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California dreamin' a nightmare about crisis
By G. Pascal Zachary |
May 25, 2009, Monday
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WHILE the new Obama administration is commanding global attention, America's future may be written - as so many times before - in and by its largest state.
Once the lodestar for American optimism and achievement, California now illustrates the difficulties confronting the United State.
The most populous and wealthiest of America's 50 states, California has long been a beacon of opportunity for talented and enterprising people from all over the world.
One in every four California residents was born in a foreign country. California's two most famous industries, Silicon Valley and Hollywood, depend on infusions of talent from abroad. Yet California's technological and entrepreneurial might - standing alone, the state would be the world's eighth largest economy - coexists with a dysfunctional political system that has brought it to the edge of fiscal bankruptcy.
On May 19, the state's voters, in a special election, rejected an array of tax increases and spending cuts required to balance its budget.
Now, California faces either an embarrassing federal bailout or a prolonged period of rule by judges.
A massive state bailout would expose the weak link in the US system of governance.
So-called "unitary" nations such as Britain and France essentially have a single set of government obligations: one national police force, one employer for all public school teachers, one overall pension system, etc.
Asymmetry
By contrast, the US has an "asymmetric" form of government, which allows many overlapping government entities - 7,000 in California alone - to incur debts, hire and fire employees, and impose taxes.
Making sense of these asymmetries is difficult. The complexity of American governance threatens the benefits of US President Barack Obama's decision to stimulate the economy through deficit spending.
While the national government expands, state governments, such as California's, contract.
Moreover, California's crisis is more than an economic one. California is the most diverse US state; more than half of its 37 million people are non-white.
For believers in the benefits of diversity, California represents the largest social experiment in human history, bringing people of different backgrounds together.
California's governor, Arnold Schwarzenegger, has repeatedly tried to bypass a polarized state legislature - even the annual budget requires a two-thirds majority - by appealing directly to voters.
Ballot initiatives were created 100 years ago to empower ordinary citizens, but in recent decades the process has been captured by self-serving elites.
Even as California's roads fall apart and public institutions decline - the result of too little spending and public workers who are too expensive - the state continues to operate the finest set of public universities in the US.
Disengagement
But the secret of the University of California's success is its ability to obtain ever-higher amounts of funding from private sources and the federal government.
Disengagement from the California polity also is true of the state's economic engines.
Intel, the world's biggest chip maker and a Silicon Valley mainstay, hasn't built a factory in California for more than 20 years.
How to forge a single community out of a state so diverse remains a challenge. Some radical thinkers insist that California is ungovernable and should be broken into two or even three states.
Creating more Californias would of course require the approval of the federal government in Washington, where elected representatives from California have more power today than at perhaps any time in US history.
Why these Washington politicians are idle while their state slides towards ruin says much about what's broken in American politics.
There's a problem: politicians across the spectrum, beholden to special interests, are habituated to denying serious problems.
(The author lives in California and is the author of "The Diversity Advantage: Multicultural Identity in the New World Economy." The views expressed are his own. Copyright: Project Syndicate.)
Once the lodestar for American optimism and achievement, California now illustrates the difficulties confronting the United State.
The most populous and wealthiest of America's 50 states, California has long been a beacon of opportunity for talented and enterprising people from all over the world.
One in every four California residents was born in a foreign country. California's two most famous industries, Silicon Valley and Hollywood, depend on infusions of talent from abroad. Yet California's technological and entrepreneurial might - standing alone, the state would be the world's eighth largest economy - coexists with a dysfunctional political system that has brought it to the edge of fiscal bankruptcy.
On May 19, the state's voters, in a special election, rejected an array of tax increases and spending cuts required to balance its budget.
Now, California faces either an embarrassing federal bailout or a prolonged period of rule by judges.
A massive state bailout would expose the weak link in the US system of governance.
So-called "unitary" nations such as Britain and France essentially have a single set of government obligations: one national police force, one employer for all public school teachers, one overall pension system, etc.
Asymmetry
By contrast, the US has an "asymmetric" form of government, which allows many overlapping government entities - 7,000 in California alone - to incur debts, hire and fire employees, and impose taxes.
Making sense of these asymmetries is difficult. The complexity of American governance threatens the benefits of US President Barack Obama's decision to stimulate the economy through deficit spending.
While the national government expands, state governments, such as California's, contract.
Moreover, California's crisis is more than an economic one. California is the most diverse US state; more than half of its 37 million people are non-white.
For believers in the benefits of diversity, California represents the largest social experiment in human history, bringing people of different backgrounds together.
California's governor, Arnold Schwarzenegger, has repeatedly tried to bypass a polarized state legislature - even the annual budget requires a two-thirds majority - by appealing directly to voters.
Ballot initiatives were created 100 years ago to empower ordinary citizens, but in recent decades the process has been captured by self-serving elites.
Even as California's roads fall apart and public institutions decline - the result of too little spending and public workers who are too expensive - the state continues to operate the finest set of public universities in the US.
Disengagement
But the secret of the University of California's success is its ability to obtain ever-higher amounts of funding from private sources and the federal government.
Disengagement from the California polity also is true of the state's economic engines.
Intel, the world's biggest chip maker and a Silicon Valley mainstay, hasn't built a factory in California for more than 20 years.
How to forge a single community out of a state so diverse remains a challenge. Some radical thinkers insist that California is ungovernable and should be broken into two or even three states.
Creating more Californias would of course require the approval of the federal government in Washington, where elected representatives from California have more power today than at perhaps any time in US history.
Why these Washington politicians are idle while their state slides towards ruin says much about what's broken in American politics.
There's a problem: politicians across the spectrum, beholden to special interests, are habituated to denying serious problems.
(The author lives in California and is the author of "The Diversity Advantage: Multicultural Identity in the New World Economy." The views expressed are his own. Copyright: Project Syndicate.)
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