Revolution Brews on the Left Coast

It is tough love time for our politicians here on the Left Coast!

While all eyes have been on Massachusetts and the election of a Republican to fill Ted Kennedy’s Senate seat, the potential for a revolution is also shaping up on the Left Coast here in California with the same force as one of those giant Mavericks waves off Half Moon Bay the surfers dream to ride.

Senator Dianne Feinstein told supporters she would NOT run for Governor of California.  No surprise, there—who in their right mind would want to be Governor?  But that is part of the revolution underway.  Rumors swirl each election about whether Dianne Feinstein will run for Governor.  Each time she teases and then, as now, says no thanks.  Why?  Because being Governor is a no-win job in California.  Not even the Terminator could shake things up enough to change the political dynamics so he will leave office with a $22 billion hole in the budget. So now, still unannounced but all alone, former Governor Jerry Brown, now California Attorney General, is the likely candidate for Democrats.

The race for Governor on the Republican side is also a small field with a primary fight between Meg Whitman of eBay fame and fortune and Steve Poizner, State insurance Commissioner and Silicon Valley fat cat.  Poizner is far behind Whitman in the polls and fundraising and now faces the ugly problem of looking like he is actually going to do something about Anthem Blue Cross’s outrageous 39% health insurance rate hike.  Memo to Steve in the bottom of the hole:  Quit Digging!

This sets up an interesting contest for California’s future between Ms eBay Entrepreneur Whitman and either former Governor Moonbeam or the brash, seasoned urbane and urban reformer that Jerry Brown turned into as a very successful Mayor of Oakland for eight years.  It will be an interesting race of ideas and cut throat politics.  To counter Meg’s money, Democrat friends of Jerry are launching a series of attack ads on Whitman designed to tarnish her image and cast her as a brazen, scornful, hard-hearted “rich bitch” who will be no friend of the People of California.  So that should be fun to watch since the Democrats own more than their share of California’s problems and turnabout is fair play.

The juicy race this time is the Senate seat of Barbara Boxer who is running scared—and she should.  Strident and in-your-face has always been Senator Boxer’s style seared into our conscious by the replay of that snide clip of the Senator berating some flustered general for calling her “Mam” in a Senate hearing.    She can be counted on to be a sponsor for almost every liberal or environmental cause that registers in the polls and now that advocacy for the left is haunting her.  Serious polling says Barbara Boxer is in SERIOUS trouble and November could see her dumped as the country—even California—moves back to the political center or just takes revenge on all incumbents.

The race on the Republican side pits former HP CEO Carly Fiorina against former Congressman Tom Campbell who started out running for Governor and bailed out to challenge Boxer when he realized Meg Whitman could buy him many times over.  Campbell represented Silicon Valley in Congress and was Dean of the Haas B School at UC Berkeley and took a leave of absence to be State Finance Director.  California has sent women to the US Senate for a generation so that is not an issue, but will we send a Republican business person!  Egads!

But a careful study of the political climate reveals the fundamental economic, business climate and governance problems facing the Golden State.  California is a state of huge potential being strangled by its government, tax system, and political correctness gone amuck.  It is time for tough love in the Golden State and we may need a fresh eyes business person with a sharp knife to do the job.

Here’s why:

According to the Tax Foundation[1], California ranked 11th among the States in per capita income in 2008 with $47,706 per person compared to the national average of $44, 254.  If taken separately, the California economy ranks as the 6th largest in the world, but these days it is looking a lot more like Greece!

The Golden State has great potential but it is running out of gold with a $22 billion budget deficit to solve largely because it has a very progressive income tax that depends upon a small number of wealthy people doing well in a growing stock market to fund its services.  When times are good the gold rolls in and California politicians spend like there is no tomorrow.  When times are bad and the gold runs out, the state borrows to play the float until the next boom.  But several years in a row of declining revenue in a banking and credit crisis threaten to kill the golden goose.

California ranks 48th out of 50 states in business climate ratings, 45th in corporate tax rates, and 49th in individual income tax rates according to the Tax Foundation and its neighbor Nevada ranks #1.  But not even that giant sucking sound of California business moving out of state was not enough to stave off near disaster in the Silver State when the economy and housing values tanked.  It does not even buy California time since outmigration of people leaving the Golden state is also speeding up in their search for jobs, lower cost of living and a better business climate.

Thanks to Proposition 13 which capped property tax rates, California ranks 15th among the states in property taxes and falling home valuations drop tax assessments automatically.  Politicians know that messing with Prop 13 is the “third rail” of politics so they have not tried it–yet.  But California is a non-recourse state meaning we still face the real threat that people will give up on California’s future and throw the keys to their underwater house on the bankers table and walk out on us to start over fresh someplace else.  There are still 14 other states with lower property taxes to choose.

So what?

I still believe in California and its potential for innovation and rebirth.  But a little revolution every now and then is good thing as Thomas Jefferson observed at the founding of our Republic.

The recession has awakened us from our complacency.  The change we had hoped for from the Obama Administration is not working out so well for California or the nation.  So in Virginia, New Jersey, Massachusetts and bubbling up here in California like ‘Mt Wilshire’ in the movies things are churning.  But as voters we must do more than just ‘kick the incumbent bums out’ to solve these problems—we must actually DO SOMETHING about the fundamentals and the problems they cause and discipline our future political leaders to change their behaviors.  And that is the challenge facing Meg Whitman and Jerry Brown; Barbara Boxer and either Carly or Tom, and candidates up and down the San Andreas fault line.

What is your plan for California?

Why should we hire you to be our Governor or Senator?

What will you do to fix our State’s problems?

How do we know you won’t be just like the other politicians?

What must we ALL do to change the way our state is governed to live into our potential not repeat our past mistakes?  That’s what we want to hear—practical solutions that work.  Hmm, maybe a business person as Governor or Senator would be a good idea.