It is with great pleasure that I take the time to comment on the running clusterfuck that is California's state government.  Here at DagBlog, we've gone back and forth a bit about the possible ramifications of expansive fiscal policy that has now been signed into law by President Obama.  If you want a real lesson in when deficits get sticky, look no further than the Golden State.

I've previously indicated that I intend to deconstruct some of the ideology behind the economic debates of the day.  I can't think of a better place to start that discussion than right here in my home state.  California is a fantastic topic if you're looking for a microcosm of America.  In fact, what happens here often predicts what goes on in the nation at large.

I'll give you an example: Ronald Reagan.  If you want to talk about the current state of poltiical or economic ideology in America, you can't really avoid talking about the Gipper.  Yes, the actor turned governor.  Here in the Golden State, we love that old chestnut.  Aside from being the Gilgamesh of modern conservatism, Ronald Reagan appointed a fellow named Mark Fowler to run the FCC.  Mr. Fowler helped to get rid of that pesky old Fairness Doctrine just in time for a young upstart by the name of Rush Limbaugh to take over Morton Downey's spot on Sacramento area radio station KFBK.  A few years later, Rush went national.

You're welcome.

Do all roads in modern conservatism lead back to Sacramento, California?  Perhaps not.  Perhaps they don't all lead back to the capital of California, but some major thoroughfares go right through it.  That's why I hope to convince you that what's happening right now in California is more than just one state's story of economic woe in a time of recession, but rather a kernel of truth about the ideologies that guide the ship of state.

If this sounds a frightening prospect, perhaps that's due.  California's balance sheet does not look good.  We have a deficit of just over $40 billion, which is actually not very far off from the projected deficit that hung over the head of the recalled Governor Gray Davis.  State workers are on furlough, our DMV is closed every other Friday, student positions and internships have been canned and the state is looking at having to lay off an additional 10-20 thousand workers in the near future if the situation is not changed.  I guess we'll have to ask Michael Steele whether these people lost jobs or if they're just out of work.

The thing is, other than the downward pressure of the recession making realities more immediate, this is not a new story for California.  Indeed, as I've noted, we were in almost exactly the same predicament a few years back when we decided to play musical Governors.  The reason for this is that California is perpetually on the edge and any downturn, whether it's upstream energy suppliers screwing us over (thanks, Enron!) or the aftermath of a housing bubble, is enough to break the bank.

In point of fact, California has only had a state budget pass through the legislature on time a scant 3 times in the last three decades.  Running state government on the fiscal razor's edge is a way of life here.  It is the rule, not the exception.

There's really never been a better time to try and understand why this is the case.  California law says that the legislature has to pass a budget by June 15th.  June 15th, if you haven't been keeping track, comes every year.  Same time.  Yet, as I've noted, the budget is almost certainly not passed by this date.  This was the case once again in 2008.  The legislature is currently in a special session to try to address the aforementioned shortfall.

Why does this happen?  I can boil it down to one word: Taxes.  That's the perennial struggle.  It's also the reason that I happen to think that what's happening in California is a fantastic way to understand conservative economic ideology.  It doesn't hurt that California has a bicameral legislature that is not dissimilar to the federal Congress.

Taking issues with taxes has a storied history in California, as it does in America as a whole.  The interesting thing to me about the California GOP is that taxes are essentially their only issue.  They oppose any and all taxes at all times.

California has a reputation for being liberal, wacky, stoned, bi-curious, excessive, in a cult and naked.  It's the nakedness that I want to focus on.  Before you get too excited thinking about flapping genitalia, I'm referring to naked ideology.  For a variety of reasons, the CA GOP doesn't really have much of a truck with the social issues that the GOP flogs around the rest of the nation.  Sure, we've got our pro-choice and pro-life constituencies and the environment is frequently at issue, but this is one place where I think that the CA GOP differs from the national GOP.

Now, this tradition goes back a ways, but it sits right at the heart of conservative ideology and trajectory nationwide.  Howard Jarvis made his mark on political history with Prop. 13 in 1978, just a couple of years before Ronald Reagan took a seat in the Big Chair.  This initiative lowered California's property taxes by a bit over 50%, but Jarvis promised CA renters that this would lead to lower rents.  Well, this didn't happen.  CA landlords pocketed the difference.

It shouldn't be a big mystery as to why this happened.  Imagine: You're a landlord.  Your property taxes have been halved.  Do you:

1. Generously pass on the savings to your tenant(s).
2. Leave the rents as they are and, comfortable with the fact that the market will bear current rents, pocket the difference.

Incidentally, this isn't unlike the discussions about temporarily canning the federal gas tax this past summer.  Here's a hint: If you still think that gas companies would pass on the savings at the pump, then perhaps you'd be better off selling your car and using the money for a down payment on a clue.

Or not.  You could always join the GOP instead.

But seriously, folks.  One of the hallmarks of the GOP anti-tax dogma is that it doesn't have to respect reality.  Laffer curve anyone?

The anti-tax crowd was also behind the 2003 recall effort.  Well, the anti-tax crowd, the guys who went on to found Move America Forward and nearly $2 million of Rep. Darrell Issa's personal funds.  So, we got rid of our governor and got a new one.  A bigger, stronger, more Austrian governor who isn't named after a boring color and doesn't suffer the snivelling of girlie men gladly.  And by girlie men he sometimes means the state nurse's union.  Women in comfortable shoes?

Boy, that was awkward.

Unfortunately, the Governator now finds himself more or less where Gray Davis did.  Oddly enough, he seems to be helped not at all by not being a girlie man or a Democrat.  There's a very good reason for this, and it's also the reason that we have the same budget battle every single year.  It's really like the CA political equivalent of the World Series.

Though this is a special legislative session, the reason for the season is still taxes.  Well, taxes and the two-thirds majority of the state legislature needed to pass the budget.  Seriously, the parallells between California and the nation are fascinating.  California has a rump, obstructionist GOP that is keeping the budget from being passed, in this case by one vote.  In fact, they were finally about to agree on a budget that contained some tax increases, which have been advocated by Governor Schwarzenegger among others, but guess what the CA GOP Senators did?  They canned their Senate leader and got a new guy to obstruct the passage of the budget!

That's right.  No way, no how, no taxes.  Ever.

This leaves the lingering question of how to pay for state government.  California's credit rating isn't so great these days.  I don't really understand all of the details, but I think it has something to do with never being able to pass a budget on time.  Anyhow, as a result we can't really bond or borrow our way out of this mess.  Besides, bonding and borrowing don't represent a long-term solution to balancing the state's expenditures against it's revenue stream.

I think that part of the problem is that you have GOP members of the CA legislature who are quite nearly single-issue politicians.  Their sole mission in life is to never ever approve any increase in taxes no matter what.  If that's everything you stand for as a politician, it's going to be hard to negotiate a compromise with you.

The other difficulty is the two-thirds majority rule.  It's an interesting topic and it's possible that it might be changed, but right now it's just a fact of the game.  This isn't incredibly different than the 60 vote cloture requirement in the US Senate.  Coincidentally, the CA legislature is pretty close to to a supermajority in both houses.  This would be a watershed moment in CA politics, but not primarily because it's also the same margin by which a veto can be over-ridden.

The reasons for opposing all taxes all the time are complex, but adherents seem to come down somewhere between Milton Friedman's "starve the beast" and something to do with Grover Norquist's bathtub.  Eww.

However, I think that this obscures the fundamental ideology at issue.  Members of the CA GOP, like members of the national GOP, do not want to give government any money because they do not want there to be much government.  They believe that government is more or less a problem and not a solution.

If you want to have a government, then you might find it reasonable to have a discussion about how to pay for it.  There might be reasonable disagreements about the optimal tax level, how much exposure the state can handle in terms of borrowing, and so forth, but as long as you can agree that there should be government then it's reasonable to expect a discussion about how to pay for it.

Well, that's not the discussion going on in the California state legislature.  It's a conversation between one group of people, some of whom happen to be Republicans, who are trying to figure out how to pay for state governance and another group who is trying to figure out precisely how not to pay for it.

Don't me wrong: CA Democrats have their problems as well.  To be specific, CA has to figure out how to deal with ballooning education costs (we're a border state and bilingual education is incredibly expensive) and our massively massive prison system (here's a hint: it's really expensive to incarcerate people for smoking weed), but again this represents a discussion about decisions on how to pay for state government rather than figuring out how to run it aground.

This is really no different than the national ideology at play.  George W. Bush, for example, cited his tax cuts as a sort of fiscal straight-jacket.  This isn't a new strategy.  It's the reason that Reagan and other self-avowed conservative executives like to run big deficits.

Fortunately, America seems to have recently decided that it would prefer to put government in the hands of people who believe that it ought to work instead of people who are dead-set on proving that it doesn't via demonstration.  Perhaps America is out ahead of California on this one.

Or maybe it's just that two-thirds is slightly more than three-fifths.