However voters may feel about the new administration set to take power under former Governor Jerry Brown, it’s undeniable that almost everyone in California has at least one reason to celebrate: Arnold Schwarzenegger will be leaving office.
Indeed, one can arguably blame Schwarzenegger’s titanic incompetence for Brown’s victory in the first place – after trying an untried but titularly Republican Governor on for size, voters (understandably, if mistakenly) concluded that Democrats were superior because it was better to go with the devil you know than the devil you don’t.
Unfortunately, Schwarzenegger has a few months left in office, during which, signs indicate that we will almost certainly be seeing more of the same budgetary gimmicks and cheap non-solutions that have marked his eight years in office. To rehash Schwarzenegger’s transformation from a courageous (if, at times, politically obtuse) crusader to an unprincipled, hapless looking, go-along, get-along politician would be highly redundant, but this most recent policy choice may call up post-traumatic memories anyway.
Specifically, in order to raise revenue to balance the budget, Schwarzenegger has decided to sell public buildings. This isn’t a terrible idea at the level of maximizing state efficiency (how many government buildings does California really need?), but as a remedy, it’s woefully insufficient. The Atlantic reports that the measure will take in $1.2 billion in additional revenue, a nontrivial but nondecisive number given that California’s budget deficit is ballooning past $25 billion. Moreover, as a long term strategy, the idea is unsustainable. California can’t sell back buildings forever, and the sunk costs required to build them would arguably make the idea unprofitable. Besides, there’s no guarantee that enough buyers would exist for the land, even if the strategy could be made profitable, given the inflated prices of the California real estate market. There are also legal difficulties, as recent lawsuits against Schwarzenegger’s office show.
Schwarzenegger should know this. Unfortunately, he has no incentive to care. Reuters recently reported that California’s treasury bonds are selling at roughly the same rate, with demand staying constant and investor confidence high. If this seems mystifying, it shouldn’t. California might seem to be the worst state to live in at the level of raw economic uncertainty, but its budgetary processes are flexible enough to permit an endless amount of budgetary tap dancing before defaulting. At this point, the California economy has become a gigantic shield for political malpractice, with the relatively decent performance of California’s bonds acting as an enabler for politicians like Schwarzenegger.
Will Jerry Brown care more? Who knows. His economic knowhow is nowhere near as high as preferable, but that won’t be new, given his predecessor. In any event, Schwarzenegger’s decision to sell state property can only be expected to bring in the same type of revenue as a garage sale: chump change.