Republicans have time on their side, that’s about it

February 27, 2009

(Copyright 2009)

You gotta hand it to crusty old Ron Paul, Republican (but libertarian) congressman from Texas. Regardless of whether you agree with his libertarian philosophy, surely he hit the nail on the head explaining the current dilemma faced by conservative Republicans.

With the new Democratic president, Barack Obama,  being the most liberal of liberal, they could tout their counter ideology. But they’ve lost their credibility.

Paul says they (not him) lost it by supporting George W. Bush for eight years, a president who claimed to be conservative, but did not seem to be when spending was concerned. And isn’t that what conservatives pride themselves in being? tight with money, prudent, business like.

He is hopeful that conservatives are reassessing their mistakes and trying to get back to their roots. He also claims that young people flock to his conservative/libertarian message and that he has great hope in that regard for the future.

And here is where traditional American conservatives seem to part ways with Paul and his libertarianism. Paul is against foreign military entanglements, such as the one we are involved in the Middle East (Iraq and Afghanistan).

(And I have to stop right here and say that  through the years in my contacts with various proclaimed libertarians, including an obscure presidential candidate, I have seen most of them as a little “eccentric” shall we say? a little off? outright nut cases? To be fair I’ve only met a handful and I should not be so judgmental. But I love how they confound both liberals and conservatives. Libertarians agree with conservatives that taxes need to be cut and/or kept low, but they do not believe that the government should be able to restrict personal decisions such as abortion and taking drugs. They are more supportive of small and limited government than conservatives. They also confound liberals, because many of their positions on social issues are considered liberal, but they do not see government as an instrument of social change or even social welfare. In my understanding, libertarians see government as the great record keeper of who owns what in order to keep order in society.)

While Republicans in general today were finding favor with President Obama’s decision to basically continue the Bush program of prolonged withdrawal from Iraq (with a caveat that we can always spring back into action), Paul was not shouting hooray.

Paul said we had no business going to war in Iraq. He said we bombed their homes and killed their people and that is why they hate us (and I add – remember Iraq did not attack us).

As for Obama’s increase in troop strength in Afghanistan, he sees it as total folly as well.

“Osama bin Laden’s strategy has been to bankrupt us and he has achieved that,” Paul said.

My own opinion is that our irresponsible fiscal policy (which can be blamed on both major parties and all entities, government and business and individuals) and a natural boom and bust business cycle is what has caused our present economic crisis. Certainly, the extremely expensive military actions we have been conducting have contributed or exacerbated the problem.

We don’t and should not base our military decisions solely on affordability – supposedly when we make a decision to strike militarily it is directly or indirectly based on our own security (I always have hard time swallowing the idea that we fight for world freedom – that is a side benefit, we hope).

If we decide that it is in our defensive interests to strike (or strike back) militarily, while we do have to figure out how to finance our actions, the assumption must be that we have no choice and will find the money because our own survival depends upon it (a war tax?).

But today, a Democrat is president with a big mandate behind him.

Ron Paul as far as I know has been consistent through the years. The other Republicans have not and that is what is hurting them today.

The Republican Party is in search of an identity. It needs to divorce itself once and for all from one of the most disastrous presidencies in our history and move on.

To Republicans I say: don’t worry, Obama has such a daunting task ahead of him there is no way to know whether he can be successful, and the American people are not generally patient, and the voters have short memories anyway.

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After watching a little, I reassess Bobby Jindal…

February 26, 2009

(Copyright 2009)

While I don’t automatically find myself a fan of the at least formerly rising young Republican political star Louisiana Governor Bobby Jindal, in half-hearted defense of a much panned (by both Democrats and Republicans) reaction speech to President Obama’s address to a joint session of Congress, and from what little I bothered to take in of it on YouTube, he just spouted off the traditional and predictable Republican conservative line.

I only watched a little bit of his introductory remarks. I understand he did not offer any alternative program to that of Obama’s. That of course, would be the major flaw in what you might call a rebuttal statement.

It just seemed to me that I ought to actually at least see and hear some of his presentation after simply following the crowd and panning it as I kind of did (by relaying their reaction) in a P.s. In my previous blog.

While I couldn’t get myself to listen to the full deal, I will note the following:

I may be getting this more from what I read about his remarks than what I actually saw, but he did seem to come off as kind of condescending, like he was trying to explain something to little kids. I forgive him. The public likes simple messages (Democrats: yes we can/Republicans: just say no).

He said Republicans have the responsibility to offer better ideas (but apparently didn’t go on to offer any of any substance – except perhaps lower taxes and incentives for business, the old Republican standby).

And he offered that old bromide that the strength of America is its people, not the government. That line is a kind of meaningless one. It’s kind of like saying the American government or the military did not win World War II, it was the soldiers and the citizens who supported them. Maybe they could just say: “everyone can’t just live off the government”. But then if all of our elected officials took that to heart, they’d have to quit their jobs.

(I do realize that part of the Republican/conservative theory is that the government should take as little as possible from its citizens in the way of taxes, thus allowing them to take care of themselves, but following that line of thinking you wind up with the pure Libertarian philosophy, which basically sees government as a record-keeping facility that keeps track of who owns what. I somehow doubt any mondern day Republicans want that, Ron Paul excluded because he is really Libertarian.)  

So, I really have not come to any conclusion on Bobby Jindal (he just didn’t stink as much as I was led to believe). He did tell a story about his folks running a small business and meeting all their obligations. Kind of sounded a little like the, albeit inarguably evil, much misunderstood Richard Nixon, son of hardworking small business people, self-made man who felt uncomfortable in the elite circles of the wealthy, but liberal (have not read up on the Jindal story yet).

The Republicans had six years of domination of the White House and Congress and eight straight years control over the administrative branch, turning a Democratically led balanced budget to a deficit, and reversing the policy of paying down the national debt to one of piling on more with borrowed money from China (and elsewhere). It is hard for any Republican now to make a case that they are the answer or have the answer to our current economic emergency.

In the common political parlance, Republican and conservative are synonymous (even though sometime in the past there used to be talk of liberal Republicans (Nelson Rockefeller) or progressive Republicans (Theodore Roosevelt).

But what kind of conservatives would let our national debt and our yearly budgets get so out of control? What kind of conservatives would join with liberals and induce a whole nation to live way beyond its means only to find that ultimately the piper demands that he be paid?

Right now, no one seems to know for sure what to do. Our economy is like Humpty Dumpty, and all the Kings horses and all the kings men can’t put it back together again.

If we were a nation of shopkeepers and conservative Republicans actually practiced what they preached, they might have more credibility.

Correct me if I’m wrong, but we (and don’t be insulted if you don’t fit into the mold; I’m talking population in total) are a nation of employees and consumers and through our own bad decisions and practices and through the bad decisions and practices of our own government we have come to the state we are in today.

Time for all folks of all persuasions, liberal and progressive, conservative, middle of the road (non committal), to reassess.

P.s.

I’m not quite sure why some of Gov. Jindal’s own Republican colleagues panned his speech – maybe they’re just jockeying for position or maybe they were embarrassed that their party seems to offer little in the way of new ideas or constructive alternatives to the Democrats.


Obama has the capital, now he must spend it wisely

February 25, 2009

(Copyright 2009)

The drought in leadership at the helm of the United States government has been broken, judging by the speech I just watched President Barack Obama deliver to a joint session of Congress.

It’s up the Republican obstructionists to either help or get out the way.

He was not long on detail, but you really can’t do that effectively in such a speech. You have to give an outline. You have to project an attitude. He did. And it seems to be a no non-nonsense move forward for and with the American people approach.

I think one of the things that is giving the Republicans fits is that they are so party and ideologically bound, while the new president, although liberal, is really projecting something beyond pure politics. As much as the Republicans want to wage that straight political battle, he won’t play by their rules.

I liked what he said about finally doing something on health care. He proved that he understands the problem and that he is ready to move beyond and around that tired old fight between the haves and have nots. I got mine, you get yours. So many people no longer have theirs, so many businesses finally realize that simply using health care benefits as an employee attractor is no longer fiscally feasible and yet they know they need to have their investment in their workforce protected. I think (I’m not sure on this one) that even Walmart discovered that just giving your employees a handout on how to get on government health care for the poor is not a substitute for a comprehensive health care plan.

Also Obama said that he has revised the budget process so the costs of the wars will be laid out for the current year with projections for years to come. We have ignored and/or fooled ourselves too long on the monetary costs of wars. Only recently have I heard experts actually saying that the cost of the wars is part of what has led us to our current economic crisis.

He warned that more money will be pumped into the banks but promised bankers will be held accountable and will not be able to use government money for their personal pleasures. We’ve heard that one before. Maybe some perp walks with bankers in chains is what we need to see.

I don’t know what the Wall Street reaction will be in the morning (I’m writing this right after the speech Tuesday evening). But I think at least the markets now have a clear message as to the direction we are going and more importantly the attitude of the new president. It would seem that stocks in innovative companies with an eye to the future (not the next quick dollar) should rise – renewable energy, for example.

Add 1:  And this morning I get the answer. Stocks are down amid concerns over the continual decline in home resales and falling home prices, as well as over concern that the credit crisis is worsening. It is troubling to know that our whole economy over these past many decades has been based on inflated home values. Seems to me we need something more like industrial and agricultural output with a dose of renewable energy to support our economy. And somewhere in there there has to be a whole lot of good paying jobs. Inflated home values did produce a lot of jobs — good paying jobs, not so much.

Getting the banking situation resolved seems to me the thing that needs to get the top priority. Housing is an offshoot of that, but I fear the president has just previously put forward a somewhat complicated sounding and maybe overreaching program in that regard.

I don’t think we want the government setting prices by forcing lenders to pull down the principle on houses, although lenders on their own might choose to do that. Unfortunately in probably the majority of cases, as tragic as it is, foreclosures need to take place, losses (to both the occupants and the lenders) to be suffered, the end result being bankruptcies for both individuals and lenders.

But only in that way can the market be determined. If in the end there is an oversupply of houses, the prices will at least settle in a more affordable category.

(Interest is a confusing thing to me. It would seem it needs to be set primarily by availability and risk, not by artificial government actions, part of what has caused the present crisis. From this time forward the price of risk will likely be higher on home mortgages.)

Only once the bad debt is finally settled (much of it by bankruptcy) can a new and improved banking sector rise up from the ashes.

While I am not sure President Obama’s approaches to each problem are the best, he has proved that he is indeed a forward thinker.

I think the wars will plague the Obama administration efforts, but he has not given any indication that he would back down from the challenges he faces in that regard. And although he has made some strong statements about fighting global terrorism, akin to those made by George W. Bush, he has not yet painted himself into a corner.

Although I appreciate and admire President Obama’s willingness to work with the Republicans, I almost wished I could hear him just tell them: “Oh, just shut up – I have work to do”! But he is much too wise a politician and too diplomatic for that.

One more thing. While his predecessor claimed to have “political capital” after his second election victory, he found it to be ephemeral, primarily due to his ineptness and pig headedness.

President Obama has as much political capital as any president I have seen in my 59 years. I hope he spends it wisely. from what I just saw, I have reason to believe he will.

P.s.

Right now the Republicans seem to be in the lonely position of the loyal opposition with no plan, only reaction, thus making them seem “reactionary”. A new leader will emerge if they are lucky.

Add 2:  And after initial reviews  I have concluded is won’t likely be the young and somewhat emaciated looking Bobby Jindal, Gov. of Louisiana, who gave the official Republican response to the Obama speech (I didn’t bother to thake that in — yadda yadda yadda).


Obama smiles, jokes, makes GOP look silly…

February 24, 2009

(Copyright 2009)

While I don’t necessarily agree with all the steps president Barack Obama has taken so far, I have to admit, he’s still killing his Republican opponents with kindness and reasonableness.

And so far, the Republicans are looking small and foolish in the process.

We’ll see how Obama does tonight with his special address to a joint session of Congress.

But during a televised conference between the president and some Republican leaders on Monday, losing Republican presidential candidate John McCain tried to put the Democrat Obama on the spot by noting the apparent cost overruns for new presidential helicopters (as if McCain would not want the most secure helicopter he could get – remember him wearing full body armor while walking through what he boasted was a “peaceful” marketplace in Baghdad? – and all Republicans would demand it if there was a Republican president, and this was all started when there was a Republican president, anyway, as far as I know).

But Obama smiled and easily fended it off by noting that he had already discussed the issue with the Secretary of Defense and as far as he was concerned his current helicopter is fine, but then again not ever having had a helicopter previously he might be missing something and not be aware of it. He got the laughs (and I think made McCain look foolish in the process – not an unusual condition for the hapless also-ran).

And when one of the Republicans whined that the Obama administration was not working with them (and remember George W. who crowed he didn’t have to work with Democrats because he had political capital (it was not well spent), Obama said that while the majority has a duty to be “inclusive”, the minority has a duty to be “constructive” (just say no is not constructive).

I was disappointed to hear some economists on Hardball say that there was not enough infrastructure projects (that would create jobs and do something highly necessary) in the stimulus package (one has to wonder why not).

They also suggested that Tim Geithner is simply in bed with the banking crowd and needs to go. One of them also said that Hank Paulson, who bamboozled (my description) Bush into throwing money the way of his, Paulson’s (and Bush’s?), cronies, started what Geithner is basically continuing. 

At least one economist on Hardball, and other commentators elsewhere, suggested that something like the Resolution Trust Corporation which was used to clean up the old Savings and Loan crisis of the 1980s needs to enacted.

As I understand it, the banks want to be relieved of some so-called toxic assets, but not all. I don’t fully understand it (and I doubt but a few do), but apparently the bankers want just enough help to keep them in business and for the current executives (who should be fired) to keep their jobs, you know the ones who lost the money in the first place.

Please, let’s just let bad entities go bankrupt and start anew (if the new banks want to rehire folks whose resumes include a track record of losing money, God help us.)

The only thing too big or important to fail is the USA itself.

(If I’ve used that last line before, it’s because it conveys best my opinion on the subject of bailouts.)

P.s.

And what about that rising Republican star Gov. Bobby Jindal of Louisiana who wants to reject federal unemployment dollars — seems like some of his constituents might need that money about now. Standing on principle is one thing, but standing in the way of a money that the unemployed and their families need is another (an example of where just say no is foolish).


Industry, not war licked the Great Depression…

February 21, 2009

(Copyright 2009)

“Government of Wall Street and by Wall Street and for Wall Street must not parish from this earth”, to paraphrase, no parody, Abraham Lincoln.

It seems, especially to hear the Republicans tell it, but also so many others, the primary bench mark we must look at each week day to judge our nation’s viability is the Dow.

It’s down again, the reports stream in, therefore everything President Barack Obama just did or said is for naught.

Excuse me for bringing the is up, but were not those movers and shakers and traders the ones who by their actions and the results and interpretations of those actions the ones who inflated the bubble so hugely that it finally burst?

And Wall Street is really just a generic title. Bank of America, at one time, maybe still, the largest financial services institution in the world, is headquartered in Charlotte, N.C. Some worry that the bad assets from its Merrill Lynch acquisition, among other things, may pull it under (it could already in reality be insolvent, but then again, as we are finding out, nearly any business can be without the wider public knowing till it’s too late). And please, I have no idea whether it is solvent or not. I only know what I read on the web and the Wall Street Journal, traditional paper edition, when I get to the public library.

Bank of America is Bank of America in name only; it sold out years ago (okay was acquired). The name was kept, I suppose, for “brand recognition”, as the marketers and merger people call it.

It began in 1904 in San Francisco, founded by an Italian immigrant, who named it Bank of Italy. One story I read claimed he was able to rescue his cash from the rubble of the 1906 earthquake and fire and set up banking on a couple of wooden planks.

I knew a guy who took a Junior College banking course and upon completion went to work for Bank of America. I mentioned something about A.P. Giannini, the founder of Bank of America. “Never heard of him” he said, with a blank look on his face. (I had in conversation admitted to this guy that journalism did not pay well. This time he looked super puzzled: “why are you doing it?” he asked. No true journalist could have come up with a more obvious and at the same time probing question. I had no real answer).

But back to the problem of the failure of our economy and more specifically our banking industry:

Maybe the federal government needs to become the bank for awhile (isn’t it already?) and bypass Wall Street altogether. While preserving capitalism, maybe we need to work out a new business model.

Or, again, maybe the free market will sort this one out too eventually. If the big banks or the majority of them (not to mention small ones) are really insolvent (if the truth be known, as is often hinted in news stories and blogs), could they not be replaced by now smaller entities or even potentially larger ones who are independent of the Wall Street crowd as the source of capital?

I read in my local newspaper that one regional bank in my area never took part in all those subprime loans and therefore does not hold all that bad debt. I don’t know whether it has accepted federal bailout money, nonetheless – I would hope not.

I think at first everyone thought that some extraordinary emergency action, such as that started in the last desperate days of the Bush administration, could head off the disaster and we could all go back to business as usual. Such was not the case.

Bush, although he would end up being blamed for all the troubles just like Hebert Hoover was before him, would have done better to simply make sure that all investors were protected from bank failures up to the insured amounts and that financial scams were prosecuted and left it at that. But judging by his haste to do a 180-degree turn from traditional capitalism to state-run socialism, he either felt public pressure (and had legacy worries) or just a lot of pressure from cronies who said, do anything, just save our money and our way of life (or give us new money).

Meanwhile, although I realize he is politically committed otherwise, Obama would do better to concentrate on making sure the unemployed are offered benefits, health care is reformed, and education and job training prioritized.

At the same time, emergency infrastructure projects should be pushed forward to forestall such things as bridge failures. And there is nothing wrong with incentives to promote green industries. And along those lines, all industries. What we need is employment.

(Bailing out the failing auto industry is a mistake. We need an auto industry, but not a failing one, and funding the existing model will just prolong the agony. Please let a new more nimble and open-minded crowd of capitalists take over. As for big labor. You won’t have jobs unless there is healthy industry – leave it at that.)

Perhaps many thought there would be some utopia where all the smart people would invest money in money, rolling over dollars, not to produce products and services and employment, but to simply increase account balances.

Certainly people should be able to invest in anything they want to (and hooray for compound interest), but as long as the only incentive is to invest in interest on interest we will push ourselves toward a world where all the dollars one can earn will be worth very little, because people won’t be working to produce products and services and improving or even maintaining the infrastructure.

And even though I don’t quite understand why, I have an idea that down the line, a year or two, maybe sooner, we are headed for major inflation (good at first, not so good as it continues to climb) and maybe that old 1970s nemesis “stagflation”.

So while all this is being sorted out, the best that veteran workers can do is adjust to the ever evolving labor market (what there is of it). If you can go to school or get training, do it.

For the young, there is only one answer: get the best possible education there is for yourself and get the type that fits you best. People in all walks of life need to be more knowledgeable than ever because of technology and the need for extreme flexibility in the workplace.

Some say Obama is doing too much (committing too much money – I have suggested that), others say not enough. I imagine no one really knows.

I’ve touched on the idea before that some now say that FDR’s New Deal, although mitigating much human misery, did nothing to bring the nation out the Great Depression, only World War II did. But here’s a new twist I heard on that and I like it:

It was not the war itself that brought us out of the Great Depression, but the giant surge in our industrial output. Suddenly people had jobs in the war industries (and nearly all industries were turned into war industries, even the USA’s own division of Steinway Piano, if you can believe it (they manufactured wooden gliders). But once the war ended, the industry was in place and re-tooled from anti-aircraft guns to automobiles and from Radar to refrigerators, and the GIs came home, made use of their GI bill education benefits and moved to the suburbs.

The lesson here is not old history, but the need for industrialization. Yes it supports consumerism, but consumerism alone will not do the trick (have you noticed?), and solar panels will be nice, but I think we have to diversify.


One family’s loss another’s opportunity…

February 19, 2009

(Copyright 2009)

I felt kind of embarrassed watching my television screen seeing reportedly desperate American workers losing their homes to foreclosure after losing their jobs. Embarrassed because these homes I was seeing on my screen did not look like modest working people homes, they were two story, upper middle class or professional class edifices with new super-sized pickups and giant SUVs parked out front.

(We have a higher class of poor people in America.)

That of course does not make the plight of these beleaguered homeowners any less desperate than someone losing a more modest home with smaller and older vehicles parked out front, but there does seem to be something incongruous about this picture.

Credit, way too much credit, has allowed a much larger portion of the American workforce to live as if they were upper middle class (sorry for using the class terminology, but how else do I describe it?) over the past couple of decades or more.

It is often said that most American families are about one pay check away from losing everything, and apparently that is so from what we are witnessing now.

I have a thought. In the neighborhood where my wife and I lived until recently, many homes are being left vacant. Others are being rented out, but the precarious lives many renters live leads to a lot of moving in and out. Yard and home care in many cases is suffering, although overall, things are not desperate yet (maybe).

It is said that homeowners who are current with their payments and are not in danger of losing their houses, and ones who have been careful and played by the rules of prudent finance will nonetheless benefit from President Barack Obama’s administration’s move to bailout distressed homeowners, because blight in neighborhoods could be prevented or curtailed and the market could be restored.

Many or most of those distressed homeowners were not terribly responsible, taking on mortgages they should have realized they could not handle (unless the price of homes continued forever on their rocket ride up and they therefore could leverage themselves into upper middle class into infinity – but even rockets often come crashing back to earth). Some may have been bamboozled by real-estate salespeople, but we have to demand of everyone, to include ourselves, a certain amount of buyer bewariness. We do have public education (although personal finance is not emphasized), use it.

But here’s a thought, just a thought:

Okay, so the lenders take over homes in my old neighborhood. They will, or should, either eventually be sold to someone else (and there are bargain hunters out there) or they will be rented out. If neither is the case, there must not be much of a demand or need for housing (and could folks rent the homes they are losing for the short term? I know, only if the rent payment was a lot lower). I always wonder why the push to get homebuilding going in the local area when apparently we now have an oversupply. I know the answer here too, carpenters want to work and I don’t blame them. But one of my now retired carpenter brother-in-laws said that when there weren’t new homes to build he did remodels. He was never out of work during his career and he never (with one short, very short, exception) moved out of the local area. 

I guess part of what I’m trying to get at here is that letting the market itself correct the problem might work somewhat more efficiently and even equitably (I know, too late for that).

I have to think that as bad as unemployment is around my area (about 10 percent – not unusual for here, though) , that means 90 percent of the workforce is busy (that’s how conservatives interpret unemployment figures, so I thought that even though I am a moderate, I would steal that from them). That means there are a lot of people who could take advantage of much lower home prices. There may be a lot of working people living in apartments who could now afford to move into a home, either to rent or buy (although, reality tells me that most apartments in my area are either occupied by the never or seldom working class nurtured by the welfare system, which was never really reformed, and retired people on fixed incomes).

The big problem around my area (and everywhere, I suppose) is speculation. Speculation is what drove up home prices around here into the stratosphere before they came back down to reality (and I think in my area at the going rate one could use the old, old fashioned rule of 25 percent of the household income for a payment, as opposed to the outrageous modern rule of 50 percent or more). The easing of lending rules (like can you really afford to take on a mortgage) led to a rush to buy homes. Outside and even inside spectators took advantage of the situation and gobbled up homes, not to live in them, of course, but to flip them. I have a nephew who actually did buy a home to live in, fixed it up, and then flipped it (with the help of his retired carpenter dad). He got out just in the nick of time; it was breathtaking. He’s an extremely hard-working fella and I don’t begrudge his speculation and I suppose it is hard to impossible to limit speculation. But make no mistake, speculation hurts. It drives up home prices way above what average working families can ever hope to afford (unless we drop prudent lending rules like we did – but now we know the outcome).

So I’ve kind of gone around in circles. Just some random thoughts. No real conclusions, except: “a penny saved is a penny earned”, “let the buyer beware”, “don’t take any wooden nickels”.

Add 1:  Hopefully Obama’s forclosure rescue plan will fare better than attempts so far by lenders. I heard on TV that the current rate of  re-default on adjusted mortgages is 50 to 60 percent. A Wall Street Journal editorial pegged it at 50 percent.

P.s.

I know of a good home buy in a certain neighborhood.


Elected officials need authority to take blame…

February 18, 2009

(Copyright 2009)

Among the major causes or components of the built-in senseless gridlock in California government is Proposition 13.

(Some of all of this may apply to other states too.) 

It’s the 1978 tax measure that among other things required a 2/3 vote of the legislature to raise taxes.

Kind of the same mentality that calls for term limits, mandatory sentencing, and constitutional requirements that lock the state government into funding specific categories or programs.

California’s budgeting laws lock in a major portion of the state’s spending for designated services, leaving the legislature and the governor with less than half of the total budget to argue over as “discretionary spending”.

And I should caution serious California readers to read Dan Walters (works for the Sacramento Bee, is on the web) to get a better understanding of this. I’ve followed California politics most of my life, but mostly on a surface basis, as a reader of current events. I did take a California government class in college, but I don’t begin to understand all of its complexities. On the other hand, it should not be terribly difficult. As it presently stands, you have Democrats who hold the majority and these days seem to reign primarily in the populous LA area and the Bay Area, and then you have a lot of Republicans everywhere else. At present, Democrats support tax increases and Republicans oppose tax increases, but do support spending cuts, to the extent they can make them. And in there, you have to realize that modern conservatives use the strategy of “starving the beast” to oppose social programs. It’s easier to cut off funding than to take on a particular social program head-on.

The problem is, as Dan Walters often notes, California continually runs a “structural deficit”, which forces it even in good economic times (and these of course are not) to spend more than it takes in. That’s because our elected officials have direct authority only over a relatively small portion of the budget.

To some extent, I think, both Democrats and Republicans almost like aspects of the structural deficit. They can hide behind it to cover their own poor judgment, throwing up their hands and saying: “we have no choice; we’re locked in”.

(I once covered county government for a newspaper. The Road Department chief continually ran what seemed to be a bloated budget, but when the supervisors tried to force his department to be more efficient, he smiled and said he could not do that because state regulations required that state-funded road equipment and even employee hours could only be used for certain things; I think there is some analogy, if indirect, there to the problem of which I am addressing.)

The way things should work in our representative democracy with its three branches of government, legislative, administrative, judicial, is that the majority of  the elected  legislators, who in turn use the proxy of the voters, determine how things should run. The governor, an elected official, is supposed to be the administrator, who does have checks on the power of the legislature, because he can veto legislation, and just like the president of the United States, he can take his case directly to the people, as well. Unlike the president of the U.S., he also has a line-item budget veto.

Oh, and I should mention, California and many other states, unlike the federal government, is required by law to balance its budget.

I mentioned the three-strikes law that hobbles the judiciary to some effect, and term limits that limit the power of voters, but those items are not the main subject of this blog, so back to the budget problem:

At some point the far right and some anti-tax extremists (to some extent one of the same), felt it did not have enough influence, and at the same time, elected officials at both the county and state levels got carried away with spending and riled property owners and potential property owners. So Proposition 13 with its 2/3 vote tax increase provision (not to mention the utterly unfair and inequitable and burdensome multi-tier property tax structure (the definition of arcane) was passed as a kind of gigantic public tax protest.

I know, back in the 70s, my wife and I had recently started to buy a home, and we voted for it. As I mentioned in a blog a few months ago, I was covering county government at the time and watched a conservative board of supervisors simply ask its treasurer what the expenses were and then they set the tax rate accordingly (a little more discussion on how we might keep those expenses in check, maybe). That seemed a rather open-ended approach. At the time, some 30 years ago, the county was already locked into funding unfunded state mandates, and it has not changed. The structural deficit situation rears its ugly head. It would seem those who are charged with spending the money must have authority over how to raise it and spend it).

The problem is that it is not practical to codify into law what decisions legislators must make on passing legislation on the budget or otherwise, or judges must make when sentencing criminals (three strikes: two felonies, then the bad guy turns good, but at some point gets hungry and steals a slice of pizza – goes back to state prison, rather than probation or a county jail term as a first offender might suffer — adds to state prison overcrowding and expenses). Both legislators and judges make wrong decisions, but there is a reason we have people make decisions. Decisions on policy or human lives must be made with flexibility to fit the circumstances.

Right now the free-spending Democrats outnumber the Republicans in the California legislature. The only way the Republicans (who actually do a fairly good job in spending themselves) feel that they can keep their rivals in check is to vote no and make use of the 2/3 requirement, making the state run out of money, lay off workers, quit paying its bills (to business and private citizens), cut back in education and law enforcement, make the state’s sorry credit rating even worse and so on.

Without the inflexibility of the 2/3 requirement the stalemate could be broken. Yes it might wind up being a tyranny of the majority as far as the Republicans are concerned, but they can get more office holders elected and it is better than letting the tyranny of the minority dismantle our state government and cause such human misery in the process.

Three strikes and terms limits (the havoc they cause a subject in itself) are silly and even dangerous as well, but some other time on those.

Add 1:  While a Bakersfield Republican senator notes in a story in the Bakersfield Californian that supposedly anti-tax hero former Gov. Ronald Reagan in 1967 proposed the largest tax increase in the state’s history, the state being in fiscal dire straits then too, and that he, the Bakersfield senator, might consider compromise, that can be dangerous. The Republicans this week kicked out their own minority leader for supporting cooperation.

P.s.

A solution: Re-do the state constitution. Give the power back to our elected officials and let the check on them be the voters. Otherwise we might as well have a computer geek write a government program and we could dismantle the human government and feed everything into a computer. Garbage in, garbage out.