Harsh Medicine

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.