Little Sir Echo: Garamendi calls for blocking spending cuts

In a debate over Britain’s membership
in the then-emergent European Union, Margaret Thatcher accused Labor Leader
Neil Kinnock of being a toady for the European interests, and playing along
with their demands “for the purpose of being little Sir
Echo and saying ‘me too!'”

Now, nearly 20 years later, it seems that
California is hosting another
such “little Sir Echo” in the form of Lieutenant Governor John
Garamendi. Like Kinnock before him, Garamendi is apparently too busy licking
the boots of special interests whose confluence with the desires of California‘s
population is limited at best. A story in the Sacramento Bee
reports that Garamendi has asked the state’s leaders to “block Gov. Arnold Schwarzenegger’s
proposed $4.5 billion in spending cuts” and has “called for
additional taxes, including raising the state’s vehicle license fee.”

And what is the reason for Garamendi’s
desire to flush the wallets of California‘s
people? “We’ve already devastated the essential services that we
need,” he says. According to the Bee, these “essential
services” include such things as “schools, public employees and
services for the elderly and disabled.”

Now, Garamendi’s rhetorical asseveration
would hold water in times of economic prosperity, but in the middle of the
recession that
California is enduring at the moment, such an argument evinces a frightening
level of profligacy with other people’s money, not to mention a total lack of
economic understanding. Let’s proceed through the logic of Garamendi’s
argument, if indeed the word “logic” can be used in any sense other
than the merely colloquial:

Presumably, both Garamendi and
Schwarzenegger acknowledge unquestioningly that California
is in the midst of a recession. Schwarzenegger proposes a $4.5 billion spending
decrease to offset the deficit, as well as a $0.015 sales tax increase.
Garamendi counters that the $4.5 billion cut would further
“devastate” the “essential services” that we need, and
proposes raising more taxes to cover the $4.5 billion which Schwarzenegger
wants to cut, rather than actually cutting it. Reasonable enough, one might say
– after all, the money comes in anyway.

Except for one problem: where does
it come from? The answer is from the wallets of California‘s
people, much like Schwarzenegger’s 1.5 cent tax increase. One inevitable
problem of removing peoples’ money is that they can’t spend it to keep the
economy going, which means that at some level, Garamendi’s plan would
exacerbate the recession. However, that’s not all that’s wrong with his plan.
The only area where the Bee suggests that Garamendi would raise taxes is
within the vehicle licensing fee. Whatever one does with this fee, the result
will be surely disastrous.

Let’s suppose Garamendi’s plan goes
through. What then? One of two things will happen; either citizens will
consider their ability to drive to be enough of a necessity that they will pay
his new fee, in which case it will amount to another tax and will drag down
consuming power among California‘s

citizens. This would obviously be problematic, but compared with the
alternative, it is preferable. The alternative is that certain people will find
different ways to get around other than driving, which would lead to decreased
consumption of gas, which in turn would give California‘s
gas station owners and workers less consuming power. Worse, given the fact that
illegal immigrants have no incentive to pay licensing fees at the point where
they’ve already broken the law, this fee might drive native Californian workers
out of the market and lead to an increased dependency on illegal labor. All of
these situations are undesirable, and the fact that even one minor piece of
Garamendi’s tax plan could produce all of them should give pause.

But this assumes that Garamendi’s plan is
actually tailored to better California‘s
economic prospects, and given his supporters, it quite clearly isn’t. The
people who oppose Schwarzenegger’s bill are all members of either private or government unions, both of which have
a history of sabotaging their respective industries for short-term personal
gain. Teachers unions especially would be hit by this budget cut, which is
arguably a good thing, considering that these unions especially enjoy pushing
for higher wages and lower standards for their work. A budget cut might force
the schools to start considering quality over cronyism, and might also break
the stranglehold of unions on industries which would now require cheaper labor.
Schwarzenegger’s tax increase is a mistake, but at least it’s a minor one
compared with Garamendi’s leviathan
proposal.

Of course, none of this will stop
Garamendi from continuing his nonsensical behavior. Little Sir Echo rarely
bothers to pay attention to the resonance of his cries.