Krugman distorts how CA works

April 9, 2013

By John Seiler

At CalWatchDog.com, we’ve published some articles on Paul Krugman’s column praising California supposedly new, high-tax, big-spend liberal government. I read the column again and a few more comments are necessary.

He might have a Nobel Prize in economics. But if he were a journalist intern here and submitted his recent piece on California, I’d have deleted it and told him to start over. It’s obvious he did absolutely no research on it, but just wrote off the top of his head. Three thousand miles away, he thinks he knows everything about our complex state. Consider this howler:

“California isn’t a state in which liberals have run wild; it’s a state where a liberal majority has been effectively hamstrung by a fanatical conservative minority that, thanks to supermajority rules, has been able to block effective policy-making.”

In fact, on everything except the budget, a majority vote was all that was needed. For more than 40 years liberal Democrats have controlled the state Legislature, except for one year, 1995, when Republicans had a majority in the Assembly. So on almost everything — schools, abortion, health care, the environment (especially AB 32) — it really has been Liberal Democrats Gone Wild.

Even “supermajority rules” on the budget were ended in 2010 with Proposition 25; the only exception was taxation, which still requires a two-thirds vote. But despite that, the Republican minority never could do much on the budget anyway, except for one year: 2011, when they blocked Gov. Jerry Brown putting a tax-increase on the budget.

Taxes

But even the tax issue is not a story of a “liberal majority…hamstrung by a fanatical conservative minority.” In 2009, enough Republicans joined the majority Democrats to pass a $13 billion tax increase pushed by Republican Gov. Arnold Schwarzenegger, the biggest tax increase of any state, ever.

Krugman is as unspecific as an amateur blogger. But he seems to be talking about GOP legislators in 2011 blocking putting an extension of the Schwarzenegger tax increases on the state ballot that year. Krugman:

“Over the years, California’s Republicans moved right as the state moved left, yet retained political relevance thanks to their blocking power. But at this point the state’s G.O.P. has fallen below critical mass, losing even its power to obstruct — and this has left Mr. Brown free to push an agenda of tax hikes and infrastructure spending that sounds remarkably like the kind of thing California used to do before the rise of the radical right.”

Acutally, the supermajority “spending” part, as noted, was taken care of by Prop. 25. As to the taxing part, it was not the Legislature that raised taxes last year, but an initiative for which signatures were gathered, and which voters passed in November.

2011

And as to the 2011 attempt by Brown to raise taxes — assuming that’s what Krugman is referring to — here’s what really happened. Brown wanted to continue the $13 billion Schwarzenegger tax increases, which were expiring. But Brown was elected in 2010 on a specific promise not to raise taxes unless the people voted for it.

In 2011, he tried to get a handful of Republicans to join with the majority Democrats to put the $13 billion tax “extension,” as he called it, on a Special Election he would call in Nov. 2011. Krugman probably doesn’t know it, but governors can call special elections if initiatives are ready for a vote, such as the Special Election in 2005 over Schwarzenegger’s reform plan; which was defeated in its entirety.

Brown is a savvy politician. He knew that, if a Special Election were called in Nov. 2011, the tax increase would be the focus of attention. So he wanted some Republican legislators as cover. He could say, “See, even Republicans are open to tax increases.”

But for once (unlike with Arnold’s 2009 tax increase), Republicans stood solid.

Even then — even then, Dr. Krugman, Nobel Laureate — Brown could have put the the tax increase before voters in Nov. 2011. All he had to do was get his “troops,” as he calls teachers’ union members, to gather signatures for a tax-increase to be put on the Nov. 2011 ballot, then himself call a Special Election.

He didn’t do that for political reasons.

He did do something similar, but with a more modest tax increase of $6 billion instead of $13 billion, for the Nov. 2012 ballot. Circumstances were more favorable then because it was a general election with a popular Democratic president heading the ticket, bringing out many more Democratic votes. So just five months ago, the Proposition 30 tax increase passed.

Ike

Krugman also writes, “Modern movement conservatism, which transformed the G.O.P. from the moderate party of Dwight Eisenhower into the radical right-wing organization we see today, was largely born in California.”

So he’s read some histories of conservatism. But everything has changed.

I just read a fine new book on the Eisenhower years, “Ike’s Bluff: President Eisenhower’s Secret Battle to Save the World,” by Evan Thomas. It mainly concerns defense and foreign policy. But I was reminded how different the 1950s were from today. For example, abortion was considered so abhorrent it wasn’t even mentioned in public, or in movies (See “Detective Story” with Kirk Douglas). Same-sex “marriage” was a joke at the end of “Some Like It Hot,” starring Marilyn Monroe. Ike even refused to hear ribald jokes.

On economics, Ike was obsessed with cutting waste in government, preventing inflation and paying down the national debt — all positions the opposite of Krugman.

The following graph shows the national debt as a percentage of GOP.

You can see how Ike paid down the debt, while Obama, following Krugman’s advice, is greatly increasing it.

(Yes, I know Reagan increased the debt. I wrote articles at the time urging him not to do so. As to the Bushes, did they ever do anything right? And Clinton should be commended for reducing the debt.)

So once again, Krugman doesn’t do even a little research to find out what really happened.

I suggest that Krugman move out here for five years and closely study our quirky state. He easily could get a teaching position at USC, UCLA, Berkeley or Stanford, probably making $400,000 or more a year. Combined with his New York Times salary, book royalties, speaking fees, and investment income from his Nobel Prize proceeds, he would make well over $1 million a year, qualifying him for the 13.3 percent top income tax rate he so lavishly has praised.

Currently, he reportedly lives in Princeton, N.J. So under Republican Gov. Chris Christie, he pays only the 9.97 percent top rate.

If he thinks California under liberal rule is so fantastic, he should move out here and pay for it.