The impending budget cataclysm, having drawn all the political courage it possibly can out of California's politicians, has now begun producing the much-less-desirable opposite reaction: namely, panic.
Capitol Weekly, the self-proclaimed newspaper of California Government
and Politics, has a story on the most recent gimmick proposed by Governor Schwarzenegger to shave money off the budget. According to the story, Schwarzenegger has "called on the
federal district court to immediately terminate its
prison health-care receivership, saying that the court-appointed
receiver forced an ill-advised, $8 billion spending program on the
strapped state in
violation of federal law."
The immediate impulse is to say, "Thank Heaven", as the closer the state gets to implementing unnecessary humanitarian projects the better, and indeed, the program in question ought not to have ever existed. But a gimmick, necessary or not, is still a gimmick, and one should be wary of allowing theatrical gestures toward fiscal responsibility to obscure the encroaching catastrophe. Moreover, the extended legal battle which is likely to ensue as a result of Schwarzenegger's defiance is arguably even more undesirable than the $8 billion. Given that this is a specifically legal battle, Schwarzenegger ought to be especially wary, since a vote from California's people would arguably be much more friendly than a ruling from one of the most liberal circuit courts in the country.
Of course, there is a much less contentious and far more useful program which the governor could terminate, but to do so would swiftly terminate the accolades he is currently receiving from the press -- that is, those elements of the press that don't understand economics. I refer, naturally, to the anti-global warming regulations President Obama gave Schwarzenegger the green light (no pun intended) to enforce upon California's unsuspecting population. The Schwarzenegger who is defending these regulations, probably passed solely for the purpose of getting on the good side of California's Democrats, is a throwback to the Schwarzenegger of old, citing bipartisan concerns for the sake of looking enlightened and like the sort of person who could fit in at a San Francisco social function.
Unfortunately, as one often has to point out, the reality is infinitely less glamorous. Stephen Moore, the senior economics writer for The Wall Street Journal, has written that "since 2007 -- in anticipation of the new mandates -- California has led the nation in job losses." The "mandates" in question are the new global warming regulations which are, in theory, supposed to create new, "green" jobs. However, given Mr. Moore's words, these jobs are only "green" insofar as they ought to induce seasickness in California's workers.
Scholarly studies on the subject paint a similarly alarming picture. Robert Bradley Jr., the president of the Institute for Energy Research in Houston, Texas, and an adjunct scholar of the Cato Institute, has written a study entitled "Renewable Energy: Not Cheap, not 'Green'" in which he points out that what he refers to as "eco-energy planning" (the sort of tactics Schwarzenegger is using) face "three major obstacles": the absence of "renewable energy options," the fact that "renewable energy subsidies and mandatory energy conservation are proving to be incompatible with a competitive restructuring of the electricity industry because of unfavorable economics and surplus existing capacity" and the fact that "economic and environmental advances in the fossil-fuels industry, particularly in the use of natural gas in electricity generation and reformulated gasoline in transportation have reduced the environmental costs of fossil-fuel consumption necessary to justify subsidized alternatives to fossil fuels."
On the basis of these
three objections, Schwarzenegger ought to cut the exhorbitant funding
that will be necessary to keep these programs going, which will also
stimulate California's economy by aiding business expectations about
the future of the economy, which surely cannot afford another shock on
top of its current budget problems.
This is the moment, in short, when Schwarzenegger will show himself either to be a seasoned leader or just another green amateur politician.