Thursday, August 7, 2003

So Arnold's Running

No, not Gary Coleman. The other Arnold. Oh, wait. They *are* both running. Nevermind.

I think now it doesn't matter who the governor is after all the sturm und drang is over. Whoever is it is going to solve California's most immediate ills by at least trying to engineer a big tax increase.

Let's recall some history here. In 1966, an actor who had never before held public office convinced voters in this state that we had an economic crisis. The budget was technically balanced but Ronald Reagan argued that this had been accomplished by accounting tricks; that things were really much worse and that incumbent Pat Brown had to be ousted to save the state from total financial disaster. Voters agreed. And when Reagan took office, he immediately went for a massive tax increase -- the largest ever in the history of any state. Here's Reagan biographer Lou Cannon describing this.

Reagan loathed tax increases and had promised during the campaign to "squeeze, cut and trim" state government. But Reagan realized immediately that no amount of budget cutting could make up for the shortfall in revenues. Two days after he became governor in 1967, he embraced a tax increase, saying that he did not want to wait "until everyone forgets that we did not cause the problem -- we only inherited it."

It worked. The state's financial problems were quickly wiped out. In fact, some said, it worked too well since California wound up with a surplus. Reagan took credit for shrewd fiscal management but he really did not "squeeze, cut and trim." He'd just raised taxes more than necessary. It was later charged (and I don't recall much argument on this point) that it would have been much better for the state if Reagan had asked for a smaller tax increase...and then another later, if necessary. He didn't do this, some said, because he figured he could blame one tax increase on his predecessor but not two.

Okay, tell me why whoever winds up being governor -- Arnold, Cruz, John, Larry, Angelyne, Gary, whoever -- won't do this. If Davis is booted out, it will more or less become accepted fact that he was an inept governor. Why wouldn't any successor solve their most immediate problem by declaring, "Because of the mess that jerk Gray Davis made, I have no choice but to ask for the Gray Davis Memorial Tax Increase"? And if Davis somehow retains the job, he can say, "Because of the expense of that stupid, unwarranted recall, we need a tax increase. Send your complaints to Darrell Issa." That would be so much easier than trying to solve the problem with a hundred smaller measures, battling over each one and whittling away the deficit a dime at a time.

Reagan managed to prove that tax increases don't affect your popularity if you can blame them on someone else. He never got blamed for that one. This will dawn on whoever winds up running the state after the circus leaves town.