California Dreamin' - A National Nightmare?
by JOHN W. HOWARD
September 7, 2011
Crisis clarifies. Our vast economic disaster is the historically predictable culmination of a century of public policy experimentation ungrounded in empirical reference. It is the result of an hubristic idealism translated into policy prescription; a process founded in Platonist thought and prefigured by the repeated failure of communal idylls.
The flow of growth is a constant in enterprise. Bare survival requires thrift and yields caution as a lack of resource demands careful husbanding. The elevation of living standards resulting from the accumulation of wealth creates opportunities for leisure and expansive resource deployment. It creates an environment that is the seed of charity. It is true in industry. It is true in personal finance. It is true in government.
When times are good and money is flowing, it is easy spend on optional activities. In families it might be charity, better vacations, bigger, more luxurious homes and more non-essential “stuff”. In business, it might be more employees to pick up work executives would rather not do, more generous benefits or expenditures on supplies and non-essential equipment and services. In government, it is the implementation of programs that are not at the root of government’s protective purpose but which some might think desirable.
Governments are initially instituted for the practical purpose of collective protection for the individuals who make up the communities in which they are created. At their most basic, they provide armies to protect the nation and police forces to protect citizens from criminality. They speak for the community to other communities by conducting government to government relations. As they grow, they provide services only government can supply, like lawmaking and courts for the enforcement of rules and furnishing public justice for private wrongs.
Until the Twentieth Century, our government was not in the business of solving its citizens’ problems. It was in the business of protecting their freedom so they could solve their own. European economic power had long since created the means through which government could begin to do things for the individual citizen and the presence of sufficient disposable wealth to create an atmosphere conducive to public generosity. Its historical culture of authoritarianism provided the philosophical, and cultural underpinning of government control and its concomitant view that charity can be politically institutionalized. The development of private wealth and increased living standards hardly interfered with that public project as calls on private resources were small enough that they did not substantially interfere with private ambition and public subsidies were not large enough to encourage private indolence.
Once the genie of social engineering was out the bottle, though, the geometric expansion of government reach became inevitable. But public generosity is possible only as long as there is private wealth to confiscate, a problem Europe now recognizes as it slowly awakens to the fact that its massive welfare state has become unsustainable. It worked as long as there were vast historical resources to plunder. That wealth has now been fully looted. Europe has completely eaten through its seed corn. The well has run dry and unceasing regulation born of the idealistic notion of perfectibility has so strangled enterprise that there is no way to replenish it. The trouble with idealism, among so many other things, is that it never recognizes practical consequence.
This experience tracks that of enterprise and family and addressing it demands the practical solutions they require.
We have, this year, been treated to a grand spectacle that has enveloped the nation in a great debate. It is a debate that is, at once, practical and principled. It is a debate so grounded in fundamental philosophy that it does not admit of principled compromise. It is the clash of two mutually exclusive worldviews based on opposing philosophical assumptions. It is a debate that, in the end, must result in a victor and a vanquished.
On one side are those who argue for an ideal ungrounded in experience and unlimited by empirical constraint. On the other are those who believe in the limitations of human perfectibility and press for public policy that is informed by the boundaries of the provably possible. It is an ancient debate that has played out, now, for two millennia. It goes well beyond a mundane discussion of dollars and cents to a debate over the fundamental basis for society and the proper role and function of government. It is no small question. It is no less than the definition of a nation; who we are and what we stand for.
Those on the left have constructed an imaginary ideal they believe can be achieved by the coercive power of government and, as such, reject any notion of limits on governmental prerogative. They conceive of no such constraint and are strangers to the idea that government has discrete core functions. In their view, all initiatives that promote social harmony and societal perfection are “core” functions of government. All government programs are equal; none superior to any other. They recognize no hierarchy of governmental purpose. If the government is the instrument of the perfection of human society and the resulting perfection of mankind, there is no power that can legitimately be denied it. That explains their disdain for individual liberty and their unstated and, by them, unrecognized authoritarianism. What is wrong with coercion if the result is perfection or, at least, the greatest good for the greatest number?
It is a world view that is fundamentally at odds with human nature and human history, inconsistent with notions of liberty and completely incompatible with the principles on which the nation was founded. And yet it is the worldview that forms the basis of our ongoing debate over government spending. For while everyone knows government cannot continue to sustain spending at current levels, the neo-Platonists who make up the political left refuse to recognize government limitation, even when it is out of money.
The public narrative was that conservatives insisted on spending cuts without tax increases as a means of gaining political advantage; that they assumed that posture to protect “the rich” who make up their base (leaving aside the obvious fact that “the rich”, however defined, is a small percentage of any political constituency and the inconvenient fact that they are as likely to support the other side as they are conservatives). Conservatives were accused of risking the nation’s financial health to serve ideological ends.
The truth was precisely the opposite. Liberals were willing to risk financial default rather than to surrender to the notion that some functions of government are optional. Their posture grew out of the idea that there is no moral difference between government programs; that each is entitled to equal dignity and equal support. They reject the very concept of primary purpose. They were unwilling to sacrifice even one of their ideological affectations to preserve those functions of government that make up its core duties to its citizens.
But responsible governance demands that when resources decline, government perform the hard work of defining essential functions and adjusting to financial reality. Over the last seventy years, a progression of initiatives has been adopted by successive leftist governments with scant opposition from those whose charge, one might think, would have been in opposition. But easy money made for easy decision making and the liberal zeitgeist of the mid-Twentieth Century weakened the impetus for resistance. The result was the bloating of governmental influence and an expansion of government authority beyond anything originally contemplated by the Founders. Now governmental ambition has outstripped governmental resource and the current crisis has cast that fact in stark relief. Like businesses and families, government must prioritize.
California demonstrates the turn of mind that has led government at all levels to near bankruptcy. It provides an example of the consequences of irresponsible and profligate spending undertaken by leftist ideologues unleavened by effective opposition. Its current budget crisis offers a useful example of liberals’ incapacity to separate core functions from those that are optional. It is a cautionary tale. Those who run California want to do for the nation what they have for their state.
The central purpose of government is protective. So, on the state level, we provide police and fire protection for the preservation of human life and courts to offer criminal and civil justice. Along with that, the state must supply a means of protecting its citizens from predators once convictions are obtained, so they build and operate jails and prisons. It has to maintain a legislature and administrative branch for lawmaking and management. Somewhere along the way, a large consensus developed that public education was also a core, if debatable, function of government, along with the construction of streets and highways (although many, these days, are built by private developers).
California has an overall budget of about $222 billion with a general fund budget of $86 billion. It began this year with a shortfall of $26 billion but received more revenues than it expected so the final figure was about $15 billion. To close the gap, cuts were made to schools, universities, courts and some services for the poor, such as in home care and day care centers. In San Francisco, some 50 courts will close to address the gap – virtually the entire civil division – meaning that civil justice will come to halt in that city.
Those core functions were sacrificed so the state could maintain programs that sooth liberal sensibilities. While the state is closing courts, it maintains the California Coastal Commission, a sort of super-planning agency the functions of which could more than adequately be handled by local government. Its budget is $18 million, more than enough to keep the courts open in San Francisco.
California has more than 16 departments and agencies the functions of which are described as “environmental protection”. It has a Superintendent of Public Instruction and a Secretary of Education, the purposes of which even liberals admit are the same.
California’s spending is handled through the use of discrete “funds” that hold money allocated for particular purposes. Among those are such gems as the California Bingo Fund; the Bicycle Transportation Account; The Acupuncture Fund; The Abandoned Watercraft Fund; The Athletic Commission Fund; The Charity Bingo Mitigation Fund; the Tire Recycling Management Fund; the Car Wash Worker Fund; the Mexican American Veterans Memorial Fund; the Dentally Underserved Account; the Film Promotion and Marketing Fund (I didn’t know Hollywood was short of money) and the Gambling Addiction Program Fund. These are just a few of the more than 500 “funds” managed by the State of California. And they wonder why state government is broke.
California maintains hundreds of boards and commissions that are nothing more than rewards the governor gives big donors and important supporters. They are maintained at the expense of tens of millions of dollars per year.
California’s public employees are paid, on average, $115,000 in salaries and benefits, about 40% more than comparable employees in the private sector. Government is a service business the biggest expense of which is salaries. It spends little on inventory and equipment. At least 50% of the budget is for salaries. (It is hard to determine, of course, since the bureaucrats have buried the figures under a mound of mischaracterizations. But it is likely closer to 75%.) If salaries were simply indexed to those of private industry, the state could save more than $17 billion per year on General Fund expenditures alone, completely closing the current budget gap. The balance of the budget, some $140 billion, goes back to other agencies and local governments. That money, too, is largely for salaries. The state could save more than $45 billion if the same standard were applied to the entire budget. But that would require taking on public employee unions and that would take courage and a change in ideological predisposition.
Leftists have been in control of California’s legislature since 1958. In the intervening 50 years, they have enacted thousands of programs that buy the continuing support of their various special interest supporters. But to dismiss them as cynical would be far too easy and would give insufficient credit to their ideological underpinnings. Theirs is a project of perfectibility driven by government mandate. In keeping with that ideology all government projects are core functions. If schools must be closed to maintain the strength of public employee unions, it is a legitimate trade. If courts must be closed to fund environmental radicalism, it is a small price to pay. This is what America will look like should the debate go wrong.
California is a microcosm of the debate that is taking place at the federal level. Its thousands of absurd boards, commissions and funds are dwarfed by those of the federal government that are so buried in budgetary obfuscation as to be nearly impossible to find, let alone close. But the programs are there for the closing and the time to close them is now. California is lost forever, but the federal government need not be. Principled conservatives can do the hard work of identifying the core functions of government and funding them. They must be prepared, though, to close those that are little more than the play things of generations of liberal legislators and be ready for the cascade of vilification that will emanate from media handmaidens when they do so. The solvency of the nation demands it. The future of the nation depends on it. This crisis has clarified the ideological battleground. We must be prepared to take the field.