California, the Example of What the Nation Could Become

I want to welcome this groundbreaking scientific expedition to the savage lands of the Left Coast.  You are here in California to answer an important theoretical question and now you have your answer.

Yes, this is what Barack Obama’s second term would look like.

Study it.  Fear it.  And then go home and make sure that it never happens to the rest of the country.

Of course, in spite of all of its problems, California is still one of the best places in the country to build a successful small business.  All you have to do is start with a successful large business.

Laugh if you will, but as you whistle past this cemetery, do heed the medieval epitaph:  “Remember man as you walk by, as you are now so once was I; as I am now so you will be.”

Mark that well, because if we lose this struggle for the future of our country, you too someday will live in a California – only without the nice climate.

Bad policies.  Bad process. Bad politics.  Those are the three acts in a Greek tragedy that tell the tale of how, in the span of a single generation, the most prosperous and golden state in the nation became an economic basket case.

When my parents came to California in the 1960’s looking for a better future, they found it here.  The state government consumed about half of what it does today after adjusting for both inflation and population.  HALF.  We had the finest highway system in the world and the finest public school system in the country.   California offered a FREE university education to every Californian who wanted one.  We produced water and electricity so cheaply that some communities didn’t bother to meter the stuff.  Our unemployment rate consistently ran well below the national rate and our diversified economy was nearly recession-proof.

One thing – and one thing only – changed in those years: public policy.  The political Left gradually gained dominance over California’s government and has imposed a disastrous agenda of radical and retrograde policies that have destroyed the quality of life that Californians once took for granted.

The Census bureau has reported for the better part of the decade that California is undergoing the biggest population exodus in its history, with many fleeing to such garden spots as Nevada, Arizona and Texas.  Think about that.  California is blessed with the most equitable climate in the entire Western Hemisphere; it has the most bountiful resources anywhere in the continental United States; it is poised on the Pacific Rim in a position to dominate world trade for the next century, and yet people are finding a better place to live and work and raise their families in the middle of the Nevada Nuclear Test Range. [Read more…]

Occupy Congress, Not Wall Street

Unfortunately, they are in the wrong city, targeting the wrong enemy.  The “Occupy Wall Street” protesters should have focused  on Washington, D.C., rather than New York from the beginning; pushing to replace crony capitalism with capitalism rather than attacking capitalism, the only real hope for progress.

The protestors have only a semi-coherent set of complaints.  Some objections focus on big business; others on the government bailouts they (particularly financial institutions) have received; still others on greed.  And there is some validity in their objections (I too object to the massive government bailouts and takeovers). But the common catch-all term for what they object to—capitalism–is incorrect, and therefore their “solution”—more political control, just of the “right” kind, would  actually be a move in the wrong direction.

The protestors seem to miss the irony of their position—they object to others being bailed out, but not themselves, and to what they consider other people’s’ greed, but not their own.  They are also misled by a major Marxian confusion about capitalism. The result is that they don’t want to eliminate the crony capitalism system of special government favors at others’ expense; they just want to become the cronies who control those favors.

These thoughts struck me because, yesterday morning, I went from reading an article about the self-styled “99 percent” to the introduction to The Morality of Capitalism (2011) , a slim book of essays edited by Tom G. Palmer.  Even though it was written before the protests began, Palmer seemed to capture the essence of what the protestors fail to understand about capitalism and, therefore, why their calls for more government control are misguided.

Palmer does an excellent job of correcting misunderstandings about capitalism.

“Far from being an amoral arena for the clash of interests, as capitalism is often portrayed…capitalism rests on a rejection of the ethics of loot and grab, the means by which most wealth enjoyed by the wealthy has been acquired in other economic and political systems…[where]  those who are rich are rich because they took from others…because they have access to organized force… Such predatory elites…feed at the state treasury and they benefit from state-imposed monopolies and restrictions on competition.  It’s only under conditions of capitalism that people commonly become wealthy without being criminals.”

“Capitalism is about creating value…The market—and not arrogant mercantilist politicians—shows us when we are adding value, and without free markets we cannot know.”

“Capitalism is…about adding value through the mobilization of human energy and ingenuity on a scale never seen before in human history, to create wealth for common people that would have dazzled and astonished the richest and most powerful…of the past…It’s about the replacement of force by persuasion.  It’s about the replacement of envy by accomplishment.  It’s about what has made my life possible, and yours.”

Palmer also locates the source of people’s confusion about capitalism in a failure by Marx to distinguish between it and crony capitalism.

“In some texts Marx used [capitalists] to refer to those innovative entrepreneurs who organize productive enterprises and invest in wealth creation, and in others he used it to refer to those who cluster around the state, who live off of taxation, who lobby to prohibit competition and restrict the freedom to trade; in brief, to those who invest, not in creating wealth, but in securing the power to redistribute or destroy the wealth of others…[He] confused productive entrepreneurship and market exchange with living off of taxes taken from others…’capitalism’…was used equivocally to refer to both free market entrepreneurship and to living off taxes and government power and patronage…”

“’free-market capitalism’ should be clearly distinguished from ‘crony capitalism’…

“Sadly, ‘crony capitalism’ is a term that can with increasing accuracy…be applied to the economy of the United States, a country in which failed firms are routinely ‘bailed out’ with money taken from taxpayers, in which the national capitol is little more than a gigantic pulsating hive or ‘rent-seeking’ lobbyists, bureaucrats, politicians, consultants, and hacks…[who] take it on themselves to reward some firms and harm others.  Such corrupt cronyisms shouldn’t be confused with ‘free-market capitalism,’ which refers to  a system of production and exchange that is based on the rule of law, on equality of rights for all, on the freedom to choose, on the freedom to trade, on the freedom to innovate, on the guiding discipline of profits of losses, and on the right to enjoy the fruits of one’s labors, of one’s savings, of one’s investments, without fearing confiscation or restriction from those who have invested not in the production of wealth but in political power.”

““People create relationships based on choice and consent.…Embracing free-market capitalism means…accommodating change and respecting the freedom of others to do as they please with what is theirs…embracing the freedom to create wealth which is the only means to the elimination of poverty…celebrating human liberation and realizing human potential.”

The Occupy Wall Street protestors justifiably object to abuses our government has imposed on the rest of us for its favored cronies.  But they are mistaken to blame the cronies rather than the government that “rents out” its power to use on their behalf. The abuses would disappear without government’s coercive backing.  Further, they are incredibly naïve in calling for more government intervention, with them as the new cronies, because those who aren’t well-informed, don’t vote, don’t contribute to politicians or mobilize resources on their behalf, and aren’t organized into an effective lobby, will not win political control over crony capitalism.

As Tom Palmer points out, if America was actually allowed to be capitalist, the fact that all such relationships are based on mutual consent, and are therefore mutually beneficial, would prevent all the abuses of some by others.  The legitimate claims of the protesters would be addressed.  As a result, the solution is not to try to redirect crony capitalism in their preferred direction, stealing for them rather than from them.  The solution is to reestablish capitalism, and once again unleash its now hamstrung cooperative miracles to improve all of our lives.

(Gary Galles is a professor of economics at Pepperdine University)

Steve Jobs: Logging Out

Steve Jobs had the vision thing.  He imagined products of which no one else had ever conceived and he had the ability to drive highly creative people to turn his visions into reality.

For example, Jobs didn’t create the iPod.  Instead, he gave his team a seemingly impossible brief:  create a device smaller than a pack of cigarettes that could hold more than 1,000 songs.  And make it aesthetically pleasing, by the way.  And let’s have it for Christmas.

Some of the design was created at Apple; some of the elements were licensed, such as the dial on the front, which came from England.  But no one had the idea to combine those elements into a device that could, indeed, hold more than 1,000 songs and remain smaller than a pack of smokes.

For all the adulation Jobs received for the brilliance of his consumer products, he was a controversial figure within the hardcore computing community, who identified more with Apple co-founder Steve Wozniak.  The reason, or at least one reason had to do with the original Apple II, which came with slots allowing enthusiasts to enter their own programs.  Eventually, Jobs closed those slots, taking control from the computer geeks and centralizing it at Apple.  This sat poorly with the enthusiasts, who viewed Jobs as a sell-out.

Yet even the hardcore computing types must be mourning the loss of an individual who transformed computing, telephony, the music industry, and pretty much everything else.  Had there not been an Apple, would there have been an Amazon?  Would as many people have bought in as quickly, or at all, to the Internet?  Would there be a Google?  Or would Microsoft have enjoyed a Soviet-style hegemony over the computing world to this day?

For Jobs brought not only innovation to the world of personal computing; he brought style.  In his famous address to a Stanford commencement class, he told of dropping out of school and sitting in on his girlfriend’s calligraphy class.  He fell in love with what he saw and multiple fonts became a hallmark of Apple computers, and eventually, everyone else’s, too.

Imagine a world of computing devices and portable phones without Jobs’ influence.  Just go back in your mind, if you’re old enough, to the first and second generations of cell phones and recall how clumsy and clunky they were, especially compared with the sleek, museum-quality design of the iPhone and all the phones that sought to emulate it.

Jobs wasn’t just smart; he was also lucky.  An investment in a then-struggling animation studio called Pixar turned into an astonishing success, bringing the world Toy Story, Cars, Up, Wall-E, and A Bug’s Life.  Pixar came along just when Disney’s animated films had been in a multi-year slump; Disney’s acquisition of a majority stake in Pixar landed Jobs on the board of Disney.

Perhaps Walt Disney is the innovator most comparable to Jobs.  Disney reinvented the delivery of entertainment in the form of cartoons, movies, and eventually theme parks just as Jobs reinvented the delivery of information, entertainment, music, and just about everything else.  Like Jobs, Disney died relatively young, not living to see the launch of Walt Disney World.  And like Jobs, Disney created and defined a company that all but deifies him, and asks, “What would Walt do?” to this day.

Ironically, tens of millions of people most likely learned of Jobs’ passing from devices he created—iPads, iPhones, MacBooks, and so on.  Can Jobs’ successors keep his company, and his vision alive?  Disney’s did.  We’d wager that Apple will do likewise.

 

(New York Times best selling author Michael Levin runs www.BusinessGhost.com.)

The Problem with So Called Schools of Education

If you ever wanted to have a complete file of Diane Ravitch’s inane union apologist utterances all in one place – here it is. As Part of NBC’s Education Nation, she and Harlem Children’s Zone’s President Geoffrey Canada duked it out for a half hour. (As I watched this, I recalled Steven Brill’s comment in Class Warfare, that American Federation of Teachers President Randi Weingarten should become the next New York City Chancellor of Education because she’s “smart” and could fix public education by making the rank and file perform better. I would add that in the highly unlikely case of this happening, Ravitch could easily replace Weingarten as AFT president.)

Needless to say, Ravitch vehemently disagreed with Canada on just about everything. However, they did agree that we needed to train our teachers better. This, of course, is like agreeing that snow is white.

The schools of education in the U.S. are by and large an abomination. Richard Vedder, a scholar at the American Enterprise Institute, pretty well nails it in a recent article he wrote for the Chronicle of Higher Education. He says that:

• colleges of education don’t really challenge their students.
• mindless education courses have crowded out study of subject matter.
• there is something of an anti-knowledge culture in many education schools; learning facts is actually disparaged.
• the education colleges have been great promoters of the highly dubious notion that self-esteem is critically important.
• schools of education have worked closely with teacher unions to convince legislators to keep archaic practices regarding teacher certification that prevent otherwise qualified persons from getting education degrees.

A few years ago, Education Reform Professor Jay Greene actually quantified one of the problems. Writing in City Journal, he and a research assistant explored the number of multicultural classes offered in our teachers’ colleges. They counted the number of course titles and descriptions that

“…contained the words ‘multiculturalism,’ ‘diversity,’ ‘inclusion,’ and variants thereof, and then compared those with the number that used variants of the word “math.” We then computed a ‘multiculturalism-to-math ratio’—a rough indicator of the relative importance of social goals to academic skills in ed schools.”

The results were very telling.

“The average ed school, we found, has a multiculturalism-to-math ratio of 1.82, meaning that it offers 82 percent more courses featuring social goals than featuring math. At Harvard and Stanford, the ratio is about 2: almost twice as many courses are social as mathematical. At the University of Minnesota, the ratio is higher than 12. And at UCLA, a whopping 47 course titles and descriptions contain the word ‘multiculturalism’ or ‘diversity,’ while only three contain the word ‘math,’ giving it a ratio of almost 16.”

It is beyond reprehensible that the ed schools make little effort to truly educate future teachers.

But why might they do that? Could the hairy hidden hand of the teachers union be behind this phenomenon?

Writer RiShawn Biddle explains,

“In 2009-2010, the NEA (National Education Association) ladled out $381,576 to the National Council for Accreditation of Teacher Education, which oversees teacher training programs, according to its filing with the U.S. Department of Labor; that’s part of $1.9 million the union gave to the group over a five-year period. In 2008-2009, the union handed out $252,262 to the American Association of Colleges for Teacher Education, the main trade group for ed schools.”

So NEA President Dennis Van Roekel does what so many teacher union leaders do. They mouth a popular education reform sentiment, (recently saying that the “system of teacher recruitment, training and hiring is broken and needs an overhaul”) but in reality put their money where their unions’ best interests lie. In this case, it means that while admitting the system is broken, Van Roekel and the NEA reinforce the status quo by supporting an agency that accredits these same “broken” schools of education. Not surprisingly, the NEA didn’t give a penny to the National Center for Alternative Education, a newer feistier organization devoted to helping teachers who are interested in avoiding the dreary ed school route.

The question becomes why the teachers unions would back a failing mode of teacher training that typically attracts students from the bottom of their class. A recent study found that just 23 percent of teachers came from the top third of college graduates.

A cynical theory has it that the teachers unions like recruiting future teachers from the bottom of their classes because they will be more compliant than their sharper classmates, thus making it easier for the unions to foist their socially progressive agenda and other dictates on them. This is the same mentality that defense attorneys employ when picking jurors; they prefer not to empanel critical types who will be more likely to challenge them. Let’s call this the O.J. Jury Theory of teacher recruitment.

Is there any good news on the horizon?

In The October 1st edition of the Wall Street Journal, there is an article which claims that a push is coming from the Obama administration to improve teacher quality by rewarding colleges of education that produce teachers whose students do well on standardized tests. Interestingly, the NEA gave vocal support to the proposal; AFT President Randi Weingarten, however, whined,

“…the U.S. Department of Education appears to be putting its foot on the accelerator by calling for yet another use for test.”

Whether any of this comes to pass is anyone’s guess. The only thing that is a given is that in the end, Van Roekel and the NEA will revert to form and do their utmost to see that the administration’s plan never sees the light of day. And so many of our children will continue to fail, because the system is rigged against them.

(Larry Sand is the president of the non-profit California Teachers Empowerment Network – a non-partisan, non-political group dedicated to providing teachers with reliable and balanced information about professional affiliations and positions on educational issues.)

Moderates Try To Buy Votes At CA GOP Convention

The recent California Republican Party convention in Los Angeles was by and large a pleasant affair.  The Presidential straw vote kept interest high and the zeal of the Paul and Perry campaigns to buy registrations for their supporters made the event a profitable one for the state party.

The one real item of business – and contention – was consideration of the moderates’ attempt to water down the state party platform.  The moderates essentially want to remove all social issues, but specifically abortion and traditional marriage, from the platform.  In its place they suggest a platform of room temperature jello, at least on social issues, which they consider “controversial and divisive”.

The moderate faction that wants to bleach Ronald Reagan’s “banner of bright, bold colors” is lead by Charles Munger, Jr., a zillionaire from the San Francisco bay area.  He has spent considerable time and money trying to change the party platform. Some of that money, or at least money supporting the moderate platform positions, was promised to conservative members of the platform committee if those members would vote to change the platform.

I have spoken with a platform committee member who was told that “up to $100,000” would be made available to that member’s local central committee if the member would speak and vote for the moderate positions. This platform committee member held fast to principle and opposed watering down the planks, but was told by at least two other committee members that they had received similar offers of large donations to their committees if the members would support changing the platform.

Happily the platform committee was more interested in presenting a true picture of Republican beliefs to voters than exchanging those beliefs for moderate cash, even $100,000 of it. That begs the question though of just where the moderates would take the party.

Their argument is that pro-life and pro-traditional marriage positions are what make it difficult for Republicans to win in California. We only have to look to the last election to see that their argument is hogwash.  The top of the GOP ticket was occupied by Meg Whitman and Abel Maldonado, two politicians who never met a principle they wouldn’t change for political advantage.  The face of the California GOP for the past 7 years had been Arnold Schwarzenegger, the ultimate political shape changer and prominent supporter of higher taxes, abortion and gay marriage.

Hey Charlie and you other moderates – we tried it your way in 2010 and got shellacked while the rest of the country, including states like Pennsylvania, Michigan and Wisconsin, were electing hundreds of Republican candidates who were real conservatives. The California GOP candidate who ran on the most traditional conservative platform in 2010 was U.S. Senate nominee Carly Fiorina. Fiorina outpolled Whitman by 150,000 and Maldonado by 400,000. Voters were given clear choices of Republican candidates who waffled on the social issues and one who stood firm. They preferred the candidate who stood by principle by a wide margin. So Charlie, put that in your pipe and smoke it.

If Munger, et. al. really want to help the party they will stop trying to buy platform committee votes and devote their dollars instead to building GOP infrastructure in key counties.  Those counties would include not only the Southern California and Sacramento area conservative bastions but also the moderate to liberal GOP “collar counties” surrounding San Francisco Bay.   Voter registration, fund raising and “gotv” are inherently non-ideological.  A rising Republican tide in these areas would lift the boats of GOP nominees of all ideological views.

We can only hope the moderates now understand that the California Republican platform is not for sale, and that bleaching to a pale white the Reagan banner of bold colors that lead to so many GOP victories is not a road the Golden State’s GOP will follow – at any price.

(Bill Saracino is a contributing editor to the California Political Review)

Special Interests Run Amuck in California

Almost exactly one century ago, almost 2/3 of California voters approved Governor Hiram Johnson’s progressive reform amendments introducing the initiative, referendum and recall, allowing voters to override special interest dominance in Sacramento. Now, Democrats are seeking to restrict initiatives, supposedly in the interests of voters. 

Exhibit A is SB 202. Originally raising raised the filing fee for ballot initiatives, an end of session “gut and amend” transformed it to only allow ballot initiatives at November general elections and explicitly delay consideration of ACA 4 until 2014. Then rammed through with virtually no scrutiny, it now sits on Governor Brown’s desk.

Sponsor Loni Hancock said “Low turnout elections do not represent the needs, priorities and desires of the larger electorate.” State Senate leader Darrell Steinberg claimed that the intent was to making the results more representative of Californians by assuring the highest voter turnout.  However, there are several reasons to question that claim.

First is the fact that SB 202 was a last-minute gut and amend bill, designed to evade the usual legislative procedures and prevent virtually any input by Californians.  Bills commanding the necessary consensus can pass in the light, allowing accountability to voters.  When legislative power brokers so blatantly abuse the legislative process, preventing diligent deliberation, it is not to better represent Californians.

Second, SB 202 includes a provision clearly at odds with “we just want initiatives to work better” claims.  A proposed state spending cap and reserve fund measure (ACA 4)  Legislative Democrats agreed to place on the June 2012 ballot, to get enough Republican support for the recent budget deal, was delayed until at least November 2014.  You would not delay voters their chance to vote two years past the 2012 general election if you wanted to better represent their interests. That only guarantees that the Legislature can ignore their preferences two years longer. And allowing one party to renege after the fact on legislative agreements does not make government work better for Californians.

Third, besides stalling ACA 4 and keeping an initiative to curb union political donations off the June ballot, which might affect 2012 elections, SB 202 is part of series of proposed curbs on the initiative process. Journalist Michael Mishak reports that “One measure would allow the Legislature to propose changes that would appear on the ballot alongside an initiative even if its sponsor rejected them.  Another would give the Legislature the right to amend or repeal initiatives that pass, after four years have gone by.” Such “reforms” cannot be defended as enabling Californians’ will to be done more effectively.

Fourth, “justice delayed is justice denied.” Say the frenzied end of the 2012 legislative session generates an egregious abuse they want to overturn. Given the filing deadlines and the time required for initiative campaign, under SB 202, It could not be reversed until November of 2014, more than two years and an entire legislative term later. Even then, other proposed restrictions could let the Legislature reverse it four years later.

Fifth, while Democrats claim higher turnouts from restricting initiatives to November elections would better represent Californians’ will, the effect may be in the other direction.  It would create very long ballots, which create real problems.  Dan Walters writes that It would “make it hard for each initiative to get the attention and scrutiny it needs,” which would make things worse. It would also increase the proportion of “low information voters,” who are least informed and most easily swayed by misleading campaigns.

Hiram Johnson argued that “nearly every governmental problem…has arisen because some private interest has intervened or has sought for its own gain to exploit either the resources or the politics of the State.” SB 202 shows that, a century later, Californians have at least as much to fear from the Democrats who dominate Sacramento as any private interest.

(Gary Galles is a professor of economics at Pepperdine University)

Central Valley a “dust bowl” under Obama & Jerry Brown

A once thriving region in California’s central belt often referred to as the “breadbasket of the world,” has morphed into a federal government-created Dust Bowl not unlike the drought so many of our ancestors fled nearly a century ago.  And while an assortment of farmers continue to produce a remarkable crop, much of the brown, fallow land now sports large signs accusing the feds of favoring fish bait over the lives and livelihoods of millions of humans.
The response from our illustrious leaders? A sound as quiet as the idle equipment lined up from Stockton to Fresno and many parts beyond. In fact, Barry and Jerry have presided over unprecedented poverty, unemployment and foreclosures in the Central Valley and neither appears to have the slightest clue how to fix it. Looking at a recent Field Poll reflecting Obama’s abysmal approval ratings in California, one might assume that voters would be just as confident in Ben & Jerry or Tom & Jerry overseeing the world’s eighth largest economy (and falling).

Obama in particular has had ample time to demonstrate he can go beyond his Community Organizer skills and positively affect the economy. But blaming others while pursuing wealth-confiscation has evidently consumed all of his time (outside of golf and fundraising).

Meanwhile it is understandable why The Economist and others refer to California’s central valley as “the Appalachia of the west.”  US Census data reveals that nearly a quarter of all people residing in the San Joaquin Valley live below the poverty level. Perhaps this is one reason why the region is the most displeased among respondents with Obama according to the aforementioned Field Poll, with fully 56% of central California residents not appreciating the president’s lack of achievement as an alleged chief executive.

Despite the horrendous economic conditions in California, Brown seems to escape the voters’ ire – so far. A state of affairs likely assisted by the savvy career politician limiting his public employee labor union genuflecting to behind closed doors. Should the state’s unemployed ever use their free time to peruse Jerry’s campaign contribution list, they may make the obvious connection between him and the unions’ wholesale destruction of the once golden state.
The Obama/Brown team has a similarly dismal record with respect to unemployment as California’s double-digit-and-rising 12.1% was once again begrudgingly reported by the duo’s fan magazine, The LA Times. While this is the country’s second highest unemployment rate, it pales in comparison to central valley counties’ rates in the teens with some approaching 20%. While residents crowd the unemployment lines, both Brown and Obama, in a typical display of serial stupidity, seek additional taxes on those who otherwise might afford to employ them.

And finally, in another all-too-common barometer of the economy, foreclosure rates as reported by RealtyTrac identify the biggest contributors to California’s ranking as third highest in the nation, with the central valley counties of Madera, Merced, Fresno, Kings and Tulare “leading” the way in housing loss.

The palpable thirst for water and jobs in the once-bountiful central valley is a modern day tragedy that the current leadership has demonstrated a woeful ineptitude to address. There is no amount of irony for San Joaquin Valley residents as we watch the First Lady, Michelle Obama, traipse out each spring to plant her White House garden, in order to teach all of us rubes that we should grow our own cilantro, tomatillos, hot peppers, lettuces including red romaine, green oak leaf, butterhead, red leaf and galactic; spinach, chard, collards and black kale, as well as berries and other choice crops. Why what a novel idea! Of course, the Obama’s little garden is a lush green paradise demonstrating no visible lack of water, with legions of taxpayer-funded White House employees to tend to it.
If only millions of real people beyond photo op acreage warranted such largesse.

A lean president or a lean government?

The rising GOP interest in New Jersey Governor Chris Christie has triggered fat jokes and discussions about whether an overweight person could be president.  Ever since the Nixon-Kennedy debates (where radio listeners thought Nixon won but TV watchers thought Kennedy won), it is clear that appearance could be a distinct disadvantage.  However, if Christie would emulate one of his “heavy” predecessors—Grover Cleveland—he would be a striking improvement.

While Cleveland was unique in many ways, his character was his most important strength.  “Honest politician” was not an oxymoron.  His reputation was so positive that he was elected Governor of New York without making a single campaign speech. Accused of fathering an illegitimate child during one campaign, his told his staff: “Tell the truth.” But most important, rather than ignoring the Constitution’s limitations on federal government power, he took his oath to defend it seriously.

Cleveland realized that “Officeholders are the agents of the people, not their masters.” Therefore, he opposed paternalistic government policies financed by imposing tax burdens on others, since “the theory of our institutions guarantees to every citizen the full enjoyment of all the fruits of his industry and enterprise, with only such deduction as may be his share toward the careful and economical maintenance of the Government which protects him…exaction of more than this is indefensible extortion and culpable betrayal of American fairness and justice.”   

 Cleveland fought to eliminate government waste throughout his public career, since “waste of public money is a crime against the citizen.”   He pushed to restore honesty and impartiality to government, particularly by cutting government favors (including for his own party), because “danger confronts us…[in] popular disposition to expect from the operation of the Government especial and direct individual advantages.” 

Cleveland recognized that “The public Treasury…should only exist as conduit conveying the people’s tribute to its legitimate objects of expenditure,” and so studied every bill Congress passed.  He vetoed over 300 of them–more than double all the Presidents before him.  One veto message reveals a central reason: “I can find no warrant for such an appropriation in the Constitution.”  Instead, he insisted that “The lessons of paternalism ought to be unlearned and the better lesson taught that while the people should patriotically and cheerfully support their Government, its functions do not include the support of the people.”

Cleveland tried to eliminate burdensome and inefficient tariffs, “the vicious, inequitable, and illogical source of unnecessary taxation.”  He also resisted political pressures to inflate, even when facing a serious recession, since “nothing is more vital to…the beneficient purposes of our Government than a sound and stable currency.”

Unlike modern politicians’ attempts to evade accountability, Cleveland insisted that everyone in government be carefully monitored, since “Every citizen owes to the country a vigilant watch and close scrutiny of its public servants and affairs…[as] the price of our liberty…”

Grover Cleveland’s last words were “I have tried so hard to do right.”  But respecting the Constitution’s limitations on legitimate federal activities, he didn’t find government to be every answer, regardless of the question (“discrediting an abject dependence upon government favor, we strive to stimulate those elements of American character which support the hope of American achievement”). America would do far better if we remembered that insight and the dangers of ignoring it. 

Fittingly, Grover Cleveland dedicated the Statue of Liberty, because he truly aspired to its dedication: “We will not forget that Liberty has made her home here, nor shall her chosen altar be neglected…A stream of light shall pierce the darkness of ignorance and man’s oppression until Liberty enlightens the world.”  We could use a man like Grover Cleveland again. Could Chris Cristie be such a man?  I don’t know.  But as writer Tom Purcell put it, “A fat president and a lean government are suddenly looking better than a lean president and a fat government.”
(Gary Galles is an economics professor at Pepperdine University.)

Legislative Abuses in California

Exactly who do our “public servants” serve, when they abuse legislative rules not once, but three times, to defend something designed to benefit unions at the expense of other Californians?  The answer is not Californians.

The “how a bill becomes law” abuses involve three “gut and amend” (GANDA) bills.  As legislators raced to pass bills before adjournment, legislative kingpins added “new and improved” legislative changes to bills or took unrelated bills and replaced them with completely different bills. Then they rushed them through the last steps, leaving no time for effective scrutiny. 

SB 922 is Exhibit A. Senate President Pro-Tem Darrell Steinberg and Assembly Speaker John Perez morphed it from a measure to add tuberculosis to information that can be disclosed under California’s immunization system to one barring local governments from banning project labor agreements (to checkmate a campaign by non-union contractors to ban PLAs that was showing results in multiple local areas). Supplementary GANDAs include AB 436 and SB 790, which Ben Boychuck reported would “benefit PLAs by exempting local governments from some fees if they require contractors to adopt a project labor agreement and by requiring public utilities to pay into a union-controlled fund actively promoting such agreements.”

What is abusive about PLAs? They give taxpayers much less for their money to pay off unions for political support.

PLAs are agreements negotiated between a government entity and unions (excluding nonunion workers and contractors) prior to accepting bids on a public construction project, which establish the terms and conditions of employment that will be mandated for all workers on the project, regardless of who wins the bid.

PLAs are justified by unions and their wholly- owned Sacramento pets as buying labor peace, “leveling the playing field” for competitors, guaranteeing projects are completed on time, and holding down costs. But they do none of those things. They restrict competition, raise costs, and pick taxpayers’ pockets.

As Wharton Professor Herbert Northrup wrote in the Journal of Labor Research, “restraints imposed by government-directed PLAs are political decisions which have little or no economic rationale, nor can they be defended on the grounds of labor peace, enhanced safety, or other reasonable criteria.” Or as Diana Furchtgott-Roth wrote last year, a PLA “drives out small businesses from competing for these projects; raises their cost to the taxpayers; and funnels a larger stream of union dues from taxpayers’ pockets to union treasuries.”

PLAs are supposed to buy labor peace because they require unions to promise not to engage in disruptive activities. But that promise need not be kept, as shown by recent PLAs in New York and earlier, by the San Francisco International Airport expansion project.

Unions leverage the threat to strike unless a PLA is adopted (supplemented by using environmental laws to halt projects unless PLAs are imposed) into a better deal for themselves. Of course, no-strike pledges would not be necessary for non-union contractors, who comprise the vast majority of the construction industry.  In fact, PLAs punish non-union workers and contractors who would never strike, in order to buy labor peace from unions who threaten strikes–penalizing the innocent (including taxpayers) while rewarding guilty. As the New York Supreme Court held in the Albany Specialties case, adopting PLAs to buy such labor peace “smacks of capitulation to extortion” by unions, not leveling the playing field.

PLA backers assert that they just impose equal labor terms on all project bidders, allowing equal competition. But those “equal” terms involve anything but equal competition between union and non-union workers. For instance, the terms of the San Francisco International Airport PLA included the requirement that even non-union workers had to join the union and pay substantial dues and fees for the project’s duration, as well as contributing to union health and pension funds, although they would get no benefits in return. Even apprentices had to be union members, and new workers had to come through union hiring halls. In addition, union wages, work rules, job classifications, and hiring and grievance procedures were required, raising costs.

Such PLA terms are so onerous to non-union contractors that most will not even bid on PLA projects. And with fewer bidders, particularly non-union contractors who may have lower costs, the reduced competition leads to higher bids.

In 2009, John McGowan estimated that employees of non-union contractors faced take home pay reductions of 20 percent from PLAs, while also increasing non-union employers’ cost by about 25 percent.  This year, a National University System Institute for Policy Research study of public school construction in California, found costs 13 to 15 percent higher with PLAs, consistent with research elsewhere by the Beacon Hill Institute at Suffolk University.

The primary defenses of PLAs stand up so poorly to investigation— including a General Accountability Office investigation that was unable to document any cost efficiencies from PLAs–that unions have invented other equally bogus “benefits” from them.

Unions claim that PLAs benefit minorities.  Some do include special minority employment programs. However, since unions have a far smaller fraction of minority members than nonunion employers, PLAs actually discriminate against minorities. This is reinforced by requirements that apprentices be union apprentices, and restrictions on lower-skilled “helper” employees, because they might undermine union jobs, even though such jobs are the primary means by which many low-income and minority workers learn their way to higher paying jobs. This is why The National Black Chamber of Commerce called PLAs “a license to discriminate against black workers.”

Unions also claim that PLAs increase quality and safety. But a 2001 Ernst and Young study concluded that “There is no quantitative evidence that suggests a difference in the quality of work performed by union or open shop contractors.”  Similarly, no statistical evidence supports claims that PLAs improve worker safety.

Given the support unions have provided for the Democrats that dominate the California legislature (backed by electoral threats against those who deviate from the union line), Sacramento’s support for unions “sweetheart deals” on public construction is hardly surprising.  But doing so harms California taxpayers and the vast majority of our workers. And when legislative leaders blatantly abuse legislative rules to generate “hide and sneak” reinforcements for PLAs, while also claiming to spend every state government dollar as wisely as possible, they simply display their hypocrisy in multiple dimensions.

(Garry Galles is a professor of economics at Pepperdine University.)

Even Obama Voters Get Tax “Blues”

Is another state turning curiously “red” as the economy tanks? Call it a case of the tax and spend “blues.” In “blue”-leaning California, it may be that even liberal voters have had enough—even the voters who reside in the most notorious bastion of liberal thinking on earth, the San Francisco Bay Area. And it may be that independent voters, a voting block President Obama must woo to squeak by next November, have also had enough. As a majority of California voters voice their support of a long-standing tax reduction measure here, are they saying they’ve had it with Obama and have the tax “blues”?

At issue is California’s infamous Proposition 13, written by the indomitable Howard Jarvis. Those of you of a certain age will remember his picture on the cover of Time magazine in 1978, when he lead a fiercely popular grassroots movement to reduce the overwhelmingly high property taxes that were forcing homeowners, especially retirees on fixed incomes, out of their homes. Now there is talk by some prominent Democrats in the state—such as Los Angeles Mayor Antonio Villaraigosa—to pick away at Proposition 13, particularly as it relates to commercial property owners, in a move to raise more tax revenue.

But a stunning poll just released shows that a majority of California voters—even Democrats, those who are identified as having “union status”, and those who actually still “approve” of Obama’s job performance—would vote in favor of the Proposition 13 tax cut if it were on the ballot today. That is, these Democrats and liberals would soundly vote in favor of keeping the state legislature from increasing their property taxes to fund tax and spend programs, even as Obama is calling for tax hikes nationally to justify his stimulus and jobs bills.

Released on Friday (9/23) by the highly respected Field Research Corporation, the poll data shows that California voters would still favor the Proposition 13 tax reduction measure if it were on the ballot today by more than a 2-to-1 margin, with 63 percent in favor and 29 percent opposed. The greatest support by party registration comes from Republicans, who back it by 78 percent.

A deeper analysis of the poll, however, shows that voters are willing to cross party lines to hang on to a tax reduction measure. In fact, the poll reveals that more than a majority of California Democrats, 53 percent, would vote in favor of the tax reduction. Even a greater number of independent voters, a block Obama needs to survive, back the tax reduction measure by 63 percent.

When broken down by “political ideology”, an overwhelming majority of voters who are identified as “conservative,” as expected, favor the tax reduction measure. But surprisingly the poll shows support for the tax reduction measure, this time by “middle of the road” and even “moderate liberal” voters. These more liberal voters back the Prop. 13 tax reduction by an astounding 58 percent. Only those voters identified in the most extreme category, “strong liberal,” show less than majority support, at 40.5 percent.

Another interesting source of support comes from “union” voters—those who are identified as having a “union status.” The poll reports that these “union” voters would vote in favor of the tax reduction measure by 56 percent.

And almost incredibly, San Francisco Bay Area voters, probably the most liberal voters in the state, also favored the Prop. 13 tax reduction measure, by 56 percent.

Most telling, however, is that even voters who “approve” of Obama’s “job rating” still favored voting for the tax reduction measure by a majority, supporting it by 53 percent (compared to the 73 percent support by those who “disapprove” of Obama’s job rating). In other words, a majority of voters in California who still approve Obama’s job performance would reject state tax and spend policies when it comes to increasing taxes on their homes and property.

This poll proves to be a fascinating reality check for Obama. The results show that even moderately liberal, “union” affiliated, pro-Obama voters in California will draw a line in the sand when it comes to tax increases. The lesson is that even Obama cannot count on Democrat voters who approve of his job performance to robotically and unwaveringly support his tax and spend policy. These seemingly liberal voters simply will not support an increase in certain taxes—in this case, increased property taxes—even if it means that the groups these voters typically support, such as unions, will not receive the benefit of another tax hike. The upshot of the poll is that even liberal voters have their limits.

What does this mean for Obama? Is this just part of the larger trend of a referendum on Obama’s tax and spend policies? The last two recent special elections resulted in Republicans picking up a Democrat-controlled Congressional seat in New York, and also winning a seat in Nevada. Poll results (Washington Post/ABC, 9/6) show dismal approval ratings for Obama’s performance with the economy—a 62 percent disapproval rate, which is oddly, almost exactly the same number as those who support California’s tax reduction measure. Finally, a new Gallup poll (9/22) reveals that this is the first time in Obama’s presidency that a majority of Americans (53 percent) blame Obama—not only President Bush as the White House spin doctors would like us to believe—as responsible for the economy’s downturn.

Even if one argues that raising property taxes is not the same as raising other types of taxes, given the increasingly flimsy support that Obama has on the political front and the state of our failing economy, it appears that in California, even Obama voters have the tax and spend “blues.” And unless Obama does something to change his tax policy, that could translate into a resounding “no” to Obama next November, when he very well might be defeated by a candidate who doesn’t need a reality check from his or her own core voters to know when to stop taxing and spending our country into economic ruin.