Sunday, March 6, 2011

What's that Analogy about Two Wolves and a Sheep Voting on What's for Dinner?

The cover story of Reason magazine's March issue is a lengthy write-up from Tim Cavanaugh regarding the pension and budget crises currently facing California. The first part of the piece is a fairly standard rehash of the situation, the type of story that could be written about half the states in the country: a multi-billion-dollar budget hole, high unemployment and recession, exploding public pension liabilities arising from years of foolish fiscal policy and bargaining, etc. What's interesting, though, is the section in which Cavanaugh describes ongoing reform efforts. Unlike reform plans in states like Ohio and Wisconsin, which have arisen from the anti-government sentiment associated with the Tea Party, the Californians leading the push are many of the same people who create the original mess.

The whole article, here, is worth reading, but for us this was the money quote:

[The current pension reform movement] is a revolt led by the supporters of big government. At every level, Californians want assertive government. Republican farmers demand cheap water and more than $2 billion a year in subsidies. Unionized TV and movie productions command incentives such as $500 million in tax credits. In popular referenda during the last five years, California voters have voted themselves nearly $100 billion in bonded debt. The acceptable question is no longer whether to spend but what to spend it on.

This is why the most aggressive lobbying for pension reform is coming not from fiscal conservatives but from progressives, who see the logarithmic cascade of pension liability as a threat to public parks, environmental programs, and rail transit.

For anyone disposed to taking the state's fiscal problems seriously, this has two troubling implications. First off, it should dispel any hope (however laughable that hope might be) that the state's Republicans intend to function as an opposition party representing the interests of the taxpayers. But it also suggests that any "solution" to the problem is unlikely to include spending cuts or measures to limit future spending. Ultimately, Democrats and other liberals in California view the state's excessive spending, taxation, and interference in private life as desirable, not problematic. To them, this is a question of figuring out where to forcibly extract the funds to pay for whatever vision of utopia they believe the government can create.

We will eagerly await a festival of schadenfreude upon seeing the public unions get fucked over good and proper. And one can dream that they'll learn from the experience that living by the sword doesn't always turn out well. But the article underscores, for us, the hopelessness of expecting California's problems to be solved through its electoral-politics machinery. The end to our fiscal woes and bloated government is far more likely to come through crisis. Probably one of the bankruptcy/municipal-debt-default variety.

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