In California, a law that promised to control politicians is now being used to control the public.
California’s Proposition 25 promised to rein in runaway spending and “end budget gridlock” by hitting politicians’ pocketbooks. Every day on which lawmakers failed to pass a balanced budget after their June 15 deadline each year would be a day of pay they lost.
This was an attempt to increase government “efficiency” — to make government conform to the laws of business: you must give people the things they want on time or you do not get paid. But, as Mises wrote, “government efficiency and industrial efficiency are entirely different things.”
Prop. 25 was passed in 2010. The next year, when legislators’ budget ran the state even further into the red, the state controller tried to dock their pay. Not surprisingly, the politicians fought him on this, and California’s superior court found that only the lawmakers’ themselves have the power to declare their own budget unbalanced and thus deprive themselves of their paychecks.
So the net effect of Prop. 25’s threat to politicians is that they can dock their own pay if they feel like admitting failure. Not bloody likely.
Critics of Prop. 25 might say that it has failed to bring the government efficiency it promised. But Prop. 25 has actually increased the efficiency of the state: the speed and ease with which it can extract wealth from its subjects.
This is because the threat to dock lawmakers’ pay was only half of the measure. The other half makes it easier to ratchet up the size of government.
In Frédéric Bastiat’s brilliant The Law, he explains that “when plunder is organized by law for the profit of those who make law,” everyone eventually becomes involved in legislation. And when the masses join in, “they emulate their evil predecessors by participating in this legal plunder.”
The illusion of democracy is that by voting yes or no to certain politicians or certain laws, the people can restrain the government. But “so long as legal plunder continues to be the main business of the legislature,” the people find themselves becoming merely the state’s accomplice.
This year, California’s budget is balanced — if you include the $8 billion in tax increases (levied largely on the richest Californians) that voters are being asked to consent to on a ballot in November.
The state of California is unusual in that it has historically required a two-thirds majority to pass any budget or tax increase. This was the cause of the state’s historical “budget gridlock.” Even a substantial majority found it difficult to railroad the public into new spending or taxing.
Prop. 25 has knocked down that roadblock.
The measure’s supporters pointed out in their video ads again and again that it “does not raise taxes.” That’s true. Prop. 25 only makes it easier to increase spending by reducing the budget requirement to a simple one-half majority in the legislature.
A slight majority of politicians stealing money from the public is not any more immoral than a large majority doing so. But the difference is, as a practical matter, grease on the wheels of the train to total government.
With Prop. 25, which promised to make government pass balanced budgets, the ruling majority now found itself able to pass all its budget measures rather easily. It still couldn’t pass tax increases directly, but it could create a tax-increase ballot measure and a bundle of targeted cuts in order to corral the public into voting for it.
The tax hike is targeted to hit the wealthiest Californians. Of the $8 billion in new taxes, $7.5 billion will come from Californians making $250,000 or more (about 5 percent of the population).
And if the masses do not approve those taxes in November, $6 billion in automatic trigger cuts to education programs will kick in. Eighty percent of those cuts will hit public schools and most of the rest will hit community colleges. Horror of horrors, there is even talk of reducing the school year by as much as 15 days.
That is the choice that the government has managed to put before voters: join in with the state to rob the rich or cut your kids’ education (which you are already forced to pay for).
Californians do not get to choose between increasing taxes and cutting their state’s bloated public pensions, which are now unfunded to the tune of $497 billion dollars. Neither do the voters have the option to cut the governor’s pet project — a $68 billion high-speed rail line. That’s not on the chopping block either.
Instead, voters must think of the children. Plunder the rich for your children’s sake. Did even Bastiat foresee machinations this cynical?
Just in case the game was not sufficiently rigged, the government has also passed a new law simply to relocate the tax increase from the bottom to the top of the November ballot paper, where they expect it will be in its best light to meet with voters’ approval. (Since that relocation was considered a budget-related measure, under Prop. 25 it could be passed with a simple majority and without any necessary waiting period for public review or comment.)
At last, government gridlock has been cured! You Californians didn’t make it easier for the politicians to raise taxes themselves, but you did make it easier for them to make you raise the taxes for them. …
In voting for Prop. 25, the people of California were duped by the mirage of government efficiency. Now they should note what their government has become more efficient at doing. Tax and spend. Rob and squander.
If that’s government efficiency, then government gridlock is vastly to be preferred.
I noted Prop 25 in an angry tirade (a rare lapse of decorum, I think) almost two years ago after that disastrous election of 2010. I noted that its true effect was to make it easier for lawmakers to increase government with a simple majority and that they would ultimately find a way to avoid losing pay.
I’ve also discussed how politicians (and California in that particular instance) like to make budget cuts hurt the public to turn them against the cuts and support tax increases: “It’s always cuts to police or fire, cuts to mail delivery days, cuts to teachers, and so on - all areas in which government monopolies leave the public without alternatives. This is always a dishonest ploy, and any politician or bureaucrat who employs this tactic is, in all cases, deliberately compromising the public’s safety and happiness for their own selfish, manipulative whims.”
Two days ago, I explained the duplicitousness of politicians who, when faced with budget shortfalls, immediately threaten those services that are most legitimate in the eyes of the public in order to agitate them to support tax increases (see “Make It Hurt”). I was specifically discussing California, which mongered fear about cuts to public safety and education instead of the mile-long list of state agencies and programs that doubtlessly have far less public support.
As if on cue, that very day the California assembly approved funding for the $68 billion boondoggle known as “high speed rail.” Last night the California senate approved the same. (As far as I can tell, the vote breakdown seems to show overwhelming support by Democrats - both houses of the state legislature have Democratic super-majority. This probably has less to do with any ideological purity on the part of Republicans and more to do with being the minority party.). This is despite the fact that most Californians have no interest in more taxes, especially when it comes to the high speed rail boondoggle - most would prefer such a project to proceed using private (see: “non-coerced”) funds. And there’s good reason: “In order to meet its virtually impossible timeline, the project will have to spend $3.5 million per day, seven days a week, over the next five years, a spending rate that will easily make California high-speed rail the costliest per-diem transportation project in the history of the United States.” Not to mention that even before these funds were approved, impropriety was well underway as those involved have been busy hiding their behind-the-scenes discussions on the specifics of the project and how the funds would be spent: “There’s nothing to be suspicious about when an agency under intense scrutiny for its unrealistic ridership and operational cost projections, currently under investigation by Congress and the Government Accountability Office and facing lawsuits from train opponents suddenly decides it’s time to purge all these silly old emails. It’s just a process!”
And, truly, it’s quite easy for California’s elected officials to ignore their constituents. For starters, the power-players’ concentrated benefits out-weigh the costs as they’re distributed among the populace. A given project is worth a lot more to a government contractor or union, for example, than it would to the average taxpayer. Therefore, the tax-consumers are more easily mobilized to support it than the taxpayers may be to stop it. In other words, if a project costs the average taxpayer $7/year but gains the tax-consumer $200,000/year - it’s easy to see that many taxpayers may not interrupt their schedules to campaign or vote against such a project if the costs outweigh the $7. The tax-consumer, on the other hand, is heavily incentivized to do what it takes to get the gravy-train, as it were, rolling.
Concerned about possible delays in state funding of high-speed rail, U.S. Transportation Secretary Ray LaHood told California leaders Thursday that the Legislature needs to send a signal that it is committed to the project by including money for it in the state budget to be approved next month.
LaHood traveled to Sacramento for meetings with Gov. Jerry Brown, legislative leaders and some lawmakers who are questioning whether to continue funding for the $68-billion project, for which the federal government has pledged $3.3 billion in matching funds.
“What I have said to them is, ‘We need a strong signal that you are committed to the money for the match, sooner rather than later. We can’t wait until the end of summer,’” LaHood recounted at a news conference following his meeting with state Senate leaders.
LaHood said he was “reassured” by Assembly Speaker John Perez (D-Los Angeles) and Senate President Darrell Steinberg (D-Sacramento) “that they are committed to high-speed rail and they are committed to making sure that California is able to provide the match that is needed.” …
LaHood’s message went beyond the leadership to the skeptics. “I wanted to be sure that I personally deliver the message that President Obama’s administration is committed to high-speed rail in California,” he added. “We have made a commitment of over $3 billion. We want to make sure that our partners here realize what is at stake.”
To a private investor, spending $68 billion you don’t have on a project that is sure to cost well above that to simply gain $3 is not very profitable (meaning, ultimately less valuable to the market/public than the costs to supply it) - but this is just a classic case of how people spend money that is not theirs. As I’ve explained, government spending is not only inefficient, but it is essentially incentivized to be so. After all, the gains to each of these legislators far out-weighs any out-of-pocket costs. To them and their cronies, it’s all up-side. So Obama’s bribe can simply be added to his long list of green energy investment success stories, alongside Solyndra, Beacon Power, Ener1, Solar Trust, Abound Solar, SoloPower, SunPower, Solar Power Project, and Nevada Geothermal Power (to be clear, those were all green energy companies you and I funder courtesy of Obama’s vision and grace, which have all subsequently failed).
California’s too broke to maintain education and public safety without more taxes, but apparently not so broke as to spend over four times the current record-breaking budget deficit on a project almost no one wants and few people will likely ever use.
This amount of money being thrown around is sure to keep countless special interests, corporate cronies, unions, bureaucrats, and politicians swimming in it. The rest of us will just be stuck with the bill.
Inevitably, governments - which have unquenchable thirsts for expansions of power - are forced to face the reality that resources are not infinite. When such encounters with truth occur, the first solutions always (almost without exception) are cuts in those areas in which a plurality of people either expect government to have a role or government’s role is so entrenched (due to its monopoly) that immediate reversals would translate into inconveniences and relative misery for either a majority or a sympathetic minority. The plutocrats want to make it hurt, and often hurt the most people possible. The idea being that if the public can be agitated against proposed cuts, they will acquiesce to tax increases to fund those things they obviously support.
It’s always cuts to police or fire, cuts to mail delivery days, cuts to teachers, and so on - all areas in which government monopolies leave the public without alternatives. This is always a dishonest ploy, and any politician or bureaucrat who employs this tactic is, in all cases, deliberately compromising the public’s safety and happiness for their own selfish, manipulative whims.
California is pulling this nonsense now: with a $16 billion budget shortfall the only solutions Sacramento can apparently think of are cutting education and public safety and a massive tax increase. They’re going to make it hurt, despite no lack of crap that the average citizen would rather trim, scale back, or outright cut rather easily and painlessly:
LA Bans The Plastic Bag
Council members stood by the ban, despite being confronted with evidence that bag bans have no discernible effect on the health of the environment and make up less than 1 percent of California’s waste stream. …
Reason contributor Jay Beeber points out that a similar ban in San Francisco failed to reduce the small number of plastic bags actually littering the street.
As the video notes: plastic bags have an 80% re-use rate and are 100% recyclable - credentials every watermelon councilcritter would be proud of. Further, the average consumer was not asking for this ban (or, to be fair, extra charge).
Banning extra large soda containers on one coast, banning plastic bags on this coast - these nanny staters believe societal perfection is only a few laws away…
…it was my lack of a small, cheap potholder that was holding me back.
And yes, that is a democrat pushing his republican approval. After redistricting, there are now two democrat incumbents (Howard Berman and Brad Sherman) going after the same new seat, and after 2010’s Proposition 14 that creates an open primary in which only the top two vote-getters move on to the general election (which, at the time I rightly called a “disastrous measure [that] would destroy third parties, muddle policy positions, and encourage banal, middle-of-the-road statist candidates.”), Berman is now staking the claim as the right-leaner of the two (he often promotes his support of police and defense) who are likely to move on to the general election.
I’ve had nothing but un-flattering things to say about the unspectacularly partly-line statists Berman and Sherman, who have both, at one time or another, been the rat claiming direct authority over “district” in which I’ve lived.
And you would think I’d be off Berman’s mailing list after the snark-tastic letter I sent him last year, among other correspondence, would label me as a waste of campaign funds. But I guess that would presume he’d be organized, efficient, and interested in saving money - which are three things a politician is not.
California Governor Jerry Brown has proposed a four-day work week to reduce pay for state employees and other cuts, mostly in welfare and medical care for the poor.
Trimming the standard week would be the equivalent of a 5 percent pay cut, according to the Governor, saving $400 million a year for the desperate government of California.
Health care for the poor would also be cut back. It would take the biggest reduction, about $1.2 billion, with $1.1 billion sliced from welfare and care for the disabled.
The cuts though significant will not come close to closing the budget gap. The proposed cuts will amount $8.7 billion in total, but the estimated budget deficit is $15.7 billion for the coming fiscal year.
Actually, he’s only asking to cut two hours from the work week: 38 hours in four days instead of 40 hours in five.
But, of course, the most cost-effective, moral, and prosperous solution is to make it a zero-hour work week for all government workers. If something can’t be funded through voluntarily means, then it should not be funded at all.
California, like many states, has a “Police Officer Bill of Rights,” a set of rights negotiated by the police union afforded to cops under investigation that goes well above and beyond the rights of regular citizens. In some states, if fellow officers don’t follow strict procedures while investigating another cop, the cop under investigation gets off. If you’re cynical, you might say these “Bills of Rights” are how-to guides for cops who want to help a fellow officer get away with misconduct. I remember at one point early on in the Occupy protests, one faction of the Occupiers in New York was protesting proposed cuts in police pensions, even as the police union in New York was suing the occupiers. And as cops in other parts of the country [not to mention in New York itself] were beating them. I guess on some level, an some odd sort of principle at work protesting on behalf of the people who are beating you.
Balko notes that the pepper-spraying UC-Davis cop is still on the job, as it’s impossible to fire him, thanks to public service union protections rendered sacrosanct by the movement he pepper-sprayed.
Thanks to labor unions and big-government activists, transportation has become another form of social engineering. …
[Government-directed] transportation… isn’t about getting around, but about creating government-funded jobs, [greasing palms, pleasing special interests,] and pursuing big-vision projects that have little correlation to how we actually get around [much less what we demand or would otherwise be willing to pay for].
California Taxes Rank Worst in Country
Despite the grim economy, Gov. Jerry Brown is asking Californians to approve a $7 billion tax hike. Without it, he recently wrote, the state “will have no choice but to make deeper and more damaging cuts to schools.” Taxpayers are thus left to weigh the potential benefits of spending an extra $7 billion, largely on public schools, against the damage that higher taxes do to employment and economic growth. When they do so, they will be surprised to learn how little they have gotten for previous increases in public school spending. …
Californians spent $27 billion more on public schooling in 2010 than they did when Jerry Brown was elected to his first term as governor in 1974. That’s after taking both inflation and rising enrollment into account. Given that a $27 billion increase was accompanied by worse academic performance, the merits of a multibillion-dollar increase are, at best, questionable.
Hey San Fran - if $10 is so good, why stop there?
“If a minimum wage is good for society, and raising the minimum wage is always better, why not set the minimum wage at $20 an hour? How about $100/hr? Or $1,000/hr? Who wouldn’t want a job at $1,000 an hour?“
17 Miles in just 78 Minutes! Light Rail vs. Reality in L.A.
Hooray for Boondoggles!
Imagine you’ve been injured as a result of the negligence of another person. You retain counsel, file a lawsuit against this person, and are awarded a decent amount in damages. A few weeks later, the defendant’s insurance company sends your attorney a check. Your attorney deposits that check in an Attorney-Client Trust account, writes a check to him/herself for the agreed upon contingency fee, then writes you a check for the remainder and gives you a call to let you know your money is in the mail.
Then, years go by and, inexplicably, you seem to have fallen off the face of the earth. Your check hasn’t been deposited, you’ve not returned any phone calls or letters, and your attorney can’t think of any other way to contact you. Meanwhile, your handsome settlement is sitting safe and sound in your attorney’s account, not bothering anyone, and legally no one can touch it — no one, that is, except for the government.
According to California Code of Civil Procedure §1518:
Settlement funds “held in a fiduciary capacity for the benefit of another person escheats to this state if after it becomes payable or distributable, the owner has not, within a period of three years, increased or decreased the principal, accepted payment of principal or income, corresponded in writing concerning the property, or otherwise indicated an interest as evidenced by a memorandum or other record on file with the fiduciary.”
That’s right folks, if you don’t claim your money within 3 years, your attorney is legally obligated to give it away to the government. Now, how exactly the government acquires title to your property no one seems to ever be able to explain (see: taxes, eminent domain, etc.), but if this isn’t a clear example of the state stealing property simply because it can then I don’t know what is. There are a million perfectly plausible reasons that someone could be MIA for three years (arguably less and less plausible because of technology, but the principle remains), so even accepting that after a certain amount of time it is reasonable for property to be fair game, there’s no reason it should escheat to the state.
But here’s a real-life example illustrating the worst (and most nonsensical) part of this law: at the law firm I work at, a large majority of our clients are not “legal” residents. As such, it’s not uncommon for them to disappear for many months at a time if they’ve been deported, lost their jobs, etc. Given the nature of some of the cases we handle, it’s also not uncommon for cases to take upwards of a decade to finally settle because plaintiffs often must undergo extensive medical treatment, etc. Recently, our office manager noticed that we still had a small amount of money for a client that we’d been out of contact with for almost a decade. After again making a reasonable effort to contact the client, she reluctantly wrote a check for $350 to the state of California and mailed it out. A few weeks later, we received a “thank you” letter from the state.
Just kidding, it was a bill…for $175. For what, you ask? That’s how much interest the state calculated should have accrued over the years, and they want their damn interest. And obviously that’s a disincentive for any attorney to ever actually follow the law, which just goes to show that government is so vastly incompetent that it inadvertently obstructs its own ability to steal.