Donald Trump reminds me of the other celebrity politician who won

Gray Davis was a well educated man, with an undergrad from Stanford and a law degree from Columbia.  He then served in Vietnam, during some of the intense conflict years, and returned as a decorated veteran.  Davis, like John Kerry and John McCain, turned to politics after the Vietnam experience and served California in various capacities.  And then was elected as governor.  A wonderful story, right?

Except that the story did not end there.  "California erupted in an anti-government, anti-establishment convulsion unlike any ever seen" and Davis was recalled less than a year into his second term as the governor.

The October 2003 ouster of Davis, a Democrat, was a primal response to the gridlock, partisan warfare, overweening special interests and mushrooming budget deficits that made the state capital a slough of dysfunction.

You can perhaps begin to see where this post is going.  For a few years now, Washington DC has been characterized by gridlock, partisan warfare, overweening special interests and mushrooming budget deficits that made the state capital a slough of dysfunction.  Voters are pissed off.  Right?

What did Californians do?  (Not me--by then I had already moved to Oregon!)  They held a special election for Davis's replacement.  Who were they?

The spectacle — a snap election featuring a color wheel of 135 candidates, including a former child actor, a porn star and a handful of professional politicians — shook California from its usual political slumber and captivated an audience that watched from around the world.

Haven't we had quite a spectacle of candidates this time around!

The eventual winner, Arnold Schwarzenegger, was not the porn star, though he could have been one!

In the interview, Schwarzenegger, then 29, acknowledged using "grass and hash, -- no hard drugs." He described participating in group sex with a group of bodybuilders and a "black girl" at Gold's Gym in Venice (Los Angeles County), saying "having chicks around is the kind of thing that breaks up the intense training. It gives you relief, and then afterward you go back to the serious stuff." 

So, with that kind of old stories, and with boastful claims of the outsider life that he led, with statements like ""I never lived my life to be a politician. I never lived my life to be the governor of California," Arnold Schwarzenegger became the governor.  What had he ever done in politics?  Nothing as an elected official. Nothing as any kind of a cabinet officer.  Nothing as a member of a regulatory body.  Schwarzenegger was a political nobody.  And he won the election.  He won as a Republican in a state where the demographics were rapidly shifting in favor of Democrats.  His celebrity status carried the day.

The voters didn't care that Schwarzenegger knew nothing about politics--they figured that he couldn't be any worse than the clowns who had paralyzed politics in the state.  Heck, even Warren Buffett came forward to be Schwarzenegger's advisor, and then promptly spoke the truth about property tax and the actor had to quickly silence the gazillionaire.  So successful he was that serious Republicans even explored loopholes in the Constitution that could allow the Austrian-American to run for the presidency.

For the most part, replace the last name of Schwarzenegger with Trump and the story sounds all too familiar now, right?

In the old country, Bengalis prided themselves on how Bengal thinks today what the country will think about only tomorrow.  California, similarly, has been a leader in political revolutions in many ways.  More than a decade later, the country is tempted to follow California's lead by electing a celebrity businessman with no political experience whatsoever.  They both have Germanic heritage as well.  I wonder if their fingers also match in size! ;)

Quote of the day! "California Dreaming"

People worry that Greece is bankrupt — hah!

That was a reader's comment on the state of California, which Gail Collins quotes in her column on readers bragging that their states have the worst political culture.  I tell you, we compete in everything :)

The election for governor of California

Quote of the day

"Work somewhere in a soup kitchen or something if you can’t take the pressure."

I suppose this is a rephrasing of "if you can't stand the heat ...." Anyway, that is California's governor quoted in Maureen Dowd's column.  I cannot understand though why that is a column--it is more like Dowd reporting on a meeting/interview.  Where is the analysis/insight?  I say this not because I am not a fan of Dowd.  Well, of course, I am not a fan of Dowd; but, that is beside the point.

Speaking of NY Times columns, Frank Rich, as always, has a good commentary and with hyperlinks.  Nicholas Kristoff has taken a break from detailing something on the freaky side of unfortunate aspects of lives somewhere, and has a neat column on an offbeat and upbeat experience. The good thing about Thomas Friedman's column is that he does not lead with how he had yet another insightful conversation at lunch with somebody.  The bad news is that his penchant for manipulating metaphors is right at the title for the column! 

California Failing

It is getting worse in California.  The latest news is that:

State revenue has already fallen more than $1 billion short of assumptions in the budget lawmakers passed less than three months ago, according to a new report from the state controller.

What is a billion anymore, right?  Well, if only it were not on top of a few other billions:

Even before the bad fiscal news, policymakers were bracing for a big budget deficit next year. The Department of Finance anticipates a $7.4-billion deficit in 2010-11. That’s a conservative estimate, because lawsuits have tied up or reversed some planned budget cuts.

The state is in so much of a mess that all the way from Britain, the Guardian asks "Will California become America's first failed state?"

There is a growing movement to call for a constitutional convention that could redraw the way the state is governed. It could change how the state passes budgets and make the political system more open, recreating the lost middle ground. Recently, the powerful mayor of Los Angeles, Antonio Villaraigosa, signed on to the idea. Gerrymandering, too, is set to take a hit. Next year Schwarzenegger will take steps to redraw some districts to make them more competitive, breaking the stranglehold of party politics. He wants district boundaries to be drawn up by impartial judges, not politicians. In previous times that would have been the equivalent of a turkey voting for Christmas. But now the bold move is seen for what it is: a necessary step to change things. And there is no denying that innovation is something that California does well.

Of course, it would be foolish to write-off California.  But, they better clean up the political mess fast if they want to maintain that California mystique.  And I want them to--some day I hope to return to Southern California .... for good.  After all, that is the place whereI was partly raised.

Schwarzenegger. California. Budget. Crisis.

Is California's messy political economy the future of this country, too?

‘Kicker’ falsely assumes economy is predictable

The Great Recession is the label that some commentators use to refer to the current global economic slump, and it seems appropriate. Even as we struggle against the downturn, I am relieved that the legislative process has been set in motion to address the “kicker law.”

The kicker law mandates refunds to taxpayers if the tax receipts exceed forecasted biennial revenue by more than 2 percent. One lesson of the Great Recession, which has immense implications for the kicker, is a simple one: Predicting the economic future is nearly impossible, and even more difficult is the task of estimating revenues within a 2 percent margin.

Very few experts foresaw the nasty recession when we were still riding high two years ago. Even the chairman of the Federal Reserve, Ben Bernanke, did not see this coming. In fact, during the early years of the bull market, Bernanke publicly worried that the problem in the world was from a savings glut. He was also among many leading economists who were confident that we had tamed the boom-bust cycles, and that we were in for smooth cruising. If only that were the case!

A clear minority of experts predicted a recession, and even fewer, such as Nouriel Roubini, worried that it would be a nasty global economic pandemic.

Plainly, economic forecasting is not as easy, nor scientific, as we might imagine it to be. Yet, the kicker is predicated upon such economic forecasts. Take, for instance, the state economist’s revenue forecast from March 2008. The report notes that, “The forecast projects a slowing Oregon economy in 2008 with mild growth returning in 2009.” It has been anything but.

However, it does not mean that the state economist was way off. The same report states, correctly, that “Uncertainty surrounds the financial system. … Broadly, we place ‘uncertainty’ under ‘risks,’ and note that the Oregon economy is at a precarious juncture of the business cycle.” A year later, that “uncertainty” has revealed itself in a number of unpleasant ways, including the 12.1 percent unemployment, which could worsen.

The bottom line is that the kicker law is built on “forecasting” that cannot ever be precise and is, therefore, set up to fail. No wonder, then, that rebates have been frequent, rather than rare exceptions.

Looking at it another way, this kicker law, which was approved in 1980, was an Oregon innovation similar to other notables such as the bottle bill or the gas tax. However, unlike the bottle bill, the kicker law was not adopted by any other state in the union. Could it be for a simple reason that the kicker was not considered an idea brilliant enough to be copied?

I fully recognize and support the reason behind the kicker law — as a check against uncontrolled expansion of government, which could otherwise suck away money from private economic activities. However, there is no guarantee that such controls on revenue alone will constrain government expenditures.

All we need for an example is immediately to the south of us. Californians passed the famous Proposition 13 back in 1978, before our own kicker law, to limit property taxes and future tax increases. Three decades later, the libertarian Reason magazine recently noted that even Gov. Arnold Schwarzenegger, who swept into office promising to limit government, has ended up expanding it at rates slightly more than what his predecessor did: “Under Schwarzenegger, spending has increased 6.8 percent annually, compared to a population/inflation rate of just under 5 percent.”

It is therefore up to us voters to be on the alert for necessary and unnecessary government expenditures, and to use existing processes to express our preferences. A constitutional revenue choke-off, which is what the kicker amounts to, cannot by itself limit government, and can only worsen budget crises whenever we enter into a recession.

Furthermore, let us not forget that there will be a recession after we recover from this one — that is the nature of the economic system. This means we ought to prepare ourselves for the economic ups and downs that are not easy to forecast, which is why I fully support the proposals to strengthen the rainy day fund by diverting a portion of the monies that would otherwise become kicker refunds.

The old saying is “once bitten, twice shy” — and Oregonians have been bitten more than once by economic downturns. Let us work on avoiding nasty bites in the future.

For The Register-Guard

Posted to Web: Wednesday, May 6, 2009 05:29PM
Appeared in print: Thursday, May 7, 2009, page A9

Schwarzenegger: California's wasted years

I was one of the many who could not believe that an actor with no political track record whatsoever could be elected as the governor of the largest economy in the US--California. Has the Governator been any better for California? Read this from Reason:

When Gray Davis, a Democrat, became California’s governor in 1999, the state’s budget was $75 billion. Tempted by dot-com windfalls and beholden to public-sector unions, Davis bumped that number to $104 billion in four short years of boom and bust, after which he was bounced out of office for his fiscal irresponsibility and replaced by a Milton Friedman–quoting action hero who promised to bring “fiscal sanity” back to Sacramento. Five years later, after facing another boom, another bust, and a series of bruising political defeats at the hands of public-sector unions, Schwarzenegger had hiked the budget to an astonishing $145 billion. In 10 years, state spending in nominal terms increased 92 percent.

One good way to measure fiscal stewardship is to see whether state spending growth exceeds the rate of population growth plus inflation. Under Davis, budgets rose an average of 6.7 percent a year, as opposed to a population/California price index growth rate of 4.8 percent. Under Schwarzenegger, spending has increased 6.8 percent annually, compared to a population/inflation rate of just under 5 percent. A governor who was swept into office by damning Davis’ $38 billion budget deficit, vowing not to raise taxes, and mocking his predecessor’s vehicle license fee hikes announced on February 20 that he would address his own $42 billion budget deficit by raising taxes and doubling those same fees.

Sometimes I wonder if politics and politicians here in the US are any better than what I experienced in India. Maybe it goes with the territory?