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Harsh Realm: The Legacy That Meg Whitman Invokes

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As she shatters all spending records in her attempt to defeat Jerry Brown and succeed Arnold Schwarzenegger as governor of California, a campaign which is way off plan, billionaire Republican Meg Whitman has a role model in mind.

He was "the greatest governor in the history of California." So says Whitman, the political novice who seldom bothered to vote and was never involved in public affairs before deciding, one fine day, that she really should start at the top.

Billionaire Meg Whitman tells us in her brand-new ad that she worked at eBay. Who knew? Whitman's campaign is way behind her schedule.

He's her campaign chairman. And, as fate would have it, he is responsible for California's structural budget deficit, the disastrous electric power deregulation scheme that enriched Enron and turned out California's lights, and the hypocritical nastiness of the debate over illegal immigration.

Who is he? He is former Governor Pete Wilson. And the legacy that his acolyte Whitman invokes demonstrates that Whitman's future, a harsh realm indeed, began arriving before Whitman ever got around to settling in the state in which she has already spent a national record amount of money to seize the reins of power. ("Harsh Realm" being inspired, of course, by Whitman's married name of Mrs. Harsh and her constant depiction by the California Nurses Association as Queen Meg, as well as the short-lived series from X-Files creator Chris Carter.)

Now, to be fair, had Jerry Brown not run for the president in 1980, the only one of his three presidential campaigns that really didn't make a lick of sense, most likely would never have heard of Wilson, then the mayor of San Diego. He had tried to run against Brown for governor in 1978, when Governor "Moonbeam" won a 20-point landslide re-election. Wilson couldn't get out of the Republican primary, finishing a badly beaten fourth.

But Brown, who, in his 30s, had finished a very late-starting runner-up for the 1976 Democratic presidential nomination to eventual President Jimmy Carter, had California cool, international celebrity, visionary energy, environmental and high tech policies and frugal fiscal policies, and a bad case of Potomac fever. He thought he could defeat a sitting president if he started soon enough. Brown continued to think that even as Senator Ted Kennedy got into the race, removing as he did all the oxygen from the room as the resurrection of Camelot vied with the power of the presidency as the guiding narrative of the race. Brown marginalized himself by remaining in the race, barely averting humiliation at his own state party convention, finally withdrawing after a Francis Ford Coppola-produced television speech outside Wisconsin's state capitol turned into his very own Apocalypse Now.

In 1982, deciding not to run for a third term as governor in those pre-term limit days, Brown made his move on the U.S. Senate seat then held by Republican S.I. Hayakawa. Brown was poised to make short work of the incumbent senator, so GOP power brokers closely aligned with President Ronald Reagan eased him out of the race. Which cleared the way for a bright, rather Brownian maverick in the form of Republican Congressman Pete McCloskey, who'd been a vociferous opponent of Richard Nixon. Wanting someone more "club-able," the power brokers turned to Wilson, funding his candidacy and easing his path to the nomination.

Not wanting Jerry Brown, capable of lighting a fire by rubbing two buzzwords together, anywhere near the U.S. Senate, President Reagan's forces provided a big war chest for Wilson, the "fresh face" who beat Brown in an off-year for California Democrats and proved to be a reliable vote for every weapons system and covert operation in the vast military build-up of the 1980s.

Eight years later, with no good candidate to replace retiring right-wing Governor George Deukmejian, Wilson was asked to run for his first love, the governorship. With Gulf War I looming and chill winds of recession in the air, Wilson beat Dianne Feinstein for the governorship. And ran into some trouble.

Deukmejian, the fiscal conservative who didn't really want to do all that much as governor other than reinstate the death penalty and help agribusiness, nevertheless left behind a very large budget deficit.

So Wilson did something logical. He cut some programs, and he raised taxes. In fact, he instituted the biggest tax increases in California's history. Even bigger than Governor Ronald Reagan's tax increases.

Wilson's tax increases were certainly bigger than Jerry Brown's, since, unlike Reagan and Wilson, Brown had no general tax increase. (And built the biggest rainy day fund in California's history besides.)

On the strength of this one ad, Pete Wilson rode to re-election as California's governor in 1994 and made illegal immigration the centerpiece issue supposedly threatening California.

The far right of Wilson's party, already very influential in the Republican legislative caucuses, went nuts. He was hung in effigy at his own state party convention. That was no fun. So in his second term, with his popularity lagging, he instituted a big cut in the car tax. Wilson did it in such a way that a future state budget director, appointed by the governor, could return the car tax (formally the vehicle license fee) to its former level in the event of a budget crisis. The car tax cut was very popular, though Wilson's popularity never returned.

A few years later, with Wilson safely out of office and revenues from the dot-com boom drying up, the money lost from the big car tax cut was badly missed. Then Governor Gray Davis, knowing the move would be very unpopular, as he told me months before he did it, has his budget director raise the car tax to former levels to help bridge a big budget deficit.

Raising the car tax to what it was before Wilson cut it was wildly unpopular. After all, nobody likes losing a tax break. Conservatives threatened a statewide initiative. The car tax hike helped drive the recall movement against Davis.

When action superstar Arnold Schwarzenegger jumped into the race -- the seventh anniversary of his "surprise" entry into the race, which I explain in this LA Weekly article from that time, was yesterday -- he seized on the issue, promising an immediate repeal. As soon as he was inaugurated in November 2003, Schwarzenegger cut the car tax back to the Wilson level.

Over the years, the move has cost the state as much as $6 billion a year. When you add it all up, it's right in the ballpark of the state's spending shortfalls.

Not surprisingly, former Governor Pete Wilson did not emphasize his own central role in creating California's structural budget deficit when discussing the chronic budget crisis last year.

Your chronic California budget crisis, courtesy of Meg Whitman's "greatest governor ever," her campaign chairman Pete Wilson.

The big car tax cut was simplicity itself compared to another major Wilson maneuver as governor. That was the scheme to deregulate California's electric power system.

The state's electric power service, mostly provided by a few big public utility companies regulated by state government, with a leavening of publicly-owned municipal utilities, was very reliable. It used a mix of natural gas, hydroelectric, nuclear, and renewable power sources, with some coal-fired power imported. Under Brown's leadership, utilities embraced new energy efficiency programs.

If it ain't broke, why fix it?

Why indeed? Well, some said that businesses needed to pay less -- they already paid lower rates than residential customers -- and that unless they did pay less they would move to other states. This is a very familiar rationale in California.

In addition, deregulation was all the vogue on Wall Street and in the business press. It was the same time as the repeal of Glass-Steagal in Congress.

Using these rationales, Wilson and his allies came up with a remarkably convoluted scheme to deregulate California's electric power system, moving away from utility generation and long-term power contracts to a spot market in which power would purchased daily. This was supposed to spur competition and innovation.

What it actually did was turn California's rather dull, reliable electric power system into a casino, featuring a host of out-of-state power companies like the infamous Enron as the power players. With, again, Wilson's Democratic successor Gray Davis holding the bag in the governor's office.

Wilson ignited a wave of anti-illegal immigrant sentiment in California and used it to campaign against the Browns. In reality, he employed an illegal immigrant housekeeper and sponsored legislation in the U.S. Senate that allowed more illegal immigrants into the country.

There were big price hikes, there were blackouts. It was an international spectacle and an absolute disaster. Davis, naturally, got the blame while Wilson laid low.

Lest one think that the great legacy that Meg Whitman so admires is all a result of Wilson's second term as governor, there is his most famous move, which occurred at the end of his first term.

Wilson wanted to run for president in the worst way, and he did, which we'll get to in a moment. But first he had to get re-elected.

There was a big problem. First-term state Treasurer Kathleen Brown, sister of Jerry Brown, highly personable and attractive, was popular and led him in the polls. There was plenty of nation press buzz about Kathleen Brown as the coming figure in American politics.

Wilson needed an issue to use to beat Kathleen Brown and perhaps ride into a strong bid for the presidency. And he found one. Illegal immigration.

Wilson leaped aboard an initiative to deny all state services to illegal immigrants -- including health care and schooling for children -- cooked up by some long-time activists and made it the centerpiece of his campaign for re-election. It was called Proposition 187. California was just coming out of a recession and many looked for scapegoats for bad times. Immigrants, legal and illegal alike, have historically filled that role here.

Perhaps the biggest beneficiary of Pete Wilson's disastrous deregulation of California's electric power system early in the last decade was the infamous Enron. Here Enron traders discuss how to manipulate the market.

Wilson began running one TV ad, over and over, which showed illegal immigrants running across the border and featured the memorable slogan: "They keep coming."

On the strength of that one TV ad, Wilson erased Brown's lead and vaulted into his own lead, which he never relinquished. While this was happening, her thoroughly mismanaged campaign was wasting its time focusing on her hopeless primary opponents, John Garamendi and Tom Hayden. (In retrospect, Kathleen Brown, a very promising but unseasoned figure, should have waited until 1998, when she would almost certainly have been elected against far right Attorney General Dan Lungren. She would have gained needed experience, developed a strong team of her own, and avoided running against an incumbent governor, which is almost never a good idea.)

Wilson rode the draconian Proposition 187, which won in a landslide, to a big win over Kathleen Brown. To her credit, incidentally, knowing that her own campaign was lost, Brown made her opposition to Prop 187 the centerpiece of her campaign in its closing days, against the opposition of her campaign manager and a number of high-ranking Democrats. Her move had the effect of placing the Democratic Party firmly on the side of the Latino community for the long run, which has paid off tremendously for Democrats ever since.

In reality, Wilson's opportunism in seizing on illegal immigration as his signature issue was rank opportunism of the worst sort. As a U.S. senator, he sponsored legislation that allowed more illegal immigrants into the country. Which was known at the time, but which oddly was not used much his Democratic opponents.

But Wilson's opportunism was even greater than that.

As he began his run for the 1996 Republican presidential nomination, it emerged that Wilson had himself long employed an illegal immigrant housekeeper in San Diego!

Wilson's hypocrisy in demagoguing the illegal immigrant issue knew no bounds. With fundraising lagging, and few impressed by his speeches, Wilson was ignominiously forced to abandon his presidential campaign long before the primaries began. Some of his consultants went to work for Boris Yeltsin, then running for re-election as Russia's president, a fascinating story in itself.

Wilson's Prop 187 legacy further degenerated when it was essentially thrown out by the courts as unconstitutional.

But none of this stopped Meg Whitman from having Wilson step in during her hard-fought Republican primary against Steve Poizner to insist that she is "tough as nails" on illegal immigration and will crack down just as he did.

Since the national co-chair of the McCain/Palin campaign didn't bother to vote before deciding she should be the governor of California, perhaps she is simply ignorant of these facts about the politician she calls California's greatest governor. But who can say for sure? It's hard to tell what Whitman really knows beyond the talking points relentlessly drilled into her skull by her panoply of high-priced political consultants.

And how are things going for Whitman's campaign? Not nearly so well as planned.

Jerry Brown has passed through what may well have been the most dangerous period of his candidacy for governor of California. Not only has Whitman been advertising heavily throughout, and Brown has not advertised at all, but the main California Working Families (CWF) independent expenditure committee was off the air. In fact, there was no IE advertising on Brown's behalf, with the exception of the Working Californians' radio ad and Spanish language TV ad, for three weeks.

Until Thursday, when AFSCME went up with a big new buy ($2 million-plus) in the Los Angeles and San Diego media markets.

AFSCME (American Federation of State, County, and Municipal Employees) was to have been next up in the CWF organizational rotation sponsoring the next flight of ads. But the money never came, and AFSCME was suddenly doing its own ad, but nobody knew when.

It turns out that AFSCME national leadership likes to do its own TV ads all around the country. The ad as written and produced turns out to be a pretty strong hit against Whitman, laying out the case why she can't be trusted, both as a leader and as a messenger distorting Brown's record.

This ad is up through August 14th. After that, California Working Families looks ready to roll till Labor Day weekend and possibly beyond. Actually, former Governor Gray Davis pointed out to me on Thursday that it and other groups are likely to raise more money once Brown is fully engaged in the campaign, as enthusiasm will increase.

The new TV ad by AFSCME.

Meanwhile, a new private poll completed at the beginning of the week still had Brown doing well, 43% to 42% over Whitman while she was spending heavily and the principal pro-Brown IE was dark. Whitman has been making a move in LA, but the new AFSCME spot should blunt that. She doesn't appear to have been able to move elsewhere.

And a new poll just out Friday from the Republican-owned Rasmussen Reports (which many believe skews Republican in its sampling and timing), has Brown with a slim edge over on Thursday night, 43% to 41%.

Brown is now two-thirds of the way through the period between the primary and the start of Labor Day weekend -- the period in which Whitman expected to build a huge and insurmountable lead -- and he's hanging very well. And President Barack Obama has yet to weigh in this state in which is still very popular.

Realizing that she is far off plan, Whitman has just changed things up in her advertising approach.

I had heard through Republican sources that Whitman would switch to a new positive TV ad. She had to change pace because the incessant negativity, which consultants all love, is hurting her image.

But the ad is not what I expected. I had heard that she would do an eBay ad, but had heard that it would focus on an arguably dramatic incident while she was CEO, when she had to stay up round the clock to deal with a disastrous computer network outage.

The ad she put up now, however, has no drama. It's actually a very vanilla TV ad telling the viewer that she was CEO of eBay, which was a very big company.

Gee, I think we knew that. I think her ads told us this last fall on the radio, and last January on the tube.

It's an odd spot, almost an attempt to reboot and re-present her persona. But done in the same old way, with an old message.

I think it's the product of Whitman herself, and her longtime consigliere Henry Gomez. She is totally in love with the image of herself as the great corporate CEO. She is totally in love with herself as a brand. And she is totally in love with the idea of appropriating the eBay brand as her own.

The problem is, it's an old message. And the problem is that there is a big, new to most, and hence dramatic counter-story to her myth about her tenure as CEO.

This counter-story has been in the works for quite awhile. And she has now provided the context for its introduction into the campaign.

As all these major moves have been taking place behind the scenes, Brown has continued to do his job as attorney general in a high-profile, impactful manner, and has sparred with Whitman in the press.

For her part, Whitman continues to exhibit the behavior of a flip-flopper. As I told Davis, Brown's gubernatorial chief of staff, when we spoke yesterday, she's flip-flopped as much in her sole campaign as Brown, a noted flip-flopper in his own right, has in the last 40 years. (Much of which he was not actually in politics, by the way.)

Her appearance Wednesday on LA's very high profile right-wing radio talkfest, the John and Ken Show, provided a dramatic case in point. She changed her position yet again on illegal immigration, shutting the door on a path to legalization for illegal immigrants already in the country, contradicting what she's been saying since the primary, in which she contradicted what she said last year. She also came up with, by my count, her fifth position on California's landmark climate change program.

I'll get to all her policy stuff in a comprehensive and definitive way in a forthcoming piece. Once I find my weathervane ...

You can check things during the day on my site, New West Notes ... www.newwestnotes.com.