Lessons from California: The perils of extreme democracy
economist.com
economist.com
Now let me ask this: If Prop 13 is such a hindrance why is California in the top 5 highest taxing states across the board?
Beyond that most of the initiatives are either social issues (Gay Marriage) or done by Percentage (Prop 98 that requires 40% of general fund spending be spent on Education).
So California's problems are not because of direct democracy. The reason the Economist is writing about this now is because they are (by their own admission) a left-leaning publication and Democrats in California believe the solution to California's problems is a tax hike. But they can't get it done without a couple Republicans because of the 2/3rd rule (imposed by Prop 13, again the only named example in the article). So the problem from their immediate perspective is "Direct Democracy".
But mark my words, some day down the line Republicans will get power in California and they will want to cut money to public schools. When that happens I'd bet all the money in my Bank Account the Democrats are going to be holding Direct Democracy up as their savior.
I thought we already had this story...
Note that though the ranking of 19th does factor in our larger economy, it doesn't account for the reality that more highly advanced economies require a better trained and more specialized bureaucracy. So just as we shouldn't be surprised when Sweden has a better compensated civil service than Namibia, all things being equal we should expect for California government to account for a larger portion of the economy than Mississippi's or Oklahoma's, instead of being in the middle of the pack.
2) The Economist is left-leaning? Heh.
3) Most technocrats, be they left or right, absolutely hate the 40% rule as well. As a Democrat, I'd gladly trade a repeal of Prop 98 for a repeal of Prop 13. Hell, I'd repeal Prop 98 just on its own.
Government by ballot box is terrible.
Is that burden in dollars-per-capita or burden in percentage-of-GDP? Since California has a higher GDP per capita than most states you could both be right.
* Note that though the ranking of 19th does factor in our larger economy, it doesn't account for the reality that more highly advanced economies require a better trained and more specialized bureaucracy. So just as we shouldn't be surprised when Sweden has a better compensated civil service than Namibia, all things being equal we should expect for California government to account for a larger portion of the economy than Mississippi's or Oklahoma's*
Sweden vs Namibia ain't exactly California vs Oklahoma. In particular, Oklahoma's state government provides pretty much exactly the same services as California's... it just provides them much cheaper.
The point remains, I think, that it's fairly disingenuous when folks (almost always folks whose own personal ox is unlikely to be gored in this case) suggest that Prop 19 is responsible for the California budget woes. California's state government is rolling in money, it's just that they're incredibly bad at spending it.
Since technocrats hate any restrictions on their power....
Technocrats have had small successes but in the large they've been a disaster.
> Government by ballot box is terrible.
It's better than the alternatives.
http://en.wikipedia.org/wiki/State_tax_levels_in_the_United_...
says that CA is 11th on a per-capita basis. However, Alaska (which is number 1) gets almost all of its tax revenue from folks who buy oil, most of whom are in other states/countries. IIRC, Wyoming, #4, is similar. I don't recall whether CT and DE, #5 and #7, get a lot of their revenue from corporate francise fees, which are also (effectively) paid by folks in other places.
2) The Economist calls itself a "Classical Liberal Newspaper" in their advertisements. Beyond that they endorsed Obama, Kerry, and Clinton (and it may go back further those are only the ones I could get off a quick Google Search)
3) But would you trade it if Republicans had a majority? It's easy to want to abolish a 2/3rd requirement when your party has the majority. But in my experience all things are cyclical (California voted for Republican Presidents until 1992 so it isn't that far fetched)
There's more than one article and there's lot's of facts in them.
>If Prop 13 is such a hindrance why is California in the top 5 highest taxing states across the board?
I don't understand your question or the point you are trying to make.
>So California's problems are not because of direct democracy.
I'm sure it can be argued that CAs problems are not the initiative process, but you haven't begun to do that.
>they are (by their own admission) a left-leaning publication
Source? "free trade, free markets" - doesn't sound left leaning. They claim to be centrist. Unless there is some other proof that they are in cahoots with CA democrats it seems pretty unlikely that they ran the articles to help them.
The Economist is proudly liberal: for free trade. Parent post is reacting from a narrow USA partisan perspective: "liberal" as code word for the left.
I thought The Economist leaned right on some issues....
Saying someone else's arguments for X aren't good isn't the same as making an argument for not X, and you've totally failed to do that.
There have historically been two major issues in California: Prop 13 itself, and the 2/3 requirement for budgets. Prop 13 has not only made it difficult to raise taxes as necessary, it's forced the state (and municipalities) to rely on less-stable, less-efficient methods of financing. Property taxes are historically a much more stable source of revenue for states than income taxes, and states that rely heavily on income taxes (like California) tend to have less stable revenues than states that rely more on property taxes. Prop 13 forced California to rely more and more heavily on income taxes, destabilizing its revenue. The 2/3 requirement to pass a tax has also made that basically impossible, so initiatives are financed through even-more-expensive bond measures. Also note that Prop 13 helped shift the tax burden away from corporate property owners (since corporations can live forever, they never have to transfer property), further drying up a source of revenue for the state. So while the best analysis I can find indicates that the initiative "earmarks" of funding are at worst a minor hindrance, Prop 13 is really the elephant in the room, and it couldn't/wouldn't have happened outside of the initiative process. But without it, we wouldn't be talking about the initiative process as an issue, because the CA budget wouldn't be such a mess.
Meanwhile, the 2/3 budget requirement also made things a mess by historically making it impossible to get a budget passed without compromising/buying off enough legislators to get it through. Since everyone knows the majority party needs every last vote to get things through, they can all hold out for their pet concessions, making it impossible to come up with any kind of a responsible, honest budget. Thankfully that issue was sort of resolved by another initiative this past year, though by not addressing the tax side of the equation it's only a half-measure: spending cuts can now be done with a simple majority, but revenues can only be increased by a 2/3 vote, which means that the legislators are basically trying to balance the budget with only half the available options.
My argument in regards to Prop 13 and taxes was "if it's so hard to raise taxes to an acceptable level why are we already the 9th highest taxed state (I mistyped 5th)". You counter with "The 2/3 requirement to pass a tax has also made that basically impossible,". That's not a response to the argument I put forth (which is a valid one). So again my point is this: If 41 states can make it by with lower per-capita tax revenue than California COULD as well meaning the 2/3rd rule is not the root of the problem.
As far as compromise every state legislature has to compromise and the arguments you make could be applied to any close legislature. Even those ruled by majority vote. We see the same shady deals being made in the U.S. Congress all the time and it's run by majority too.
I also made the point that the shift from property taxes to income taxes made the budget harder to balance by destabilizing revenue. California's problems are often caused by revenue volatility, and the state's budget is fine during booms and blows up during busts. States that rely more on property tax and less on income tax have much more stable revenues. I don't believe that's something that you've find much controversy on among either researchers or academics.
And your counter-argument around "everyone has to compromise" is, I'm afraid, just straight-up incorrect. Sure, everyone has to compromise. The point is that the more votes you have to get on board, the more watered down it gets. The budget you get with a 2/3 majority required is demonstrably worse than the budget you would have gotten with a 51% majority, because getting those extra 16% on board almost certainly required a bunch more one-off compromises to individual legislators. If you've seen the CA budgetary process in action, you'll know it worked pretty much exactly like that, and pretty much every year involved a late budget and some holdout congressman demanding pork for his district in exchange for his vote. Imagine how much already has to go on to get the vote to 51% on any given budget, and then just add a bunch more of it.
Having one or two layers of bureaucracy can provide a powerful buffer to voters doing things for immediate gains, or based on popular trends. Certainly some of how modern governments are set up is based on the time information took to travel and the distances involved hundreds (or thousands) of years ago, but I don't think that this point was lost on the early founders of democratic systems.
People (especially Americans) often forget that a bureaucracy that slows things down can provide the occasional benefit, right along with all its costs.
Americans should be especially loath to forget this. Our government was engineered with the goal of making it very difficult to get anything done through government.
"Initiatives should be far harder to introduce. They should be shorter and simpler, so that voters can actually understand them. They should state what they cost, and where that money is to come from. And, if successful, initiatives must be subject to amendment by the legislature."
I disagree that initiatives should be harder to introduce. In the last election, I had friends volunteering to collect petition signatures for the legalization of marijuana initiative, and it was a struggle to coordinate an effort large enough to collect the required signatures, testing the limits of grassroots mobilization. If such a controversial topic as marijuana legalization, with its army of local proponents in California, struggled to motivate enough people to support a ballot initiative, then I must ask how difficult it would be to organize an effort focusing on more mundane topics which may be just as critical to our fiscal situation.
I don't see how a limit on complexity could be determined or enforced, but I will agree that there is a lack of clear information on the likely ramifications of a given ballot initiative. A better solution here would be to have trusted 3rd parties providing assessments of various initiatives, perhaps a state-level equivalent to the Congressional Budget Office offering credible fiscal assessments.
One major improvement might be for initiatives to go through a process of competitive runoff selection, where petition signatories could sign on to an overarching policy goal (which is pretty much the only information they're given before signing the petition in any case), such as the legalization of marijuana, and then would be able to select from a variety of different implementations of that policy goal, with the winning implementation getting all the petition signatures.
One place I will agree with the author would be to allow our legislators a greater ability to amend these initiatives, and if we're unhappy with the way they exercise this power, we can always show them the door next election cycle (or just recall them if they really pissed us off).
I wouldn't give up my initiative power without a fight, and I am strongly encouraged that an unpopular law is only a petition and referendum away from redress. It's not for nothing that California is the R&D center of this laboratory of democracy we lovingly call the US states, with the California initiative process leading the way on many social issues, which then spread to the rest of the country. We should be careful not to throw out the baby with the bath water.
Most initiative signatures are not collected by volunteers, they're collected by paid signature gathering organizations. And that's the problem the article was getting at: that anyone with enough money can get an initiative on the ballot by paying people to collect signatures, and once something's on the ballot, they can spend enough money to try to persuade people to vote for it. As a result, rich people and organizations can effectively buy legislation, or even constitutional amendments. That's not how the initiative process was intended to be used, but that's what we've got.
I'd also challenge you, if you're a fan of California's initiative system, to take a look at all the initiatives that have passed over the last 10 years or so. Now, remove the ones put on there by the state legislature (which is a lot of them), and of the remaining ones, ask yourself: how many of these represent a positive, populist change versus how many of them represent some corporate special interest or populist outrage attempting to do something that is more properly the responsibility of the legislature (like, in my opinion, the three-strikes law or sex-offender laws) or even just out-right discriminatory laws (like the various illegal immigration ones that have passed)? My personal calculus has been that the initiative process has, on balance, done more harm than good.
I must agree with you that there is likely more harmful legislation coming out of this process than beneficial, but I think that is largely a result of a lack of honest communication, as well as a lack of follow-through on the part of participating citizens.
I believe my proposed solution of having citizens sign petitions for an overarching policy goal, and then having them choose from a list of implementations under that goal, would do much to limit some of the more egregious manipulation of those signing petitions. People could sign a policy goal petition, providing a mailing address and email address, and once sufficient signatures are collected to get on the ballot, signatories would be sent a packet of competing initiatives to select from. The variant with the most votes gets all the petition signatures and gets on the ballot. This would give participating voters an opportunity to review what they're signing up for, and perhaps become more informed of various alternative proposals which would address the same putative issue. This will ultimately force special interests to fight on a more level playing field with competing interests.
I think the real problem is that there's still a state government. The people who know how to balance the budget best and know what needs/wants they need to fulfill are the people in local communities and counties. Give them more power to deal with the budget and make the state government a council of delegates from each of those counties and you won't have much of a problem anymore.
Indeed, in their guise of “Publius” in the “Federalist Papers”, Madison and Hamilton warn against the dangerous “passions” of the mob and the threat of “minority factions” (ie, special interests) seizing the democratic process.
They wanted a republic where representatives were accountable to their constitutients. That doesn't happen anymore. Too often do representatives ignore the ideas and opinions of their constituents. A representative should be asking his constiuents wtf to do instead of being completely autonomous (except on election day). The minority factions are the representatives themselves which is why it's very important to keep any and all direct democracy actions.
Initiatives should be far harder to introduce. They should be shorter and simpler, so that voters can actually understand them. They should state what they cost, and where that money is to come from. And, if successful, initiatives must be subject to amendment by the legislature.
So give less voice to the people who actually make up the state. Shorter and simpler because people are dumb? Why not make them longer with more arguments to support them, or have them written in 2-3 different ways as a counter to any biased/emotionally-heavy language?
The initiatives are voted on on a state-level. It's difficult to estimate costs on something like that and it's difficult to say where the money will come from. I guess it's a good idea though because then the marijuana legalization initiative could say "this will cost $0, and will earn us $X".
They shouldn't be subject to amendment by the legislature. They should be subject to amendment by the citizens. That might curb any special interest group bullshit.
What always brings it to mind is the oft-cited success of the Scandinavian states on welfare, as compared with the USA.
Size isn't the only difference - the US is far more diverse.
Compare Sweden http://en.wikipedia.org/wiki/Demographics_of_Sweden with LA http://en.wikipedia.org/wiki/Demographics_of_Los_Angeles .
Sweden is about as diverse as Wisconsin http://en.wikipedia.org/wiki/Madison,_Wisconsin#Demographics .
Probably would improve governance, as the Republican Party we deal with in the Bay Area would offer people like Tom Campbell instead of Prop 8 NOMers.
In Australia there's only six states, and they're all large and demographically diverse enough to be (in the American terminology) purple. That means that there's a regular cycle of kicking the bums out and installing the other set of bums every few election cycles, keeping things relatively healthy.
In the US, though, problems seem to develop when one party controls the legislature more or less indefinitely. In blue states this leads to slowly-collapsing economies where public-sector unions slowly suck increasing amounts of money out of the economy, and in perma-red states this leads to zany places where sodomy is theoretically illegal and you can't even buy a vibrator.
So what we really need to do is join California up with Nevada, Arizona, Idaho... maybe even as far as West Texas.
Australia still has a lot of problems and when you have larger states that means the law applies to more people. Even if the majority of people are in favour of a law, they're still forcing the minority to abide by their choices and that's pretty much mob rule. On the flip side, if there's fewer people voting in elections, a minority of voters can force the rest of the people in the state to be represented by some jerkoff politician.
/read your histories of Athens to see why
Athens at least burned brightly.