California: A Morality Tale in Three Parts
The following is a speech I delivered to the Council on National Policy on September 30, 2011
I want to welcome this groundbreaking scientific expedition to the savage lands of the Left Coast. You are here in California to answer an important theoretical question and now you have your answer.
Yes, this is what Barack Obama’s second term would look like.
Study it. Fear it. And then go home and make sure that it never happens to the rest of the country.
Of course, in spite of all of its problems, California is still one of the best places in the country to build a successful small business. All you have to do is start with a successful large business.
Laugh if you will, but as you whistle past this cemetery, do heed the medieval epitaph: “Remember man as you walk by, as you are now so once was I; as I am now so you will be.”
Mark that well, because if we lose this struggle for the future of our country, you too someday will live in a California – only without the nice climate.
Bad policies. Bad process. Bad politics. Those are the three acts in a Greek tragedy that tell the tale of how, in the span of a single generation, the most prosperous and golden state in the nation became an economic basket case.
When my parents came to California in the 1960’s looking for a better future, they found it here. The state government consumed about half of what it does today after adjusting for both inflation and population. HALF. We had the finest highway system in the world and the finest public school system in the country. California offered a FREE university education to every Californian who wanted one. We produced water and electricity so cheaply that some communities didn’t bother to meter the stuff. Our unemployment rate consistently ran well below the national rate and our diversified economy was nearly recession-proof.
One thing – and one thing only – changed in those years: public policy. The political Left gradually gained dominance over California’s government and has imposed a disastrous agenda of radical and retrograde policies that have destroyed the quality of life that Californians once took for granted.
The Census bureau has reported for the better part of the decade that California is undergoing the biggest population exodus in its history, with many fleeing to such garden spots as Nevada, Arizona and Texas. Think about that. California is blessed with the most equitable climate in the entire Western Hemisphere; it has the most bountiful resources anywhere in the continental United States; it is poised on the Pacific Rim in a position to dominate world trade for the next century, and yet people are finding a better place to live and work and raise their families in the middle of the Nevada Nuclear Test Range.
I submit to you that no conceivable act of God could wreak such devastation. Only acts of government can do that. And they have.
We conservatives espouse principles of individual liberty, free markets, constitutionally limited government, fiscal responsibility, the protection of natural rights – not out of some slavish devotion to ideology, but because all human experience has shown these principles to be the most certain means to achieve a prosperous and happy society. If you want to see the opposite of that – come to California.
James Madison said the trickiest question the Constitutional convention confronted was how to oblige a government to control itself. History records not a single example of a nation that spent, borrowed and taxed its way to prosperity; but it offers us many, many examples of nations that spent and borrowed and taxed their way to economic ruin and bankruptcy. And history is screaming this warning at us: that nations that bankrupt themselves aren’t around very long, because before you can provide for the common defense and promote the general welfare and secure the blessings of liberty – you have to be able to pay for it.
California may not have invented deficit spending but we certainly refined it into a science. Before the crash of 2008, when California was taking in more money than ever in its history, it was already running a nine billion dollar deficit, under a Republican governor elected on the pledge to “cut up the credit cards.”
Federal spending increased 26 percent in the last three years literally consuming and squandering the wealth of the nation at the worst possible time. Yet consider this: from July of 2005 to July of 2008, California increased its spending by 31 percent, under a Republican governor elected on the pledge to “stop the crazy deficit spending”. You can see how well that’s worked for us.
If stimulus spending, massive deficits and burgeoning government bureaucracies were the path to economic prosperity, California should be leading the nation from the top rather than from the bottom. After we lost the nation’s triple-A credit rating this summer specifically because of chronic deficit spending, it should surprise no one that California suffers the lowest bond rating in the nation for precisely the same reason.
Our regulatory burdens are also years ahead of the rest of the nation – we’ve had our own version of Cap and Trade on the books for five years now, and even though the bulk of these restrictions yet to take effect, investors make decisions every day anticipating their impact.
This has already proven utterly devastating to energy generation, cargo and passenger transportation, cement production, construction, wine making, agriculture and manufacturing. When he signed this legislation, Gov. Schwarzenegger promised that this would produce a cornucopia of new green jobs.
How’s that working out? Up until the autumn of 2006, California’s unemployment rate tracked fairly steadily with the national unemployment numbers. But beginning in that quarter, California’s unemployment rate moved steadily beyond the national numbers. Today it stands at 12.1 percent – three full points above the national rate. You can’t blame the national economy for that – you have to find something specific to California that occurred in the autumn of 2006 to explain this divergence. I submit that the only significant event in that period was the signing of AB 32.
And I should note that although we’ve devastated California’s once recession-proof economy with these ridiculous regulations, the Earth stubbornly continues to warm and cool as it has for billions of years.
I mentioned water and electricity so cheap that some communities didn’t meter the stuff. There’s a reason for that: California had embarked on an aggressive program of hydroelectric and nuclear power construction that promised an era of clean, cheap and abundant electricity. But beginning with the first “small is beautiful” administration of Jerry Brown, these programs were abandoned in favor of “green energy.” We now have the most stringent renewable energy requirements in the nation.
Which helps explain why California is the home to such stunning green energy success stories as Solyndra. We have among the highest electricity prices in the continental United States. We have the lowest per-capita electricity consumption in the nation as well. And every day, our government spends part of our sky-high electricity bills to lecture us to conserve more.
We completed our last major dam in 1979. Last year, environmentalists diverted 200 billion gallons of water from central valley agriculture for the enjoyment and amusement of the Delta Smelt – a three-inch long minnow that has become the environmental left’s pet cause. This single action destroyed thousands of jobs and laid waste to a half million acres of the most fertile farmland in America. It is no coincidence that four of the ten metropolitan areas suffering the highest unemployment rate in the country are all in California’s Central Valley.
Meanwhile, up north on the Klamath River, California has found a new partnership with the Obama administration as they proceed to tear down four perfectly good hydroelectric dams capable of producing 155 megawatts of the cleanest and cheapest electricity on the planet — enough to power 155,000 homes. This is due, we are told, to the decline of the salmon population. The Iron Gate Fish Hatchery on the Klamath produces 5 million salmon smolts each year – 17,000 of which return as fully-grown adults to spawn – but they don’t include them in the population count. To add insult to insanity, when the Iron Gate Dam is destroyed, we will lose the Iron Gate Fish Hatchery.
We have the most aggressive mass transit program in the country – although we have not added significant capacity to our highway system in a generation. Californians consistently pay among the highest taxes per gallon of gasoline in the country and yet make among the lowest per capita expenditures on our roads. And what a surprise: we also have among the highest congestion rates in the country.
We have the largest population of illegal aliens in the country, consuming somewhere in the neighborhood of $10 billion in direct state expenditures. A few years ago, the Los Angeles County Sheriff reported that fully 25 percent of the jail inmates were illegal aliens. For years, California has provided in-state tuition for illegal aliens at the expense of California taxpayers – and with the signing of the California Dream Act four days ago, they will also have access to taxpayer-financed grants. Meanwhile, CSU has increased tuition 22 percent in just two years.
I’ve noticed a few of you on your cell phones no doubt checking to be sure that your return reservations are confirmed.
But I need to remind you that the Obama administration is pursuing exactly the same policies nationally – and so far with the same results. When you step off the plane back in your home state, just remember that all your plane trip will buy you is a couple of years if we lose the fight in 2012.
The second act of this morality tale is how bad process accommodated and amplified bad policy.
The Left loves to throw the term “dysfunctional” at our governing institutions. In the last week, the Democratic governor of North Carolina seriously opined that we ought to postpone congressional elections so that congressmen would “do the right thing.” Peter Orzag this week wrote of wanting to shift even more decision-making from our elected representatives to elitist boards appointed by our betters.
We have reached this point not because of a failure of our republican institutions, but because of a failure to respect those institutions.
Again, California is a pioneer, but the rest of the country is fast catching up. In the 1960’s, California’s legislature was respected throughout the country as the model for others to follow. It was professional, it respected process, and it worked. It did a few things, but it did them exceedingly well. It left local schools, local governments and local revenues in local hands. But beginning in the 1970’s this began to break down.
The humility that kept Sacramento from sticking its nose into the business of local governments gave way to the hubris that the state knew better what was important to local communities than those communities themselves. The appalling breakdown of federalist principles at the national level now geometrically compounds this problem.
But at the core of this breakdown was the abandonment of our basic republican structure of government – and it began right here.
Our parliamentary institutions have evolved over centuries to distill diverse viewpoints to a common direction within constitutional boundaries. When this process is applied, it works extremely well.
For a quarter of a century, I watched as these brilliant checks and balances that had produced reasonably punctual and reasonably balanced budgets for over a century, and nurtured the most prosperous economy in the nation, were gradually abandoned in the name of liberal efficiency.
Slowly, inexorably, decision-making that had been done broadly and independently by the two houses of the legislature — involving the active participation of every elected representative — was usurped by an extra-constitutional abomination called the “Big Five.”
See if any of this sounds familiar: The “Big Five” is essentially a super-committee that meets behind closed doors outside the scrutiny of the public, sidelining the legislature, short-circuiting the independent judgment of the two houses, and then in the eleventh hour drops its decision into the laps of the legislature for a take-it–or-leave it vote that cannot even be amended.
I know I don’t have to connect the dots for anybody here. Ladies and gentlemen, it does not work. California’s plague of chronically late and chronically unbalanced budgets coincides quite clearly with the disintegration of the legislative process and the replacement of parliamentary institutions with handpicked super-committees.
Which brings me to the third act of this Greek Tragedy – bad politics.
Last November, while the rest of the country was celebrating historic Republican gains (including a shift of 63 U.S. House Seats, six U.S. Senate Seats, 680 state legislative seats, 19 state legislatures and six governors), the statewide Republican ticket in California – despite massively outspending the Democrats in the best Republican year since 1938 – lost every statewide race and even lost ground in the state legislature.
Republicans nationally now hold more state legislative seats than in any year since 1928. In California, they hold fewer than at any time since 1978!
That is not because the voting population of California has lost its collective mind and it is not because the state is divinely ordained to be run by morons.
It happened because Dick Armey is right: “When we act like us we win, and when we act like them we lose.”
Republicans lost the 2006 and 2008 elections not because voters abandoned Republican principles, but because they looked at the Republicans and concluded that the Republicans had abandoned Republican principles.
During the Bush years, Republicans had increased federal spending at twice the rate of Bill Clinton; they left our borders wide open; they approved the biggest increase in entitlement spending since the Great Society and that turned record budget surpluses into record deficits to launch this brave new era of stimulus spending.
I last visited with the CNP in Washington in May of 2009. What a depressing meeting that was! Obama enjoyed 66 percent public approval. The week before, a conference of self-appointed Republican leaders had concluded that “we had to put the Reagan era behind us” and we had to be “mindful and respectful that the other side has something and that we have nothing and you can’t beat something with nothing.” (I won’t mention names, but his initials were Jeb Bush.)
Thank God House Republicans didn’t take that approach.
In the aftermath of that debacle, House Republican leaders resolved to restore traditional Republican principles as the policy and political focus of the party and they achieved something no one at the time thought possible: they united House Republicans as a determined voice of opposition to the Left and they rallied the American people.
Republicans rediscovered why we were Republicans, and Republican leaders rediscovered Reagan’s advice to paint our positions in bold colors and not hide them in pale pastels.
The result was one of the most dramatic watershed elections in American history.
California Republicans did exactly the opposite, and ended up replaying the disaster of 2008 while the rest of the country was enjoying one of the greatest Republican landslides ever recorded.
In California, the Democrats attacked Republicans for imposing the biggest state tax increase in American history. The Democrats attacked Republicans for obstructing pension reform to protect the prison guards union. These attacks had the unfortunate element of being true.
Meanwhile, the Republican ticket attacked Arizona’s immigration law. Republicans attacked the Proposition that would have stopped AB 32 – California’s version of Cap and Trade.
The sad truth is that we were more like the Democrats than the Democrats.
A few days after the election, a Republican leader whose mission in life has been to redefine the Republican Party in the image of Arnold Schwarzenegger said he just couldn’t explain the results.
I can. We didn’t need to redefine our principles. We needed to return to them. House Republicans did. California Republicans did not. Any questions?
Great parties are built upon great principles and they are judged by their devotion to those principles. Since its inception, the central principle of the Republican Party can be summed up in a single word, Freedom.
The closer we have hewn to that principle, the better we have done. The farther we have strayed from that principle, the worse we have done.
In 1858, Abraham Lincoln warned the nation that two incompatible and irreconcilable philosophies, freedom and slavery, competed for our future and reminded us that “a house divided against itself cannot stand.” “I do not believe the house will fall,” he said, “but I do believe that it will cease to be divided. It will become all one thing or all the other.”
Today two incompatible and irreconcilable philosophies — freedom and socialism — compete for our nation’s future and the stage is set for one of the greatest debates in the history of the American Republic.
We are winning that debate. But we have to stand firm.
What has happened to California and now is threatening our country is the inevitable consequence of bad policy, bad process and bad politics – and the good news is, that’s all within our power as a people to change.
I believe that if Californians rediscover these self-evident truths, Jerry Brown will be to California what Barack Obama has been to the rest of the country – a giant wake-up call. And if Americans rally behind these truths, together, we will write the next great chapter of the American Republic: that just when it looked like America would fade into history as just another failed socialist state, this generation of Americans rediscovered, revived and restored those uniquely American principles of individual liberty and constitutionally limited government, rallied under a bold banner held high by the traditional party of freedom, and from that moment America began her next great era of expansion, prosperity and influence.