Something else happened in the 2012 elections that I haven’t blogged about yet: Californians most likely elected a super-majority of Democrats to both chambers of the state congress. This means they essentially have enough votes to pass whatever they want, especially higher taxes, which through a quirk of history requires two-thirds approval in a very blue state that still usually had at least one-third Republican congressmen saying no.
But no more. Conservatives and libertarians alike are practically giddy that California has “open[ed] the gates to an endless flood of tax increases.” Now “Americans will be able to see the modern liberal-union state in all its raw ambition.” They think California will try to fix its budget problems with higher taxes, which will keep driving businesses and rich people out of the state, which will keep making the problems worse, until the state finally collapses, and there will be no one to blame but the Democrats and their now-unfettered schemes!
I call this theory “Peak California,” and like other peak political theories, you might not be surprised to find me skeptical.
First, I’m not so sure that Democrats will take the blame, even if California continues to struggle. Yes, we’re used to hearing Obama and the Democrats at the federal level complain about the Republican obstructionism that’s holding back their brilliant ideas for saving the economy, and sometimes I almost wish they could just do whatever they want so we could all actually see if it would work (but of course I’m slightly terrified that it wouldn’t). But most people seem to have forgotten that the Democrats had full control of Congress for two years; that didn’t stop them from blaming Republicans in 2011 for not letting them do what they didn’t do themselves in 2009.
Let’s not underestimate the creative power of ideological thinking, either. Paul Krugman has been figuring out how to blame California’s problems on their Republican minority for years, and I see no reason to think he won’t find a way to do it now. (For example, it would not surprise me at all if two years from now he blames California’s budget deficit on Republicans in the U.S. Congress for blocking federal aid that was righteously deserved.)
Second, I’m not so sure California is doomed to flounder, anyway. Conservatives have been predicting the state’s demise for years, but it hasn’t happened yet. I’ve written before about why so many people might keep living in a state that conservatives think is so horrible; it’s not clear that a few more marginal tax increases will finally drive out those rich Hollywood elites. California’s budget problems do seem pretty grim, and they may really be running out of ways to tiptoe around them, but I’m not sure they won’t find a way to at least keep piddling along.
Maybe the legislature won’t really go on a tax-raising spree. Maybe they will raise taxes but not too many wealthy people and businesses will leave. Maybe the state will legalize marijuana and raise money by taxing that. Maybe the state will actually cut some spending; voters in several cities are already showing an aversion to the backwards government of creeping public sector pensions.
Or maybe not. Maybe those radical liberals will finally tax-and-spend the state to bankruptcy, in a glorious microcosmic economic lesson for us all. We’ll just have to wait and see…