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Meg Whitman’s “Plan” October 17, 2010

Posted by Dwight Furrow in Dwight Furrow's Posts, politics.
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This post from the Wonk Room is the most concise account I’ve seen about why no one should vote for Meg Whitman for Governor

I pointed out yesterday that California gubernatorial candidate Meg Whitman’s (R) job creation plan is based on a tax cut that economists don’t believe will create jobs or boost investment. Rather, it would amount to nothing more than a giveaway to California’s wealthy.

But Whitman’s plan to balance the state budget also leaves a lot to be desired. As UC Berkley economic Michael Reich noted, Whitman’s promise to cut $15 billion from the budget “necessarily implies significant reductions in spending on education, health, and social service programs on top of the deep cuts already made in the past two years.” But you won’t hear that from her, if her interview today with the New York Times’ John Harwood is any indication:

HARWOOD: Every single, at the national level, big deficit reduction package…has involved tax increases, revenue, as well as spending cuts. Is the better part of honesty and candor with the voters of California to say that’s what you’re going to have to do as well?

WHITMAN: I don’t believe we are going to have to do that. I am against increasing taxes on Californians.

HARWOOD: You can close a $19 billion budget deficit just by cutting spending?

WHITMAN: And growing the economy.

In the interview, Whitman named four things that she would do to supposedly save $15 billion (which still wouldn’t eliminate California’s $19 billion deficit). Here’s a look at why they amount to little more than hot air:

Reduce government workforce: Whitman claims this will save $3 billion per year, but fails to mention that she plans to lay off one-quarter of the state workforce. California’s government employment per capita is already 28 percent below the U.S. average, ranking 48th among the states, and has not increased since the early 1980s. Such cuts will obviously depress consumer spending and increase social safety net spending in the state, harming economic recovery.

Pension reform: Whitman acknowledged that California spends about $3.9 billion on pensions, and obviously they won’t be eliminated entirely, rendering savings far below that. Unless she plans to cut benefits for already retired workers, pension reform will do little to close California’s current budget gap.

Welfare reform: Whitman doesn’t specify how much money she can save by reforming welfare, but it’s likely not very much. As the California Budget Project noted, “welfare spending dropped $349 million between 1996-97 and 2009-10, without adjusting for inflation. On an inflation-adjusted basis, spending is down by $2.5 billion.” Under the proposed 2011 state budget, welfare accounts for just 3 percent of state spending.

“Run this government more efficiently and effectively”: The rest of Whitman’s spending cut plan amounts to finding efficiencies in government that everyone else has somehow missed. As Harwood said, “don’t you think, if it were as easy as cutting wasteful and obviously frivolous programs, it would have been done long ago?”

So even if she eliminates California’s public pension system entirely — an obvious impossibility — Whitman comes nowhere close to balancing the budget without raiding important education and health programs. And remember, she is proposing to blow another $4.5 billion hole in the budget by completely eliminating her state’s capital gains tax, almost entirely offsetting the cuts outlined above.

All of this should sound very familiar. These ideas represent precisely the policies of Arnold Schwartzenegger, and we know how they turned out.

It has been demonstrated time and again that giving money to the wealthy through tax cuts does not generate enough revenue to run the government. To get the budget cuts she promises she will have to cut education and welfare, programs that have already been cut to the bone.

This is just one more plan to transfer wealth from the middle class to the wealthy.

book-section-book-cover2 Dwight Furrow is author of

Reviving the Left: The Need to Restore Liberal Values in America

For political commentary by Dwight Furrow visit: www.revivingliberalism.com


Tired Rhetoric September 28, 2010

Posted by Dwight Furrow in Dwight Furrow's Posts, politics, Uncategorized.
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I just listened to part of the debate between Brown and Whitman. And Whitman keeps making the same tired argument that businesses are leaving California because of taxes and too much regulation. But Bureau of Labor Statistics don’t support  that claim. In fact, we have lost fewer jobs than neighboring states. Last year, Arizona, Nevada and Oregon had over 6.5% job loss compared to 4% in California. Of course any job lost is one too many but the job losses are caused by the recession, not taxes or regulations.

According to the  Public Policy Institute of California (PPIC), there is very little movement of businesses across state lines and California is about 20th in the nation when it comes to the tax burden.  A recent report found that California loses fewer jobs across its borders than other states because large, metropolitan areas are far from the state border.

Schwarzenegger was fond of making the same false claim. E-meg needs to find some new talking points.

book-section-book-cover2 Dwight Furrow is author of

Reviving the Left: The Need to Restore Liberal Values in America

For political commentary by Dwight Furrow visit: www.revivingliberalism.com

Emeg vs. Moonbeam March 29, 2010

Posted by Dwight Furrow in Uncategorized.
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Ed Kilgore has an informative account of the California Governor’s race. Here are some highlights.

He begins by questioning why anyone would want the job.

California’s bad case of political self-loathing goes beyond a terrible economy, the state’s chronic monstrous state budget deficits, and the endless gridlock over virtually all major decisions in Sacramento. On the structural level, California’s permissive ballot initiative system has inserted voters—or, to be cynical about it, the special interests backing initiatives—into matters normally left to governors and legislators, resulting in constitutional limits on property taxes; excessive reliance on recession-sensitive income taxes; a crippling two-thirds vote requirement for legislative enactment of a state budget or for increasing taxes at any level of government; and a variety of spending mandates. Polls consistently show that a majority of citizens oppose tax increases and most spending cuts (they do favor cutting spending on prisons, which are operating under court rules and stuffed with inmates who have run afoul of the state’s many mandatory sentencing laws, some imposed by initiative). “Waste” is where Californians seem to want lawmakers to look for the massive savings necessary to balance the budget. Too bad California already ranks near the bottom among states in per capita state employees and infrastructure investment, and below average in per-pupil spending on education.

He goes on to characterize the two main candidates for this highly sought after position:

The second GOP candidate, former eBay CEO Meg Whitman, is running far ahead of Poizner, floating her campaign on an extraordinary sea of early money. Three months before the June primary, and eight months before the general election, Whitman (or eMeg, as local political journalists often call her) has already spent $46 million, mostly from personal funds on her campaign, and has threatened to spend up to $150 million if necessary.

EMeg’s strategy is to buy the election with her almost limitless personal fortune.

Whitman’s ads mainly convey, with numbing repetition, her claim to offer a fresh start for the state, delivered by a rock-star business executive committed to cuts in spending, tax cuts, and education reform.

And how is this to be accomplished in a state in which the population routinely says no to spending cuts and taxes?

She’s also bought herself grief by refusing, until very recently, to answer press questions or elaborate beyond the happy talk of her biographical ads about her positions on various issues. All in all, she’s in danger of earning the reputation of being something of a robo-pol like her political mentor, Mitt Romney.

So far there are no ideas coming from EMeg and no experience in government either. That sounds like “Governator” redux to me.

On the other side of the aisle we have Jerry Brown, known as “Governor Moonbeam” 30 years ago for his unorthodox style. He has experience in spades:

…Brown was first elected to statewide office 40—yes, 40—years ago. After a term as secretary of state, he was governor for eight years, and later state party chair, mayor of Oakland, and currently attorney general of California. He also ran unsuccessfully, and somewhat fecklessly, for the U.S. Senate once and for president three times.

But, although the anti-politician sentiment is raging, Brown may not be handicapped by it.

You see, Jerry Brown is a tough challenger because he is hard to confine to the standard political and ideological boxes. His long political career may be a handicap in some respects, but it has also helped him defy typecasting and create unusual coalitions. Long an ally of Democratic liberals—in the 1990s, he had a show on the lefty Pacifica radio network—Brown governed California as a fiscal hawk in the wake of the property tax-slashing Proposition 13 (which he had opposed) in 1978. Similarly, as mayor of Oakland from 1999 to 2007, he became known for a strong law-enforcement record, and for his championship of charter public schools, including one controversial military school. He can be broadly characterized as a social liberal and fiscal conservative, which is a good fit for his state. But his leitmotif as a politician has always been unpredictability and a knack for anticipating and sometimes embodying the zeitgeist. […]

He seriously studied Zen Buddhism in the 1980s, underwent training for the Jesuit priesthood, and worked with Mother Teresa in Calcutta. Not surprisingly, he conveys a certain aura of ironic detachment and self-control.

Indeed, over four decades of engagement in public life, Jerry Brown has developed a remarkable knack for displaying a sense of his own—and government’s—limits. He began his gubernatorial first term in 1975 with an off-the-cuff “address” that ran seven minutes; replaced the traditional inaugural ball with an informal dinner at a Chinese restaurant; traded in his gubernatorial limo for a 1974 Plymouth from the state car pool; rented a small apartment instead of living in the governor’s mansion; and reportedly slept on a mattress on the floor. (As governor, Brown was far more fiscally conservative than his predecessor, Ronald Reagan, who raised taxes and spending several times. His austerity, which created vast budget surpluses, prompted one Reagan aide to joke that the Gipper “thinks Jerry Brown has gone too far to the right.”)

How will Governor Moonbeam do this time around?

Short of having their own grossly rich and relentless attack dog in the race, Democrats are probably blessed to have Brown, who can be expected to shrug off Whitman’s certain assault on his record and land a few coolly delivered blows of his own. He’s already reminding voters that California hasn’t had a particularly good recent experience with “outsider” governors promising to come in and clean up Sacramento by sheer force of will. […]

And it’s not as though Jerry Brown is likely to present Whitman with an unmoving target. As protean as California itself and as wily as any other 40-year veteran of political wars, Brown nicely defined himself in an interview with Calbuzz just after officially announcing his candidacy: “Adaptation is the essence of evolution,” he explained. “And those who don’t adapt go extinct.”

Indeed, such adaptivity may be the only thing that can serve California’s needs right now.

I don’t know who will win. Californians have proven that they are willing to elect a wealthy, empty suit with a big mouth to run the state.

But one way or another, our next governor is likely to be a clown.


book-section-book-cover2 Dwight Furrow is author of

Reviving the Left: The Need to Restore Liberal Values in America

For political commentary by Dwight Furrow visit: www.revivingliberalism.com

California Sinking May 18, 2009

Posted by Dwight Furrow in Current Events, Dwight Furrow's Posts, politics.
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The ballot propositions being voted on in today’s election are likely to go down to defeat, according to latest polls, as well they should since they will not solve the budget deficit and will hamstring the state for years to come.

Even if they should pass, California is faced with at least a $15 billion dollar deficit.

Thus far, the only solution to the budget deficit offered by the clown show that is the Schwarzenegger Administration is draconian cuts to health, education, and social services.

In an economic crisis, budget cuts are the last thing we need. In a recession, consumers cut back on their buying and businesses cut back on production. As a result, the state has to encourage spending, so people can stay employed, businesses are encouraged to produce, and eventually grow buy hiring new workers. By contrast, state spending reductions that entail unemployment or underemployment for thousands of teachers and state workers reduces consumption and thus reduces production.

This is elementary economics and it is hard to fathom why Schwarzenegger and his Republican stooges in the legislature don’t get it.

What kind of response do we get from Republicans?  From Andrew Ross:

Gov. Arnold Schwarzenegger‘s latest grim budgets bring to mind assertions by opponents of Propositions 1A-1F that, in the words of gubernatorial candidate Meg Whitman, “We don’t have a revenue problem. We have a spending problem.” Given that the state is facing a $21.3 billion hole, does not a $11.7 billion revenue drop count as a problem? …The three major sources of state revenue – income taxes, sales taxes and corporate taxes – fell by $12.4 billion, a 16.4 percent drop.

How is this not a “revenue problem”?

Schwarzenegger, since he has been in office, has constantly used the argument that business will avoid the state if taxes are raised. But what business will want to stay or relocate here when schools are decimated, college is unaffordable and inaccessible, and unemployment is skyrocketing?

In a recent letter to New York Governor David Patterson who is facing his own budget crisis, Nobel Prize winning economist Joseph Stiglitz argued that raising taxes on the state’s wealthiest residents would help pull the state out of a recession more quickly by maximizing the total spending in the economy.

“Every dollar of state and local government spending enters the local economy right away, generating a greater economic impact,” he wrote.

“Raising taxes on high income households also will reduce spending, but by less than the amount of the tax increase since those with plenty of income typically spend only a fraction of their income,” he wrote.

Yet, raising taxes is not on the agenda.

Just as George W. Bush presided over the demise of the U.S., Schwarzenegger is presiding over the demise of the Golden State. I doubt that in 10 years anyone will want to live here.