October 08, 2003

The Last-Minute Transformation of Gray Davis

The highly intelligent and extremely readable Matt Welch writes about the transformation of soon-to-be-ex-governor Gray Davis from a cautious status quo moderate interested mostly in campaign contributions to a left-wing activist:

Reason: One of the 113 or so humorous ironies of today's recall is that the fact of the election itself finally turned one of its proponents' most fervent beliefs--that Gray Davis is a lefty Democrat who never met a regulation or spending proposal he didn't like--into a self-fulfilling prophecy. The career centrist pol was never loved by progressives (the old-left L.A. Weekly, in its no-on-recall endorsement, wrote: "Certainly we are no great fans of Gray Davis--last November we began our lesser-of-two-evils endorsement of him this way: 'We abhor so much about Gray Davis'"), but once the recall qualified for the ballot, they knew he had no one left to turn to. "Some administrations are famous for their first hundred days," the Weekly's Harold Meyerson wrote, in what turned out to be a prescient Aug. 8 column on Organized Labor's laundry-list of bills it wanted the lame-duck governor to sign in exchange for support. "Davis--who shies from the business of legislating unless absolutely necessary--may be remembered for his final 60."

And what a two months it has been. Davis has signed into law the most sweeping gay couples' rights bill this side of Vermont, the toughtest anti-spam legislation in the country, a far-reaching financial privacy act, a controversial driver's-licenses-for-illegal-immigrants law he had previously vetoed, expensive health care regulations compelling all companies larger than 50 employees to provide coverage for workers and their families, and scores of other bills. "As a result, California government has become a liberal bastion, a development with profound implications for the future of governance," California political analyst Sherry Bebitch Jeffe wrote in the Oct. 5 Los Angeles Times. "[S]hould the recall pass, the new governor will not have a hand in policies that significantly changed the direction of California government." The assembly line of last-minute legislation was just a part of it. According to the Oct. 4 New York Times, "Davis has made more than 260 appointments to judgeships and state commissions since the California recall election was announced 10 weeks ago, part of a concerted effort to secure a lasting Democratic imprint on Sacramento should the Republican candidate Arnold Schwarzenegger win on Tuesday."

Around half of a California governor's 3,000 possible appointees can't be overturned by a new governor, the Times reported. The State Senate, said the Times, was considering an emergency session this week to approve as many last-minute appointees as possible; and the entire end-of-term binge has been carefully mapped out...

I should ask somebody who has thought seriously about this stuff to teach me about how this is one more step in the transformation of American governance from "consensus and compromise" to "ideological base-building" politicians.

Posted by DeLong at October 8, 2003 09:49 AM | TrackBack

Comments

- I should ask somebody who has thought seriously about this stuff to teach me about how this is one more step in the transformation of American governance from "consensus and compromise" to "ideological base-building" politicians. -

Please, if you will, explain what this sentence means. Did Gray Davis really build an ideological base in the weeks before the recall election? If so, is this regrettable? Again, was Gray Davis ousted by ideological base builders?

Thank you.

Posted by: lise on October 8, 2003 10:26 AM

Hey, he didn't so horribly bungle the electricity situation, increase per capita taxes by 30%, and commit to $38 billion of increased *permanent* annual spending (a 30% inflation adjusted increase over three years) using *temporary* boom tax collections, all after the recall was announced!

After the recall the pigs at the trough (to use a memorable description from another administration) simply had to *speed up* their feeding.

As the ever popular Mickster put it:

"In two big crises -- the budget crisis, and the electricity crisis -- [Davis'] instincts led him to dawdle when he needed to take firm action (spending cuts, small electrical rate hikes) that would have produced huge long-term benefits for the state at the expense of short-term political opposition (from unions and consumer groups). The textbook poli-sci reasons for opposing mid-term recalls -- that leaders should be able to do unpopular things that will pay off eventually -- are particularly inapposite when applied to Davis, who is terrified precisely of doing potentially unpopular things that will pay off eventually." http://slate.msn.com/id/2089298/

"If I wanted to raise rates, I could have solved this problem in 20 minutes." -- Gray Davis, quoted in 9/16/02 Wall Street Journal.

Why didn't he want to? Because he didn't want to upset the voters. Good call!

Posted by: Jim Glass on October 8, 2003 10:59 AM

"In two big crises -- the budget crisis, and the electricity crisis -- [Davis'] instincts led him to dawdle...."

This is a typical bit of Mickey Mouse Kaus rubbish. Mickey Mouse Kaus has not idea of what truth means. None.

Posted by: Ari on October 8, 2003 11:09 AM

BTW, the way I read the data from the California State Controller, over the last four years California's state spending has risen 30% (well, 29%) in real terms per capita -- that is, over the growth in both population and inflation.

Has anyone out there noticed a 30% improvement in the quality of the services provided by the state over that short time? (I'd think that improvement on anything like that scale would be very visible and empirically demonstrable.)

All political name calling aside, that really is *the* question that matters in the "size of government" and "accountability of government" debate.

Posted by: Jim Glass on October 8, 2003 11:17 AM

"BTW, the way I read the data from the California State Controller, over the last four years California's state spending has risen 30% (well, 29%) in real terms per capita -- that is, over the growth in both population and inflation."

Since you read the data, one question:

How much of that 30% spending increase is the result of: (1) The electrical power deregulation debacle, and (2) The economic downturn which forced mandatory increases in unemployment compensation, medicaid, and other formula-driven entitlement programs?

Posted by: Kent Lind on October 8, 2003 11:44 AM

Careful, Jim. Before you run with that 30% number, you need to figure out how much of that 30% increase is because of the recession and increased state transfer payments to a lot of people who find themselves suddenly eligible for state programs.

Suggestion: Look at how much of the 30% increase comes from increased spending on old state programs to help people buy food and housing and whatnot, and how much of the 30% increase comes from increased spending on new programs and on infrastructure and education. Then you could ask the question of "how much are we getting for all that government spending." I still believe that you are likely to have a good case, but it's good to be sure you make your case with the right numbers.

Posted by: Keith on October 8, 2003 11:46 AM

What difference does truth make to Mickey Mouse Kaus?

Here is the truth -

Paul Krugman

"California's Constitution requires that budgets be passed by the State Legislature by a two-thirds' margin which gives the Republican minority blocking power. And that minority has refused either to vote for any tax increase, or to make realistic proposals for spending cuts.

You often hear claims that excessive spending is responsible for California's budget woes. True, budgets grew rapidly after the mid-1990's. But California began the 1990's by slashing outlays in response to a fiscal crisis, and most of the subsequent growth was simply a return to pre-crisis levels. As analysts at the nonpartisan California Budget Project point out, real state spending per capita was only 10 percent higher in 2002-03 than it was in 1989-90 that is, most of the spending growth was simply a matter of keeping up with the population and inflation."

Posted by: Ari on October 8, 2003 11:49 AM

Paul Krugman

"The key factor in rising California spending has been the effort to rebuild a crippled education system.

Proposition 13, the 1978 cap on property taxes, led to a progressive starvation of California's once-lauded public schools. By 1994, the state had the largest class sizes in the nation; its reading scores were on a par with Mississippi's.

Voters wanted this shameful situation remedied. Indeed, much of the recent growth of education spending was mandated by a rather complex measure called Proposition 98. So when conservatives denounce "runaway government spending" in California, what they're really talking about is the effort to hire more teachers and repair decrepit school buildings."

Posted by: Ari on October 8, 2003 11:50 AM

The power crisis had no direct impact on the state's budget problems. The rate increases are being repayed by a surcharge on electric bills, not out of the general fund or any tax revenue. There may have been second-order effects like driving businesses out of the state and a reduction in the state's credit rating, but I don't think that's what you were talking about.

Posted by: Jake McGuire on October 8, 2003 11:59 AM

If this is a watershed moment in American politics, (and I do not, I think it is simply one more stop on the way to the coming train wreck), then Arnold -- as the pundits seem to imply -- must set himself up as the fair cop. Willing to tell both Democrats and Republicans what they are being pigs about. He has to identify who the whoremasters are and name names and not speak in code, ie the "trial lawyers" or "unions" or "big utilities" or "Indians" or whatever. But this requires a detailed understanding of the programs, the budget, the laws, the regulations and the services the government provides. He will simply say, well Mr. Buffett says . . . (he simply speaks for the insurance industry). Or George Schultz recommends . . . (who speaks for Bectel). But that is pandering and doesn't advance fundamental reforms. I have not seen an evidence that he understands anything about the workings of government and providing such services to the people of this State. He'll get a budget deal, but so what. It will be meaningless without structural reform. I would take notice if he called a constitutional convention and said everything is on the table. But he won't do that. He will get a budget deal. The economy will fix itself. Then he will claim that he is responsible for both then run for the Senate. He will win, then we will have to listen to how the US Constitution should be amended so that foreign born can be President.

Posted by: Cal on October 8, 2003 12:05 PM

"The power crisis had no direct impact on the state's budget problems. The rate increases are being repayed by a surcharge on electric bills, not out of the general fund or any tax revenue. There may have been second-order effects like driving businesses out of the state and a reduction in the state's credit rating, but I don't think that's what you were talking about."

Doesn't the State use electricity?

How do state agencies pay for the power that they use? Out of their budgets perhaps?

It's not just all the state agency buildings, thing about all the lighted state highways that run through California. Who pays to keep all those freeway streetlights burning?

What is the total increase in state spending that results from higher power costs? I'm guessing that it's not a small number.

Posted by: Kent Lind on October 8, 2003 12:52 PM

Who would you rather make the appointments? A career politician well connected to those that can properly evaluate the talent pool? Or a neophyte that will have to rely on ??? for advice on whom to appoint???

Don't think that Arnold won't do the same as he leaves office in 2006. For better or worse, some appointments carry over.

Posted by: bakho on October 8, 2003 01:03 PM

Our host's Berkeley colleague, Hal Varian, weighed in recently:

http://www.nytimes.com/2003/09/25/business/25SCEN.html?pagewanted=all&position=

----------quote--------------
Fundamentally, the deficit is a hangover from the days of irrational exuberance. California was the epicenter of the dot-com boom of the late 1990's, and tax receipts flowed to Sacramento. Tax revenue from stock-option grants and capital gains alone rose from $7.5 billion in 1998-9 to $12.7 billion in 1999-2000 to $17.6 billion in 2000-1.

When money flows in, governments find it hard not to spend it. This is particularly true in California, thanks to mandated spending constraints. For example, Proposition 98, passed in 1988, requires the state to spend 40 percent of general funds on education from kindergarten through high school. As a result, spending, both automatic and discretionary, rose in parallel with tax revenue.

Then the house of cards came tumbling down. Revenue from options and capital gains fell to $8.6 billion in 2001-2, and $5.2 billion in 2002-3.

Reversing those spending decisions was not as easy as putting them in place: much of the increased revenue went for education, tax cuts and other long-term commitments.
------------endquote---------

Posted by: Patrick R. Sullivan on October 8, 2003 01:15 PM

"Careful, Jim. Before you run with that 30% number, you need to figure out how much of that 30% increase is because of the recession..."

Looking at the way the trend line bent up in 1998, ran in a straight line from there, and at how the bulk of that time was before the recession hit, I'd say very little of the 30% was due to the recession. Certainly none of the 23% that occurred before the recession hit was due to the recession.

(And, of course, all this does not include the big boosts in compensation/benefits/pensions packages that the departing governor put in that will be the major cost felt in out years.)

In any event, the question was: Has anyone noticed any empirical beneficial results? Were any measurable from the 23% real per capita spending gain before the recession hit?
~~~

"Paul Krugman

"The key factor in rising California spending has been the effort to rebuild a crippled education system..."

Well, heck, educational results are quanitified all the time. Scores, graduation rates, etc. And if the 30% real spending increase was really concentrated in one area it ought to make an even bigger difference there.

So, any measured improvement in educational outcomes due to this extra spending?

If so, tell how it was done because here in NYC we have increased per student spending in the public schools by a really impressive 50% in the last six years with no measured (positive) result at all. Zip. Nada. The HS graduation rate actually has fallen a bit. So we here could stand to learn something.

See, here's the problem with the Krugman-type rationalizations for ever greater government spending -- they always justify spending by good intentions, they never justify spending by good *results*.

If Krugman has said: "the key factor in rising California spending has been achieving the recently seen improvements in education outcomes ..." that would have been something meaningful. But he didn't say that.

And *that* is the true *key* issue in the whole "size of government", "accountability of government" debate.

The intentions that everybody instead all the time talks about -- "we intend to improve things, they intend to destroy things" -- are bull spit. They are just used in argument to distract from what counts.

Posted by: Jim Glass on October 8, 2003 06:21 PM

"Who would you rather make the appointments? A career politician well connected to those that can properly evaluate the talent pool? Or a neophyte ..."

Well, if the neophyte hasn't yet picked up from the professional career politicos the idea that a temporary unsustainable boom in revenues should be built into the permanent budget, that might be an improvement to start with.

In ignorance there can be wisdom.


Posted by: Jim Glass on October 8, 2003 06:28 PM

-=I should ask somebody who has thought seriously about this stuff to teach me about how this is one more step in the transformation of American governance from "consensus and compromise" to "ideological base-building" politicians.=-

It sounds to me a lot like John Adams's "midnight appointments" in March 1801, the last of which were confirmed by the Senate the day before Thomas Jefferson was to take office. Jefferson withheld the commission for one of Adams's DC JPs, which wound up in the Supreme Court as _Marbury v. Madison._ So, if American governance is "transforming" it's been doing so for a very long time....

Posted by: Mike Forester on October 8, 2003 08:36 PM

Of course John Adams packed the Federal judiciary just as he was leaving office, before Jefferson came in. So I'm not sure there is any kind of transformation in American politics.

Posted by: Andrew Boucher on October 9, 2003 04:11 AM

While there's no denying that Davis pursues a general traditional Democrat line, what is "Lefty" about these:

* Financial privacy? polls show more than 90% of the US wants this

* Gay couple rights? Again, national polls show 60% or more of Americans support this, though not official marriage

* Anti-spam legislation? Legal or not, this is as popular as do not call legislation, corssing all political lines except mad Libertarians

* Health care for workers? In the last century this was accepted by all parties, busineses, industries. Only now that it has become expensive is it a "lefty" "union" thing. C'mon, even Donnie Rumsfeld's military gives free health care. Commies? Yeah, this doesn't solve the problem of expensive health care generally. But National polls say that votes put health care as the most important issue to them after national security/anti-terrorism. Again, it cuts across ideological lines, except with republican and libertarian extremists.

Of this list, only drivers licenses for illegal immigrants could be considered "lefty". And clearly it was a desparate move for Davis.

But he also stablised wormans comp payouts, if not cutting them. "Lefty"?

Posted by: paul on October 9, 2003 06:34 AM
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