Thursday, August 26, 2010

Compare and contrast

Two posts I found on my 'things you might find interesting' list provided by google reader.

One is a letter to students at Berkeley, about how the previous generations stopped 'paying it forward' with social programs and decided to keep investment for the future to themselves.

The other is an attack on California as having a 'terrible business climate' that includes, among other things, ' unnecessarily lavish social programs'.

I thought the latter was a perfect illustration of the former. The second talks about how why California is so awful:
These companies fleeing California’s horrid business climate are not alone. There has been a steady flow of businesses out of California for the better part of a decade. As California’s political morass worsens, as its budget woes increase, and as her politicians are proven incapable of making the hard budgetary decisions to take power from unions and chop unnecessarily lavish social programs, the state’s jobs are bleeding out. California is an a freefall the end of which is still unseen.
This sounds terrible! But wait, what exactly did happen in California? From the first article:
This deal held until about thirty years ago, when for a variety of reasons, California voters realized that while they had done very well from the existing contract, they could do even better by walking away from their obligations and spending what they had inherited on themselves.  “My kids are finished with school; why should I pay taxes for someone else’s?  Posterity never did anything for me!”  An army of fake ‘leaders’ sprang up to pull the moral and fiscal wool over their eyes, and again and again, your parents and their parents lashed out at government (as though there were something else that could replace it) with tax limits, term limits, safe districts, throw-away-the-key imprisonment no matter the cost, smoke-and-mirrors budgeting, and a rule never to use the words taxes and services in the same paragraph.
Now, your infrastructure is falling to pieces under your feet, and as citizens you are responsible for crudities like closing parks, and inhumanities like closing battered women’s shelters. It’s outrageous, inexcusable, that you can’t get into the courses you need, but much worse that Oakland police have stopped taking 911 calls for burglaries and runaway children. If you read what your elected officials say about the state today, you’ll see things like “California can’t afford” this or that basic government function, and that “we need to make hard choices” to shut down one or another public service, or starve it even more (like your university). Can’t afford? The budget deficit that’s paralyzing Sacramento is about $500 per person; add another $500 to get back to a public sector we don’t have to be ashamed of, and our average income is almost forty times that.  Of course we can afford a government that actually works: the fact is that your parents have simply chosen not to have it.
Another link: to a summary of where California's budget goes and where the shortfalls are. Add to this the fact that California's legislature requires a 2/3 majority to increase revenues, but only a bare majority to decrease and you have a recipe for fiscal disaster.

It sounds to me like blaming California's 'lavish social programs' for the budget and the subsequent exodus of companies to other states is simply a missed target.

Why talk about this? Well, despite my focus so far on Australian political issues, I'm more broadly-interested than that. I've actually been following American politics more than Australian recently. Second, these memes have already reached Australia. I've said before that Australian politics are American, writ small. This is more a truism than it is true, but it works for simple analysis. Simply put, if something crops up in American politics, it'll likely find its way to Australian sooner or later, though mostly in a somewhat muted form. If nothing else, looking at America is a good way of seeing what it would be like if certain policies were adopted.

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