Lesson for liberals in California

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That's the headline on today's Washington Post column by E. J. Dionne, in which this usually optimistic liberal columnist takes an unflinching view of the results of the California primary. As Dionne notes, California voters rejected by 61 to 39 percent a ballot proposition that would have set up a universal preschool program to be funded by a tax on people earning $400,000 a year (or couples earning $800,000). They also rejected by 53 to 47 percent a $600 million bond measure for public libraries. This in a state with many more registered Democrats than Republicans and in which the turnout was disproportionately Democratic because the Democrats had a serious primary contest for governor and the Republicans didn't.

Dionne points out, accurately, that the preschool proposition got into trouble after it was reported that its chief backer, actor Rob Reiner, had used his position as head of a state commission to spend $23 million of public money on ads talking up preschool education. But there seems to be a bigger problem here, Dionne concludes, for advocates of public spending:

There remains a deep skepticism about government spending, even for the best purposes. On the same day the two propositions went down, voters in five California counties rejected sales tax increases, mostly to fund transportation projects. Attacks on tax-and-spend sound old and tired, but they still have force.

He goes on to make the valid point that universal programs that serve everyone, like Reiner's preschool proposition, are extremely expensive and that one strong argument against the proposition was that it would spend state money for the children of affluent parents who already pay for preschool.

There's only so much room in a 700-word column, but here are a couple of other points raised by these results, which Dionne might want to consider:

l Taxes on the rich make for a very volatile revenue stream. The state of California, with its progressive income tax, reaped a huge windfall during the dot-com boom of 1999–2000. Gov. Gray Davis tried to hold down the Democratic Legislature's appetite for vast spending increases but with what turned out to be less than complete success. When the dot coms went bust, California's revenues slumped hugely, and the state suddenly didn't have money to pay for the programs its legislators and governor had voted in. All of which led to the 2003 recall and the election of Republican Arnold Schwarzenegger as governor.

l The big institutional force behind the demand for increased spending is the public employee unions, which combine a huge appetite for pay increases and generous pension and other benefits with a determination that their members should never be held accountable for results. This tends to produce overexpensive and undercompetent government: not what principled liberals should want. Reiner's proposition was intended to create a state system of preschool, together with lots of jobs for teachers and aides who would be represented by—guess what?—public employee unions. That would produce a whole new vast stream of revenue going from state taxpayers to public employee union members and then, through compulsory dues, to the people who run the public employee unions and then to their friends in the Democratic Party.

The public employee unions spent something on the order of $80 million on ads in 2005 to lower Schwarzenegger's job rating and to defeat the propositions he put on the November ballot that were intended to reduce their power. They won on both counts, and Schwarzenegger is now reduced to making deals with them—deals one hopes will not be as overgenerous as those Davis felt obliged to make.

Liberal Democrats like to believe that government programs can improve people's lives and that it's a good idea to redistribute through taxes money from the rich to the presumably less well off. But in practice the redistribution they support turns out to be from the pockets of taxpayers generally to public employee unions and thence to the Democratic Party. In California this has been facilitated because a lot of affluent people in the Los Angeles and San Francisco metro areas are happy to vote for Democrats because of their liberal stands on lifestyle issues like abortion and because they are so well off that they don't mind paying more in taxes.

But of course these people don't really have to live with the results. They wouldn't think of sending their children to public schools (unless they live in a few affluent suburban school districts), and they don't care if public employee union members provide bad services (they get their services from the private sector). And they don't mind if high taxes squelch business formation and kill off private sector growth, since they're rich already. It's a recipe ultimately for bad government and a diminished private sector, and those who favor it had a great year in 2005.

They also did well in the Democratic gubernatorial primary, which was won by Treasurer Phil Angelides, who advocates higher taxes on "the rich" to pay for more spending on public education (i.e., more taxpayer money for the California Teachers Association and hence for the Democratic Party). What's surprising, and to me encouraging, is that on the ballot propositions most California voters, including some Democrats, seem to have some doubts about this scheme.