Which California?

Which California?



By INVESTOR'S BUSINESS DAILY | Posted Wednesday, December 24, 2008 4:20 PM PT

Governance: The new "alpha state," as the Web site Politico calls it, is a study in dysfunction at home but a rising power in Washington. Maybe it can teach through its bad example.

It was probably inevitable. With a Democratic Congress in place and a Democratic administration on the way, the biggest and one of the bluest states in the union is emerging as the most influential. Politico compares California's political heft to that of Texas in the heyday of Tom DeLay and George W. Bush.

It lists a host of reasons why. Mostly these are people in powerful places — House Speaker Nancy Pelosi, senators and House members chairing a half-dozen key committees and the incoming secretaries of energy and labor and top presidential advisers on the economy and the environment.

California's 34-member Democratic bloc in the House is larger than the whole delegation of any other state. Zoe Lofgren, who leads that herd, says the state "has always been the ATM to the nation in terms of political fundraising. We're policy leaders now."

If Lofgren's right, then the question is whether all this new power will be used for good. To put it another way: Will California politicians help lead the country into the sunny uplands or into the sort of dank fog that so often engulfs the state's capital, Sacramento, at this time of year? The most likely answer: Don't get your hopes up.

To judge from the record of California's political class, the state right now can help Washington only by serving as a bad example. Years of overspending, fueled by a union-owned Legislature and unwise ballot initiatives, have thrown the state deeply into the red.

The state faces a shortfall of $15 billion in the current fiscal year and $25 billion in the next. Democrats, having run the Legislature nonstop for the past 38 years, can fairly be called the main architects of this fiasco and similar fiscal crackups in the past.

Republican minorities and Republican governors have some power to shape budgets and block tax hikes, but they've had little luck putting the brakes on spending. Their main contribution in recent years has been to hold taxes down with borrowing — a strategy that can only go so far before destroying the state's credit.

Added to this chronic lack of fiscal responsibility is a cavalier attitude toward the state's business climate. Past Republican governors provided some adult supervision in this area, but Arnold Schwarzenegger has sided with the greens and gone on a potentially costly crusade to end global warming one state — his — at a time.

California has a huge economy, with world-leading roles in computer technology and popular culture. And as every winter reminds us, it's a pleasant place to live. But the state's blessings also lead to complacency, over-regulation and steep taxes.

Currently, California has the third-highest unemployment rate in the nation, at 8.2%. Only Michigan, home to imploding automakers, and Rhode Island, a state that ranks near California for high business taxes, were worse.

It's this California — the one that can't get the hang of governance — that we fear is showing up in Washington to replicate itself on a national scale. Then again, maybe the individuals who have come out of its political culture will rise above it. We can only hope.

There is also another California: a dynamic, freedom-loving society whose natural leaders are its innovators and entrepreneurs, not its elected officials. It has something of value to teach, as long as it survives.



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