Man Without Qualities

Wednesday, August 27, 2003

Word Magic

One of the more peculiar themes that is now developing in the California recall is the denial of the significance of the $38 Billion California state budget deficit. For example, the Daily Howler criticizes this bit of reporting by CNN’s Wolf Blitzer, interviewing Gray Davis on Late Edition:

BLITZER: At the same time your critics…are pointing to mismanagement on your point. They point out—and we’ll put some numbers up on the screen—that when you took office in 1998, there was more than a $4 billion surplus in the California, $4.4 billion California surplus, but there is now a $38 billion deficit. They say that’s extraordinary, extraordinary mismanagement that warrants your recall.

DAVIS: First of all, there is no $38 billion deficit. I signed a budget a couple of weeks ago. It is balanced in the year we’re currently in. We do have an out-year problem of $8 billion. But we’ve made great progress going from $38 billion to $8 billion.

The Howler comments: Where in the world has Blitzer been? Should major journalists be conversant with even the most basic facts? The Howler had previously cited Herr Doktorprofessor Krugman as pointing this out.

The issue here is: Why are people in California angry enough at Gray Davis to possibly recall him? That a budget has now been signed with "an out-year problem of $8 billion" rather misses the point as far as current California voter anger goes because the budget deficit was reduced by making cuts, borrowings and increasing taxes in ways that were not previously needed and which many of the now-angry voters now say they did not expect.

To get some idea of how peculiar this Howler/Krugman/Davis approach to understanding voter antipathy really is, just imagine a conversation between Gray Davis (or the Howler or Paul Krugman) and a California voter:

Gray Davis: Why are you, as a California voter, mad at me now?

Voter: Because you let the state budget go $38 Billion into deficit and lied about it when you asked for my vote when you were re-elected.

Davis: But that's all wrong! First of all, there is no $38 billion deficit. I signed a budget a couple of weeks ago. It is balanced in the year we’re currently in. We do have an out-year problem of $8 billion.

Voter: You have balanced the budget and avoided a complete state shutdown that should never have even been possible under your campaign promises - goodie! OK, then I'm mad at you because you let the state budget go into a condition that required $38 Billion in spending cuts and tax increases and lied about it when you asked for my vote when you were re-elected. What's the difference? My car registration fee just tripled - you said that would not be needed. All kinds of state benefits have been cut - you said that would not be needed. The state sales tax is going up - you said that would not be needed. The state's borrowing has trashed its credit rating - you said that would not happen. Most of the reason I was mad at you because of that $38 Billion deficit was that I realized my taxes would have to go up and my benefits go down until that gap was closed. Now you say there's no problem because you have just signed a budget raising my taxes and reducing my benefits to close that very gap. And I'm not supposed to be mad at you? ARE YOU OUT OF YOUR MIND?

Davis: But I balanced the budget. I'm a fiscal conservative.

Voter: No. You're like somebody who shows up at my door, points a gun at me and asks "Why are you mad at me?" Then, when I tell you that I'm mad because you're threatening to shoot me, you pull the trigger and ask "Why are you mad at me now, I'm not threatening to shoot you now!"

Yes, this year's budget is passed and balanced. Yes, we do have an out-year problem of "only" $8 billion - provided no additional spending is authorized and no spending cuts are restored in the coming election year, the vehicle registration fee is not rolled back (despite the desire of every major contender in the recall to do just that) and no "unexpected emergencies" arise - like the need to keep the lights on when the cost of power goes up.

But the $38 Billion number is still the right number to keep in mind when considering why voters are angry at Gray Davis' performance as governor. Blitzer may not have got the figures right in the trivial sense that instead of saying "there is now a $38 billion deficit" he should have said "two weeks ago there was a $38 billion deficit which was closed only through massive and possibly illegal tax increases, borrowings and program cuts", but he sure got the substance of the recall election right. It's the Howler and Messrs. Davis and Krugman who are missing the important point.

POSTSCIPT: The passage of the California budget is, of course, a significant event for Gray Davis and an important development in the recall process - but not for the reasons which Messrs. Krugman and Davis and others have sought to assign to it. As far as the recall is concerned, before the budget passed the fighting over it was the constant focus of California political coverage. In effect, the budget coverage was the recall campaign, or most if it. Following the budget's passage, the various players - especially the Governor - could hope to mount their own campaigns and otherwise attempt to direct public attention and opinion. That is not happening, or at least it is not happening to the extent and as quickly as the Governor and his supporters would prefer.

Budget concerns have not fully or quickly abated partially because the budget that was just passed does some of the painful things necessary, which smarts and will long linger, and partially because the budget does not do all of those things - but leaves lots of pain for next year, which is an election year for the legislature. In addition, the budget mess is a kind of mnemonic for other California messes, especially the workers compensation system, which is a major impediment to the growth needed to address the structural component of the recurring budget crisis.

MORE:Bob Somerby of the Howler e-mails the following response:

What Blitzer said was inaccurate. It was typical, know-nothing insider
journalism. If he had said something else that WAS accurate, that would
been fine. Which part of "major journalists shouldn't make factual
misstatements" don't you understand?

By the way, because Blitzer said something that was factually
time was wasted on Davis' answer, which didn't speak to the questions
raise. Davis didn't speak to the question you raise because Blitzer was
dumb to ask them.

For what it's worth, I think Mr. Somerby is correct that Blitzer should get his facts right, even facts which are details. However, a politician determined to avoid the substance of a question - like Governor Davis, here - has plenty of opportunities to do so. It seems a stretch to suggest as Mr. Somerby does that Mr. Davis would have said something meaningful if Blitzer's question had included the words "two weeks ago..." instead of "now ...."

The Governor's evasiveness also indicates how spectacularly out of touch he has become. He suffers from his own evasiveness in addition to the voting public because he desperately needs to address - or appear to address - the substance of questions like Blitzer's in order to increase his chances of surviving the recall. While it is technically possible for him to survive with a campaign of word magic, he sure isn't stacking the deck in his favor with responses like this. There are now plenty of reports of private polls indicating that the recent one by the Los Angeles Times that seemed to throw Mr. Davis a lifeline was not accurate. If Mr. Davis wants to remain governor, his best bet is to address the voters' concerns, not deny their reality as if the whole recall movement were some modern version of a medieval dancing mania.

STILL MORE: An astute reader correctly notes that a draft paper by Daniel J. B. Mitchell now appearing on the UCLA Anderson School web site shows that the $38 billion was a moving target, impervious to accurate classification by such terms as “deficit” “shortfall” “hole” etc. The opaque accounting that produced the $38 billion number was obsolete when Blitzer cited it, having been replaced by a new opaque accounting that produced the $8 billion number. Blitzer is hardly the issue.

The perversely obscure public reporting of California finance can also be seen in this screed from the liberal California Budget Project, which attempts the amazing feat of persuading its readers that California did not "spend it's way" into the current crisis without ever mentioning how much California actually spent, or how much revenue it received, in any year, and also misrepresents the state's General Fund as "California spending" - where California spends from many other funds, too. Indeed, the CBP's summary of the current budget notes opaquely that billions of dollars in the current budget were paid for with "fund shifts and internal borrowing." That is, the current budget moves money into the General Fund from other state funds whose very existence is never acknowledged in the screed purporting to track California spending and arguing that California did not "spend its way" into the current crisis. That's not revenue, that's accounting magic. California spending and revenue is made even harder to track by the legislature's frequent shifting of revenue and spending to localities, often just to accomodate (some would say "evade") state constitutional provisions.

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