California Budget Woes Show Flaws in Democracy

On November 2, 2010 California voters went to the polls. They chose Jerry Brown to replace Arnold Schwarzenegger as Governor. For the most part they sent the same gang back to the State Assembly and Senate, barring only those who were forced out by term limits. Well-greased political machines made sure that when their guys (or gals) were term-limited out, an indistinguishable candidate was selected to continue to represent their interests in exactly the same way.

After so many reforms being enacted in California, it is fair to ask: what is the point? Nothing stops The Blob of self-interest, it just oozes around what ever new barriers or weapons are used against it.

But there is a barrier The Blob cannot overcome: the limits on California state spending. Oh, it tries. It tries to increase taxes, and some times it succeeds. But there is only so much economy out there. Raise personal or business taxes and people only have so much they can spend, especially given they have to pay federal taxes in addition to state taxes. True, at the high end, rich Californians and giant corporations that operate in the state may still have some juice left to squeeze out. But then there is the major goal of the Blob: squeezing the juice out of the middle class, so that the rich need bleed out only token juice.

Now Jerry Brown is delivering the bad news: his budget is going to cut services, and public sector jobs and salaries, even further back than Arnold's did. This is not Jerry's fault. He is trying to deal with reality. Just like Arnold was.

The reality is that in good years the screaming Mimi's, from MediCal recipients to public service unions to corporations that profiteer on government contracts, always want more. They get it, too, then try to hold onto it during recessions.

California's economy will grow again, especially once housing starts to sell again and new housing construction resumes, but 2011 will be a tough year. Silicon Valley is already prospering and paid more taxes in 2010 than it did in 2009, but much of the tax base depends on real estate taxes and the construction industry. Real estate tax revenues may continue to decline in 2011 and even 2012 as people get their residences re-assessed.

People and businesses can take only so much squeezing. A wise government would find ways to encourage business activity in California without compromising the environment or exploiting workers. Democracy, unfortunately, works (to the extent it works) by allowing the dividing lines to be set by the pushing and pulling of interest groups. The rich are few in number, but can deploy a lot of money to choose the politicians they want. Generally speaking, only candidates backed by the rich, or by public sector unions, can win political primaries. Most of us are not rich and not in public sector unions, so we get shafted. In fact the current system means 90% of the voters are disenfranchised before the general election is held.

Public funding of campaigns could help break up this unfair scenario, but attempts to enact that have been consistently blocked.

Which leaves only remote possibilities to break the deadlock. A political party, currently a third party, could organize the 90% to vote for their interests. Organizing voters without already having political power to begin with, however, is no easy task. Or independent political machines could emerge in each Assembly district, led by individuals rather than political machines. Proposition 14 made that possible, at least in theory.