THE BLOG

State of CA Economy (Well, you fill-in the blank)

05/25/2011 03:10 pm ET

As Governor Arnold Schwarzenegger was about to give his final state of the state address, I came up with a number words that could sum up the state of the California economy without taking too much of the people's time with needless watchwords and shibboleths.

The state of the state is (you fill in the blank): lousy, intractable, unmanageable, hopeless, going from bad to worse.

The governor made his remarks under the cloud of what has become a California a tradition: How to deal with the immediate concerns of the state's annual deficit?

Any discussion of California's best days are ahead is insincere pabulum. We've already seen this movie, we know lawmaker's lines, we know what the governor will say, and we know though choices that will come from the California Legislative Analyst's office that will most likely be ignored.

But this year may be different; we don't how it will end.

By recent standards, a projected $21 billion deficit over the next 18 months hardly seems insurmountable. With very few financial gimmicks left in its bag, California is like the Costco shopper who is suddenly startled to learn the lifetime supply of condiments has finally run out.

Last year, California used one-time fixes, such as accelerated income tax collections and borrowing from local governments. These options are no longer available.

Neither are additional cuts from education and social services because such actions could result in reductions in federal money. Hardly a prudent move given that outgoing Assembly Speaker Karen Bass and Senate President Darrell Steinberg have already announced their intentions lobby Washington for additional federal assistance.

Not only has the kicking the can down the road days seemingly come to an end, the Legislative Analyst's Office predicts California could expect $20 billion deficits annually until 2014.

Since this is also an election year, gubernatorial candidates must answer the unanswerable question: How are you going to fix the California economy? I'm afraid responses to that all-important question will most likely come in the form of focus group tested, tinkering around the edges.

To suggest that running a Fortune 500 company provides one the requisite skill sets to turn around the state's economy is as implausible as to suggest that making action movies or being governor 30 years ago makes one ready for the state's current challenges, given the structural impediments in place.

What does it say that among the declared major candidates for governor only one, Tom Campbell, is seriously talking about the state's deficit crisis; and he may not have the resources to stay in the race?

Does anyone honestly believe the elimination of so-called waste fraud and abuse will magically lead the state into the land of surplus and honey?

For all of our outwardly expressions of frustration with the Legislature and governor--some of it justifiable--we the people would be less than forthright if we did not also acknowledge the behavior exhibited by the elected officials we send to Sacramento is a reflection of us.
Term limits enacted by the voters may have successfully eliminated the "career politician", but at what cost?

Legislative staff and special interests are the keepers of institutional memory. The lack of time an individual has in office robs him or her of the ability to build the type of trust, especially with members of the opposite party, necessary to get deals done.
As a result, too many legislators become more interested in the next office they'll run for than the office they currently hold.

I have little doubt any legislator with a past voting record on par with the people's record would be unceremoniously removed from office. Over the past several decades we have voted for a series of unrelated ballot propositions from Prop.13 to three strikes to bonds measures to other items without any consideration of the unintended consequences that have coalesced into annual institutionalized deficits.

We want the Legislature and governor to fix the problem, as if there is an obvious pain-free solution that no one has considered. And we want it by the constitutionally mandated deadline, approved by a two-thirds majority. By the way, we're okay if the Legislature and governor are forced to make tough choices as long as it impacts someone else.