Governor Brown: A “Statist” solution to California’s Problems

Our newly-minted retro ultra-untraditional Governor Jerry Brown may not find it “authentic” to deliver a state of the state address but that does not mean the very real crises we face can be ignored.  In December, Victor Davis Hanson painted Brown’s dilemma is stark language:

At 72, Brown is returning to a third term as California governor after a hiatus of 28 years to face a $26 billion budget deficit and an unemployment rate above 12 percent. So is it to be more taxes, more government, both or neither?

Both conservatives and liberals agree that Brown will probably do what California’s progressive voters elected him to do: keep government and its services big and find the necessary revenue from corporations and more affluent individuals to pay for it. The real debate is over whether he can pull that off in recessionary times.

Hanson went on to say conservatives doubt he can pull it off, that liberals feel the Old Golden Goose still has a few eggs left. So would he stay left or veer right? Or would he pull the Nixon option: use his stature as a liberal to require essentially conservative acts that “only he” can get away with? The analogy is somewhat crude. Our situation isn’t exactly the same as the foreign policy questions that dogged Nixon. But, yes, it was easier for the crusading Anti-Communist to break the ice with China than it would have been for a liberal democrat. Whether Nixon’s overtures led to good or ill is another debate.

Brown is starting to provide some answers as outlined in the Reuters article cited below:

Brown proposed cutting the take-home pay of unionized state employees in six bargaining units by between 8 percent and 10 percent. The units account for more than a third of the state’s general fund payroll. Salaries are projected to cost the fund $7 billion in the next fiscal year, and cutting the pay of the six units would bring them in line with the agreements reached by Schwarzenegger’s administration and the state work force’s 15 other bargaining units last year.

Brown also wants the six units to remain on three-day-per-month furloughs through June. Schwarzenegger made aggressive use of furloughs to hold down payroll expenses.

In addition, the budget proposal includes $1.7 billion in cuts to the state’s health program and $1.5 billion in spending reductions for its welfare-to-work program.

 Spending cuts paired with “temporary” tax increases sounds middle-of-the-road in the sense that everyone suffers, so everyone should be equally miserable – and equally happy.  But will it work?  I have my doubts. The legislature hasn’t signed off on the idea and both parties would have to agree to lose  face, power and pelf for it to pass. One side will growl and one side will blink in all likelihood.

Because it is a compromise it is likely to make matters worse. The sheer number and size of goverment agencies is not addressed, nor is the strangling of initiative and growth. Instead, you take something away from everyone and hope for the best. The long-term solution is a real cut in the size and scope of government and this plan does not accomplish that. Businesses and productive people are not leaving California because of the pay state workers get. They are leaving because of the sheer number of state workers and the intrusion of the state into all aspects of goverment. California is not a good place to grow a business right now. It is not a good place to have an income in either. As noted earlier 725 new laws went into effect on 1/1. Each of those laws demands staff, budget and enforcement time. This on top of the “Beast” I laid out for you in an early post. Cutting some of the pay of state workers isn’t really a good thing and raising taxes compounds the  problem in the state. You get angry  workers with less spending money and fewer employers and “wealthy” people to tax.  Brown’s proposal is “Statist” in that it is good for the state goverment – it will help balance the beast’s budget, but it does nothing for the people of the state. The real solution is to force people out of government employ and into a vibrant public sector. Brown seems to be acting as if the problem is simply that the government needs to balance its budget for a while rather than drastically change what it is. Liberals have a fixed notion that government is “good.” It is inefficient, oppressive and it does not create wealth. Wealth creation is the ticket out of this mess, not a brief period of belt-tightening and a “temporary” tax increase. I give him 2.5 points out of 5 for this. That would be an F in schools outside of California.

Well, at least he ruled out borrowing money….

http://www.victorhanson.com/articles/hanson120710.html

http://www.reuters.com/article/idUSTRE7095FB20110110

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4 Responses to Governor Brown: A “Statist” solution to California’s Problems

  1. Realistically, California’s recovery will take time, a serious plan, and focused persistence. So Brown wants to significantly cut from the powerful unions, cut a couple billion more from the entitlements, and extend current tax rates over five years. It’s a good start. Best thing President Obama can do for the state is commit to truly sealing the border

    • Hi Sceptic
      I see your point, but I don’t think it is bold enough. What will get past the legislature will always be less than what is asked for and that is less than what is needed. I believe his plan is good for state government but not for the state. As a career politician, I suppose that is what one should expect. As for the border, true immigration reform and enforcement can’t come quickly enough.

  2. Pingback: Illinois Lawmakers “Bite the Bullet” – Raise Taxes A Modest 66% | bearroombrawl

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