Wednesday, January 07, 2009

Cliff Diving

We made it to the part of the movie where a series of what appeared to be rational decisions has us going together off a cliff. With the US Senate in turmoil, it is doubtful a federal bailout will happen before California begins defaulting. (Hint: Sending IOUs instead of vendor payments and tax return checks is default.) Excerpted, from the Governator (via the LA Times, pdf warning):

This afternoon, you sent me legislation intended to address California's budget crisis and stimulate our state's economy. Unfortunately, this package is deeply flawed and, as promised, I vetoed it the moment it landed on my desk. The measures you sent me punish people with increased taxes, but do not make the serious cuts in spending necessary to balance our budget; do nothing to help keep California families working during this recession; and do nothing to help Californians facing foreclosure in this mortgage crisis. It is unfair and unacceptable to place an even greater burden on hard-working taxpayers without doing all we can to cut spending, create jobs and keep people in their homes...

The revenues adopted in this package are also flawed. These proposals take money from individuals’ paychecks by establishing a new withholding requirement for independent contractors, putting California out of sync with most states and with the federal government. Not only is this the wrong policy for California, but this proposal couldn’t be implemented by the Franchise Tax Board until 2010. Your legislation also gives the Department of Finance the authority to raise taxes administratively, without legislative approval, based on annual revenue projections - this is unconstitutional on its face. Finally, your proposal increases the price of gasoline 13 cents above current levels at a time when hard-working Californians are already suffering...

While I appreciate that your letter expresses a willingness to address some of my concerns with the proposals you have sent me, I am confused by your public statements that you are unclear on what it would take for me to sign these measures. You have in your hands detailed language on each and every measure to reduce spending, create jobs and keep people in their homes, which I have asked for since November. In fact, your letter lists many of these specific concerns that you plan to address in the future. I have never wavered in my commitment to address this economic crisis, and I have never minced words on what I believe it will take to get the job done...

13 comments :

Rob Dawg said...

I'm no fan but Arnold is correct in this case. The Legislature knows what it needs to do. Arnold's plan does that. They can substitute their own version but it still needs to have the same components. They won't do it. Let me make clear "won't" not "can't." Republican obstructionism claims don't wash. This is about a ruling class that more resembles the French Aritocrisy than a Republic.

Deflationary Jane said...

'a ruling class that more resembles the French Aritocrisy than a Republic'

This is where my spider sense is tingling. I've seen more and more references to the French Revolution as a solution for the current situation. The difference is I've most often seen it used in reference to finance and top earning individuals but this is first time I've seen it mentioned in reference to state or fed representatives. Really interesting

As far as Arnold is concerned, his career is over after this term and good riddance.

Max said...

This is about a ruling class that more resembles the French Aritocrisy than a Republic.

Hard to argue with that. The response so far has been purely political; the Dems believe a fiscal crisis will damage the Gov worse than they, and a solution will help the Gov more than they, so there's no incentive to act. They could care less about the real consequences.

Delaying tax return payments might be the social trigger that creates change, although Jarvis will sue (and prevail) the millisecond any IOUs are issued...

Max said...

This is where my spider sense is tingling.

Political revolutions in the US are the norm, and the last 30 years have been the exception. I'm just looking at what form the new order will take. I think a breakup of the Republican party is coming very soon, with a fiscal conservative faction breaking away from the wacko born-agains. But the pain on its way from the approaching unemployment wave will have a character all its own.

The national Dems still can't get their shit together, and Obama is already pissing off the elder statesmen. Given their previous track record, combined with the intractable nature of the economic crisis, the odds of a Carter repeat are growing.

Rob Dawg said...

We conservatives have given up on both parties. Conservative values are barely acknowledged in either platform. The Ds and Rs need not fear our taking over "their" parties but they should rightly tremble at the prospect of a Conservative Party. And fear not those who don't feel comfortable with that. The rise of a Conservative Party will undoubtably create a Liberal Party that will likely call itself a Progressive Party. Their ideas have merit as well.

Sold in '05 said...

"...with a fiscal conservative faction breaking away from the wacko born-agains."

You are incorrect in your assumption that the fiscal conservatives are separate from the wacko born-agains (I challenge you to find a tax and spend born-againer). The vast majority of the religious right is VERY fiscally conservative while it is the socially moderate republicans that lean toward fiscal liberalism. If there is a fracture of the Republican Party it would be along those lines. Palin and McCain are examples of each side of this division. I doubt however that you will see an actual breakup of the party even along those lines.

Having worked as a part time lobbyist for a few years on behalf of a union in a state legislature, I can say with out a doubt that the Democratic Party will never fracture because Democrats in general are already fractured and have never really been united on much of anything (except complete hatred of everything W). Trying to get Dem legislators to work together was like herding cats on speed (and this was in a body where the Dems had comfortable majorities in both houses and we were working for unions!) I found that Dems are very individualistic, with each having their own ideals and motivations and ENORMOUS and unpredictable egos. Republicans on the other hand, were more than willing to march lockstep toward whatever the party goals were and were much more business like. The nice thing about the Reps was you knew what to expect from them.

Now that they control all branches of govt, the Dems are very likely to splinter and fight amongst themselves for the biggest ego trips. This will give the Reps some clear ideological ground to maneuver. There may be some fighting, but when all is said and done, we already have a party that represents social and fiscal moderates, so the new blood will eventually win out in the Rep Party, with the McCain types fading due to their indistinguishability from moderate Dems. This will allow true financial conservatives (who may happen to also have religious convictions) to lead the party into 2012. One more note, if 'bama does start looking like Carter and the economy is still in the hole, there will be hell to pay in the House elections for 2010 and he may well have at least a Republican house to contend with for his last two years.

-CD

patient renter said...

I'm not totally in synch with Arnold:

do nothing to help Californians facing foreclosure

Why is the governor interested in keeping people in homes they cannot afford?

Max said...

The vast majority of the religious right is VERY fiscally conservative while it is the socially moderate republicans that lean toward fiscal liberalism.

I think all politicians are fiscally conservative about programs they don't like. At the federal level at least, you'll have a hard time finding any amount of fiscal responsibility from either party. They marched lockstep into the biggest budget deficits in US history.

Why is the governor interested in keeping people in homes they cannot afford?

That was a jab at the dems who have been promising "help" for over a year, but have done nothing.

Rob Dawg said...

The vast majority of the religious right is VERY fiscally conservative while it is the socially moderate republicans that lean toward fiscal liberalism.

It gets tiresome explaining the difference between conservative and obstructionist. Conservatives introduced things like the national parks which are antithetical to the goals of religious right.

Darth Toll said...

Rob Dawg is absolutely correct here. The D's and R's should definitely fear the rise of the Constitution party and other third parties (disclaimer: I wrote in Constitution party and Ron Paul this last time around).

Hopefully, both traditional parties will implode after GD2 really starts kicking in and we can get some actual Constitutional government going, or at least some representative government.

The real source of evil, imho, is the Federal Reserve system and this needs to be dismantled immediately. It is a crime and an outrage that our money is loaned into existence and has an automatic debt component associated with it. Benjamin Franklin, Andrew Jackson, Lincoln, and Kennedy (among others) were all aware of the true source of our (now massive) debt burden and how a debt-based monetary system creates poverty and fascism over time. The Federal Reserve is ultimately the source of this crises as well.

Rob Dawg said...

I'll take the under on the bet that the Howard Jarvis Tax Foundation gets an injunction against IOUs within 24 hours. Sacramento really has no idea.

Max said...

Sacramento really has no idea.

Or they do and they just don't care. As long as they benefit politically, who cares what happens to the state?

Bryan said...

Exactly.