Man Without Qualities

Sunday, August 03, 2003

Herr Doktorprofessor In Lotus Land

Vaguely conscious of his own impending demise, Gustave von Aschenbach journeyed to Venice to surrender the last portion of his common sense, capability for reason and, ultimately, his life. Herr Doktorprofessor Krugman settles for Venice Beach. Perhaps the New Jerseyan was drawn to these milder climes because he, like Aschenbach, delighted in the scene on the beach, the sight of sophisticated society giving itself over to a simple life at the edge of the element. If so, he should have stuck to squishing Bain de Soleil on his thighs, because his analysis of the current California scene could hardly be more trivial - or more lacking in common sense and reason.

But surely Herr Doktorprofessor's journeys to California have not been physical enough to require any Bain de Soleil! Surely he relies entirely on celluloid and digitized images created by California craftsmen. It must be so, because no intelligent, observant person who has passed through Los Angeles International Airport during the Bradley and Riordan mayoralties of this City, and troubled to learn even a bit of that airport's history, could write something as preposterously out of touch as:

The recall isn't just a case of hardball politics. It's also a grand act of evasion: in the face of a severe fiscal crisis, voters are being invited to focus not on hard choices but on personality. Replacing Gray Davis with someone more likable isn't going to pay the bills.

Richard Riordan's will likely be one of the much-more-likeable-than-Davis names on the recall ballot. California is now a mess - but what was Los Angeles like when Republican Richard Riordan took over from his immediate predecessor, Tom Bradley? In the words of F. Scott Fitzgerald: Draw your chair up close to the edge of the precipice and I'll tell you a story.

Our move into a new (for us) house during the height of the Bradley-era Rodney King riots - a house located only a mile from a burning electronics store on Sunset Boulevard - was not easy. All utility company service personnel were too busy dealing with the consequences of the riots to turn on our utilities - and we were faced with the prospect of spending our first nights in the house without lights or the ability to call the police if the need were to arise. A few months later when Richard Riordan assumed the mayor's office, the marks of those riots were still fresh on the streets. More riots seemed likely to break out again on almost any morning, and that would have been nasty. Some communities, especially Koreatown, which had been sacked while the LAPD stood by, were known to have armed themselves to the teeth - and merchants vowed a bloodbath if the riots were repeated. Real estate values were plunging. Values in Hancock Park, for example, one of the finest neighborhoods in the City, were in free fall as residents sold and fled because that neighborhood was felt to be too exposed to riots. The Los Angeles Unified School District was almost universally regarded as a nearly complete failure and getting worse. Employment was falling precipitously as federal defense appropriation expenditures fell severely. And in addition to of all that, it was impossible to find a decent cup of coffee in the Tom Bradley International Arrivals Building at the Los Angeles International Airport.

Was Tom Bradley to blame? The city's problems were deemed by many, especially many in the liberal media, to be manufactured elsewhere (especially Washington), structural, endemic and insoluble - and therefore not particularly Tom Bradley's fault. Mr. Bradley was presented by many such people as a decent man who was being blamed by critics who just didn't want to face up to reality. Such apologists also argued that it was simply unrealistic to imagine that LAX could provide services to passengers and significant income to the City. Los Angeles was widely viewed as all but doomed, what Herr Doktorprofessor would term a "banana republic," no matter who its mayor was.

But I didn't like Mr. Bradley very much. Yes, he was personally charming and he kept a civil tone. But he also caused the retail space at LAX to be leased to his political cronies, who did not pay much and did not provide many retail service - or decent coffee. He did not confront the City Council enough - and they continued essentially unchecked their rapacious taxing, crony-laden expenditures and suffocating regulatory policies. Personal charm without competence, guts and principle is just a form of seduction.

The Tom Bradley apologists were wrong. Grossly wrong. I voted for Richard Riordan then (he did not run against Bradley, who retired after the riots). I am certain that replacing Tom Bradley with this "someone" - Riordan - who was a lot more likable than Bradley did help my City to pay the bills.

If California voters do, by the grace of God and turn-of-the-century populism, have another chance to install the much more likeable Richard Riordan as Governor in lieu of Gray Davis, they should do so in a heartbeat, and focus on his brilliant if incomplete successes as mayor of Los Angeles. Richard Riordan as Governor would be a big help to California to pay the bills.

Memories are short in politics, but, yes, much changed in Los Angeles under the Riordan mayoralty. As a small but representative part of that change, decent coffee became available at the Bradley Terminal, along with a whole range of restaurants and a pretty reasonable selection of shopping outlets. Riordan had run on a platform of privatizing the airport - but that was blocked by the Clinton Administration (Tom Daschle's wife then headed the FAA). But Riordan caused the City to put the airport master lease out to bid - and the English company W.H. Smith took it, and has managed and sublet the retail space at the airport ever since. The results have been astonishing. But Riordan's accomplishments were not limited to the airport. Race relations throughout the City improved dramatically. White flight stopped. Hancock Park turned itself around, and then boomed and bloomed. Property values in my neighborhood - Los Feliz - soared and the neighborhood has been declared the "hippest" in the world by the Economist magazine (which I suppose is a compliment).

As Mayor, Richard Riordan confronted the City Council regularly, and often won - if not entirely, then meaningful, partial victories. He used the leverage of his office and his personal fortune and connections to challenge the school board - and helped install many reformers. The school district is still a disaster, but his efforts did help. He commissioned studies on the City's conflicting regulatory structures from competent, private firms. One such study revealed that it was quite literally impossible to build almost any factory in Los Angeles - simply because many material features of most factories mandated by one regulatory system (say, fire) flatly violated mandatory requirements of another (say, health or environment). Riordan caused the City to coordinate those systems, and thereby de-criminalized industrial construction in Los Angeles. Riordan was not divisive - either ethnically or politically, and frequently reached across the aisle to Democratic friends and allies (Broad, Feinstein, many, many more). One could go on and on and on. And on every count there is an obvious parallel to current State needs, and to current and past Gray Davis deficiencies. In sum: Herr Doktorprofessor could not be more wrong. Replacing Gray Davis with someone more likable like Richard Riordan will certainly help to pay the bills. And even if Riordan's name does not appear on the ballot, there are many, many people in California - some of them even Democrats - who would be far better for the State's economy and its ability to pay its bills than Gray Davis, who has been far more adept at running demonization campaigns than governing constructively.

Herr Doktorprofessor's errors aren't limited to ignoring the fact that replacing an incompetent chief executive officer of an entity - in this case California - with a competent chief executive officer will likely help the entity's finances. His errors are much more extensive than that because in urging California to raise taxes (which is really all the column amounts to) he doesn't even ask the most basic question: Can California raise taxes without damaging the State's economy through creating an even more uncompetitive business climate? The answer is almost certainly "no." According to the latest data (1999-2000) from the U.S. Department of Commerce’s Bureau of the Census, California is eighth highest among the states when tax burden is compared on the basis of personal income and seventh-highest per capita - but none of the western states with which California competes is even close to eighth. States with a higher burden than California are thousands of miles away.

[Of course, California also needs extensive regulatory reform, privatization and out-sourcing. But that's another argument for ejecting Davis in favor of someone like Riordan, and for a lot of other changes.]

Herr Doktorprofessor's column appeared just days after California Senator Dianne Feinstein backed vouchers for Washington DC students because, in the Senator's words, "We all know D.C. public schools need improvement. According to the most recent census, the District spends $10,852 per student annually -- the third highest level of per-pupil spending in the nation -- yet test scores lag far behind." So one's jaw drops at Herr Doktorprofessor's passages that continue to ignore willfully the disconnect between public education spending and results:

Proposition 13, the 1978 cap on property taxes, led to a progressive starvation of California's once-lauded public schools. By 1994, the state had the largest class sizes in the nation; its reading scores were on a par with Mississippi's. Voters wanted this shameful situation remedied. Indeed, much of the recent growth of education spending was mandated by a rather complex measure called Proposition 98. So when conservatives denounce "runaway government spending" in California, what they're really talking about is the effort to hire more teachers and repair decrepit school buildings.

But, even more peculiar, is Herr Doktorprofessor's view of Proposition 13. Real property taxes violate a basic principle of taxation: a tax should not be levied where there is no cash to pay it. Proposition 13 was enacted to stop a very real and disastrous aspect of real property taxation: in the event of a real estate price boom, many people were forced from their homes - and every home owner was forced to participate in the real property speculation. There is no good reason why every home owner should be forced to pay higher taxes just because a house down the street sold for more, especially in a hot market like the current one, which Herr Doktorprofessor has characterized as a probable "bubble" for more than a year:

More and more people are using the B-word about the housing market. A recent analysis by Dean Baker, of the Center for Economic Policy Research, makes a particularly compelling case for a housing bubble. House prices have run well ahead of rents, suggesting that people are now buying houses for speculation rather than merely for shelter. And the explanations one hears for those high prices sound more and more like the rationalizations one heard for Nasdaq 5,000.

Without Proposition 13 all homeowners in California would be finding their property taxes "bubbling up," too. Is that efficient tax policy? Does Herr Doktorprofessor even stop to ask? No. He's too busy wallowing around in some silly, economically irrelevant review of what he says former Governor Wilson did in the 1990's. Who cares? - Wilson's not going to be on the recall ballot.

The trivial superficiality of this column shows up even in its confused vocabulary. Herr Doktorprofessor uses the upcoming recall to support his contention that California resembles a "banana republic." But a "banana republic" refers to a country which suffers from too little democracy and too many despotic juntas. But the recall procedure, a product of turn-of-the-century progressivism, represents expanded direct democracy - as does the referendum procedure generally. If the California recall procedure is bad (which is by no means clear), then it is a case of too much democracy being bad - the exact opposite of the problems characterizing a "banana republic." I really don't care that Herr Doktorprofessor can't control his vocabulary. But I do object to his use of vocabulary failings to conceal his growing economic and analytic deficiencies.

Further, his failure to understand or even see the nature of the recall and referendum process denies him any real ability to address their deeper consequences - or to see how those processes are reflected in the current California problems. For example, more whites, Republicans and middle class voters tend to vote in referendum elections. That - together with gerrymandering of the California legislature to favor the Democrats - has created a serious tension between the results of referendums and the sentiments of the legislature. Many of California's financial parameters are now imposed by past referendums. There are many serious public choice economics questions to be asked and answered here - and probably some serious reforms to be suggested. [Incidentally, Herr Doktorprofessor's main correct observation, that many of California's (and America's) problems flow from the demands of its citizens, was made long ago and in vastly more entertaining fashion in P.J. O'Rourke's Parliament of Whores.]

Not that Herr Doktorprofessor would know or care about any of that. Intellectually, he's too busy wolfing as bikini bottoms go by on the Venice Beach walkway. Make him happy – just pass him another margarita.

Hoystory has more. And Maguire has still more.

More from Hogberg: Herr Doktorprofessor's basic source didn't say what he says it did. That's common practice in the Grand Dutchy of Krugmania.

STILL MORE: The complete and utter carnival of the Krugmanities. By Don Luskin - who, by the way, writes lots of interesting things in many venues - things that have absolutely nothing to do with Paul Krugman. And Luskin is correct a lot more often than Krugman is.

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