Conservative Forum — Week of September 15

McClintock Pro and Con

In his interview with the editors of HUMAN EVENTS, ["A Conversation With Tom McClintock"], California State Sen. Tom McClintock (R.) proved to this native Californian and conservative (who voted for Pat Buchanan in the 1992 GOP primary) that he is not the conservative candidate for governor of California.

In the HUMAN EVENTS interview, McClintock blamed GOP gubernatorial candidate Arnold Schwarzenegger for employing members of former California Gov. Pete Wilson's political team. Pete Wilson, for those with short memories, was the last Republican governor of the state who actually won re-election, and whose coattails gave Republicans a short-lived majority in the state legislature.

McClintock alleged that in bringing these staffers on, Schwarzenegger "has surrounded himself with the team that imposed the biggest tax increase by any state in American history in 1991 here in California-a tax that broke the back of the state's economy???."

Might I, as someone who worked in Gov. Wilson's office in his first term, point out that this is demonstrably untrue?

The "biggest tax increase by any state in American history" was a 3/4 cent sales tax increase; 1/4 of which (as per the original legislation) has expired; 1/2 cent of which became mandated spending on public safety (cops and prisons) by vote of the people under Proposition 172. So is McClintock campaigning against the people of California's fiscal irresponsibility in mandating taxes to fight crime or against a 1/4 cent sales tax increase that no longer exists?

Amazingly, despite allegedly breaking the back of the economy, unemployment in California fell from its 1991-92 high of nearly 10% to under 6% (around 5.7%) by the time of the 1998 elections. (Source: Rand Corporation)

Also amazingly, California economic growth (even with a broken back) outpaced that of the nation in the second half of the 1990s. (Source: Federal Reserve Bank of CA)

Further amazingly, starting around 1992, according to the anti-sales tax Pacific Research Institute, "Governor Wilson began a six-year run of cutting personal, corporate, and investment taxes. . . . From 1993 to 1998, employment increased 10%. Personal income rose 31%. The number of corporations increased 10%. Manufacturing investment rose 68%. And in 1998, 120,000 more people entered the state than left."

And more amazingly still, the supposed fiscal irresponsibility of the temporary sales tax increase was combined with budget cuts that slashed general fund (discretionary) spending by about $4 billion (about ten percent of the then general fund budget), along with $1.5 billion in welfare cuts (despite the recession), and an estimated $16 billion in savings by voiding the autopilot spending increases in state programs. (Source: 1994 State of the State)

And there's one other very important point. Half of the job losses during the deep recession of the early 1990s in California came from the "peace dividend" of base closings and cuts in defense spending enacted by George Herbert Walker Bush and Bill Clinton. That's the single overwhelming factor that made California's recession worse than the nation's (and incidentally drove natural GOP voters out of the state).

Then-Gov. Wilson (USMC Ret. and defense hawk) lobbied hard against the Bush cuts and protested that Clinton's defense cuts and base closings were shortsighted and wrong.

Apparently, however, McClintock sees the source of California's current budget and economic woes not in Gray Davis (or the Clinton defense cuts), but in the 1991 sales tax increase. To believe McClintock you have to believe that the crushing of California's defense and aerospace industry (the biggest and most important single economic loss, by far, to California in the 1990s) was due to a 1/4 cent sales tax that no longer exists and a 1/2 cent sales tax increase that goes to fund cops and prisons.

McClintock likes to claim the moral high ground as the conservative candidate. But what sort of conservative distorts reality to pursue a political vendetta against a fellow Republican (as McClintock does with the 1991 sales tax increase), and puts personal ego and ambition before the possibility of electing a Republican to the governor's office (as he seems to gleefully do in his role of spoiling Schwarzenegger's chances)?

Performances like this from McClintock have reminded me that he is not the Calvin Coolidge of California fiscal conservatism, but rather the George Wallace.

There is one candidate running for governor on the October 7 recall ballot who has exemplary qualifications for that office. He is a cum laude graduate with a political science degree from UCLA. He served as Chief of Staff for State Sen. Ed Davis (a former L.A. Police Chief) from 1980-1982.

This man, current State Sen. Tom McClintock, is an expert in parliamentary law, an ardent tax reformer, and has been connected with economic and regulatory affairs with the Center for Policy Studies and, most importantly, he has served as an Assemblyman and a state senator in the legislature in Sacramento for 17 years. He has a quick mind, is brilliant and serious and really cares about the future of California for its citizens, their children and grand children.

McClintock has a lovely and supportive wife, a daughter and a son and he came to California as a 9-year-old with his family from White Plains, N.Y.

Go to his website: www.tommclintock.com and listen to his presentations on radio and television and I'm sure you will be impressed.

I am voting for Tom McClintock on October 7 and hope you will consider doing the same.

The Best Reason To Dump Gray Davis

I always enjoy HUMAN EVENTS. Regarding your recent supplement ["Ten Good Reasons To Recall Gray Davis"], Gray Davis's biggest mistake was not following the 1996 Restructuring Act, which was actually good. Read it.

It called for 'direct access', i.e., retail competition at the consumer level.

Davis did not follow this Act.

Therefore, electric power was purchased largely by the state through its ISO, and later the Department of Water Resources, DWR. This was a monopsony . . . a large dominant purchaser.

Although large purchasers - monopsonies - can bring down prices if supply is adequate, they are the worst when supplies are inadequate, because they have to pay all sellers at the rate of the last marginal seller - during any daily auction.

Thus, the California DWR, looked at what the "peaker" generators, the last generators called upon to meet the load, received for their few megawatts and had to give all previous bidders - on that day - the same rate of payment per megawatt per hour.

Ergo. The State became a "price-making buyer." Monopolies are just the opposite and are price-making sellers.

If there had been a lot of purchasers, i.e. homeowners each with a contract with their own electric company, there is no way that this could have happened.

Recall a feature of a free market from Econ 101: "many sellers and many buyers."