Back in the February budget battle, notorious right-wing SoCal talk show hosts John and Ken put the heads of Republican legislators who voted for the tax increases on sticks as a threat of grassroots wingnut revolt. Their primary enemy became GOP Assemblymember Anthony Adams (AD-59), who they targeted with a recall effort, gathering and submitting signatures to put a recall on the ballot. It was to be the biggest demonstration yet of the power the KFI duo have over California politics - and the Republican Party.

Except they failed.

We learned today that the recall effort will fall 11,000 signatures short of qualifying for the ballot, according to the random sampling projections. John and Ken turned in 58,000 signatures but the sampling projects less than half - about 24,500 - will be valid, short of the 35,825 they needed to make the ballot.

Chalk this up as a pretty big FAIL on the part of John and Ken and their own SoCal version of the teabagger movement. Armed with one of the West Coast's most powerful radio signals and one of the highest rated shows in the region

On Twitter I noted that if they couldn't get the recall on the ballot, maybe John and Ken aren't so powerful after all. Anthony Adams agrees. Once again, the great anti-tax revolution of 2009 is a mouse that failed to roar.

Late last week we learned that California's unemployment rate dropped 0.1% in September, from 12.3% to 12.2%. That stat obscures far more than it reveals, including the fact that the 12.3% rate for August was an upward revision of the earlier reported number.

More significantly, the stat is not an accurate reflection of the job market in California. We actually lost 39,000 jobs in September. The only reason the rate appears to have dropped is that a significant number of the long-term unemployed have stopped looking for work and are no longer counted as "unemployed.

Nearly 1/3 of those lost jobs came from the public sector, as Steven Levy explained:

The state's job losses were especially pronounced in construction, which lost 14,100 jobs over the month, and government, which lost 12,700.

Cutbacks in government employment, which includes public schools, are partly to blame for the state's lackluster performance this month, said Stephen Levy of the Center for the Continuing Study of the California Economy.

"We are disproportionately hit in the government sector because our state and local governments are having worse budget shortfalls than in other states," he said. (LA Times, 10/17/09)

As Atrios said, that's not the way it's supposed to work. Government needs to be the employer of last resort, especially in a state that has the highest unemployment levels in 60 years. When 12,700 government employees lose their jobs, that translates into less consumer spending, which in turn means pressure to lay off more workers, all of which results in less tax revenue for the state, which merely exacerbates the vicious circle.

Yet Arnold Schwarzenegger simply doesn't care about the unemployment crisis. Instead of working to create private sector jobs through the preservation and expansion of public sector jobs, Arnold has engaged in a right-wing shock doctrine attack on the basic services of the state, an attack that was never going to succeed before the recession hit.

Once upon a time conservative Republicans claimed job creation was their #1 task, and that we had to give corporations whatever they wanted to create jobs - tax cuts, regulation cuts, etc. California did so - and as a result we have a far larger recession and unemployment numbers than we've ever had when Big Government supposedly ruled our political economy.

Today, you'll hear nary a peep out of the Republican Party about jobs. Sure, the Cal Chamber will publish its list of "job killer" bills, but that's only the public excuse to give Arnold the reason he needs to veto bills he'd have vetoed anyway. Instead you have a party that simply does not care about unemployment and the jobless. Instead, to hear Chuck DeVore tell it, the unemployed should just leave California.

California Republicans see unemployment as an unalloyed good, something to be embraced as a tool to destroy what remains of the New Deal and create a working class utterly dependent upon and unable to resist corporate power. California's economic policy has become nothing short of kleptocracy, justified by a constant media drumbeat demanding greater spending cuts, apparently for their own sake.

It is up to Democrats and progressives, then, to make the case to California that jobs matter, that jobs are what this state desperately needs, and that Republicans have not just given up on providing jobs, but are actively cheerleading unemployment and attacking the jobless.

Of course, we don't need jobs for their own sake. We need quality jobs, jobs that pay a living wage, jobs that are sustainable and not dependent on the latest asset bubble Ponzi scheme. And just as we learned in the 1930s, we need government to step in and provide them - instead of actively destroying them.

A few weeks back the Guardian's Sunday paper, the Observer, published a long article titled Will California become America's first failed state? It was one of their most widely read and emailed articles that week, and generated a lot of responses. One of them was mine at Calitics.

The Guardian wanted a response to their article for their Comment is Free section of the website, and asked me to write it. The result is now available: From Golden State to failed state.

With a 700-word limit it was difficult to be more expansive than I could here at Calitics. But my article makes the basic points: the 20th century model of California, emphasizing sprawl and weighing government down with absurd, non-functional rules designed to protect that sprawl, have produced "a California that more closely resembles the world of Charles Dickens than that of the Beach Boys."

We need to craft a new vision of the California Dream for the 21st century. Go read the article to see what that would look like.

Just a few months into the 2009-10 fiscal year, and after three excruciatingly painful rounds of budget cuts (September 2008, February 2009, and July 2009) we learned today from John Chiang that California's budget is again in the red:

State revenue has already fallen more than $1 billion short of assumptions in the budget lawmakers passed less than three months ago, according to a new report from the state controller.

Disappointing income tax receipts are the main culprit, falling 11% below what lawmakers and Gov. Arnold Schwarzenegger expected when they agreed on a patchwork budget during the summer, halting the state’s issuance of IOUs. Sales and corporate taxes have also slid below projections.

"While there are encouraging signs that California's economy is preparing for a comeback, the recession continues to drag state revenues down,” said Controller John Chiang in a statement. He called the new figures “a major blow to a budget that is barely 10 weeks old.”

Even before the bad fiscal news, policymakers were bracing for a big budget deficit next year. The Department of Finance anticipates a $7.4-billion deficit in 2010-11. That’s a conservative estimate, because lawsuits have tied up or reversed some planned budget cuts.

As we've made quite clear here at Calitics, the previous budget deals did absolutely nothing to solve the state's economic and fiscal crisis. Despite those who would have us believe the problem is somehow caused by "overspending," we are actually seeing the effect of state budget cuts that have laid off thousands of workers, and caused them as well as those who remain to spend less money in the state. It was entirely predictable that the massive budget cuts would merely weaken the economy further and thereby exacerbate the cycle of decline in revenues.

But it should come as no surprise to us that such an outcome has taken place. At no time during the present recession have legislators and the governor given any thought to how they will produce economic recovery. The dominant impulse in Sacramento is to cut, to cut for its own sake, to cut when it costs money to do so, to cut when it is illegal to to do, to cut when it further weakens an already disastrous economy.

The last thing California needs are the further and deeper budget cuts that we're likely to hear suggested in the wake of this news. California instead desperately needs jobs, particularly unionized, well-paid and high-benefit government jobs.

Californians also need affordable health care. They need affordable transportation. They need also more educational options. As Paul Krugman pointed out today, the cuts to education are weakening our economy and will cause permanent damage:

For example, the Chronicle of Higher Education recently reported on the plight of California’s community college students. For generations, talented students from less affluent families have used those colleges as a stepping stone to the state’s public universities. But in the face of the state’s budget crisis those universities have been forced to slam the door on this year’s potential transfer students. One result, almost surely, will be lifetime damage to many students’ prospects — and a large, gratuitous waste of human potential.

Krugman calls for an emergency package of aid to state and local budgets, a call we at Calitics heartily second.

But we must also work hard to stop the 121 Herbert Hoovers in Sacramento from doing further harm to an already stressed state. We've tried Republicans' neo-Hooverite solution. Democrats have insisted we had no choice to go along with it, but they have instead caused untold suffering and pain to the people of California without gaining anything in return.

As we prepare for the next budget battle, we need to also prepare to demand that Democrats abandon neo-Hooverism and stop embracing policies and budget deals that merely make the economic and fiscal crisis worse.

Yes, our state has severe structural governance problems that make truly progressive solutions difficult. But the first step toward fixing those structural problems is to articulate a clear vision for a fairer, more prosperous, and more economically secure California. Only then will Californians be willing to dismantle the structural barriers that have strangled our state over these last 30 years.

Earlier today at Calitics David Dayen leveled his criticism of the Sacramento Democratic establishment for their apparent failure to produce an initiative to roll back the 2/3rds rule and start fixing California's broken government.

Here I want to offer a slightly different perspective on the issue of what we need to do to win the battle. This isn't a disagreement with David, but instead a discussion of something related - the question of how it is we win this battle.

My own views on this have evolved somewhat over the last 6 months. I very much think we need to be "making the argument" for majority rule, and that so far this hasn't yet been done.

And the way that has to be done is to place the 2/3rds rule into a broader effort to emphasize progressive values. This is a twofold approach that requires us to do two things:

1. Show Californians where progressives want to take them: Universal health care, free higher ed, eliminate traffic, create sustainable jobs, etc. Articulate our end goals and get people excited about them, since it's hard to excite people about procedural questions.



2. Show Californians how we want to get there. Go populist and hammer the shit out of the corporations and wealthy folks who benefit from the current tax structure, and push for sensible revenue solutions consonant with that populism that can achieve the promised goals.

I think that to emphasize the procedural problems (the 2/3rds rule) before emphasizing the fundamental injustice and inequality of our tax code is to put the cart before the horse. If we are going to reverse the polling and win this, we need to first mobilize Californians behind the notion that our state's economic problems and our inability to properly fund schools or healthcare or parks or transit is because we are letting those with the money escape their obligations.

The PPIC and Binder polls (the one from the May 19 election) have both shown the public is willing to support certain taxes to preserve important services. So the move should be to push hard for an oil severance tax to fund schools, or closing corporate tax loopholes to expand Healthy Families, or to jack up taxes on the wealthy (particularly taxing unearned income) to bring down higher ed tuition, or something to that effect.

Dems should plan to move these things in the next legislative session and spend several weeks beforehand making this argument. Back Republicans up against a wall, make them defend the unpopular tax breaks for the unpopular bandits that have ruined out economy. And when the Republicans predictably use the 2/3rds rule to block those revenue solutions, then we will be in a much better position to win public support for majority vote on revenue.


We will have the opportunity over the next 12 months to move on this strategy, especially as outrage builds over the existing cuts. That outrage is not about process, but about the basic values of this state being violated and cast aside in order to enable the wealthy to get tax breaks at the expense of everyone else.

There are some folks in Sacramento who seem to get this. Lt. Gov. and future Congressman John Garamendi has been calling for an oil severance tax to fund higher education.

I know that leads some to criticize "ballot box budgeting" and argue that dedicating specific taxes to specific services doesn't help the problems with the general fund. I have always been much less critical of ballot box budgeting than others, partly because I see it as a necessary holding action until we resolve Prop 13 itself.

But more fundamentally, we need to overturn 30 years of anti-tax rhetoric that has sank very deeply into the minds of many Californians, including those who otherwise call themselves progressive. One of the core tenets of the anti-tax mentality is the notion that government would just waste new revenues. Public hostility to dumping money into the general fund is significant.

So what we have to do is rehabilitate the notion of using taxes to provide services. Californians need to see the connection between low taxes and failing schools, jammed roads, a lack of health care, and a lack of jobs. And they need to see that it is Republicans that are blocking those things from getting done, by the 2/3rds rule.

The only reason anyone in America knows about "reconciliation" in the Senate, or the "mark-up" process, or even the "filibuster" is because those things stand in the way of key progressive goals. Those Senate procedures have screwed us and have needed to be eliminated for a long time, but only when they stood in the path of something people wanted did awareness rise.

In short, we are not going to win this if it is framed as a procedural problem, or even as a way to fix a broken state. We win the majority vote by enfolding it within a broader narrative and a broader campaign that uses progressive populism to beat the stuffing out of the large corporations and their allies in the Republican Party, in the service of clear goals that people actively and strongly desire.

Steve Wiegand of the Sacramento Bee telegraphed his intention yesterday to spread the right-wing myth that California has a spending problem. And sure enough, that's what we got from Wiegand today in an article with the stunning title of "State officials spread loot like Santa." That quote comes from Dave Doerr, head of the right-wing California Tax Association, and furthers the myth that California "overspends" and is, unfortunately, *not* a reference to the "two Santa Claus" theory.

Wiegand's article repeats many of the right-wing frames about state spending - yet at the same time it actually examines the structural revenue shortfall. The two are related, of course - Wiegand's study of the structural deficit is vague and lacking much detail, and is used to buttress the argument that California overspends. In short, Wiegand is taking as gospel the right-wing claim that our state budget mess is a product of overspending, when in fact it is a problem of undertaxing. Take this section of the article, for example:

Doerr's observation is borne out by a Bee analysis of California's spending and debt patterns compared to other states', which found California spends more per capita than the national average in every government program except highways and public welfare - but consistently runs budget deficits and takes on more and more debt.

Why would that necessarily be a bad thing? Most other states are penurious with their public spending, and have economic and social problems that reflect such miserly policies.

Doerr appears again:

Doerr's reference is to a penchant of lawmakers and governors over the past three decades to spend whatever money they have on hand - and promise even more - then let succeeding budget drafters fend for themselves.

This is in fact a core conservative frame. They believe that when it comes to budgets, you can spend whatever you take in, and nothing more. If you have $100 billion in revenues one year and $80 billion the next, then you just have to cut $20 billion in spending, no matter the effect.

A progressive budget frame is that it is government's job to see to it that certain tasks get done because they are inherently valuable or necessary. This might include keeping open 220 state parks, or ensuring children under age 10 learn in classrooms of no more than 20 students, or that our state's children and poor families have access to health care no matter the state of the economy.

Under that frame, the "overspending" claims are rendered even more absurd than the Wiegand article shows them to be, given its lack of explanation in most places for what actually caused the spending spikes. California needs to find the revenue to maintain core services, and to maintain and even expand government employment as a counter-cyclical recovery measure. The UCLA Anderson Forecast showed that budget cuts have worsened CA's recession - but none of that seems to have made it into Wiegand's article.

Given the dearth of media coverage of California politics, it's especially unfortunate that when a major paper chooses to devote so much time and space to examining the budget crisis, they have not only gotten it so deeply wrong, but have wound up reinforcing right-wing dogma in the process.

Anytime a member of the media says there are "inarguable facts" about the state's economic and financial crisis, that's usually a sign that you should be extra dubious of their claims. Steve Wiegand uses that phrase in his Sunday SacBee article to essentially make the Parsky Commission's case for it, in advance of whenever it is exactly that they're going to produce an actual final proposal. Wiegand's article essentially rehashes the basic center-right argument about state government: our taxes are too volatile, and combined with "reckless spending" and the severe economic crisis, that explains the state budget mess:

Three inarguable facts dominate California's system of financing state government:

• It's a mess.

• It's currently a mess in large part due to the deepest and most pervasive global recession since the Great Depression of the 1930s.

• It's been a mess for much of the past three decades because the combination of an out-of date tax system, reckless spending and fickle voters has made state government extremely vulnerable to the ebbs and flows of the economy.

I'll grant Wiegand the first two points. Since 2007 California has had a total of about $60 billion in budget deficits. $47 billion of that is due to decline in taxes. But much of that decline is led by collapsing sales taxes. This recession is a balance sheet recession led by consumers working feverishly to pay down debt. Until the debt is purged and wages grow, the massive consumer spending binge of the last 20 years *is never coming back*.

That starts us down the path of realizing just how wrong Wiegand is in making his third point. Wiegand repeats the discredited "volatility" argument to infer that the reliance on personal income taxes is flawed:

Since California relies so heavily on those revenues – more than half of general fund income comes from income taxes – it makes state government extremely susceptible to swings in the economy.

"When the market tanks, those taxpayers sneeze," said H.D. Palmer, the veteran spokesman for the Department of Finance. "And when those taxpayers sneeze, the state budget catches pneumonia."

One of the reasons CA relies on that income is because Prop 13 has meant the state does not capture the wealth temporarily created by two massive real estate bubbles since 1978 (one in the 1980s and the other in the 2000s).

But Wiegand misses two other crucial points about income taxes. Both personal and corporate income taxes have held up better than sales taxes during this recession. This is an especially important point during this so-called economic "recovery" where those at the upper end of the income scale, along with large corporations, are weathering the storm pretty well. It is nutty to assume that they need their tax burden reduced.

Wiegand's entire embrace of the "volatility" argument is of course flawed from conception, since there is no government budget out there that I'm aware of that has been able to resist the stress of the economic downturn. Those states that haven't had significant budget crises, like North Dakota, also haven't been hit as hard by the recession. The underlying economy in California is volatile and has been since about 1980. It makes perfect sense that tax collections would reflect a boom-and-bust economy.

The rest of Wiegand's article focuses on the sales tax. As I argued above, any examination of state tax policy that does not examine the collapse of consumer spending, likely to be a long-term trend, is probably not going to be a very useful guide to what's actually happening. After mentioning in passing the notion of modernizing the sales tax, he quickly shifts to a trip down memory lane, to the widely-mocked 1991 "snack tax" that Pete Wilson and the Legislature used in their solution to the budget deficit that year. The "snack tax" was repealed at the ballot box in 1992, and Wiegand uses it to argue that California voters are reluctant to extend taxes to untaxed goods and services.

But is still actually the case? Polls from 2009 suggest voters are willing to raise taxes to protect existing state services. Taxing accounting services, for example, in order to keep teachers in classrooms or taxing soda and junk food to keep parks open may well be more popular today than it was 17 years ago.

Wiegand closes his article by letting David Doerr of the right-wing California Tax Association repeat the totally unverified and undefended claim that the other element in our state's fiscal crisis is "overspending":

"The tax structure has been pretty consistent in providing income," Doerr continued. "It's spending. They (elected officials) just can't say no."

This claim isn't supported by any evidence in the article, and as it's the very last sentence in the article, it is not rebutted. California's media takes it as a given - an "inarguable fact" as Wiegand said at the outset - that we have "reckless spending." They believe this is so self-evident that they don't actually have to prove it or explain it or justify the claim.

In fact, California's spending over the last 6 or 7 years has been flat. The largest amounts of spending have actually gone to tax cuts, with Arnold Schwarzenegger's $6 billion per year backfilling of the VLF cuts in 2003 being the most obvious example.

When will California's major media outlets start questioning the "reckless spending" myth? As long as they treat that myth as an "inarguable fact," it's not something I'm going to hold my breath to see.

You wouldn't know it by paying attention to the goings-on in Sacramento these days, but California is mired in one of the worst economic crises we've experienced in several decades. Over the Labor Day weekend our friends at the California Budget Project charted the depths of that crisis in a new study, "In The Midst of the Great Recession: The State of Working California, 2009."

The CBP's study has already been getting media coverage for its stat that 2 of 5 working-age Californians are jobless. But the report gives a fuller picture of just how bad things are out there. Among the conclusions:

• California has about the same number of jobs in July 2009 that it did in January 2000 - in other words, the recession has wiped out a decade's worth of job growth. Add in the fact that we have 3.3 million more people of working age and you can see how severe the recession is.



• Job losses have been more severe - in both overall number and the rapid rate of decline - than in any previous recession (at least those with available data).



• Wages are declining across the board, but the top wage earners have seen increases, and the top 1% is taking a share of the overall wealth at a rate unseen since the Roaring '20s, which as we know ended so well.



• More and more people are beginning to exhaust their unemployment benefits, a situation likely to worsen as high unemployment lingers for several more years.

There are several important conclusions I take from this study. You're unlikely to ever see these in what's left of the major media in this state, and even Democrats in Sacramento don't seem to be touting these stats or conclusions as evidence of a need for change.

1. Arnold Schwarzenegger is a job killer. He and his allies at the Chamber of Commerce like to tout their opposition to so-called "job killer" bills that usually increase taxes or regulations on businesses. And yet after 6 years of these policies California is far worse off than we were at the depth of recession that ultimately cost Gray Davis his job. If Democrats ever wanted evidence that anti-tax, anti-regulation policies are an economic disaster, California in 2009 is it.



2. Sacramento has nothing - nothing whatsoever - to offer the jobless or to this state's future. As I often remark, the only words forbidden to be spoken within the halls of the state Capitol are "economic recovery." Both Republicans and Democrats have agreed that their #1 task isn't economic recovery but to eviscerate government when it is most desperately needed; they merely disagree on the particulars. Economic recovery should take precedence over nutty demands to cut spending, but in Sacramento, it's been the other way around.



3. Specifically, we have yet to see *any* plans from either party in the state legislature for producing meaningful, lasting economic recovery. California voters took matters into their own hands last November by voting for Proposition 1A, to create 160,000 short-term jobs and 450,000 long-term jobs by building a high speed rail system. But HSR, to name but one example of possible government job creation programs, has very few defenders in the Legislature, and plenty of opponents (including Democrats like Sen. Alan Lowenthal).



4. Lacking any plan for economic recovery or job creation, the factors identified in the CBP report are going to get much worse. Wages will continue to drop for everyone who isn't already wealthy, as persistent unemployment perpetuates a weak economy and fuels a deflationary cycle.

So what do we do about this?   Read More »

One of the most despicable yet effective attacks on public services and government spending made in the last two years of the budget crisis is the argument that spending cuts are necessary because public employees are overpaid. I am certain we'll see at least a few such comments pop up in response to this post.

We've made the argument that this is just not so, that the overwhelming majority of public employees are barely hanging on to their middle-class status (if that), and that spending cuts are merely exacerbating the recession instead of helping resolve it.

Over the weekend Shane Goldmacher showed us the true impact of spending cuts on public employees. It is not a pretty picture.

Reporting from Sacramento - State worker Rochelle Johnson's $38,000 salary never allowed her family to live in luxury. Then the furloughs hit, cutting her pay by 14%.

Now Johnson, an appointment scheduler at a California agency that reviews disability applications, finds herself at the mercy of payday lenders, utility companies' patience -- they shut off her power once already -- and co-workers who share their lunch leftovers....

Carrie Ann and John Quintos of Chino work for California's workers' compensation insurer and earned a combined $70,000 before the furloughs. The pay cut made their $3,200 mortgage unaffordable.

Selling the house was impossible; they owed more than it was worth, so they rented it out and took a town house. But their tenants missed a payment and the couple, in turn, missed payments of their own. Then their car was repossessed in the office parking lot.

"It was the most embarrassing moment that I've ever endured," said Carrie Ann Quintos.

The couple got the car back but gave up the town house. Now John lives with his parents in Moreno Valley; his wife and four children are with an aunt in Chino some 30 miles away.

"I don't know how anyone can be expected to live like this," said Carrie Ann.

These Californians are innocent victims of a malicious and virulent strain in our politics - a demand from those who have means and resources to make other people suffer so that they don't have to pay another penny in taxes. "Beggar thy neighbor" was a common national policy response to the Great Depression. It was a complete failure.

The last thing California needs is fewer people able to pay their mortgages, able to service their debts, able to spend money at local businesses, able to pay their taxes. Government's role in a recession is to provide countercyclical stimulus to flood the economy with money. Instead California, led by Arnold Schwarzenegger and with the full compliance of both parties in the state legislature, has decided on a pro-cyclical strategy of worsening the foreclosure crisis in one of the state's hardest-hit regions (Sacramento).

It's not just public workers, of course, but Californians of a wide range of backgrounds and occupations are financially and materially worse off because of budget cuts. Meanwhile, those who already had wealth and privilege are not being asked to sacrifice one bit to deal with the state's financial and economic crisis.

As Simon Johnson has concluded the US is increasingly becoming a two-track economy. Perhaps it's not news to John Edwards, but Johnson's point is specific to the context of 2009, that the Wall Street bailouts and spending cuts that affect everyone else are producing a massively unstable and unequal economy that is almost certain to lurch into another crisis before much longer:

The two-track concept overlaps with, and builds on, long-standing issues of inequality in the U.S., but it’s also different. Within existing income classes, some people find themselves in relatively good shape and others are completely hammered....

If you’re on the outside track, you are experiencing a version of Naomi Klein’s “Shock Doctrine”. Some (former) members of the elite are in this category – this is another standard feature of emerging market crises and “recoveries”. But mostly, of course, it’s nonelite on the outside track and a more concentrated, reconfigured version of the elite on the inside.

This can lead to short-term growth – the speed of recovery in many emerging markets surprises many, from about 12 months after the crisis breaks. But it also leads to repeated crisis, to derailed growth, and to a loss of income, status, and prospects for most of society.

California is becoming the poster child for this two-track economy, as we are now experiencing the shock doctrine in full swing. The successful attacks on schools, health care, transportation, public safety, jobs, and other vital services are producing a state that will almost certainly be suffering prolonged economic malaise. Economic recovery, the phrase that is forbidden to be discussed within the halls of the Capitol, is nowhere in sight. California was once the epitome of the American dream. There are few dreamers here now.

And yet there may be some hope that California's political leadership, the Democrats in particular, might someday realize that strong public services are a winning political position. (Or they could just look to the results of the May 19th special election and the Binder Poll.) After years of deflation and depression, Japanese voters threw out the longtime center-right government of the Liberal Democrats for the Democratic Party of Japan in Sunday's election.

The DPJ ran on a platform of reversing the Liberal Democrats' massive budget cuts, promising to expand public services and hire more government workers. In a remarkable op-ed published in last week's New York Times, incoming DPJ Prime Minister Yukio Hatoyama called for a new economics based on human dignity:

In the fundamentalist pursuit of capitalism people are treated not as an end but as a means. Consequently, human dignity is lost.

How can we put an end to unrestrained market fundamentalism and financial capitalism, that are void of morals or moderation, in order to protect the finances and livelihoods of our citizens? That is the issue we are now facing.

In these times, we must return to the idea of fraternity — as in the French slogan “liberté, égalité, fraternité” — as a force for moderating the danger inherent within freedom....

Under the principle of fraternity, we would not implement policies that leave areas relating to human lives and safety — such as agriculture, the environment and medicine — to the mercy of globalism.

Hatoyama now has an opportunity to put these ideas into action, thanks to a massive landslide election victory. Let us hope that it does not take California 20 years to go from crash to enlightened economic policy. We must not continue to let our government be used to produce human suffering, whether it's that of a state worker of anyone else hurt by the cruel and exploitative budget cuts.

We get a lot of questions here at the Courage Campaign about the budget crisis - why it exists and what needs to be done to resolve it. Here I lay out an overview of the topic. This is by no means in-depth. One of the best resources for further information is the California Budget Project.

Because the governor and the legislature have traditionally crafted budgets without much public input, and have frequently resorted to complex gimmicks to balance the budget, most Californians have been left without a good understanding of how our state funds its public services, and misinformation has spread rapidly. Assemblymember Noreen Evans has put together a very good overview of this, which you can view via YouTube at this link:


http://www.youtube.com/watch?v=ogfNEw2XSbY&feature=player_embedded

The current budget mess stems from two problems: the severe recession and a broken government that is designed to produce fiscal shortfalls. Like every other state, California is experiencing significant revenue declines as a result of the recession - revenues have fallen by the largest percentage since the Great Depression. At the same time, the recession generates greater demand for public services, from unemployment insurance to health care to education. The state is left with less money to provide more services.

Although virtually every other state faces this problem, it is exacerbated in California. Ever since Prop 13 passed in 1978, California has been running a structural revenue shortfall. While the residential property tax protections of Prop 13 are sensible, Prop 13 went further, giving corporations the same tax exemptions and imposing a 2/3rds requirement on governments to raise revenues. This was exacerbated in the 1990s when the legislature used the economic boom to cut taxes even further - tax cuts made during the good times have left us without the funds to ride out the bad times. As a result we haven't brought in the money needed to keep our services running. Significant budget cuts in the 1980s and 1990s eliminated many of the so-called "unnecessary" spending programs. By the 21st century the state was spending most of its money on core services - health care, schools, transportation, and parks. And even those services have been reduced in scope and effectiveness.

More importantly, the rule requiring a 2/3rds vote of the legislature or the voters to raise revenues has enabled Republicans to block new revenues, making it virtually impossible for the state to find money to keep these services functioning. This is despite the fact that poll after poll shows voters support fair and sensible new taxes, such as a tax on oil companies or elimination of corporate tax loopholes, that could help solve the budget crisis. Further, California is one of only 3 states requiring a 2/3rds vote to pass a budget. This also enables Republicans to obstruct fair budget solutions.

Conservatives have also had success at spreading misinformation about how California raises and spends its money. Contrary to their claims, California is not actually a high tax state. Our income tax rates are higher than most, but our sales tax is average, and our property taxes are significantly lower than other states. When you combine state and local taxes California ranks about 15th in overall taxes. However, because of Prop 13, the burden of that taxation has shifted away from the rich and the corporations and onto everyone else.

Further, California has not been "overspending" in this decade, despite claims to the contrary. Most of the "new" spending done since Arnold Schwarzenegger took office are not actually new spending at all. $6 billion per year comes from the cut to the Vehicle License Fee that was Arnold's first act as governor. Cities and counties used to receive that money, so Arnold promised to backfill their losses out of our general fund. Another $6 billion per year comes from an accounting shift in how schools get their money (more of it comes from the state than from local districts, even though the overall amount of school spending remained unchanged).

California has already made plenty of spending cuts. Since tax revenues first started declining in 2007, the legislature has cut at least $30 billion from the budget, mostly hitting schools (which have lost over $10 billion), transportation (mass transit is no longer funded at all by the state, a cut of $5 billion), and health care. Despite claims that there is waste and fraud in state spending, all studies, including Arnold Schwarzenegger's own performance review, have indicated that these add up to only a tiny fraction of the overall budget deficit. The same is true of legislative pay. What this means is that there is nothing left to cut aside from services people need to survive and thrive - services that, if cut, will prevent an economic recovery while causing widespread suffering.

So what would we do to solve the crisis? There are two kinds of solutions that are necessary - short-term revenue solutions, and long-term structural fixes.

Short-term revenue solutions are necessary to avoid crippling and economically ruinous cuts. These new revenues need to be fair, of course, and they need to not overburden an already stressed middle-class and working-class. That's why we believe we need to increase the income tax for those making over $250,000 a year, as President Obama has planned to do at the federal level. We also support closing corporate tax loopholes, and enacting an oil severance tax (California is the only oil-producing state in the country that does not tax the extraction of oil from our lands).

Long-term structural fixes are necessary to prevent this mess from happening again. The 2/3rds rule must be repealed and replaced with rules allowing the legislators the people have chosen to represent them to make financial decisions for our state. We need to fix a broken initiative process that has allowed those with money to use the initiatives to help themselves at the expense of the rest of us. We need to consider calling a Constitutional Convention to fix a broken governmental process.

California's crisis is severe. But it would become an outright catastrophe if we let that crisis be used to make innocent and sick people suffer. That's why we must oppose these budget cuts, and implement the solutions that will help California survive this recession while positioning us to recover quickly, fully, and fairly.

Last week the annual Netroots Nation conference was held in Pittsburgh, and the Courage Campaign was there to share our knowledge of online organizing and progressive activism with bloggers from across the country.

Managing Director Eden James spoke about turning red districts blue, sharing his experiences from the successful effort to elect Jerry McNerney in California's 11th Congressional district in 2006. Online Political Director Julia Rosen spoke about applying the lessons of the 2008 presidential campaign to state and local races, as well as on where the marriage equality movement needs to go in the aftermath of Prop 8's passage.

The Courage Campaign also helped convene a meeting of bloggers to do specific work planning for the Maine marriage equality battle coming up this fall.

For my part, alongside participating in the above, I joined fellow Calitics blogger David Dayen, candidate for Assembly district 21 Kai Stinchcombe, and the incomparable Jean Ross of the California Budget Project for a panel to discuss California's economic and political crisis.

I received a lot of feedback from panel attendees that it was one of the best panels of the weekend - which, aside from being flattering, is quite a statement considering how good the other discussions had been.

Dante Atkins, an LA-based blogger and activist, transcribed our panel's discussion, and that transcript is offered below. The panel was a good opportunity to build momentum for the coming battles over taxes, public services, the state budget, and the future of our democracy. The Courage Campaign staff fully intend to continue helping our members play a central role in solving these problems.   Read More »

I've been noticing a trend over the last few budget cycles - the frequent use of illegal actions to claim that there is a balanced budget. Arnold Schwarzenegger is the worst offender here, though the Legislature as a whole has proven too willing to go along with these practices.

Thankfully Californians hurt by these reckless and economically indefensible budget cuts are not taking the lawbreaking lying down. Evan Halper at the LA Times reports on the rising number of lawsuits being filed and, increasingly, being won to block the cuts:

Lawyers are being drafted in droves to unravel spending plans passed by the Legislature and signed by the governor. The goal of these litigators is to get back money their clients lost in the budget process. They are having considerable success, winning one lawsuit after another, costing the state billions of dollars and throwing California's budget process into further tumult.

In the last few months alone, the courts added more than a billion dollars to the state's deficit by declaring illegal reductions in healthcare services, redevelopment agency funds and transportation spending. Another ruling threatens to deprive California of all its federal stimulus money if the state does not rescind a cut to the salaries of home healthcare workers.

Unfortunately Halper's tone makes this sound like a bunch of ambulance chasers are taking advantage of the state's financial crisis to enrich themselves and reverse a fair outcome of a democratic process. Nothing could be further from the truth. The lawsuits are typically filed on behalf of working-class Californians who are being made to bear the brunt of these cuts, whether it's a reduction to their already paltry pay, loss of their health care, or loss of their means to get to work.

Halper's article goes further in stacking the deck against Californians affected by the cuts. Instead of emphasizing the fact that numerous court cases on a variety of budget subjects have found major pieces of recent budget deals to be illegal, instead of questioning why the Legislature and the governor feel they can blithely ignore the law whenever they feel like it, Halper lays the blame for this at the feet of voters, who he casts as being reckless and profligate:

The attorneys are seizing on state laws that were drafted in sunnier economic times, some of which were put in place by citizen initiative. They created new programs or expanded existing ones and contained language intended to solidify the place of those programs in state government. Now, the state is broke, and lawmakers and the governor are finding their attempts to take money from the programs rebuffed by the courts. Just the lawsuits themselves cost the state millions of dollars in attorney salaries and other legal fees.

Of course those efforts are being rebuffed - the law and the state constitution are unmistakably clear here.

What Halper leaves out is the fact that most ballot-box budgeting isn't due to voters who don't know what they are doing. Instead it is typically a reaction to legislative failure to protect vital services. The grandaddy of all "ballot-box budgeting", Proposition 98, was passed in 1988 as a reaction to a series of cuts in education funding during the 1980s. Voters, who have never been offered an opportunity to revisit the core elements of Prop 13 and have only once been asked to revisit the 2/3rds rule, understandably grow frustrated with the legislature's unwillingness to protect the core services of state government and those that depend on those services to survive and thrive.

What the frequent lawbreaking makes clear is that in Sacramento, the only laws that truly matter are those laid down in 1978 by Howard Jarvis, and enforced by the kangaroo courts of the California Chamber of Commerce and the Howard Jarvis Taxpayers Association. The legislature and the governor are so determined to avoid tax increases, even when they make more economic sense than spending cuts, that they will break the law rather than offend Jarvis's ghost.

Legislators and reporters may not like it, but this is precisely why American governments have three coequal branches - to enable the judiciary to uphold rights and laws when the legislature and the executive choose to ignore them out of a misguided concept of political expediency.

Let a thousand lawsuits bloom.

The folks over at Calbuzz have offered several suggestions for how Democrats, who have clearly lost the battle over the budget, can craft a better strategy starting now in advance of the next budget battle, which will arrive anytime between Labor Day and Martin Luther King, Jr Day. Overall their suggestions are excellent, though there are others that ought to be included, as I'll describe below. First, an overview of the Calbuzz suggestions:

Instead of aggresively fighting against the tyranny of the minority, Democrats act like the two-thirds is some unspeakable force of nature, an all-powerful totem before which all must bow down and worship in fear.

Underlying this passive posture are two crippling, if unspoken, assumptions: 1) that policy is somehow separate from politics and 2) that the only reality that matters is that unfolding in the hothouse halls, meeting rooms, chambers, restaurants and saloons of the cul de sac that is Sacramento.

This is a crucial point, and I am pleased to see Calbuzz understanding it. Democratic leaders have used the 2/3rds rule as a crutch to justify their acquiescence to horrific cuts, ignoring the fact that even with that insane stricture there is still plenty of opportunity for them to use smart politics to turn that disadvantage around. The Calbuzz proposals are, in brief (theirs are in quotes, my comments follow):

1. "Bury the petty feuds between the Assembly and Senate and among members." Probably easier said than done, especially in an era where term limits mean members are jockeying against each other for 2010 primary races. But a unified message is certainly a good idea.

2. "Craft a message." Calbuzz suggests that consultants be brought in to accomplish this goal. I'm not entirely sure that's necessary. Dems have the pieces of a winning message in front of them; what they have lacked is the will to assemble them. Californians *do not want* these cuts, so Dems need to highlight the horror stories of the cuts and use that to bludgeon Republicans every day between now and November 2010.

3. "Identify and exploit the weaknesses of individual Republican members." Oh absolutely. That needed to be done yesterday. Abel Maldonado's claims of being a moderate mean he is exposed and vulnerable to a consistent Democratic attack. Maldonado voted against the Tranquillon Ridge project and has expressed unease with some of the health care cuts. Time to back him up against the wall and ask if he is willing to support new revenues to avoid those cuts. Republicans looking to run for statewide office, like Jeff Denham, or who won their seat by claiming to be somehow moderate, like Tony Strickland, are equally vulnerable. Sure, we know that deep down these people are hardcore wingnuts. But they are also politicians, and that means they are vulnerable to the right kind of pressure. Find it, apply it, and repeat often.

4. "Agree on a progressive tax strategy and stick with it." Calbuzz's point here is that Dems have not consistently stuck to promoting one or two (or more) new revenues. Instead they've thrown whatever they can against the wall to see what sticks. Calbuzz suggests instead focusing on the oil severance tax, and I fully agree. The February deal's corporate loopholes ought to be included as well. Democrats need to make it clear to Republicans, the governor, and the state that without an oil severance tax, there will be *no* Democratic votes for any budget in the future.

5. "Build stronger alliances with the netroots." The Courage Campaign is always willing to listen to what our legislators have to say, though we will always maintain our core mission of empowering our members to produce the progressive change they want to see in this state.

There are at least three additional things Democrats ought to be doing:

• Stop worrying about the state's credit rating. One argument we've heard from legislators as to why this terrible budget deal was necessary was that it was necessary to stop the IOUs and protect the state's credit rating. Well, it isn't working. The rating agencies aren't buying it, as the deals are merely ensuring future deficits. Democrats need to find new revenues and resist borrowing and raiding gimmicks - otherwise the state's credit rating will collapse, sooner or later.

• Focus on the human impact of the budget cuts in order to build public resistance to spending cuts as a concept. We're witnessing the construction of a political spending cap, where the force of precedent prevents Democrats from restoring these cuts in the future. The stories of people suffering from the cuts are extremely powerful. Californians do not want battered women to be denied shelter. They want kids to have health care. They want schools to be properly funded. That makes Republicans vulnerable, as the "two Santa Claus" theory has been proved wrong.

• Demand that economic recovery be part of the solution. The two words you have /never/ heard in Sacramento during the budget cycle are "economic recovery." Everyone is focused on cuts and nobody, I mean nobody, is talking about what California needs to do to provide economic recovery. The cuts already made have neutralized the impact of the stimulus, are driving businesses out of the state, and will make it extremely difficult to grow jobs in the future.

Combine those with the Calbuzz proposals and I think you have a winning strategy for Democrats to finally reverse their political losses and save this state from ruin.

That headline needs to be tattooed on the foreheads of every politician, journalist, and pundit in this state. The PPIC poll leaves no doubt about the public's dislike for the governor and his insane, economically ruinous policies that cause direct harm to children, the sick, the disabled, and many others:

The PPIC Survey, which began before an agreement was announced on the state budget on July 20 and concluded just afterward, finds Governor Arnold Schwarzenegger’s approval rating at a record-low 28 percent. Approval of a California governor has not been this low since August 2003 (26% approve, 67% disapprove), when then-Governor Gray Davis was facing a recall and budget standoff with the legislature. The governor’s approval rating for handling environmental issues has also declined (35% approve, 43% disapprove) since last July (46% approve, 36% disapprove).

That's George W. Bush territory. Schwarzenegger's overall trajectory in office closely resembles the reviled former president: elected under dubious circumstances, he won Democratic support for stupid economic and fiscal policies that have produced a severe recession characterized by high unemployment. Of course, Bush had the power to run deficits to prevent spending cuts - Arnold doesn't, and in his desire to destroy the services that made California prosperous and a pleasant place to live, he is alienating the public:

"A lot of the cuts being made were not popular, and he really took the lead and was out front on what he said was needed — staying firm on not raising taxes — so the entire deal has his fingerprints," said Melissa Michelson, a political science professor at California State University-East Bay. "I hear from a lot of people who would have understood if some taxes were raised. Raising taxes on the wealthy sure would have been more palatable than cuts on students, elderly and children."

The legislature's approval ratings are low as well - 17% approve of their job, which is actually somewhat surprising given the frequent legislature-bashing that goes on in our media.

As Sacramento prepares for yet another special session, called this time to try and implement Arnold's regressive tax policies, it is worth keeping in mind just how unpopular he is. Legislators should feel themselves under no pressure whatsoever to do anything this guy asks. Arnold will be gone from office in 18 months, and while the Legislature still needs to deal with him on the budget, there is no reason at all for them to deal with him on tax reform.

Democrats would do well to treat Arnold like Bush, and run out the clock on his failed governorship. With record unemployment, no prospects at all for economic recovery, and his desire to smash public services, Californians are going to continue to sour on their governor, and look forward to the day in January 2011 when we are no longer plagued with his corrosive presence in government.

Arnold Schwarzenegger's crazy, reckless budget vetoes have been getting a lot of attention around the state in the last 24 hours or so, and have led Democrats to vow to fight these cuts. So how exactly can that happen, given that Democrats embraced billions in other cuts just last week?

There are three emerging tracks for fighting these cuts. The first is the Courage Campaign's call for a veto override session. (Note: I am of course the Public Policy Director at the Courage Campaign.) We're asking our members to contact Speaker Karen Bass and Senate President Pro Tem Darrell Steinberg to call the legislature back into session and override the vetoes.

Some might contend that this is either not likely to happen, or if an override were attempted, it would fail. I'm not so sure that's the case. The US Congress overrode precious few of Bush's vetoes, but they came extremely close to overriding Bush's 2007 veto of the State Children's Health Insurance Program (S-CHIP) - the votes were there in the Senate to override, including 17 Republicans, and the veto override fell just a few votes short of the 2/3 mark in the House.

Overriding a gubernatorial veto is less difficult in California, where Democrats are very close to having 2/3rds majorities in both houses. It stands to reason that Republicans would be under intense pressure to override vetoes to protect children's health care, domestic violence programs, HIV/AIDS programs, and state parks.

Sure, we all know that the Republican Party in California is insanely right-wing. But even they have their limits. Several of their number are running for statewide office in 2010, giving Democrats an opportunity to leverage them in support of widely popular programs. Dems would also be able to use a veto override to target vulnerable Republican seats in their bid to win a 2/3 majority in the 2010 election.

The best political strategies are those that have multiple avenues of success. In addition to the Courage Campaign veto override action, legislators are stepping up their attack on the line-item vetoes as being illegal. John Pérez offered this statement today:

“The Constitution gives the governor considerable power over the budget, but it doesn’t give him the power to make it up as he goes along. While I consider these cuts criminal morally, they are in fact illegal in the eyes of the law,” said Pérez, who has called for an
immediate restoration of the funds that were cut. “It is wrong for ordinary Californians to suffer so the Governor can spare oil, alcohol and tobacco companies from paying their fair share.”


The California State Constitution gives the Governor "line-item" veto authority, permitting him to "reduce or eliminate one or more items of
appropriation while approving other portions of a bill" [Cal. Const. Art. IV, Section 10(e)]. However, this line-item veto authority only
applies to "appropriations.” When the Legislature takes an item of appropriation – like the budget signed by the Governor and enacted into law this past February - and passes a new bill that reduces the amount of that appropriation, that new bill is not an appropriation because it does not give anyone more authority to spend state money - it takes away spending authority.

While legislators have talked of aggrieved parties taking this to court, Controller John Chiang is reviewing whether the vetoes are legal and constitutional:

While the governor signed the budget revision yesterday, Democratic state Controller John Chiang is charged with carrying out his budget. Earlier this week, Chiang spokeswoman Hallye Jordan said the controller's legal staff was reviewing whether the governor's line-item vetoes were constitutional.

If Chiang does carry out Schwarzenegger's vetoes, expect advocacy groups to file suit against Chiang. If Chiang does not carry them out, expect another legal battle between Schwarzenegger and the controller.

The governor's office is taunting Democrats, convinced that this is all just sturm und drang without any likelihood of materializing into an actual reversal of the cuts:

Department of Finance Director Mike Genest predicted Tuesday that Democrats would not challenge the vetoes because "they have something to lose, too." His comment suggested that Democrats know full well that it is difficult to find another $489 million in savings -- and they might be better off politically allowing the governor to bear the brunt of criticism for the cuts he did implement yesterday.

I read this as Genest wanting to actually avoid a veto session. The cuts Arnold made are extremely unpopular - even Abel Maldonado has called the cuts "too severe". The governor's office probably realizes they would be vulnerable in an actual veto session.

Arnold Schwarzenegger is out on a limb. Let's saw it off by calling a veto session and reversing these heinous cuts.

Over the flip is the email the Courage Campaign sent to our members today.   Read More »

We've been focusing a lot on the losers in the recent budget deal. But who are the winners? Pretty high on that list would have to be Big Oil. They were able to convince Democrats to drop their demands for an oil severance tax, and were able to convince Democrats to agree to allow the first offshore oil drilling in 40 years to begin off the unspoiled coast of Santa Barbara County near Point Conception.

Every other oil-producing state in the union taxes the extraction of oil from its lands - including Texas and Wyoming. Even Sarah Palin raised the oil severance tax in Alaska to 25% in 2007. Instead, as Paul Hogarth pointed out, California is defining itself to the right of Sarah Palin by refusing to embrace such a tax.

The California Budget Project estimated a 9.9% oil severance tax would bring it at least $1 billion to state coffers. If oil prices rose again above $100/bbl then we could see $2 billion in revenue per year. Given the high likelihood of such increases, an oil severance tax would be a significant long-term boon to the state's coffers, since oil companies can't exactly shift production out of state, since oil is only going to become more valuable over time.

And that money could help prevent the most egregious human services cuts that were agreed to in the budget deal - the cuts to healthy families that will cost 500,000 children their health care coverage, the cuts to in home supportive services that people like Nori need to survive.

There are many possible responses to the budget deal. The Courage Campaign is asking our members to zero in on the oil severance tax and ask their legislators to vote "no" on a budget that does not include that tax. We will collect signatures to our letter and deliver it to every legislator in the Capitol ahead of the Thursday budget vote.

Californians are being asked to make a choice: give the oil companies a sweetheart deal unprecedented in the United States, or demand that oil companies pay their fair share and help prevent a humanitarian catastrophe that budget cuts will cause.

The Courage Campaign thinks the choice is clear. Let's let make sure our legislators hear about that clear choice before the vote on Thursday.

Over the flip is the email we sent to our members, which includes the California Closed video produced by community organizers Marta Evry and Laura Velkei.   Read More »

And so the budget drama hurtles toward its inevitable conclusion, perhaps as soon as tomorrow. Democrats have caved and given Arnold Schwarzenegger what he wanted - a cuts-only budget that does massive and lasting damage to the state of California, to the people who live here, and to our collective future. It's taken 31 years, but Howard Jarvis is finally going to get the wholesale destruction of public services he always wanted.

After resolving their major education dispute Friday, Gov. Arnold Schwarzenegger and legislative leaders hope to finalize a budget deal today that closes California's $26 billion deficit with spending cuts, accounting shifts and revenues from local governments.

State leaders have agreed on a general budget framework and gave attorneys and budget aides time Saturday to draft a bill, sources close to negotiations said....

Besides spending cuts, the budget proposal includes capturing more than $4 billion from cities, counties and special districts.

It also relies on accounting tricks, such as increasing income tax withholding schedules by 10 percent to shift money from 2010-11 to 2009-10, as well as delaying state worker paychecks next June 30 to July 1.

In the coming days we will hear Democratic legislators claiming this is some sort of victory - that Cal-WORKS wasn't eliminated, that California can again pay its bills. These are hollow, pyrrhic victories. The raid on local government funds will ensure dozens of cities go bankrupt and will lead to reckless public safety cuts, especially to firefighters. Schools are going to get another hit without any firm guarantee that they will be repaid - we haven't seen details of the "agreement" to repay the $9.5 billion schools are owed, but Arnold seems to have won the battle to prevent repayment from becoming a constitutional mandate, meaning that repayment shouldn't be counted on until the checks are actually cut.

Still unclear is the fate of health care, IHSS, state parks, and other proposed cuts. But at this point it's not clear that their exact fate matters much. Democrats have signaled that they will abandon their half-hearted efforts to demand new revenues, to close corporate tax loopholes, and to have a more fairly balanced budget. When the next mid-year budget adjustment has to be done in 6 to 9 months from now, or in the battle over the 2010-11 budget a year from now, Arnold will have little incentive to listen to Democratic proposals, since he has proved once and for all that he can get Democrats to do his bidding by holding firm and demanding massive cuts.

For their part, Democratic legislators likely believe that they are merely living to fight another day, especially on Election Day in November 2010 when they hope to elect a 2/3 majority in both houses.

It seems highly unlikely they will get that result. Democrats have given Californians no good reason to vote for them in state legislative races, as they refused to stand up for Californians and the services they need to survive. They refused to make a strong push for tax fairness. And they refused to plan for economic recovery.

This is the way California ends. Not with a bang, but a whimper. With a failure of leadership so complete, so total, as to leave the state bereft of hope for its future.

One of the great progressive achievements in American history (and no, that isn't hyperbole) is the nationwide adoption of universal public education. Here in California we went one better and created what for many decades was seen as the world's leading system of higher education - the 1960 Master Plan for Higher Education.

Both were created out of the recognition that for California to have broadly shared economic prosperity, it was *essential* that we have a strong public education system that included *affordable* and *accessible* college education for those who desired it. California's fantastic economic success over the last 50 to 60 years was enabled in no small part by this commitment to education. And even after the state began entering a slow period of decline in 1978, with increasing inequality and slowly contracting public services, the educational system was still able to train a skilled and innovative workforce that helped sustain California until the present crisis hit.

Now all of that is about to be destroyed. California's colleges are facing cuts so vast that they will finally eliminate what remains of the *affordable* and *accessible* promise while turning the world-renowned system into "bachelor degree mills" that no longer contribute research knowledge to the state - knowledge that in the past spawned entire industries, including the high-tech industry.

At the same time the state legislature is poised to deliver major cuts to education spending - the only debate at this point seems to be "how" and not "if." Schools already sustained a $9 billion hit through an illegal interpretation of the Prop 98 rules, so now Arnold Schwarzenegger wants the legislature to suspend Prop 98 outright. Democrats, who have been engaged in a slow-motion cave yet again, appear likely to go along with some form of the insane cut.

Nobody has yet explained how this will do anything to promote economic recovery. Instead it is likely to leave California permanently behind the rest of the nation and much of the industrialized world for quite some time. Without being able to educate our children ind decent schools, it will be difficult to retain businesses here as they will struggle to find qualified workers, and will continually lose employees to other states that have not decided education is no longer important or valuable.

Unfortunately California in 2009 is a place where the word "future" is a verboten word, rivaled only by the phrase "economic recovery" in the level of disdain it is held in Sacramento. We are told that the need to cut trumps all else in our state - apparently it even trumps common sense.

Democrats have convinced themselves a budget deal is necessary to avert meltdown. But that meltdown is already here. Agreeing to destroy education in this state would merely be agreeing to ensure the radioactivity is channeled primarily at the young.

And so it begins. As Anthony Wright is tweeting, a group of disabled activists have taken up positions in the Capitol building and are refusing to leave until the health and human services cuts are reconsidered:

Wheelchairs blocking the Governor's office for the last two hours over the budget cuts.. CHP threatens arrest, they say they are prepared...

Over 100 folks protesting cuts in the hall outside Governor Schwarzenegger's office. Gov is at Mason's having lunch... maybe Jacuzzi later?

CHP threatens not just arrest-and-release, but taking disabled protestors to county jail. They say they rather be in jail than nursing home.

Outside Gov's office... Several Dem legislators came down to talk to/cheer on the disabled protestors: Cedillo, Perez, Beall, Skinner, etc

Budget protesters call out "hold the line" when someone tries to pass. The wheelchairs effectively stop any traffic in hallway.

Bad budget boon for Blimpie's: Food arrives for protestors with disabilities, as thet settle in for the long haul in front of Gov's office

This is just the start. These protestors are taking matters into their own hands. As Arnold is actively burning down the state and forcing through destructive cuts to some of California's most vulnerable people, more and more Californians are going to start pushing back.

One doesn't want to overstate this. But after Arnold's "let them eat cake" moment in the NYT magazine article - replacing cake with stogies and Versailles with the smoking tent - it's sensible that the Third Estate is going to storm the building to demand justice and equality.

UPDATE: The protest organizers, the "People's Day of Reckoning Coalition" (an offshoot of the IHSS Coalition) have explained their actions to the media:

Caregivers and people with disabilities are furious that Gov. Arnold Schwarzenegger is asking for more cuts to California's in-home support services.

About 100 protesters said they successfully blocked the entrance to the governor's office Tuesday. The People's Day of Reckoning Coalition organized the protest.

The coalition sent a letter to Schwarzenegger in June, asking him to come up with a budget solution that includes new sources of income and not just cuts to services.

"We are calling for a budget solution that is based upon shared responsibility and shared sacrifice -- not a solution that falls squarely upon on the shoulders of children, people with disabilities, elders, the chronically ill, the unemployed and the impoverished," the letter said.

The People's Day of Reckoning Coalition represents human services, health care, community improvement and educational interest....

John Campbell, a caregiver, said claims of fraud are exaggerated, calling the governor's remarks "just a bit of political theater."

What I really love about this is the quote from John Campbell there at the end. It's like he's shrugging off Arnold's attacks as part of his typical BS. Clearly the protestors aren't scared - not of Arnold, not of the CHP, not of anyone.

This kind of sit-in is exactly what is needed to bring more attention to the actual impact of this crisis. Arnold wants to make it sound like it's about unions and fraud, but it's about real human beings, people who need care and those that provide it, and how they are getting the brunt of the budget cuts.

Their stories are the secrets Arnold has tried to keep from the public. But no longer.

Once upon a time, way back in the spring of 2009, there was a lot of talk of "green shoots" and the promise of economic recovery. Well, that theory seems pretty much shot to hell now, as there is growing recognition that, in Nouriel Roubini's words, "the green shoots are mostly yellow weeds." Unemployment continues to rise, and the economic indicators that implied a possible turnaround seem to have been little more than side effects of another Goldman Sachs bubble.

And as a result there's more and more talk of a "third stimulus" across the left blogs, including Paul Krugman, especially as people come to realize just how stupid it was to gut the February stimulus by taking out the all-important state stabilization funds. As realization dawns that 50 Herbert Hoovers are wiping out the effect of the stimulus by state budget cuts, the necessity of federal aid to the states is becoming obvious.

Unfortunately, some commentators are still stuck in "blame" mode, and haven't yet grasped the need to move beyond blame and toward action that can prevent a full-blown Depression. Take Ryan Avent, for example, who opines today that California is the obstacle to a new stimulus aimed at rescuing the states:

The huge obstacle to getting this done, however, is California. California is the state in the worst shape, and it’s also the state no one wants to help, because its problems stem from terrible institutions and a horribly dysfunctional government. They’re not just cyclically screwed; they worked very hard to get themselves into this mess, and the rest of America, quite reasonably, doesn’t want to bail them out. But this is a problem for the rest of America, because rare is the state that couldn’t use some additional help right about now.

This sort of argument is becoming depressingly familiar. As David Dayen at Calitics pointed out yesterday most Californians weren't able to vote in the June 1978 election that approved Prop 13, and many who voted yes didn't know what they were doing. More significantly, Californians have never been given the chance to vote to reform Prop 13 - to protect vulnerable homeowners yet close the corporate loopholes - as our political leadership convinced itself that it could cut a series of deals in the name of asset bubble centrism and avoid both financial collapse and being overrun by the Jarvisite hordes.

Californians routinely vote for responsible tax increases, especially at the local level, and would do so much more often if the right-wing hadn't blocked the majority from governing the state by the 2/3rds rule. Folks like Ryan Avent offer a superficial understanding of California's problems, unfamiliar with the fact that we have a center-left electorate governed by a center-right system and a Democratic Party whose leadership has been frankly afraid to challenge that status quo.

But as wrong as Avent is about the details, his "blame all Californians and let them rot" attitude is quite familiar, even widespread, among national elites, including ostensible liberals. I say "ostensible" because a core tenet of liberalism is the notion that government should provide second chances.

Avent does offer a somewhat sensible basis for a solution:

This is the part where I’d recommend a negotiated, conditional aid package to California, combined with a broader state budget resolution authority designed to facilitate countercyclical aid in situations like these. But at this point, I kind of think that California is screwed, and that by extension America is screwed, and will suffer a longer and more painful recession than is necessary thanks to the intractable politics of the issue.

And such a package is precisely what many of us in California want. We recognize that we need the federal government to use its leverage to break the impasse in Sacramento. But we're worried about the conditions. With Larry Summers in charge of economic policy, the conditions are likely to resemble a 1990s IMF bailout, demanding massive cuts to the public sector - cuts that will merely worsen the recession, as the Sacramento region is discovering.

The fact that many other states are facing budget meltdown may be enough to overcome the previous hesitance of the feds to offer California anything that smacks of a "bailout". And if that assistance came with appropriate and progressive conditions - that California place a repeal of the 2/3rds rule on the ballot, that corporate tax loopholes be closed, that education and health care no longer face cuts - then it would be a significant step forward.

Unfortunately we may not be at the point yet where this is possible. Avent blames "intractable politics" but I would argue the problem is instead intractable assumptions. Too many people are still out to play the blame game, or like the Obama Administration, are more afraid of right-wing criticism than of the political repercussions of a slide into Depression.

It would help if national observers would look past the superficial assumption that all Californians were party to the reckless economic, fiscal and political choices of the last 30 years, and instead realize that avoiding a national Depression and fixing California's problems are not mutually exclusive, but instead are mutually reinforcing.