I guess post-partisan was so nine months ago. Today, Arnold Schwarzenegger appeared on FoxNews (h/t SacBee) with Greta Van Sustern. Always a “fair and balanced” forum, don’t you know.
Ol’ Greta really went after him, with such chin music as “Is it hard to make the cuts?” and “Why are the Democrats mad at you?”
But Arnold took a different tack than the New York Times Article where he famously said that after work he goes home to enjoy a stogie in his jacuzzi. This time he claimed to, you know, give a damn about the state that he was elected to govern. He claimed there were many sleepless nights, interesting how that differs from last time. I suppose he learned a lesson.
But the more interesting thing in terms of policy was his frank talk about his use of the shock doctrine to bend California to his crazy will. From my rough paraphrase of the interview:
GVS: Why does California have big problems?
GAS: California is more exaggerated about everything, with the good things, but also with the bad things. We don’t have just a lack of revenues, but we have an outdated tax system. It’s always very popular to pile on the rich, but it backfires when Wall Street takes a hit. Other states don’t have those kinds of losses, like $60 Billion in losses, that’s bigger than any other state’s budget. The budget in this system is outdated, the tax system is outdated, the initiative system is outdated. There is a lot of things like that we need to modernize. We also have a budget which needs 2/3 of the vote, which a lot of states don’t have. We have to use the loss of revenues as an opportunity to reform all of those systems as quickly as possible.
I tried to do this for the last 5 years. I tried through the initiative system, but the people didn’t vote for it. The special interests spent hundreds of millions, and I tried through the legislature. But we can use this crisis to create change.
This is pretty much textbook Shock Doctrine Theory, using a crisis to push through reforms that are democratically unpopular. It really isn’t that much of a stretch that Arnold himself was in fact pushing the state towards that crisis. Whether that was willful depends on your political take of the situation, I suppose.
I suppose there shouldn’t be any surprise left with this governor. But, on occasion, Naomi Klein’s thesis just rings so dramatically true with this guy, that you just have to shudder.
Over the flip, you’ll find my very rough paraphrase.
GVS: Why are they made at you:
Gov. Arnold Schwarzenegger: I promised the people of California that I would never sign a budget that was not balanced and did not have a reserve. … So I had to make the tough decisions. … We need a reserve for fires and earthquakes.
GVS: Making Cuts isn’t a lot of fun is it?
GAS: This is the greatest job, the most rewarding job, the most challenging job. There are moments when it is hard…You have sleepless nights. You don’t want to make the cuts. But if you don’t have the money, then that’s what you have to do. Just cuts, cuts, cuts, to bring the spending in line with the revenues.
GVS: Why does California have big problems?
GAS: California is more exaggerated about everything, with the good things, but also with the bad things. We don’t have just a lack of revenues, but we have an outdated tax system. It’s always very popular to pile on the rich, but it backfires when Wall Street takes a hit. Other states don’t have those kinds of losses, like $60 Billion in losses, that’s bigger than any other state’s budget. The budget in this system is outdated, the tax system is outdated, the initiative system is outdated. There is a lot of things like that we need to modernize. We also have a budget which needs 2/3 of the vote, which a lot of states don’t have. We have to use the loss of revenues as an opportunity to reform all of those systems as quickly as possible.
I tried to do this for the last 5 years. I tried through the initiative system, but the people didn’t vote for it. The special interests spent hundreds of millions, and I tried through the legislature. But we can use this crisis to create change.
GVS: What would you change structurally?
GAS: I would change the tax structure, to make it less volatile, to not just rely on rich people. It makes you vulnerable.
I would change the budget system to have at least a $10-15 billion rainy day fund.
We need a spending cap to never spend more than 4-5% than the previous year. We have to give the extra revenues for a rainy day fund
I would also change the initiative system, so we don’t have people just trying to spend money we don’t have.
GVS: Were the rich complaining? Would taxing the rich solve the problem? Is the money there to tax the rich?
GAS: It doesn’t have to do with the rich complaining, but all the rich people are living the state. They can leave the state, and income tax is volatile. The revenues are not just based on economic activities in California, it’s based on Wall Street. We can’t make important programs go on a roller coaster ride. You can’t continue running like that.
GVS: After the Democrats left, did they know this was coming?
GAS: Yes, they realized it. Sometimes, legislators come to me and say we are a bunch of kids. They were not willing to make the extra step. It was not balanced, and in the hole by $150 million.
Governor Hollywood knows how to handle last minute script revisions. But he and I are not too much in disagreement:
– Change the tax system. Check. Less “volatile” revenue, more commercial property tax.
– Rainy day fund. Check. But not during the current monsoon.
– Change the initiative system. Check. Require PayGo in propositions and take the money OUT of signature gathering.
Have to confess… I keep thinking that the current crisis is our best opportunity to dethrone Prop-13 – a different kind of Shock Doctrine thinking, yes?
Is there another way?
Focus group tested and consultant massaged. He’s never made much sense, but he’s always ready with the list of approved statements, and that’s pretty much all he says. Ever.
I’m sure he talks the same way with the Big Four, probably with Maria and the kids, too.
And he always says the same thing about taxing the rich: raising their taxes won’t raise enough money to cover the deficit, so there’s no justification for raising their taxes at all. Sometimes he can slip in a pitch to lower their taxes, too.
He sort of elides the question with Greta, but still it’s the same sloganeering.
And of course he’ll be happy as a clam at Pismo to follow the Parsky Commission’s recommendation (assuming, of course, they so recommend) to raise taxes on the working and middle classes, “those who use the services,” as it were.
Oh, why lookee, the sales tax was raised another penny in April! And corporate taxes were lowered. Makes perfect sense! That’s the way it’s supposed to be!
As for the rich leaving California if their taxes are raised, so? Let them go. Please. We have a net outmigration as it is, but far too few of those leaving are the victimised aristos. If they seriously believe that taxes are punishment — and not the price those who benefit the most have to pay to live in a decent society — then they really don’t belong here at all. They need to be gone. The sooner the better.