July 8th, 2009 08:33pm
Forbes.com article on California crisis making the rounds
The article “Who Killed California’s Ecnnomy” linked below is making the rounds of North Bay business leaders. Among the questions asked by this Forbes.com contributor: Is business apathy partly to blame for California’s crisis? You be the judge.
Who Killed California’s Economy?
There are five suspects, from the governor to the constituents themselves.
By Joel Kotkin
http://www.forbes.com/2009/07/06/economy-pension-environment-business-opinions-columnists-california.html?partner=email
Interesting article. It is hard to understand how all these smart people have allowed us to get so far down the wrong path. I wish we were having more dialogue about possible long term solutions (rather than short term fixes). I think your earlier post about encouraging more free enterprise and innovation is spot on. How can we make that happen? I am astounded that for a State which has been at the epicenter of innovation, we seem to be unable to tap that potential to help us in this crisis. I would add that we need more real leadership as well. From my perpsective, leadership is about delivering results. I haven’t seen much in the way of results.
by SSU B-School Dean
While an interesting article, the author misses some points key points as to why California is truly in this mess.
1. Term limits. While wildly popular, term limits have created politicians in State government who make decision that really focus on short term results. As a result, pay offs today are much more popular and get you re-elected. Rarely does one get re-elected making responsible, somber, prudent budgetary decisions that don’t give every interest in Sacramento a bright shiny new toy today. Lobbyist run policy in Sacramento because they have the experience, expertise, and institutional knowledge necessary to get the job done. Solution: Lengthen term limits. (Don’t eliminate but lengthen)
2. Legislative Redistricting. In California, State leaders are allowed to draw their own legislative districts. This results in extreme democratic and republican districts that rarely allow moderate and compromising politics to occur. Solution: Create an independent redistricting process not controlled by the politicians. (They will always have influence, but take the maps out of their hands.)
3. Campaign Finance. When special interests, regardless of ideology or political leaning are put in a position to fund, influence and disproportionately influence campaigns, their agendas also receive disproportionate attention. Solution: Create more ways for candidates to not have to rely on donations to run an effective campaign.
4. State Budget Process. A two-thirds majority of the state legislature to pass a budget makes it virtually impossible to accomplish in a timely manner. By the time the state is done, the next year’s budget is due. Solutions: Simple majority approval and a two year budget.
5. Ballot Box Budgeting. Voters are often presented great ideas for California’s future through the initiative process. As a result, all kinds of projects, programs, and initiatives are voter approved without an identified funding source. This locks up discretionary funds for the future and hamstrings our leaders from using the budget effectively. Solution: Initiatives without clearly identified funding sources should be rejected.
The author is correct about revising some of Prop. 13′s impacts. Annually reassessing commercial property and eliminating the two-thirds requirement for new taxes come readily to mind. But to discuss any of these issues without looking at the structural problems within California’s governance is simply politicians tilting at the same ol’ windmills.
California has a diverse population, great educational institutions, a fertile ground for innovation and development, and a can do spirit. It truly is a shame that our leaders forget this and get entrenched in politics as usual and self-preservation instead of simply doing what is right.
by Simple Voice