Arnold Schwarzenegger is packing up his office in the Capitol and finally, after 7 long years, leaving his post as governor of California. It comes not a moment too soon, as he has distinguished himself as the worst governor in California history by quite a wide margin. The Sacramento Bee’s readers agreed there was one word that encapsulated his misrule: failure.

George Skelton has recognized that the recall of Governor Gray Davis in the fall of 2003, which brought Schwarzenegger to office, was a colossal mistake. John Myers of KQED offered a more in-depth assessment of Arnold’s signature failure, his inability to fix the state’s budget mess. And he leaves office with approval ratings at record lows – at or below the numbers Gray Davis had when he was recalled.

But why exactly did Arnold fail? Getting that story right matters quite a lot as Governor Jerry Brown and the Democratic legislature seek to fix not just the 7 years of misrule, but 32 years of destructive policies that were initiated by the passage in June 1978 of Prop 13. More below.

Arnold’s defenders and apologists blame the state’s broken political process and its entrenched “special interests” for making it impossible for the former action movie star to “blow up the boxes” in Sacramento. There’s no doubt that California’s government is indeed broken, and many labor unions – often the target of the “special interest” charge – helped mobilize voters to reject Arnold’s proposals.

But this lets Arnold off the hook for his own failures, which were ideological in nature. Arnold Schwarzenegger became the worst governor in California history through his unwavering commitment to a far-right economic agenda, his fealty to the large corporations who helped elect him back in 2003, and his pursuit of a shock doctrine attack on the state’s institutions and prosperity in the service of his ideology and of his wealthy backers.

Early in his tenure in office, Arnold rejected advice from Warren Buffet and others that he needed to raise taxes in 2004 to close the state’s budget gap. Instead of this responsible – and necessary – solution, Arnold stuck to his ideological guns. He pushed through a costly campaign promise to repeal the restoration of a higher Vehicle License Fee, costing the state $6 billion a year in expenditures to local government to make up the lost funds.

Arnold’s “solution” to the structural revenue shortfall was to borrow our way out of the mess. A total of $25 billion in bonds were sold to help pay the operating costs of the state in 2004 and 2005. While deficit spending in a recession is sensible, California’s economy was in recovery during those years, and could have handled a tax increase. In fact, a tax increase, especially on property taxes, might have slowed the growth of the real estate bubble that eventually crippled the state’s economy. The debt service on those bonds takes away from other spending priorities, and lessens the state’s ability to borrow to build infrastructure.

After Arnold’s extremist special election initiatives were rejected by voters in 2005, he embarked on a high-profile effort to moderate his image and, for a time, his governance. The only product of this period worth noting was his belated support for AB 32, a bill that any Democratic governor would have signed in a heartbeat. Meanwhile Arnold ignored other concerns, such as a growing property bubble and the need to wean the state off of its dependence on oil. While Arnold was signing AB 32 in the late summer of 2006, he was threatening to eliminate the funding for the California High Speed Rail Authority, risking the HSR project.

This short period of moderation did not last. From 2007 onward, Arnold became a truly destructive force. As the economy turned south, he began implementing a shock doctrine attack on California’s basic prosperity. The term comes from Naomi Klein’s 2007 book The Shock Doctrine, she explains how the last 30 years of neoliberal economic policy, aimed at the transfer of wealth away from working people and toward a small elite, was implemented largely through the taking advantage of a crisis, a crisis usually manufactured by those same neoliberals. As she explained it to Democracy Now!:

The shock doctrine, like all doctrines, is a philosophy of power. It’s a philosophy about how to achieve your political and economic goals. And this is a philosophy that holds that the best way, the best time, to push through radical free-market ideas is in the aftermath of a major shock. Now, that shock could be an economic meltdown. It could be a natural disaster.

This describes Arnold Schwarzenegger’s approach to California government after mid-2007 quite well. Surrounded by Friedman acolytes such as David Crane, Arnold sought to use the recession and the budget crisis to push through a radical attack on government and prosperity that he would never have accomplished before the crisis – a crisis he himself provoked by his failure to resolve the underlying budget problems as described above.

What did Arnold’s shock doctrine attack look like? Let’s review the list:

• An unprecedented attack on education. Over $9 billion was cut from K-12 schools in 2009, leading to mass layoffs of teachers and a collapse in instructional quality. The intent appears to have been to force parents and students into the arms of private charter school operators, something that had been resisted prior to the crisis.

• Similarly, Arnold slashed higher education budgets as part of a predetermined plan to privatize higher ed. While the privatization isn’t complete, UC and CSU education has become increasingly unaffordable for most Californians. Along with the K-12 cuts, these cuts threaten the state’s future prosperity.

• Beyond education, Arnold pushed a broad privatization project, intended to encompass as much of state government as possible, including infrastructure projects – despite the higher cost of public/private partnerships.

• Arnold has pushed mass transit in California to the brink of collapse through his cuts to state transportation funding. Despite a massive increase in mass transit ridership after gas prices rose in 2007, Arnold has attacked mass transit in the service of his oil company donors, who want to eliminate the competition and force Californians to pay their exorbitant prices. Without affordable, available mass transit options, California cannot possibly hope to recover from a recession triggered when gas prices rose above $3/gal in 2006.

• Arnold’s attack on health and human services, from his cuts to Medi-Cal to his effort to eliminate CalWORKS and even his proposed cuts to HIV/AIDS services, has been designed with two purposes in mind: to increase poverty, and to push more people to spend their health care dollars in the private sector.

• Arnold frequently acted as a puppet of the right-wing, anti-business California Chamber of Commerce, implementing their job-killing agenda of favoring large corporations at the expense of small and medium-sized businesses of the state. Under Schwarzenegger, California lost millions more jobs than under Gray Davis. Unemployment rates in 2010 were nearly double those of the peaks seen during Gray Davis’s tenure as governor.

We could go on, and I encourage others to add in the comments the ways in which Arnold Schwarzenegger has destroyed the California Dream.

But the conclusion is clear and obvious. Arnold failed not because he couldn’t get his agenda through Sacramento – quite the opposite. He failed because so much of his right-wing shock doctrine did make it through Sacramento to become law.

I wish that Arnold had been defeated at every turn. Sadly, he wasn’t, and only in his final year in office did Sacramento Democrats learn that resisting him was necessary – and only then after the public had already turned on the governor.

Arnold’s failure is the failure of his right-wing ideology. No wonder California voters soundly rejected Meg Whitman last month, who promised to continue Arnold’s right-wing policies.

It’s unclear whether Jerry Brown can use his third term as governor to fix this mess. It will take a long time to recover from the catastrophic Schwarzenegger Administration. We might be able to begin the recovery in spring 2011 if voters approve new revenues to restore the cuts Arnold brutally pushed through. But even then it will just be the start of a long road of recovery.

Back in 2003, many joked about the Terminator becoming governor of California. Nobody is laughing now. Arnold Schwarzenegger terminated the California Dream, smashing prosperity and gutting the public services that made the middle-class possible. In an ideal world, he would be chased from office by pitchforks and torches, and would be forced to flee California entirely. Instead he slinks from office back to Brentwood to enjoy his riches along with his wealthy allies, untouched and apparently unmoved by the suffering they have wrought.

It’s up to us to fix what he destroyed. And it begins by ensuring everyone knows why Arnold failed, and why we must never allow his policies to become law again.