Governor outlines weak agenda

Jan. 7, 2010

By JOHN SEILER

He won’t be back.

This was Gov. Arnold Schwarzenegger’s last State of the State address, given on Jan. 6, 2010. In a year, he’ll be gone, a faded memory like his role in 1970’s “Hercules in New York.”

An out-sized presence in everything else he has done, from bodybuilding to movies to charity, he was humbled by the political process. He will spend his last year trying to carve out some kind of legacy besides that of high unemployment, working to partly erase the six years spent in his cigar tent getting rolled by Sacramento’s best, trying to find some way to close yet another budget deficit, this one for $21 billion. Although even that previous estimate could be surpassed by the estimate in the governor’s proposed 2010-11 budget, which will be released Friday.

Today’s address was his last chance to advance bold solutions to California’s mammoth problems, many caused by his own switch, in early 2006, from moderation to a blind faith in excessive government programs. He passed the chance by.

With the state suffering 12.3 percent unemployment, according to the official figure – and above 20 percent if one uses a broader measure – all he could come up were a few stopgap measures. There was nothing bold to get the economy moving again, such as a large tax cut or a major rollback of anti-business regulations – what he once, in balmier times, called blowing up the boxes. As he said in his first State of the State in 2004:

“Every governor proposes moving boxes around to reorganize government. I don’t want to move boxes around; I want to blow them up. The executive branch of this government is a mastodon frozen in time and about as responsive. This is not the fault of our public servants but of the system. We have multiple departments with overlapping responsibilities. I say consolidate them. We have boards and commissions that serve no pressing public need. I say abolish them.”

In today’s address, he only called for moving the boxes around, expanding some of them and painting them Irvine beige.

He talked about “priorities,” saying that his would be “jobs, jobs, jobs.” So will he favor suspending AB32, the greenhouse gases overregulation that is killing jobs, until the economy recovers? That proposal has been advanced by Assemblyman Dan Logue, R-Linda. No, the governor is sticking with his 2006 law that is hampering business, even though its intended purpose – to reduce global warming – is being mocked by record cold weather across the globe.[1]

97-pound weakling proposals

Instead of giving us bodybuilder-pumped proposals to promote jobs, the governor advanced four 97-pound weakling proposals:

1. A $500 million jobs training bill. But such training doesn’t work, as the New York Times reported on similar proposals from the Obama administration:

“Yet for all the popularity of these government-financed programs, there are questions about whether they actually work, even as President Obama’s stimulus plan directs $1.4 billion more to retraining and other services for people who have lost their jobs….

“Nonetheless, a little-noticed study the Labor Department released several months ago found that the benefits of the biggest federal job training program were “small or nonexistent” for laid-off workers. It showed little difference in earnings and the chances of being rehired between laid-off people who had been retrained and those who had not.

“In interviews, the authors of the study and other economists cited several reasons that retraining might not be effective.”

The governor’s proposal, if passed, would add another $500 million to the budget deficit, add more state workers to the payroll (including future mammoth pension guarantees), but produce little or nothing in jobs creation.

2. “[A] measure to streamline the permitting of construction projects that already have a completed environmental report.” A good idea if he could push it through. But the governor offered no bold new push to really root out the worst regulations, many of which he has signed.

3. A homebuyer’s tax credit “of up to $10,000 for the purchase of new or existing homes” to stimulate construction. But past credits, although not the main reason for the housing bust, contributed to the disaster by artificially increasing house ownership beyond market levels. A better idea: broad tax cuts to give everybody more money to afford housing they want, whether ownership or rental. Let the market, not government, decide the amount of housing to build.

4. Exempting the purchase of green manufacturing equipment from the sales tax. This is more social and industrial engineering, something we need less of. Instead, how about repealing the 1-cent sales tax increase the governor pushed through last year?

“The worst is over for the California economy,” he said. “Our economy is well positioned” to take advantage of the future. But nobody knows how long this recession will last – or whether it will turn into a Great Depression II. And California’s anti-business climate still is driving businesses away. Two days before the governor’s address, Northrup Grumman Corp. announced it was moving its headquarters from Los Angeles to the Washington, D.C. area. The Wall Street Journal reported:

“Northrop’s move underscores a broader struggle for Los Angeles: It is the nation’s second-largest city with 13 million people in its metropolitan area, but has suffered a growing exodus of corporations. In addition to defense and aerospace industries, there has been a steady erosion of its other iconic trade, the movie business, as states lure away film productions with rich tax incentives.

“Other corporations based in Los Angeles have pulled up stakes recently. Hilton Hotels Corp. left Beverly Hills, Calif., last year for Washington, D.C. The area’s once-prominent mortgage-finance industry imploded during the housing bust, with companies such as Calabasas, Calif.-based Countrywide Financial Corp. sold to Bank of America Corp.

“The largest public company still based in Los Angeles County is Walt Disney Co., with headquarters in Burbank. However, major Hollywood studios, such as Time Warner Inc.’s Warner Bros. and Viacom Inc.’s Paramount Pictures, are part of media conglomerates based elsewhere.

“Northrop’s departure comes amid a backdrop of 12.6 percent unemployment in Los Angeles County in October, and widening budget shortfalls in both the city and state governments.”

Paltry reforms

Instead of bold proposals to get the budget in balance, he backed the Best Practices Budget Accountability Act of California Forward. He said, “I especially support its proposals for performance-based budgeting and applying one-time spikes in revenues to one-time uses, such as debt reduction, infrastructure and the rainy day fund.”

Those are good proposals that have been knocking around for years. Then why hasn’t he insisted, in past negotiations over the budget, that they become law?

He called for spending more on universities than on prisons. So, with the state still facing $21 billion in deficits, he wants more spending. But there’s no money. Nor did he call for releasing non-violent drug offenders from prisons, which would greatly reduce the cost of prison maintenance.

Along with all recent governors, he wants to get more money from federal government. Good luck. The feds have their own budget problems.

On the state’s pension tsunami, in which the pensions and other benefits going to retired government employees are devouring the budgets of the state and local governments, he called for generic reform. Again, nothing bold.

He said he would sign a new education reform the Legislature just passed:

“For too many years, too many children were trapped in low-performing schools. The exit doors may as well have been chained. Now, for the first time, parents – without the principal’s permission – have the right to free their children from these destructive schools. That is a great freedom.

“Also in the past, parents had no power to bring about change in their children’s schools. But that will now change. Parents will now have the means to get rid of incompetent principals and take other necessary steps to improve their children’s education.

“To increase accountability, we broke down the firewall so that teacher performance can be linked to student performance.”

We’ll see. So many education reforms in the past have gone bust.

In Reaganesque fashion, the governor closed by speaking of the sacrifices of California veterans who have lost homes, marriages, and limbs. Some even have committed suicide. He asked service members in the audience to stand up and take an ovation. But caring for veterans is largely a federal responsibility. And the best way he actually could help vets would be to repeal his assaults on the state’s economy of the last four years, reducing impediments to jobs growth.

Just a few years ago the governor’s references to his childhood in Austria and his corny stories still added to his charm. Now, they’re just a reminder of how he wasted a golden opportunity to reform the state, squandering the immense political capital he earned when he was elected in 2003 during the Gray Davis recall.

His state Web sites still labels him “The People’s Governor,” but he always governed as if “ARNOLD IS NUMERO UNO,” as a T-shirt he wore during his bodybuilding days proclaimed. But hubris, as the Greek word is defined, “often indicates a loss of touch with reality and overestimating one’s own competence or capabilities, especially for people in positions of power.”

The political furies and the eyes of voters now turn to choosing his replacement, as the election season grinds on toward the June primary and the November general elections. Everything he does from now on, including the budget battles, will have the added factor of the influence of the candidates vying to succeed him. His time has passed.

John Seiler, an editorial writer for The Orange County Register for 19 years, is an independent writer. His email: [email protected].

---

[1] Even as the governor was speaking at 10 a.m. on Jan. 6, 2009, here were the top stories on The Drudge Report:

Winter Could Be Worst in 25 Years for USA...
CHILL MAP...
Britain's big snow shuts cities...
GAS SUPPLIES RUNNING OUT IN UK...
Elderly burn books for warmth?
Army drafted to rescue 1,000 snow stranded motorists...
Vermont sets 'all-time record for one snowstorm'...
Iowa temps 'a solid 30 degrees below normal'...
Seoul buried in heaviest snowfall in 70 years...
3 die in fire at Detroit home; power was cut...
Midwest Sees Near-Record Lows, Snow By The Foot...
Miami shivers from coldest weather in decade; Florida Gov Signs Emergency Order ...
Cold snap spurs power rationing in China...