Saturday, October 16, 2010

Jobs are on the way

A close reading of Meg Whitman's campaign bus.

As I was perambulating through town on the day of California's recent gubernatorial debate, what did I see but an enormous bus, emblazoned with "Jobs are on the way", featuring California poppies on a field of green. I immediately cracked up, as this was the campaign bus of Meg Whitman, posing as some kind of flower-child messiah. I figured that she was parked outside the local Staples to catch a snooze in a business-friendly atmosphere before the night's debate, held right here in the fair city of San Rafael.

The back of the bus... note license from Tennessee.
Speaking of the atmosphere, the bus was running the whole time I was nearby, perhaps to keep her cool and comfortable on a hot day, but not doing much (in my book) for her green credentials, of which there are precious few. Nor were there any windows on the bus- the sides were devoted entirely to the colorful and boastful publicity, leaving whoever was inside none the wiser about where in California they might be passing through. The bus was also emblazoned in smaller type as the "Take back Sac express", a minor-key homage to John McCain's doomed buses of yore.

But what really got me thinking was the "Jobs are on the way" slogan, paired with Whitman's mantra that she is a job creator and knows how to make jobs. If we had an honest politics, the message would be quite different, perhaps "I know how to fire people".

Whitman's central skill is management of corporate brands and large business organizations, and this is not a skill to sneaze at. Our state government is an enormous, recalcitrant behemoth, in need of effective management. And Whitman's program for the government, as far as I can discern, is to fire a lot of people and cut the pay and benefits of the rest. Not necessarily a terrible program for a bloated bureaucracy with wildly unrealistic benefits and a good deal of corruption.

Yet there are some problems. First is that the main issues at the state level are not just ones of management, though good management is always in short supply. The main issues are structural, due to the chaos of our endlessly amended constitution, which empowers special interests of many stripes (and especially minorities in the legislature) to hold the state hostage like so many Lilliputians. Schwartzenegger has taken a few shots at these structures, mostly ineffectively. He has also supported a few propositions that promise to help the situation, namely those for open primaries, rational redistricting, and passing budgets with a simple legislative majority. But much more needs to be done, and I have not heard either candidate supporting the kind of deep reform or even constitutional convention it might take to accomplish real change.

In that respect, Jerry Brown clearly has more experience than Whitman does, knowing the nuts and bolts of the state government perhaps better than anyone, from the bottom up and the top down. Does he have a coherent critique of that government and a path for fixing it? I haven't heard it yet, so this campaign has failed on that basic point of discussing the most important issues.

With the immediate question of the state's general employment situation, we presumably get to the bus slogan above, and Whitman's claim that she "knows how to create jobs". Personally, I wouldn't think the governor has a great deal to do with the cycles of state economy. The foremost job of the state government is to govern well, provide robust public goods, and let the economy wend its way through the regular business cycle with minimal interference. The economy is far more strongly affected by federal policy, and it is additionally hard to imagine how firing lots of state employees will raise employment statewide, except perhaps in homeless shelters.


At any rate, what Whitman offers explicitly is the straight Republican plutocratic line- that cuts in capital gains taxes will magically create jobs and help balance the state budget. And that her tough love at the state level, reducing business regulation, eliminating public goods, and cutting taxes of the wealthy, will make business people happier and more likely to create jobs here.

Here is where Whitman's campaign parts with reality. Republican economics have gotten us into a long-term economic ditch nationally, and California is part of that trend. The widening gap between rich and poor over the last thirty years has failed to lead to the trickle-down promised land, but instead has led to ... further widening the gap between rich and poor, which in turn leads to private overindebtedness, amplified economic crises, and economic stagnation.

This gap also leads to reduced commitment to public goods and impaired political leadership, since the rich increasingly supply their own "public" goods in the form of private communities, private air services, private security, private schools, private ... you name it. Competent regulation of companies and the economy generally is another public good that has suffered due to this shift in power and resources, since the rich have, along with gobs of money, captured a great deal of political power. Obama's coddling of the banks provided eloquent testimony to the takeover of both parties by the rich.

So Whitman's prescription of more trickle-down economics is not a plausible program, unless we are interested in turning California into a something more feudal like Southern states which compete for low-skill non-union jobs in the margin before they are shipped overseas. Nor have Whitman's own business or non-business activities shed any light on her capacity to improve California's economic prospects. She began as a brand manager for Procter & Gamble. Then she worked with Mitt Romney at the investment house Bain & Co. Then it was off managing consumer products at Disney for three years. Then to Keds shoes, then FTD, then Hasbro. After ebay, she served as fundraiser for friend Mitt Romney and on several corporate boards. No government experience at all, other than hobnobbing. Business experience focused on selling brands to apathetic consumers. One can see where the slick sales job comes from, but not where deep public policy experience or leadership is supposed to come from.

Nor does Whitman's specific experience at ebay have much to do with the innovation that lays the basis for better job creation in this state. The idea of ebay was someone else's, and that idea, plus its technical incarnation, was what created the economic job-creating juggernaut that is ebay. Whitman was the "adult" CEO brought in to organize the company's growth, promote its brand, and keep costs under control. She not only had nothing to do with the original idea, but spent her time managing headlong growth, a quite different proposition from the stagnation, sclerosis, and extreme animosity that she will, if elected, undoubtedly face in Sacramento.

Whitman also was on the board of Goldman Sachs during perhaps its most profligate period, the dot-com boom, and is squarely in the plutocratic camp- by wealth, by background, by personal experience, by personal attitude (e.g. the housekeeper drama), and by avowed policy. Is this what California needs? The way I see it, the state needs its crumbling infrastructure kept up and pushed forward to projects such as high speed rail. We need governance reform. We need better bargaining with public employees which puts them in touch with reality and removes them from the political process. We need reduced incarceration. We need to restore budgets at all levels of education, and resume California's commitment to low-cost higher education. We need a vision of public policy that sees the state lead in great future challenges, such as green energy, climate change mitigation, scientific and business innovation, demographic change, and continued attention to civil freedoms and diversity.

Whitman has explicitly disavowed the legislature's and Schwarzenegger's work on carbon emissions reductions, and would suspend its implementation if elected. She supported proposition 8 which denied marriage rights to gay couples, (and which would no longer pass). She plans, as indicated above, to cut taxes for the rich, widening an already enormous gap. She has attacked illegal immigrants and plans to reduce their educational opportunities, though employing them herself and proposing a temporary serf program instead. She wants to reduce business regulation and engage in a regulatory race to the bottom vs other states. She opposes legalization of marijuana. She has no plan for higher education, despite education being a supposed focus. She opposes the high-speed rail project that would join Northern and Southern California. She personally failed to vote for 28 years, up to 2007, and has otherwise had no political involvement at any level, other than being friends with Mitt Romney.

So while there is a glimmer of reason to her candidacy in terms of sheer management chops and domineering will, it is hard to see how, for all her talents and her $170 million media blitz, (outspending Jerry Brown 6:1, and including the notorious "Talk to Meg" listening tour last spring), the citizens of California can take her seriously as a leader on the many issues afflicting our state.

  • Arnold vs the prisons. Exhibit A of dysfunction.
  • Senator Shelby blocks Nobel laureate Fed appointee out of concern for "qualifications". But Bill Mitchell has nothing but scorn for this crop of laureates, so maybe Shelby is barking up the right tree after all!
  • The revolution might even start in church.
  • Newton and transmutation.
  • I can't believe this made it into USA Today.
  • Bill Mitchell quote of the week, here quoting a Morgan Stanley economic report:
"Business was the biggest beneficiary of policy stimulus: it didn’t have to pay for the recovery. Consequently, the profit recovery was strong even though the growth recovery was weak. If corporates don’t start ‘paying’ – hiring and, to a lesser extent, investing – then expect a double-dip. If they do start to pay, the recovery will continue, but it won’t be as profitable as the first phase of the expansion. The Great Swap that ended the Great Recession involved a big transfer of income from the public sector to the private sector."

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