Visit to Berkeley, California

Here’s a trip report on four days spent in the East Bay (Berkeley, Oakland, Piedmont), primarily with people who work or  study at the University of California, Berkeley and people who have high-tech jobs.

Bitterness against Republicans in general and King Bush II in particular is commonly expressed. We tried to go over to the Berkeley Art Museum to see paintings recently given to the museum by Fernando Botero: The Abu Ghraib series. Unfortunately the museum was closed along with every other University of California building, due to lack of funds. Whose fault is that? According to all of the East Bayers with whom I spoke, the Republican-sponsored Proposition 13 is to blame. Ever since this initiative passed in 1978, the state has been starved for funds. I pointed out that California collects a larger percentage of its citizens’ income than all but five other states (10.5 percent; source). Shouldn’t it be possible to run the state on 10.5 percent of income?

Despite the fact that all of my interlocutors had university educations, sometimes including PhDs, all were so deeply invested in the idea that their insolvent state government is starved for revenue that they were unable to parse the information. They all replied that of course California needed more money than the average state because it had a larger population, thinking that I had said California collected more total dollars than all but five other states. None could accept the idea that their state had a spending problem rather than a revenue problem and everyone thought that more money should be collected “from rich people” (these folks, if only by virtue of owning houses in Berkeley, were rich by American standards, but they defined “rich” as “more than $50 million in assets”; nobody considered the idea that wealthy people could easily pick up and move to states with lower taxes). None would accept the idea that their state and local government were no longer there to serve current citizens, that they existed primarily to pay pension obligations incurred decades earlier (more).

For roughly 60 years, Berkeley has offered more services to its residents than virtually any other city in the U.S. The schools are expensively funded. Welfare programs have been lavish. People can borrow a full set of tools from the public library. There is a non-profit organization on every block. Yet Berkeley has a poverty rate of 21 percent, higher than the state average of 12 percent (source). The school system tracks student performance by race and ethnicity so that they can reveal to local employers that “white students are doing far better than the state average while black and Latino students are doing worse” (source). Anywhere else in the country one would be considered a vicious racist for claiming that black and Latino high school students are intellectually inferior to white and Asian students, but in Berkeley broadcasting this information marks one as a concerned humanitarian. Sixty years of failure had not daunted any of the East Bayers with whom I spoke; all were in favor of even bigger and more expensive government.

Given the cheerleading for government expansion, I would have thought that the latest $1 trillion health care spending initiative in Congress would have delighted Berkeleyites. “The Republicans gutted the bill,” one woman said, “by removing the public option. So it isn’t a fair test of what government could do.” How about the ascendancy of Barack Obama, which should give the U.S. eight years of the kind of political philosophy that Berkeley folks have espoused for decades. “He’s a moderate, not a liberal,” was the response. Thus if the extra trillions of dollars in borrowing and spending and eight years of Barack Obama does not usher in prosperity, the fault is that Obama and Congress did not grow the government’s share of GDP sufficiently.

Big government is working reasonably well for a U.C. Berkeley scientist who received $250,000 in stimulus money for scientific research. He explained “I’m going to spend all of it in Europe and Japan; I’m stimulating the global economy.”

When not pointing out the evilness of Republicans and the idiocy of Americans who vote for them, my Berkeley friends turned their attention to denouncing the second largest force for evil in the world: Israel. Due to the state-wide out-of-money shutdown, there was no chance of a West Bank checkpoint on the U.C. campus (http://calsjp.org/ has the schedule for these), but the rest of the anti-Israel industry was up and running. I asked folks whether they couldn’t at least admire the Israeli health care system, which provides universal coverage (not leaving millions of people out, like our new one) and superb results, all at a cost close to what a Golden Retriever owner would pay here for high quality vet care. The response was that apparent Israeli achievements are not due to hard work by Israelis, but are a result of rich Jews in the U.S. sending so much money to Israel (this study reveals that the total amounts to roughly 0.4 percent of Israel’s GDP; if withdrawn, each employed Israeli would have to work one additional day per year). I wondered aloud whether Americans didn’t have it even easier, with our near-infinite supply of natural resources. We’ve had free land, free water, oil, minerals, etc., all from the big plot of land that we stole from the Indians. Aren’t we Americans the ones who have been enjoying a 400-year tailwind? (A tailwind that is a lot less powerful now that we’ve expanded the population to 300 million and sucked many of the resources dry.) Nope. It was the Jews who got the unfairly good deal.

Berkeley students and faculty have recently been protesting tuition and fee hikes, but there haven’t been any protests about government borrowing and spending. Depending on your assumptions about how long pensioned government employees will live, wages in the U.S., and investment returns, it is quite possible that a Berkeley graduate who stays in California will find that local, state, and federal governments have already spent 80 percent of his lifetime earnings. Students aren’t protesting increased government spending or advocating any cuts, however, but only demanding more spending on their parochial concerns. Neither are East Bay parents complaining about government spending; they are dealing with the risk of a future U.S. economic collapse by getting foreign passports for their children. [Parenting in Berkeley can be a little more creative than in the rest of the U.S. One family invited me to share a meal with their “dinner co-op” partners, another family with a kid about the same age. They trade off cooking dinner every Monday evening. “By the way,” my friend noted, “there are two mommies in this other family.”]

I had breakfast with two white males. One founded a mobile phone tech company and mentioned that they are soon to go public. He is already pretty rich but stands to make tens of millions of dollars in the IPO. Our entrepreneur grew up in the U.S., attended the best private schools, and then went on to the most elite universities. His family happens to come from Argentina. I asked the other white male at the table, a wage slave for a big company, how he would feel if his own daughter were rejected from college in favor of the rich entrepreneur’s kid, due to that child’s Hispanic status. This turned out not to be a tough question. Of course he wanted his daughter to go to the most prestigious school, but Affirmative Action was important and his own daughter would surely get into at least some college somewhere. So on balance he thought it would be fair for his daughter to be rejected.

I met a friend picking up his laptop from an independent Macintosh repair store, with lower prices than the official sleek Apple stores. A minor whack had caused the power connector to fail internally. His love for the Mac was not diminished when I pointed out that the repair bill was about the same as what Dell charged for a brand new computer. The other Macintosh experience that I had was trying to use a Flip video camera with an iMac (vastly inferior user experience) and listening to the owner talk about how much easier to use and more reliable the Macintosh was than Windows. The only problem that he’d had with his machine recently was the loss of three months of data: all writing, photos, and video.

After the Macintosh repair shop, we stopped into the Brower Center, which calls itself  “Berkeley’s greenest building” and is packed with non-profit organizations that are determined to stop stupid people in the rest of the U.S. from trashing the planet. The building is named for David Brower, famous for being pushed out of the Sierra Club when he pointed out that immigration was going to ruin the environment of the U.S. (more).  In 2000, Brower thought that the U.S. would be a pleasant place to live with 150 million people (what we had around 1950) and an unpleasant place with the 600 million that we were forecast to have by 2100. As of 2008, the experts were forecasting a 2100 population closer to 1 billion (source). Brower’s legacy is a building featuring a cavernous two-story atrium and high ceilings everywhere. On a day with temperatures of about 55 degrees outside, the environmentalists’ building was heated to more than 80 degrees. We stripped off all of the clothes that we could.

At a CVS in Oakland, we bought sundries from a 70-year-old working as a cashier. I asked my local companion if he thought it was moral for the government to tax this poor old working person and hand the money over to a comfortable 50-year-old retired former public employee, which is essentially how California is now set up. He had not thought about the question.

A white man told me how proud he was of his year-long dialog with an angry young black student back when he was an undergraduate at an Ivy League university. “When we first met,” he said, “I said that he should admit that we were mostly alike, despite our difference in skin color. He replied that there was no way that I could understand the rage of a black man. We spent a whole year working this out and I came to understand his point of view.” My response was that perhaps his first idea was correct. Could it be that black and white Americans are mostly alike? We spend our time talking about skin tone while the Chinese grow their economy at 9 percent per year.

One nice thing about living in Berkeley is that you can be sure that God agrees with whatever you’re thinking. If God didn’t agree with and love you, why would would He pour down good weather and sunshine on Berkeley almost every day?

31 Comments

  1. Chris C.

    January 10, 2010 @ 7:39 pm

    1

    Good to hear you had an enjoyable visit! (At least, I’m assuming you did — was there anything other than the weather you liked?)

    About proposition 13: Many folks argue the problem with prop 13 is not that it restricts the amount of taxes collected, but that it introduces too much variance and unpredictability into taxes. Income tax revenues vary much more dramatically with changes in the economy than property tax revenues, especially when the income tax is biased to tax high-earners disproportionately highly. Politicians (of all stripes) have a habit of spending all of the tax money they can raise, since spending gets votes. Democrats spend excess on new programs, republicans spend excess on tax reductions. The combination of politician nearsightedness and income variance means that the California government lives large in the good times, and goes broke when times are tough.

    Certain aspects of government respond very poorly to variance in income. For example, education systems have a lot of momentum, and can’t instantly turn off expenditures when income gets squeezed. Every once in a while a portion of government nearly implodes from this variance, and they manage to get the voters to vote in a proposition ensuring stability for their budget. This stability comes at the expense of increasing the variance in the budget of the rest of government, and the downward spiral continues…

    Eventually this downward spiral will hit rock bottom, and the California government will have to reorganize itself. Hopefully something happens which: (a) gives the government the power to set the entire budget and make sensible trade-offs, instead of the current “spend whatever is left after all the mandated expenditures go out the door”; (b) either decreases the variance in government income, or forces the government to do something sensible like pay down debt or save for the bad times when times are good.

  2. Ziad

    January 10, 2010 @ 7:57 pm

    2

    Interesting analysis of Berkeley. However, the nod to Chinese GDP was somewhat ironic considering the history of communism in that country.

    If anything, the juxtaposition of these two places demonstrates how obsolete our 20th century labels of ideology and government are in both places.

    Methinks that the 9% GDP in China might have a little bit to with people like your friend’s mobile phone company along with the boatloads of iPhones that China sends our way. Once upon a time a couple of young radicals in Berkeley had something to do with that, too.

  3. Jake

    January 10, 2010 @ 8:14 pm

    3

    I pointed out that California collects a larger percentage of its citizens’ income than all but five other states (10.5 percent; source).

    The problem isn’t (just) the property tax issue of Prop 13, but the two-thirds legislative majority needed to pass a budget of any kind (which James Fallows talks about briefly here). In addition, Prop 13 distorts incentives in all kinds of weird ways—cities and counties often prefer retail or industrial uses to residential ones, for example, because those uses bring in sales or other tax revenue.

    California’s tax burden is a problem, but its structural burdens go far beyond taxation, which is one reason why the state is in the news so often for its (mostly self-imposed) dysfunction.

  4. philg

    January 10, 2010 @ 8:24 pm

    4

    Jake: Thanks for the Fallows article link. Fallows, like my friends in the East Bay, bashes Prop 13 and leaves readers with the impression that the state somehow collects less revenue than other states. Given the wide range of taxes available to a state, e.g., sales tax, income tax, corporate tax, liquor tax, tobacco tax, car registration tax, gasoline tax, etc., I don’t understand the obsession with the property tax limitation. If property tax were tomorrow ruled unconstitutional, for example, I don’t see why Massachusetts, for example, would have any difficulty going back to operating as usual. The legislature would simply raise other taxes to compensate.

    Chris: Thanks for the thoughtful contribution. As a taxpayer, I take issue with “republicans spend excess on tax reductions”. A tax reduction is not spending! Spending is anything that increases the government’s share of GDP.

  5. Anonymous Howard

    January 10, 2010 @ 10:10 pm

    5

    Are you trying to make a connection between a high ceiling and higher temperature inside the building ? It’s not clear.

  6. Matt

    January 10, 2010 @ 10:30 pm

    6

    Proposition 13 has two components.
    1) Cap on property taxes.
    2) Super majority requirement on all subsequent tax increases.

    Note that the second part does not just apply to property taxes. Which is why your obvious solution of adjusting sales tax, income tax, corporate tax, liquor tax, tobacco tax, car registration tax, gasoline tax, etc are unavailable.

    The consequence of this is that standard budgetary matter must be passed through the proposition system, which is ill suited to the task. This contributes to the inefficient spending, but let’s postpone that discussion until we’re clear on the most fundamental aspect of Prop 13.

  7. Fazal Majid

    January 10, 2010 @ 10:41 pm

    7

    “As a taxpayer, I take issue with “republicans spend excess on tax reductions”. A tax reduction is not spending! Spending is anything that increases the government’s share of GDP.”

    Tax reductions not accompanied by spending cuts mean an increase in debt, with accompanying increase in the cost of servicing interest on the said debt. Debt service will soon be the single largest item on the federal budget (in fact it may be already, just covered up in Washington’s creative accounting).

    The problem is that neither party is interested in cutting spending, just cutting spending on the other party’s constituency and redistributing the money to its own favored constituencies. There is no popular demand for sound fiscal policy, and thus no supply from the politicians either, and things will continue to drift until they come to a head.

  8. philg

    January 10, 2010 @ 11:00 pm

    8

    Anonymous Howard: I pointed out the high ceilings and massive climate-controlled atrium because those are very energy-intensive. Heating or cooling an apartment with 7’4″ ceilings is a lot cheaper, per square foot, than heating or cooling a McMansion with 12′ ceilings. For a commercial office building like the Brower Center, presumably the HVAC costs scale with the total cubic footage of enclosed space and therefore, if the goal is to save energy, you wouldn’t want to build more cubic feet than necessary.

  9. philg

    January 10, 2010 @ 11:15 pm

    9

    Matt: Thanks for the clarification. I still don’t get it. California collects 10.5 percent of her citizens’ incomes, more than most other states. Why does the state need tax rate increases? And if the state did need to get two-thirds of legislators together, how tough can that be? http://en.wikipedia.org/wiki/California_State_Legislature says that one party has controlled both houses almost continuously since 1970.

    I just got off the phone with a California friend. He’d seen this blog posting and said “I have a Repeal Prop 13 bumper sticker on my car.” I asked him if he had been aware that his state was collecting 10.5% of total income already. He had been under the impression that California was starved for revenue compared to other states and had been spending minimally.

    We need to give credit to California’s politicians. They’ve convinced some of the world’s most heavily taxed people that they aren’t taxed enough.

  10. Mike

    January 10, 2010 @ 11:17 pm

    10

    LOL.

    And this is part of why I live in the boring suburbs down in Silicon Valley, having previously lived in San Francisco.

  11. Fazal Majid

    January 11, 2010 @ 12:13 am

    11

    “We need to give credit to California’s politicians. They’ve convinced some of the world’s most heavily taxed people that they aren’t taxed enough.”

    It’s not politicians but special interests like teachers’ unions who did most of the convincing. Politicians have zero credibility in California, but for some reason special interests, who stand most to benefit, still do. Does not say much about the intelligence of the average California voter, I suppose (I am a California taxpayer, but as a non-citizen, not a voter).

    Former governor Jerry “Moonbeam” Brown (a likely future governor) deregulated public-sector unions in 1978, making the current mess possible. Unions are allowed to participate in the political process (i.e. corruption) and wring concessions from weak candidates and a gridlocked legislature. Since there are no market curbs to their depredations, their demands naturally inflated to the point where the state reached the limits of its ability to tax further or raise money by fiddling the books and racking up debt.

  12. Daniel Silverman

    January 11, 2010 @ 12:47 am

    12

    Heating an apartment with 7′4″ ceilings is a lot cheaper, per square foot, than heating a McMansion with 12′ ceilings.

    I sort of figured that the point, in a warmer climate, of high ceilings had something to do with more efficient convection cooling (i.e. heat rises) rather than heating. Admittedly I have only long-forgotten high school physics to base this on, so maybe my assumption is incorrect. But doesn’t the large atrium, in addition to be aesthetically pleasing, serve a similar purpose to having an attic and a whole house fan?

  13. Viva la Reagan Revolucion

    January 11, 2010 @ 1:18 am

    13

    Prop 13 rocks, and is working just as Reagan intended it to. It leaves no other option but to rein in spending.

  14. Mike Woods

    January 11, 2010 @ 2:12 am

    14

    Hey Phil – as a Californian, I too am impressed at the way our politicians have convinced my friends and neighbors that they simply aren’t paying enough in taxes.

    The dreaded Prop 13 has curtailed property tax growth to a measly 84 percent faster than combined inflation and population growth. ( http://weblog.signonsandiego.com/weblogs/afb/archives/034048.html ) and the 2/3rds majority has done nothing to keep CA from being the 6th highest taxed state in the US.

    In an LA Times Op Ed piece last summer, A USC Professor asked what is truly the most relevant question: Where Does it all Go?
    ( http://articles.latimes.com/2008/jul/17/opinion/oe-matsusaka17 )
    “California state government spent $145 billion last fiscal year, $41 billion more than four years ago when Gov. Gray Davis got recalled by voters. With all that new spending — a whopping 40% increase — we ought to be in a golden age of government with abundant public services for all.
    So why does it seem like the quality and quantity of government is not all that different from 2004? How many of us feel like we are getting 40% more public services, 40% better schools, roads, parks and so on?”

    The truth is that the Intelligentsia simply believes unquestioningly in Government – much like the right-wing might react to “God Says”. Although all evidence is to the contrary (ever been to the DMV or the Post Office?) – they are true believers that Government is Good and offers, with altruistic nobility, that it will take care of all of our needs…if only it had more money.

  15. Matt

    January 11, 2010 @ 3:40 am

    15

    The 10.5% tax rate you mentioned does not all feed into the general fund. So even if total revenue is sufficient, it does not mean that things could be appropriately funded. Because of the way that taxes are passed by propositions, fixed percentages of revenues are devoted to particular purposes.

    One party does control the legislature. Although “control” has some connotations which do not seem to apply here. If majority ruled, then they would be able to enact their agenda — citizens would evaluate the results and then vote accordingly. However, as was mentioned earlier, Proposition 13 added a super majority requirement for tax increases. So nobody really “controls” the legislature.

    The question of how tough is is to pass a budget with a two-thirds majority is somewhat tricky. Historical evidence suggests it is ‘sufficiently tough’. It seems as though the minority party currently sees an upside to obstruction.

  16. Ryan Tate

    January 11, 2010 @ 3:40 am

    16

    As a Berkeley resident, I read your post and wondered if there wasn’t something in the water here that desensitizes us to wasteful spending. Maybe it goes hand in hand with liberal politics, as you imply?

    Then I remembered my hometown of San Diego, a conservative bastion. How did the business friendly, “fiscally conservative” Republicans in local government handle excess government spending there? By hiding it, until the city woke up one day and discovered a $1.7 billion pension deficit, papered over for decades in violation of state law. The city has been dubbed “Enron by the Sea” (http://www.usatoday.com/news/nation/2004-10-24-sandiego-_x.htm) and had its debt rating slashed to junk status.

    I’d prefer if we slashed pension obligations as much as possible. Unfortunately, neither Republican nor Democratic leaders seem to be proposing that in any significant way. The (R) approach, not just in San Diego but Orange County (http://www.businessweek.com/archives/1994/b340434.arc.htm), seems to be to keep taxes low without cutting obligations, defying fiscal reality through various schemes until such time as things explode. The (D) approach usually involves some attempt to lever up taxes to meet the obligations. I’ll take (D) over (R). I’d like a thrifty government, but if I can’t get it, I’ll take one that pays its bills.

  17. Ryan Tate

    January 11, 2010 @ 3:42 am

    17

    PS Or at least _attempts_ to.

  18. Joe

    January 11, 2010 @ 3:46 am

    18

    Year after year. California lurches from financial catastrophe to catastrophe.
    We have a structural deficit that gets worse every year. In the rare year we have a
    tax surplus, the legislature goes on a spending spree that inflates the deficit by
    committing us to 30 years of new bond issuances… The legislature never fails to
    pass really bad entitlements if there’s the chance someone will vote for them.

    A 10.5 percent tax rate is suicidal. Wealthy people *do* move out of California. I notice that Tiger Woods beat a hasty retreat to Florida (a zero income tax state) once he started signing $100MM endoresment deals. Many of our large electronics & R&D companies have opened satellite offices in other states simply because it very difficult and expensive to recruit out-of-staters to California.

    In some counties, the sales tax is over 10%.

    Whatever other issues California may have, California does not have a tax collection problem.

    Unfortunately, I see no indication that it’s going to get any better.

  19. Harri

    January 11, 2010 @ 5:10 am

    19

    Perhaps Californian’s are wanna be Scandinavians, there is a lot of margin to raise taxes to approach Finnish taxation.

  20. Federico Calboli

    January 11, 2010 @ 7:01 am

    20

    Phil,

    aside from having a upper and lower houses with a number of seats that is not cleanly divided by 3, the current numbers reported in the wikipedia page show that Democrats are not in control of 2/3 of either house. How difficult to recruit people for a 2/3 majority I would not know (harder if the issue is taxes?), and I would not know about past legislatures, but getting 2/3 or more votes might be less trivial than you imagine.

    Just a though.

  21. Joshua Levinson

    January 11, 2010 @ 9:12 am

    21

    A tax reduction is not spending! Spending is anything that increases the government’s share of GDP.

    But it’s equally burdensome. Tax reductions not offset by spending cuts require the government to issue debt. This increases the supply of debt instruments on the market, lowering prices of such instruments, and raising interest rates.

    This in turn makes borrowing for businesses and persons more expensive, decreasing incentive to invest, which hinders long-term GDP growth. So, even with a tax cut, government share of GDP increases! Only, it does it by decreasing GDP rather than increasing the absolute amount of spending.

    Whether you believe in more or less government, it’s clear that all spending increases must be paid for via taxes, not debt, and all tax cuts must be offset by spending cuts. (This doesn’t take Keynesian principles into account, which is a long discussion in and of itself.)

  22. philg

    January 11, 2010 @ 10:11 am

    22

    Federico: Thanks for your input from the UK. Party control here in the U.S. is not as strict. As you may have seen at the federal level, not all Republican senators could be relied upon to vote for a particular proposal by George W. Bush, and the Democratic party does not vote as a bloc either. The same thing happens at the state level. There is no way for a party to enforce discipline. According to Wikipedia, for example, the Democrats control 25 out of 40 seats in the state senate. To pass a law requiring a 2/3rds majority, they simply need convince just 2 out of the 15 Republicans. They can do this by persuasion, by allocating pork barrel spending projects to those senators’ districts, by promising to vote for other legislation, etc. If it sounds like a crummy system, keep in mind that almost no other country in the world has copied us. The other countries that claim to implement “democracy” use a British-style parliament and prime minister and don’t have to horse-trade over every vote.

    Because we have no party discipline and don’t have a parliamentary system, the voters have essentially nobody to blame when things are going badly. This is why polls show that Americans have a low opinion of Congress but a high opinion of their Representative.

    Joe: Thanks for the Tiger Woods reference. I had no idea that he was a Californian, despite my two week vigil at his Orlando house (http://blogs.law.harvard.edu/philg/2009/12/19/tiger-woods-vigil-ended/). If he earns an average of $100 million per year, he is saving $10 million per year by not living in California! That’s enough to pay to lease and operate a Google/Arab-style Boeing 767 fitted out with bedroom, bathtub, etc., at which point it wouldn’t matter too much where he resided physically since he could show up in the city of his choice, anywhere in the world, after a good night’s sleep.

    Ryan: Thanks for the San Diego reference. I wrote about that in http://blogs.law.harvard.edu/philg/2009/09/18/pensions-how-states-and-local-governments-indulge-in-deficit-spending/ ; By pointing out how much time East Bayers spend expressing hatred of Republicans, I hope that I did not imply that I think Republicans would do a better job running California. Presumably the problem is somehow structural. The voters are determined to vote themselves programs to be paid for with other peoples’ money and can’t wake up to the fact that they are the other people.

  23. Rob Schoening

    January 11, 2010 @ 1:03 pm

    23

    I’m a registered democrat that lives in Oakland and I consider myself quite liberal. Ironically for many of the reasons that you mention, the left and its divorced-from-reality mentality here scares me more than do the ideas coming from the right.

    The lack of outrage over (and even support of) public sector worker benefits is particularly bothersome. Your quote sums up the crux of the issue quite well.

    At a CVS in Oakland, we bought sundries from a 70-year-old working as a cashier. I asked my local companion if he thought it was moral for the government to tax this poor old working person and hand the money over to a comfortable 50-year-old retired former public employee, which is essentially how California is now set up. He had not thought about the question.

  24. Bob Hamilton

    January 11, 2010 @ 1:06 pm

    24

    “I hope that I did not imply that I think Republicans would do a better job running California. Presumably the problem is somehow structural. The voters are determined to vote themselves programs to be paid for with other peoples’ money and can’t wake up to the fact that they are the other people.”

    Phil, you are hard to pin down. You write like a conservative but IIRC you voted for Obama, arguably the most leftist president in US history. I am curious where you come down on Brown v. Coakley.

  25. Calif*

    January 11, 2010 @ 1:12 pm

    25

    Calif* is mob behavior at its best. No-one makes their own conclusions. It’s probably because of the emphasis on information technology & mass media instead of using one’s own eyes.

  26. philg

    January 11, 2010 @ 1:44 pm

    26

    Bob: I did vote for Obama (the alternatives seemed worse and I had predicted his victory back in 2007!), but I don’t think that the U.S. President has a lot to do with the challenges that we’re currently facing. It is Congress who keeps approving massive deficit spending, as well as wasting money on Iraq, Afghanistan, and handouts to cronies. State and local governments are the ones who fail to educate children and commit to pension obligations that ensure that, eventually, they won’t be able to do anything other than pay pensions. Obama costs us a few billion dollars per year in helicopter taxi services, security, and miscellaneous staff, but the impact is probably only 20-50 percent larger than it was for King Bush II (Obama travels more and his wife has a larger staff).

    As far as the Massachusetts Senate race goes, I have to admit that I have not paid attention to the Republican challenger. It seems inconceivable that any Republican could get elected. As for Coakley, she is a lawyer who has spent almost her entire life collecting a government paycheck. I would not expect her to bring any new perspective to the Senate as there are already plenty of folks with identical backgrounds there.

  27. J Cortez

    January 11, 2010 @ 4:55 pm

    27

    I very much enjoyed your post on your trip as it highlights some of the thinking there.

    I used to live in California. At the time, I was involved in real estate and saw that there just seemed like too many foreclosures for there not to affect the entire state. Every neighborhood had too many for it to be absorbed by the market. On top of that, most were just sitting on the market, in comparison to years previous when they would disappear quick.

    Property valuations were very high during that time, to the point it just didn’t make sense with anything that had happened in the past. It seemed that there would have to be a fall, and the total impact of the losses would be huge for any government collecting property tax. They were spending like crazy and all that tax money would soon be gone. It seemed like something was going on and that the fall was definitely coming.

    I left at the end of 2007 when it became very clear to me that the state was headed for trouble. I’m very happy I made the move.

  28. Oren

    January 11, 2010 @ 11:26 pm

    28

    California is smack in the middle of the states for per-capita spending: http://www.statehealthfacts.org/comparemaptable.jsp?cat=1&ind=32

    The way they get the money may or may not be stupid. What’s broken in CA for sure is the way that money is allocated. The proposition system and constant earmarking mean that a truly insane amount of the budget is committed. Combine that with a process that makes significant change almost impossible due to requiring a supermajority, and it’s clearly a broken situation.

  29. philg

    January 12, 2010 @ 12:10 am

    29

    Oren: Thanks for that link on state government spending. It seems reasonably consistent with the Tax Foundation data, but statehealthfacts.org is not clear about whether local spending is included in the state total. If not, the numbers could be distorted by the extent to which the government of a state is centralized.

  30. Bob T

    January 12, 2010 @ 6:28 pm

    30

    Phil, alas your impressions are spot on. I spent all my early life near Berkeley. The “reality distortion field” is just as intact today as it was in the 60’s. “Berkeley” being what it is – from a University perspective – it’s sad that the thinking is so stunted. They live in their own bubbled world, unable to easily see through it.

    I would like to live outside of CA, and have visited many other states, but I cannot find one I like better when ignoring political issues.

  31. Bob Kerns

    January 14, 2010 @ 5:49 am

    31

    Phil, if you’ll recall, I summed up our state’s fiscal mess as “we’ve gone insane”.

    It’s not so much how MUCH we’re spending that’s the problem. It’s that we’re spending it in all the wrong places. If we actually got value for all that spending, then we could have a sane conversation about the proper role of government, etc.

    The Tea Party folks want to fix the problem by choking off the supply. However, Sacramento has already developed and fine-tuned an effective counter-strategy — and your museum visit is a part of it. Cut back on the most visible, painful-but-not-quite-essential services at the first sign of a cutback.

    Unfortunately, education is always a perennial target when “funds are low”.

    Proposition IS largely to blame for this. Not because it meant insufficient tax revenue. Rather, because, as another commenter pointed out, because it introduced gross distortions. And a key distortion is that it, and some subsequent measures, moved more financial control to Sacramento.

    So we have local school budgets that have to be refigured THREE times, after they should have been locked down. Teachers fired, because money that was supposed to be coming to Sacramento, where they have no plan, is suddenly withdrawn, forcing the local districts to replan.

    We spend an ever-increasing amount on prisons. Our previous governor was in thrall to the prison guard’s union; Arnold is, at least, sometimes willing to talk about the problem. We’re spending a VAST sum on upgrading San Quentin’s death row, where we have executed 30 people in the last 50 years. If it lasts 100 years, and we continue to execute at that rate, that’ll be around $5,000,000 per executed inmate, as capital expenditure spent now. Plus operating costs.

    Berkeley doesn’t represent the rest of CA, not even the liberal parts.

    I’m pretty convinced that the solution isn’t to cut revenue. That will just lead to even more madness, and not to a solution.

    I think we have to reform the entire process. I want to see politicians accountable to voters for every single dollar they vote to spend, and not just in the current fiscal year, but going forward, and every single dollar of revenue they vote to raise. Track that, both for failed and successful measures.

    That’s just a tiny piece of what’s needed, but it all ends up amounting to an accountable democracy. Trying to impose it with proposition this-or-that won’t do it. We have to change the entire political incentive structure to one that’s reality-based, and highly transparent.

    Most of all, we have to stop sending money to Sacramento to control for local purposes. School budgets are they way they are because there’s a complex formula for school funds, intended to level the playing field for poorer districts. A laudable goal, but not when it acts as a ceiling AND as a means of central control, AND as a destabilizing influence on already-tight school finances.

    Because while we spend 10.5% (or however you count it), our school spending has just about reached the bottom of the list. 49th, the last I heard, on a per-pupil basis.

    The bottom line is, we’re spending, but we’re not doing so wisely. So we max out our credit cards, and we still don’t have enough money.

    So our problem isn’t really that we don’t have enough money, or that we’re spending too much. We have money, we could spend this much, if we want. I don’t think we want to, except perhaps in Berkeley. But we could. We could decide on priorities, make realistic forecasts, build realistic reserves to carry us through hard times and unexpected events, and tax at a rate consistent with the spending and reserve requirements.

    Just like the local school districts do.

    Nope, the problem is we’ve gone INSANE!

Log in