Bobo, who was born in Toronto, grew up in New York, went to college in Chicago, and lives in Bethesda, has decided he’s an expert on California. In “Tom Joad Gave Up” he has a question: Remember what good government looks like? He gurgles that revisiting California’s golden age might help. Typical Bobo crap. Mr. Cohen, in “The New American Normal,” says as the U.S. descends into tribal division, expect the “animal spirits” to keep on hoarding. Mr. Herbert asks “What Is Paladino About?” He says the Republican candidate for governor in New York has a lot more explaining to do before Election Day. Here’s Bobo:
Sometimes it’s hard to remember what good government looks like: government that disciplines itself but looks to the long term; government that inspires trust; government that promotes social mobility without busting the budget.
That kind of government existed for decades right here in California. Between 1911 and the ’60s, California had a series of governors — like Hiram Johnson, Earl Warren, Goodwin Knight and Pat Brown — who were pro-market and pro-business, but also progressive reformers.
They rode a great wave of prosperity, and people flocked to the Golden State, but they used the fruits of that prosperity in a disciplined way to lay the groundwork for even more growth. They built an outstanding school and university system. They started a series of gigantic public works projects that today are seen as engineering miracles. These included monumental water projects, harbors and ports, the sprawling highway system and even mental health facilities.
They disdained partisanship. They continually reorganized government to make it more businesslike and cost effective. “Thus,” the historian Kevin Starr has written, “California progressivism contained within itself both liberal and conservative impulses, as judged by the standards of today.”
Most important, California progressives focused on the middle class. By the end of these years, California enjoyed the highest living standards in the country. The core of the state’s strength was in the suburbs. Between 1945 and 1950 alone, the San Fernando Valley doubled in population. In one 12-month period, between 1959 and 1960, Valley residents applied for 6,000 swimming pool permits.
In fits and starts, California’s progressive model has been abandoned. The state’s current economic decline and political stagnation is a result of that abandonment. Now California government has all the dysfunctions that mark national government, but at a more advanced stage.
Both parties helped kill off California’s pro-market progressivism. Some assaults came from the left. First, there was the growing power of the public sector employee unions. These unions began lobbying for richer salaries and pensions. That, of course, is their job. But in the 1970s, governors started caving in. Money that could have gone into development went into prison guard benefits. Infrastructure spending, for example, has dropped from 20 percent of the state budget to 3 percent.
Then there was the growing power of the environmental movement. In the 1960s, environmental groups protested against the excesses of the infrastructure boom. Many of their complaints were absolutely legitimate. But over the years, environmental concern transmogrified into a “small is beautiful” ideology. A new cadre of activists arose — hostile to suburbia, skeptical of capitalism and eager to impose greater regulations and costs on small businesses.
As Joel Kotkin of Chapman University has pointed out, the interests of the affluent class along the coasts began to crowd out the interests of the middle-class suburbanites and agricultural workers further inland. “The result,” he writes, “is two separate California realities: a lucrative one for the wealthy and for government workers, who are largely insulated from economic decline; and a grim one for the private-sector middle and working classes, who are fleeing the state.”
Another assault on California progressivism came from the right. Conservatives refused to acknowledge the public sector’s role in creating the state’s prosperity. With Proposition 13 and other measures that cut taxes, they cut off revenue and pushed through structural reforms, making it hard for future administrations to raise funds. Many on the right became unwilling to think creatively about using government to promote prosperity.
The result is a state in crisis. Eighty-two percent of Californians say they believe their state is heading in the wrong direction, according to this week’s University of Southern California/Los Angeles Times survey. State growth has lagged behind national growth. Unemployment is at 12.4 percent statewide and at catastrophic levels in the Central Valley. More people are leaving California for Oklahoma and Texas than came here during the Dust Bowl days of the 1930s. Tom Joad is giving up.
Meanwhile, the political set is an embarrassment. As jobs disappear, legislators are fixated on transgender rights and deals for lobbyists. Legislators are polarized and gridlocked. The pension system is $300 billion in the red, and the state hops from one fiscal crisis to the next.
The answer is to return to the tradition of pro-market progressivism that built modern California in the first place. Except this time, it can’t be about building up the ’50s-style suburbs. It needs to focus on supporting the immigrant entrepreneurs, averting state bankruptcy and unleashing the industrial and agricultural base.
The antigovernment conservatives and the unions have built institutions and bases of support. The heirs to the pro-market progressive tradition have not. What’s needed is not a revolution, but a restoration and a modernization of what California once had.
Here’s Mr. Cohen, writing from London:
The “animal spirits” of which Keynes spoke are on the prowl across the United States. Their mood is ugly. The spirits are wary and troubled. Corporations and individuals are hoarding cash, when they have any, because they’re not buying into the recovery.
On a weeklong visit, I found a mood of deep unease in an America that seems to have descended into tribalism — not ethnic, but political, economic and social. Uncertainty is pervasive. The government’s rescue of Wall Street combined with the acute difficulties of a middle class struggling to get by on stagnant or falling incomes has sharpened resentments.
This is not a momentary phenomenon. Nobody seems to think unemployment is going to fall significantly from 9.6 percent — a level more often associated with France — in the near future. Get used to the new normal.
I spoke to a retired Wall Street executive who got out a few years back and set up a small business where he had to make payroll (sobering), but was freed from the debilitating short-termism of financial institutions that, over his career, had become dominated by traders “who look at economic opportunity rather than economic conditions.”
He said the final straw came in 2002. Top executives at the bank where he worked gathered to discuss their bonuses. The issue before them was whether to maintain those bonuses in a time of economic contraction, which would require firing 5 percent of the workforce, or take a 25 percent bonus cut, which would allow those jobs to be kept.
“The guy running the meeting asked for a show of hands on who would accept a reduced bonus,” he said. “There were 30 of us in the room. Three raised their hands. I was one of them.”
The job losses went through, this executive left, and the bank today is still trying to claw out from its uncontrolled excess.
America is a land of associations. Solidarity has not vanished from the land. But it’s in retreat. None of those guys who wanted all their yummy money was anything but rich.
Fragmentation holds sway. The stock market used to be a fair proxy for the state of the economy. Now it’s a market of traders, not investors. They want to know what the spread is today and tomorrow; they can make money on the way up or down; they care far less about U.S.A. Inc.
So the market goes where it goes — up of late but largely directionless (which makes it harder on those up-or-down traders) — while out on Main Street the struggle to make family payroll continues. People work longer hours, they juggle how to cover their kids’ needs, how to de-leverage just a little — and they’re still meant to “consume” for the economy’s sake.
The share of national income held by the top 1 percent of American families has doubled in recent decades to 20 percent. That’s a huge shift. I spoke to Doug Severance, a Vietnam vet who’s a hotel employee in Aspen, Colorado. “When I moved here in 1984 we were all family,” he said. “Now either you arrive in a Lear Jet or you’re a servant.”
Obama hope has dissipated in short order. He’s not entirely to blame and he’s not blameless. The exclamation from Velma Hart, a black Obama supporter, at a recent town hall meeting — “I’m exhausted of defending you,” — struck a national chord because so many people feel the same thing.
Arriving from the U.K., it was the uncertainty that was most striking. That’s about the worst thing for an economy. As one Chicago executive put it to me, people who are creative rise above a consistently applied set of rules. Opacity kills.
Britain has similar post-binge economic problems — of personal and national debt and spiraling deficits. But Conservative Prime Minister David Cameron and his Liberal Democrat partners have actually put bipartisanship to work — did any Republicans notice? They are looking to lock in five years of stability through a new law and push through painful cuts across government departments.
Five years is a decent stretch. In America today, quarter-to-quarter concerns hem in even a visionary chief executive.
The policy debate in the United States is head-spinning. Nobody knows if there’s going to be more fiscal stimulus, after the first $787 billion, or how a row over taxes will end. Under an Obama proposal, Bush-era tax cuts are due to expire at year-end for affluent couples and small business owners earning over $250,000. Republicans are digging in, saying it’s crazy to raise taxes in a faltering economy.
It’s not crazy. Ending the tax cuts for the rich is a minimum signal for a divided land, a statement that the two Americas are acquainted with each other. But with Obama facing a stinging midterm defeat, it looks like a long shot. What is needed above all is some clarity and sense of direction — the kind Cameron has given in London and booming China consistently applies.
Without that expect the animal spirits to keep on hoarding, an inward-looking America bent on retrenchment, and a new normal that lasts and lasts.
Lord, I’m glad I’m an old fart and don’t have children… Here’s Mr. Herbert:
Is the Republican candidate for governor of New York a racist, sexist, pornography-loving creep? Or are there other, more benign, explanations for the stomach-turning e-mails distributed by Carl Paladino?
One of the things that can happen in the news business is that some portion of a story becomes so vile, so offensive, it is virtually impossible to effectively recount or describe. Reporters keep their distance. Editors lunge for the delete button.
Such is the case with the images and videos forwarded by Mr. Paladino to a wide variety of people. The public should know about these mailings, and Mr. Paladino should give a full, thoughtful explanation of why he trafficked in such filth.
Example: A photo showing a group of black men trying to get out of the way of an airplane that is apparently moving across a field. The caption reads: “Run niggers, run.”
Example: A doctored photo of President and Mrs. Obama showing the president in a stereotypical pimp’s costume holding the hand of the first lady, who is dressed as a prostitute in a grotesquely revealing outfit.
Example: A video clip of a nude couple engaged in intercourse with the title: “Miss France [expletive].” Mr. Paladino characterized it as “a keeper.”
Example: An image showing a woman performing a sexual act on a horse.
There are many more. Mr. Paladino has acknowledged forwarding the e-mails, which he said was evidence of “poor judgment” on his part. But that’s not sufficient. The e-mails raise legitimate questions about the fitness of the sender to hold the highest office in the state, and Mr. Paladino should feel an obligation to put those questions to rest.
The images and videos are so blatantly hostile to blacks and women that it’s fair to wonder whether Mr. Paladino is prejudiced against them. He’s made it clear that he’s fully capable of mindless stereotyping — letting us know, for example, that people from Manhattan, who tend to be “smug” and “elitist,” are his least favorite New Yorkers.
Questions about possible prejudice are germane whenever a candidate aspires to public office. In Mr. Paladino’s case, the questions are entwined with some of his specific policy positions. He believes that space in prisons should be turned into work camps in which poor people would get, among other types of training, classes in personal hygiene. The camps would be part of Mr. Paladino’s proposed “Dignity Corps,” the inference being that the poor lack dignity in the first place, along with their presumed lack of cleanliness. (It’s a good bet that Mr. Paladino is oblivious to the extreme irony of someone who sends out racist and pornographic e-mails counseling others about personal dignity.)
But while aiming to bolster the sagging dignity of poor New Yorkers, Mr. Paladino would simultaneously hack away at their health care. He has said that one of his first acts as governor would be to cut Medicaid — which provides health services to the poor — by $20 billion.
On an issue of particular concern to women, Mr. Paladino is opposed to abortion in virtually all instances, including cases of rape and incest. The only exception, according to a spokesman, would be if the life of the woman was at stake.
Michael Caputo, Mr. Paladino’s campaign manager, said the candidate is sorry for sending the e-mails and has apologized a number of times. But when asked to explain why his boss engaged in this pattern of distributing such offensive material, he could only repeat, as Mr. Paladino has: “Bad judgment.”
This does not give voters any insight into how Mr. Paladino really feels about blacks and other minorities; or about women, who just happen to make up half the population of the state that he would be governing; or about the most extreme forms of hard-core pornography.
As for the poor, Mr. Caputo said that Mr. Paladino has at times not fully explained his expansive plans for welfare recipients, failing public school students, and men and women who receive unemployment benefits. He said a Governor Paladino would ask parents of struggling students to send them to state-sponsored boarding schools, which would also house children taken from their parents “because of social service or child welfare reasons.”
He said all recipients of long-term unemployment insurance or welfare services (except for the disabled and mothers with small children) would be required to work (or be re-trained) in government programs in order to get their benefits. This would include, he said, those who are already very well educated.
I don’t think voters quite know what they might be getting with Mr. Paladino. New Yorkers need to hear much more from him.
