Ironically, in the midst of Sunshine Week, designed to create more open government and freedom of information, the “Committee of Two” considering the financial situation of the UC system – Gov. Jerry Brown and University of California President Janet Napolitano – are not forthcoming in revealing details about their negotiations. Despite protests to the contrary, this may be a necessary thing.

Yesterday at the UC Regents’ meeting in San Francisco, both Brown and Napolitano did a two-step around whatever progress is being made in their talks about the proposed tuition increase. Napolitano and the Regents supported tuition increases if the university system did not get more money from the state. Brown refused to be bullied.

Now the two are working on a plan that will try to re-set some university finances without raising tuition or dramatically increasing the state’s contribution. Not an easy task, but they claim they are making progress.

That doesn’t stop critics from demanding the negotiations be more open. As one student was quoted in the Sacramento Bee, “We need a committee that not just represents a committee of two, but a committee of 240,000,” referring to the number of students in the system.

University business

Are private talks setting government plans ever the way to go? Historians have suggested that, if the United States Constitution was cobbled together in open meetings the document would be much different and, they suggest, not better.

Tackling tuition hikes is not the same as constitution writing. However, to continue the broad analogy, what comes out of these private meetings may set a course of change for the way the university does business, just as the long ago constitution-writers went beyond their original assignment of fixing the Articles of Confederation.

I know – a little bit of a grandiose comparison.  But it is quite possible the UC system might look and feel quite different if the negotiators come to an agreement and any proposed changes are approved after debate. Online courses, larger teaching loads for professors and a shorter time to graduation all may alter the university experience as we have come to know it over the last few decades.

Whatever the Committee of Two comes up with would have to withstand vigorous public debate. There is no guarantee any Committee of Two proposal will pass the test. I served on a half-dozen state commissions over the years and few commission recommendations were turned into state policy.

Pensions

One big issue that is affecting all government-related organizations is employee pensions and health costs. When the issue of raising tuition first surfaced, the university’s financial division pointed to pension costs as one of the culprits. That issue must also be part of the negotiations, along with rising retiree health care costs.

We will see if the Committee of Two can come up with any solutions on the pension/health care front that succeed and maybe set the course for reform in this area for other government entities.

One suspects big changes are coming to the UC system. Getting the ball rolling is happening in private.

By John Seiler

If you’ve ever lived in Washington, D.C., as I did in 1977 and from 1982 to 1987, you know the place lives under a bubble. They have no idea what’s going on in the rest of the country. But they tell us what to do.

That’s sure the case with E.J. Dionne, the Washington Post’s top political writer. From a San Francisco dateline, he asks:

“If the United States were still governed under the Articles of Confederation, might California be in the position of Greece, Spain or Italy?

“After all, California has a major budget crisis and all sorts of difficulties governing itself. Its initiative system allows voters to mandate specific forms of spending and to limit tax increases and also make them harder to enact. Absent a strong federal government with the power to offset the impact of the recession and the banking crisis, how would California fare in a global financial system?”

He doesn’t seem to know that, unlike in those countries, California law mandates that bond payments are the first priority of payment in any budget. So the state’s current $73 billion in general obligation bonds (meaning they must be paid for from the general fund) are quite secure.

It’s true that California vies with Illinois for the state with the worst credit rating. But that’s because, should the national economy begin to implode, it is these state economies that would be hit the hardest, demolishing their state budgets. But so long as the national economy doesn’t implode, that won’t happen.

Bond rating

So the real problem then shifts to Dionne’s beloved federal government, which has taken out $16 trillion in debt in the name of all Americans. If the Articles of Confederation still were in effect, the federal government never could have run up that debt.

Under the Articles, Congress had no power of taxation. The federal government ran only on money given it by the several states. So the federal government never could have grown into the monstrosity it has become, wasting $3.8 trillion a year while running up trillion-dollar annual deficits.

On its own, California’s far-left politics would not be tempered by the more moderate politics of the rest of the United States. So it might resemble Cuba.

Then again, Canada is run by left-wingers — but lefties who figured out about 15 years ago that they could only manipulate society if reasonable tax and regulatory policies keep the economy growing. Same thing for Australia.

California’s large Latino population also pushes its politics to the left. But as an independent country, California might resemble Mexico; which, as I noted in an earlier article, has less than half America’s national debt (as a percentage of its economy) and has pursued progressively more free-market policies since 1995.

So, by itself, California might develop a hybrid Canadian-Mexican system with lower taxes and less regulation, but maybe a government-run medical system that’s inefficient (as in Canada, where there are long lines and people go to the United States for many operations), but costs half as much.

Dionne’s ‘solution’

Dionne’s “solution” the the ongoing economic problems of California and the United States is … the suspense is unbearable … massive new federal government spending! So the deficits and debt now weighing us down would be increased. Dionne:

“First, we are lucky to have a robust federal government, which the European Union lacks. Early in the recession, the feds were able to offset problems in the country’s most troubled regions with a stimulus program (and also with that auto bailout that so many, including Mitt Romney, opposed). The stimulus should have been bigger, and it should have extended over a longer period. But it helped.”

First, the opposite is true. There never was any recovery. Certainly not in California, where unemployment remains at 10.8 percent.

The bailouts didn’t work. GM would have been better off if its assets had been auctioned off. By now it would be a strong, independent company. Instead, taxpayers lost about $14 billion in the bailouts of GM and Chrysler.

Worse, the GM bondholders were ripped off so that the UAW could get a piece of the action. This set a dangerous precedent and undermined every business bond in the country, disrupting capital formation — and so business and jobs formation. Now, no one’s bonds are secure.

How D.C. looks at California

On California, Dionne naturally likes Gov. Jerry Brown’s proposed $8.5 billion tax hike:

“Moreover, Gov. Jerry Brown deserves credit for trying to get a handle on the California budget crisis. He’s going to the voters this fall with a referendum to raise about $8 billion in taxes to stave off further cuts. Without the money, Brown says, education spending would have to be slashed beyond the cutbacks that have already taken effect.”

Actually, Brown deserves no credit. The tax increase would chase even more businesses and jobs from the state. He also offered only a paltry reform of the state’s underfunded pension systems. And the problem with California’s education system is not a lack of spending, which is generous, but severe structural and pedagogical defects, with the powerful California Teachers Association and the California Federation of Teachers impeding reforms.

Dionne’s view is important because it gives us Californians a glimpse into what our masters in D.C. are thinking about us — and are preparing to do to us.

Maybe the good old Articles of Confederation weren’t such a bad idea after all.