While California teeters on the edge of bankruptcy, the Golden State will feature the nation's most expensive gubernatorial race between former eBay CEO Meg Whitman and Attorney General Jerry Brown. Will desperate Californians be beguiled by Whitman's multi-million dollar advertising blitz?
California has a $20 billion budget shortfall and its bond rating has been downrated to below that of Kazakhstan. As usual, the governor, Arnold Schwarzenegger, and the legislature can't agree what to do. California's unemployment rate is 11 percent and recent budget cuts have caused sharp curtailments in state services ranging from layoffs of public safety employees to diminution of highway maintenance.
In theory, Schwarzenegger was well positioned to deal with California's budget woes. A self-declared centrist Republican, he appeared to occupy a halfway position between the Democrats who control the state legislature and the über-conservative Republicans who constantly fight them tooth and nail. (California is one of only three states that require a 2/3rds vote to pass a state budget.) Unfortunately, the "governator" morphed into an erratic wimp, managing to irritate both parties and, ultimately, the electorate.
As a consequence, California has a horrendous budget crisis and no clear path to resolution. Enter Whitman and Brown.
It's pretty clear why Jerry Brown is running for Governor. He's a career Democratic politician; he'd been termed out as Attorney General; he'd already been Governor from 1975-83; and no other major Democrat wanted the job.
It's less clear why Meg Whitman is running. As CEO of eBay, Whitman took the company public and became a billionaire. Some suggest she's emulating former Massachusetts' Governor Mitt Romney, another billionaire who used the state house as a route to Republican political prominence.
Whatever Whitman's motivation may be, it's clear that she's willing to spend millions to win the governor's race. To capture the Republican primary, she expended $76 per voter, roughly $80 million. (In contrast, Jerry Brown spent 50 cents per voter to win the Democratic contest.)
Whitman 's campaign emphasizes her CEO credentials. Unfortunately, the experience Whitman describes - "At eBay, Meg learned how technology and decentralization can be harnessed to deliver powerful results" -has little to do with fixing California. Instead of thoughtful proposals, she offers grandiosity. With one hand, Whitman promises to beat the legislature into shape, while with the other she proposes to balance the budget by simultaneously cutting taxes and reducing state payrolls by $15 billion.
One of the lessons successful CEO's immediately learn is the necessity to balance a budget. In California, that doesn't mean cutting services, they've already been cut to the bone. It means sensible tax increases; for example, a severance tax on oil producers. But Whitman, as a conservative Republican, is dogmatically opposed to any tax increase no matter how fiscally responsible.
In fact, Whitman wants to eliminate state capital gains taxes, which are primarily paid by the wealthy. In 2006, 61 percent of capital gains taxes were paid by individuals with adjusted gross income in excess of $1 million. Eliminating California's capital gains tax would primarily benefit Whitman and her rich pals.
Whitman's solution to working with a Democratically controlled legislature is to reduce their effectiveness: "Meg will support a constitutional amendment that would turn California's full-time legislature into a part-time legislature with a greatly reduced salary." That's a terrible idea; it would guarantee that only the wealthy could afford to be legislators.
Managing California isn't like running eBay. California has the eighth largest economy in the world and - considered as a nation state - has responsibilities that corporations don't have. When times get tough, corporations can lay off their workers. But California can't responsibly lay off public safety workers and teachers. When times get tough, corporations can gut their employee benefits. But California can't responsibly cut life support for the elderly and infirm or for children.
In contrast to Whitman's pomposity, Jerry Brown comes across as stolid. Whereas Whitman touts her experience as a corporate CEO, Brown notes his experience working in state government: "insider's knowledge, outsider's mind." And Brown was an effective mayor of Oakland, a deeply troubled city.
Brown and Whitman have major points of agreement: no new taxes, downsize the state bureaucracy, and push some responsibilities to counties and cities. The difference between them is process. Whitman is confrontational, I will bend the legislature to my will. Brown is collaborative, I know how to work with the legislature to get things done .
Ultimately the contest will come down to money and voter turnout. Whitman will pour more millions into her campaign, outspend Brown by at least two to one. But Brown has the advantage of running as a Democrat in a state where 44.6 percent of voters identify as Dems versus 30.8 percent who favor Republicans.
Is Brown exciting enough to bring out Democrats and capture enough Independent votes? Will Whitman's money overcome her deficiencies? Will either candidate be able to prevent California's slide into bankruptcy? Will Golden Staters live happily ever after? Stay tuned.
If she wins it will be because the voters view Jerry Brown as the past, and Meg Whitman as the future, and because liberals have given conservatives plenty of amunition, by supporting a far left agenda that alienated the middle.
Sadly, the payback for the far left agenda, is going to be disastrous for anyone in this state who still has a job after election day.
The rich will do fine under Whitman, the poor would do fine under Brown. But the middle class has been used as a cash register by both parties, their leaving and won't be coming back, now that California has been trashed. Without a middle class there will be no tax base, no wiggle room, and more staggering deficits.
You know they're going to gain seats after the Cenus, but the question becomes why would anyone want to live there anymore...?
You have your priorities back asswards.
The greater harm is not the deficit but the spending.
Milton Friedman stated that a balanced $200 billion budget is worse than a $200 billion budget with a $100 billion deficit. At least in the latter budget the taxpayers still have the $100 billion dollars to pursue their economic interest. Individuals make far better judgement with their own money than government.
In the pursuit of balancing the budget through tax increases alone, one ends up with a dead economy.
One has to wait - usually - about 50 years to gauge the sustainability of social experiments. The Soviet Union lasted only 70 years. The Western Europe socialist experiments started around the 1950's and they are currently suffering sovereign debt (PIIG: Portugal, Ireland, Iceland, Greece).
The US government - unwisely - pushed many programs which were contrary to the Constitution. Thus the growing deficit. President Wilson started this mess. Keep the tax rates the same, removing the unconstitutional programs and the main benefit is decreased spending and a secondary - and it is only secondary - benefit is balanced budgets.
won't be fooled by Whitman?? haha
http://www.megwhitman.com/story/1315/meg-whitman-announces-new-public-safety-coalition-leaders.html
On name in particular stands out: ED JAGELS, DA from Kern County. Ya thats the same guy who put 25(at least) innocent people in jail for years on sex abuse charges while withholding evidence. I hope all Californians realize just who they are giving power to here. I consider myself pretty fiscally conservative also, but there is no way that I would ever vote for her knowing this.
As Governor he reduced taxes by 4 billion and left 5 billion in a rainy day fund.
All Megabucks has done is cost ebay shareholders billions in bad business deals. If she couldn't run ebay why should we trust her with the state?
BTW - I know Meg personally and professionally. No way would I vote for her. That said, however, Brown is not all that great either.
The Governator did try to fix one of our most pressing structural problems, non-competitive Legislative elections. He was partially successful this go around with the passage of Prop 14 but failed to fix gerrymandering. Both parties hate these moves, but thoughtful politicians on both sides (including Jerry Brown) support them. The reason is that our system currently allows for only the most radical (on both sides) of politicians to get elected. Open primaries and hopefully and eventual fix to gerrymandering will force the politicians to move towards the center and to compromise, which may finally allow something to actually happen in this state.
She's a typical billionaire: all money. Absolutely no sense.
Yeah, "sense" had nothing to do with her becoming a BILLIONAIRE, I'm sure.
republican party - the party of billionaires, multi-millionaires and big oil.
Am I going to have to factually correct every one of your posts or will you finally just take a Government 101 class and read a newspaper sometime?
Brown spent 50 cents per vote.