The California Scare Campaign
Previously on Spring Street Blues, we had told you about how California's political-journalist class was gearing up to frighten-slash-chastise Californians about the "annihilating cuts" coming their way now that petulant voters failed to heed the weary wisdom of their betters. As this article in yesterday's L.A. Times demonstrates, one primary method for this uncoordinated campaign is news articles unlabeled as opinion. Check out the following grafs, and consider that this represents the bulk of the argument contained therein.
[E]liminating as much as $24 billion from the proposed $95.5-billion general-fund portion of the 2009-10 state budget would further corrode an economy already creaking under the weight of a national recession.
Distressed car dealers could see sales to state agencies shrink, printing shops may lose business as courts and other government operations shorten their workweek, and office-equipment suppliers would lose sales as cash-strapped agencies make do with aging copiers.
And cutting as many as 5,000 state jobs, and perhaps thousands more as budget reductions cascade down to schools and local governments, would hit especially hard in a state that already has the fifth-highest unemployment rate in the nation.
Gov. Arnold Schwarzenegger has proposed slashing state spending on education by $3 billion to help close the budget gap, and the state would pay dearly for canceling classes, firing instructors, cutting class days and shortening the school year, experts said.
Promising students would go to other states, taking their future skills, earnings and, possibly, Nobel Prizes elsewhere. California companies would then find it harder to attract high-value employees who might be dubious about moving to a state with sub-par schools. […]
John Sedgwick, co-founder of Santa Clara solar-energy company Solaicx, agreed.
"When you think about the genesis of Silicon Valley, it really started from its superior educational base" at Stanford and UC Berkeley, said Sedgwick, whose company makes the building blocks for photovoltaic cells. "That indicates that you don't want to kill the goose that's laying the golden eggs." […]
Businesses have long complained about big-spending government in California. But with state and local spending accounting for about one-fifth of the state's gross domestic product, California is in line with some other heavily populated, expensive-to-manage states, such as New York and Florida. […]
"Government is supposed to be a stabilizing influence, and instead they're becoming part of the problem," said Christopher Thornberg of Beacon Economics. "They should be spending when everyone else is cutting back. They should be buying cars when no one else is buying cars."
Eight quick counterpoints:
1) The alternative scenario, represented by the various tax increases and budget gimmicks that failed to pass muster last week, is never introduced as a comparison point. The mostly dreamed-up scenarios about that $24 billion cut (which I'll believe when I see) are never compared to the effect of tax hikes on a wobbly economy and suffering populace. Traditionally, all else being equal, smaller taxes equals more economic growth.
2) An economy (or business strategy) that relies on the government buying cars is neither sustainable in the long-term nor an efficient use of taxpayer dollars at any time. As Jacob Sullum has repeatedly pointed out, "That's a recipe for wasteful spending that will divert resources from more productive uses, and ultimately for higher unemployment than would otherwise occur." Put another way, there have indeed been many countries whose governments have provided most of the spending, and whose unemployment figures were very low. These were, in most cases, countries that couldn't afford many cars, on account of being so poor.
3) Do you know how many 5,000 state jobs are? A whopping 2 percent of the state work force, maximum. If that's "annihilating," how on earth would you characterize a 3 percent cut? As genocide?
4) Use of the word "experts" is one of the great tells in journalism. It usually means something close to "those people I cherry-picked to agree with my thesis." It is an artificial and scientific-sounding reputation-enhancer, one used in stark contrasts to the way that critics of said thesis will be portrayed in the same article.
5) "Promising students would go to other states, taking their future skills, earnings and, possibly, Nobel Prizes elsewhere"? What? There is no scenario being contemplated that I'm aware of where the net number of University of California students will be decreased under whatever cuts are coming. Does higher tuition = less Nobel Prizes? I dunno, ask the aforementioned Stanford, which IS A PRIVATE UNIVERSITY THAT WON'T BE AFFECTED BY THESE ANNIHILATING CUTS, YA MAROON.
6) California companies would then find it harder to attract high-value employees who might be dubious about moving to a state with sub-par schools. Here is the fundamental point behind every California budget story: The state has increased spending on K-12 education by 40 percent under Schwarzenegger (it has to; by dumb law, 40 cents on every state dollar has to go to education). The main drain on the California economy is that these massive increases in spending are producing ZERO noticeable improvements. Because the union-run school districts are infamous laboratories for inefficiency, job protection, and corruption, the state spends and spends, with nothing to show for it. Teachers unions are literally running out of other people's money, and now they warn us about "sub-par schools"? That par got done subbed a long time ago. If politicians, journalists, and other "experts" want to defend the status quo (of constant spending increases), then they need to explain why Californians need to keep throwing more and more good money after bad on a K-12 system that is showing no results.
7) Remember what I said about the opposite of "experts"? "Businesses have long complained about big-spending government," sez the Times. So in a direct comnparison here, the "experts" "said" that "the state would pay dearly" for education cuts; meanwhile "businesses" have "complained" about spending. Of course, the next sentence starts with the word "But." It's almost as if this is an editorial instead of a news article! Well, not quite–the editorial version would call the opposition "small-government zealots [who] lecture smugly that California has gotten its comeuppance for years of prodigal spending and unrighteous living." I swear to God I am not making that sentence up.
8) Speaking of that big "But," there are two other classic weasel-word phrases in the ensuing sentence– "some," and "such as." This allows the writer to ignore a state that is much closer to California's population, geography, and demographics than Florida or New York: Texas. According to U.S. Government Spending dot com, California state and local governments are currently spending 21.9 percent of GDP, compared to 14.5 percent for Texas. Big diff. Also, the whole GDP comparison in the first place, while useful, implicitly suggests that at minimum government spending should march right along with private-sector wealth creation.
I have no doubt whatsoever that some of the impending California budget cuts will be painful, inflicting harm on precisely the type of person you might otherwise want to help with a social safety net. That's not because the state is spending just the right amount of money right now, but because the state, like all lumbering bureaucracies (including the L.A. Times) is even more horribly inefficient in cutting spending than it is at spending money in the first place. The Times is a useful example in this case: For around a decade of job cuts, the paper didn't go around firing the newsroom's ample dead wood, it offered buyouts to anyone who would walk. And who is most likely to take such a deal? People who are confident they can match their earnings elsewhere. In other words, the employable.
Calfornia lawmakers, and the unions who put them into office, will do everything in their power to cut services first, employees last. That is indeed a crucial reason why we got here in the first place. Any analysis that doesn't explore how a higher-than-inflation-plus-immigration budget has failed to deliver on any increase in services, is not an analysis worth taking more seriously than common propaganda.