(Always great to have Paul ’round these parts. – promoted by Julia Rosen)

Cross-posted from Open Left

During the 2003 recall campaign, Arnold Schwarzenegger promised he would “fix” the budget.  He fixed it, all right, his first day in office he repealed the vehicle license fee (VLF), leaving the state liable for an addition $6 billion of local spending annually. He then used all kinds of “creative financing” as it’s known in Hollywood, to maintain the illusion that everything was just fine. This January, he dropped the act.

“For several years, we kept the budget wolf from the door, but the wolf is back,” he said, as he announced an 18-month budget shortfall of $14.5 billion, a figure that the non-partisan Legislative Analyst soon upped to $16 billion.  The Democratic legislative leadership managed to trim that by $9 billion with some creative financing of its own, before the Governor announced on April 24 that it was up to $10 billion, and still climbing as California’s economy continued to worsen, along with the rest of America, and the world.

For some idea of what this means, in March, the California Budget Project reported that the Governors proposed budget would hit children, seniors, the poor and disabled especially hard.  In Los Angeles County alone, this would include cuts of $670 per student for all 1,544,710 students served by the county’s public schools.  In the past, conservative Republican governors like Ronald Reagan and Pete Wilson agreed to balancing budget cuts and tax increases to fill budget gaps, but so-called “moderate” Arnold Schwarzenegger is dead set against raising taxes-Republican legislators are even more adamant.

All of which means we need to “think outside the box.”

Mandatory Blood Donations

Because education cuts account for such a large chunk of the budget gap, it seems only natural to think creatively about how these cuts in particular might be made up. Some have suggested instituting a system of mandatory blood donations for all students, and using the proceeds to help fill the budget gap.  At first blush, it seems like a promising approach.

“We do collect form high schools and colleges,” said Theresa Solorio, Public Affairs Manager for Red Cross Blood Service in Southern California.   “About 20 percent comes from high school and college.”

But there’s a catch, it turns out, as Solorio explained further.  (Solorio did not address policy questions, but was most helpful in illuminating how things currently stand.) California law requires donors to be 17–16 with parental permission and and a doctor’s approval–while FDA regulations require donors to weigh 110.  This would exclude the vast majority of public school students–though not those attending college, another big deficit sore spot.

There is, however, a more fundamental problem: blood is routinely donated–as in, “for free.”  Changing a non-profit operation into a for-profit one is hardly impossible, however. Most hospitals were non-profit only a few decades ago.  And besides, blood plasma, as opposed to whole blood, is already routinely sold.  What’s more, whole blood cannot be drawn more often than once every 56 days–the FDA again.  Plasma, however, can be donated twice a week, and there already is a paying market for it–in the range of $20 to $30 per donation.

Since the public school budget shortfall is under $4 per day, plasma donation can clearly fill the funding gap with a single donation a week, at least for those who qualify.  There’s the rub.  Most school children are too young, don’t weigh enough, or both.  There are two other problems.  First, even if we could solve these legal difficulties, by getting these legal restrictions removed, younger children just don’t have that much blood.  Second, even if we could get that much blood, the market for it simply isn’t big enough to pay for the budget shortfall we face.

However, public policy expert Richard Vigorous–a pseudonym used for work on policies with “special sensitivity”–sees a great deal of promise in exploiting foreign blood markets, where supply and demand may not be so reliably matched.  Taking a page from OPEC, Vigorous suggests, we might even be able to manipulate world markets by tapping into the sort of oversupply that a well-run mandatory donation program could generate.  

By strategically managing gluts and droughts, Vigorous argues, the results could be spectacular, particularly in dealing with the Middle East. “We have to create an artificial shortage and give people a chance to speculate in futures,” Vigorous explained.  “We need to find a way to stockpile it, so we could make a straight exchange of blood for oil.”

Another wrinkle is added when we consider the potential for driving up demand for blood the old-fashioned way–declaring war. “The state of California should be allowed to declare war on its own,” Vigorous insists.  “We would be fine if we didn’t have to deal with those greedy Texans.”

As for the age issues, and questions about whole blood versus plasma, Vigorous suggests “a long-term multi-billion dollar contract should be given to Halliburton” to study the options in detail, and develop plans accordingly.

Plan B: A Return To Child Labor

However, if we’ve learned anything from the last few years of budget woes, it’s that we need to diversify our sources of revenue.  Translated into policy terms this means that instead of relying entirely on children’s blood, we should rely on their sweat and tears as well.  In a word: child labor.

Child labor has a definite negative connotation for many. “It was not a pleasant thought when you think of early child labor,” said labor historian and former Longshore Local 13 President Art Almeida.  “Back in the turn of the last century, the kids worked in the factories and the cotton mills in New England.  The breaker boys in coal mines in Pennsylvania, their backs were misshapened.”  (Breaker boys–as young as eight, sometimes younger, picked slag and slate from the coal as tumbled down chutes to where it was loaded onto wagons or trains.)  “Girls would get their hair caught in the machines,” Almeida added.

Still, Almeida himself was a child laborer in the 1930s, picking white onions in Dominguez, he recalled.  So it can’t be all bad.  Besides, we’re in a crisis here.

The question is–what sort of work could children best do in an increasingly post-industrial economy.

“We could consider exporting children for the sex industry [to countries] that are not well served by other suppliers,” Vigorous mused.  But it’s unlikely Republicans would go for it publicly, just because they’d go for it in private.

On the other hand, Vigorous suggested another possibility for bringing about synergy in Republican goals–using low-priced child labor to underbid immigrants and drive them out of the marketplace.

“If children are willing [so to speak] to work for $3 [an hour], then Mexicans working $3.50 won’t find any takers,” Vigorous pointed out.

What’s more, he insists, “To the extent that children need training or supervision, those costs should be borne by parents through fees.”

Revenue Diversification: Organ Sales In the Lottery Context

A third front for diversified revenues would be organ sales.  While initially repugnant to many–as well as being illegal–putting organ sales into a lottery context changes everything.  Anyone needing an organ could join the lottery. Those who win get the organ they need. Those who lose, donate one instead. After the winners are taken care of, the rest are sold–overseas if need be, at least until domestic laws are changed.

“We should keep the number of lottery winners to the minimum,” Vigorous advised. “That increases hope and anticipation.”

It’s possible that an organ lottery alone would not be the most attractive approach, even with enhanced advertising and promotion to increase participation rates.  One possibility is include additional prizes, possibly even merging it with the existing state lottery system, so people who don’t need an organ could also become potential donors.  Or we could legally require participation–as a condition of probation and/or parole, for example, or for various other special status people who require something from the state–perhaps even a vehicle license.

There’s sure to be some vigorous opposition to this–but not from Vigorous himself.  He likes the idea a good deal, and if opponents must be given something, he suggests a complicated opt-out system.  On the other hand, “There might be another revenue stream in the opt-out. If you want to opt out, its going to cost you.  The only way you can opt out is through campaign contributions to an approved list.”

At this point in our interview, Vigorous had become thoroughly engaged, and offered a few more suggestions of his own.

“For years, we have been handling the excess runoff water from Colorado, Nevada, and other states, and we have not charged them for it.  We need to start collecting for it,” Vigorous proclaimed. Along similar lines, he added, “It’s imperative we start assessing the relatives of prisoners, some sort of fees for taking care of their relatives.”

With his sudden burst of enthusiasm, I began to have my doubts.  Was he just an anomaly? A political outlier with ideas no one else would ever seriously consider?

I decided to seek a second opinion.

A More Visionary Approach

To the contrary, Patrick Marsh (another “sensitive issues” pseudonym) assured me that my original options–mandatory blood donations from school children, child labor and an organ donation lottery–were too conventional.

“I think your list is incomplete,” Marsh said, “The Republican Party is basically an extension of the lobbying arm for the People’s Republic of China. We need to get with Chinese leadership and adopt the models of the Chinese state and bring them over to the US in much more explicit ways–not just importing Chinese goods, and importing pollution from China–but labor standards, even prison labor,” Marsh declared.  “Budget crisis is not really a crisis,” he explained, but the passing away of outmoded forms.

“We need to abolish our fundamental social fabric,” he said, matter-of-factly.

Something about this sounded faintly familiar.  

It would be, Marsh said, simply, “A great leap forward.”