State of Confusion
Will fear of illegal immigration save Schwarzenegger from political oblivion?
WSJ.com OpinionJournal
BY MARK CHAPIN JOHNSON
Thursday, July 14, 2005 12:01 a.m.
SACRAMENTO, Calif.--Although I've made it a point not to spend much time in the state capital, and haven't taken any position within the California administration, I'm certainly supportive of Gov. Arnold Schwarzenegger's efforts to correct the dysfunctional and rapidly deteriorating state budget process.
I've developed this positive view of "Arnold's" efforts as a result of having had the opportunity to serve as Dick Riordan's state finance chairman during the former Los Angeles mayor's campaign for governor of California in 2002. Arnold was very helpful to our efforts, and I had the privilege to spend quite a bit of time with him as I worked on Dick's race. I was, and am, very impressed with Arnold's intellect and critical thinking skills. The business degree from Wisconsin is no joke; he is an entrepreneur and knows how to read and understand a P&L and balance sheet better than just about any politician I've known.
Having said that, I fear he might have surrounded himself with people who are far more interested in their consulting income than cooperatively putting together a strategic plan for Arnold to stick to--and his greatest weakness may be that he still is trying to please almost everyone.
Obviously, that can't be done, and he may end up as political road kill if the well-funded special interests (teachers unions, public-employee unions, prison guards and others) gain much more traction with their constant barrage of anti-Arnold hit pieces on TV. Typical California voters on both sides of the aisle are tragically ignorant of the true financial circumstances of our state--and they are the ones who, in their frustration, will vote for or against a myriad of confusing initiatives that will go on our ballot soon.
These various and competing measures will only further confuse and inflame the electorate over the months to come. The obfuscation of the real added economic burden of these measures will be almost total, and many voters will go to the polls voting for the "panacea" of their choice: Surcharge the rich to fund new pre-K education programs, at the cost of billions of new tax dollars infused into the already arguably least effective and completely broken K-12 education system in the U.S.; or add a higher tax rate to ensure the continuation of defined-benefit retirement plans for teachers, police, fire and all government employees that are far more lucrative than anything most American workers in the "real" world will be receiving in their golden years.
While this vitriolic and passionate debate continues in front of the public trough of California, there are certainly some, like John Cogan and George Shultz, who have given the governor excellent advice on priorities and strategy. But they are only two voices in a larger group of very competitive "inner circle" advisers. From the others, there has been more smoke and mirrors. The result? More borrowing, more voters' initiatives, more downgrades from Moody's and S&P, while we slowly sink into the fiscal abyss that is clearly in our future.
This year's proposed budget would increase actual cash spending by "only" about $8 billion, or almost 10%. California continues to increase spending, in the midst of a deep financial hole, much faster than revenues can possibly grow. (How quickly we've forgotten that the tech bubble burst!) The governor and Legislature agreed to these bloated numbers only so they could spend the majority of their time in the upcoming months fighting over the special election coming up for the initiatives.
I sense strongly that despite the good advice of some, the governor is vacillating over so much conflicting counsel from his inner circle that his persona (and poll approval numbers) are taking a painful hit. So in the real world of politics, where everything is driven by winning elections rather than doing the peoples' work, what does all this confusion bode for the months to come in the Golden State?
I've watched California politics take unimaginable twists and turns over the years. And now, ever so quietly and subtly, I sense that possibly another sea-change may come about. For all the flak Pete Wilson took for promoting Proposition 187, and for how it alienated the Latino community, his push resonated with a very large and frightened WASP middle class. The campaign empowered him to come from behind and win a decisive victory. Not pretty, but it worked for him. As a trustee of Chapman University in the middle of increasingly Latino Orange County, and also spending time with CEOs and community leaders, I can sense a deep and intensely growing concern and fear that illegal immigrants are completely overwhelming our state infrastructure.
The daily drumbeat of proposed higher taxes being needed from the average hardworking citizen to support medical services and K-12 education for a flood of illegals is enraging the average voter. It makes little difference whether this view is accurate or not. The perception is driving a strong reaction and our widespread talk shows are focused on the issue daily.
As was widely reported not long ago, Arnold invited the "Minutemen" from Arizona to come to California to guard our borders this summer because the federal government, as many Californians see it, won't do the job. This issue is one of those occasional, unique circumstances that can, and may, so suck all the air out of the other political discourse in California that budgets, education and infrastructure may simply fade to the back pages while withering intensity goes into the front-page "stop the illegals" debate.
If this scenario takes traction, as it appears it will, the issue will be the only one that drives the next statewide election. I can, of course, see Arnold winning in a landslide in that intellectually impoverished event. Paralyzed legislative Democrats in Sacramento will have no one to blame but themselves once again. Yet while the result may be great for Republicans, California will still be a state where nothing gets done to balance the budget, control spending, plan water policy and fix K-12 education.
Mr. Johnson, a member of the board of overseers at the Hoover Institution, is CEO of Chapin Medical Company.
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