus.

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Tax reform now, or at least a rough draft

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

It’s only been a month since the appointment of members of the tax reform commission that was the brainchild of Assembly Speaker Karen Bass. My question to the commission: you folks got any recommendations yet?

Because the state could sure use some thoughtful tax proposals. Right. Now. With the state facing a cash crunch (in fact, there’s already a cash shortage that will cause real pain even if the legislature and governor reach an agreement on a plan to address the budget shortfall today), California’s leaders have to raise taxes. So there’s no better time to advance tax reform. If we had strong recommendations from the commission, they’d have a chance of becoming law. And state leaders might be able to say, with some pride, that they took advantage of a miserable situation to make some important changes in how California is governed. The crisis was too good to waste and all that.

At the very least, recommendations from a tax reform commission might shape a more productive debate about the budget. Right now, the back and forth is all about brinksmanship and games of chicken. Will Democrats cut the budget more? Will Republicans finally back down and support tax increases? Can they reach a compromise, or can the Democrats find a way around the requirement of a two-thirds vote on budget and tax issues?

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Only One Way Out Of California’s Mess: The People

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

It has become obvious that Gov. Schwarzenegger and legislative leaders of both parties simply won’t be able to reach a compromise that comes anywhere close to closing California’s rapidly growing budget deficit, now estimated at some $40 billion over two years. The state government is running low on cash. Within weeks, it may have to start paying people in IOUs.

Democrats simply won’t agree to enough cuts. Republicans won’t agree to tax increases, and they can block that because of the state’s requirement for a two-thirds vote. The Democrats’ convoluted (if politically smart) attempt to do an end run around two thirds and raise taxes by majority vote isn’t going anywhere; even if it’s revived and signed into law, it’s all but certain to get struck down in the courts or overturned by referendum. The governor you ask? Schwarzenegger has little credibility with lawmakers of either party. When it comes to big deals, he simply can’t close.

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Does Barbara Boxer possess compromising photographs of all of California’s most promising Republicans?

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

I don’t know. But there must be some explanation for why Republicans seem to be doing so little to produce a strong candidate to challenge Boxer in 2010.

It’s particularly striking when you consider all the jockeying between potential Republican candidates in the 2010 race for governor. The California GOP is either dead or on life support, depending on whether you’re an optimist or a pessimist (and depending on what you think of Republicans). The party doesn’t have much money and has only a handful of potentially attractive statewide candidates.

In fact, the three strongest statewide candidates in the party might be Insurance Commissioner Steve Poizner, former Congressman Tom Campbell, and former eBay chief Meg Whitman, who made news this week by resigning corporate board seats to prepare for a career in politics. These three candidates, however, share a problem: they all want to be governor. And they’re going to run against each other.

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A History Note: Some Founders Worried About Actors in Power

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

In a recent column, the Sacramento Bee’s Dan Walters bitterly accused Gov. Schwarzenegger of being an “amateur governor.” That shot at our movie star governor was fresh on my mind as I read Ira Stoll’s new biography, Samuel Adams: A Life.

Full disclosure: Stoll, a journalist and newspaper editor, is a friend. So I won’t go on and on about how great the book is. But I did want to relay one historical gem that Stoll unearthed in the journals of the Second Continental Congress. It’s a detail I had never encountered before, even through many years as a newspaper reporter who had to write often about the intersection of entertainment and politics.

Sam Adams — the Boston patriot, legislator and Founding Father — saw religion and morals as the foundations of liberty and happiness. Adams was delighted that the Congress, in 1778, had passed a resolution making that plain. But some in that Congress, Stoll reports, wanted to go further and ban people involved with the theater from federal office.

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Two Initiatives Take On Two-Thirds

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

There are two things you already know for certain about California in 2009: the state will have terrible budget problems. And the state’s requirements of a two-thirds vote to raise taxes or pass a budget will face a serious challenge.

You’ve undoubtedly heard about the legislative side: a Democratic plan, with backing from Schwarzenegger, to raise taxes to reduce the budget deficit in a complicated way that, Democratic lawyers believe, does not require a two-thirds vote of the legislature.

Now comes the initiative side of the attack on two-thirds. A Democratic law firm filed two versions of an initiative shortly before Christmas with the California attorney general’s office. As Democratic leaders have promised, the initiative effectively would eliminate California’s requirement of a two-thirds vote to pass a budget. For political purposes, however, the two-thirds requirement would remain in the constitution–new language would merely exempt all appropriations from the two-thirds requirement for approving appropriations. Look for advocates of the initiative to say, over and over, that it doesn’t remove the two-thirds requirement from the constitution. Because technically, it doesn’t.

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The Advice Arnold Didn’t Take

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

As I watch Gov. Schwarzenegger declare that the state has to have a real balanced budget plan — with tax increases and spending cuts — I can’t help but think of Ed Leamer.

Leamer is the director of the UCLA Anderson Forecast. But he’s important to the story of Arnold the Politician because of advice he gave back in 2003, when Schwarzenegger was running for governor.

Leamer met with Schwarzenegger during one of the policy session he held with experts early in his 2003 gubernatorial campaign. Leamer also was part of the “economic recovery team” of advisors that Schwarzenegger invited to an LAX-area hotel early in his campaign. This group, headlined by billionaire Warren Buffett and former Secretary of State George Shultz, had a private meeting on Aug. 20, 2003, that went for more than an hour.

The state faced a massive budget deficit (roughly as large as some of the estimates for the current problem). Schwarzenegger was running against taxes, so he and his advisors were pitching a convoluted argument that the shortfall could be broken into pieces, with borrowing and a spending limit bringing the budget back into balance. But Leamer didn’t buy it.

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