California, it has long been claimed, is where the future happens first. If that is still true, God help America.
The recession has hit the Golden State hard. The housing bubble was bigger there than almost anywhere else, and the bust has been bigger, too.
What's really alarming about California, however, is the political system's inability to rise to the occasion.
Despite the economic slump, despite irresponsible policies that have doubled the state's debt burden since Arnold Schwarzenegger became governor, California has immense human and financial resources. It should not be in fiscal crisis; it should not be on the verge of cutting essential public services and denying health coverage to almost a million children. But it is, and you have to wonder if California's political paralysis foreshadows the future of the nation as a whole.
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The seeds of California's current crisis were planted more than 30 years ago, when voters overwhelmingly passed Proposition 13. Property tax rates were capped, and homeowners were shielded from increases in their tax assessments even as the value of their homes rose.
The result was a tax system that is both inequitable and unstable. It's inequitable because older homeowners often pay far less property tax than their younger neighbors. It's unstable because limits on property taxation have forced California to rely more heavily than other states on income taxes, which fall steeply during recessions.
Even more important, however, Proposition 13 made it extremely hard to raise taxes, even in emergencies: No state tax rate may be increased without a two-thirds majority in both houses of the Legislature. This provision has interacted disastrously with state political trends.
For California, where the Republicans began their transformation from the party of Eisenhower to the party of Reagan, is also the place where they began their transformation into the party of Rush Limbaugh. As the political tide has turned against California Republicans, the party's remaining members have become ever more extreme, ever less interested in governing.
As the party's growing extremism condemns it to seemingly permanent minority status, the Republican rump retains enough seats in the Legislature to block any responsible action in the face of the fiscal crisis.
Will the same thing happen to the nation as a whole? Last week Bill Gross of Pimco, the giant bond fund, warned that the U.S. government may lose its AAA debt rating in a few years, thanks to the trillions it's spending to rescue the economy and the banks.
In a rational world, Gross' warning would make no sense. America's projected deficits may sound large, yet it would take only a modest tax increase to cover the expected rise in interest payments, and right now American taxes are well below those in most other wealthy countries. The fiscal consequences of the current crisis should be manageable.
But that presumes that we'll be able to act responsibly. The example of California shows that this is by no means guaranteed.
To be blunt: Recent events suggest that the Republican Party has been driven mad by lack of power. The few remaining moderates have been defeated, have fled or are being driven out. What's left is a party whose national committee has just passed a resolution solemnly declaring that Democrats are "dedicated to restructuring American society along socialist ideals," and released a video comparing Speaker of the House Nancy Pelosi to Pussy Galore.
That party still has 40 senators.
So will America follow California into ungovernability? Well, California has some special weaknesses not shared by the federal government. In particular, tax increases at the federal level don't require a two-thirds majority.
But the California precedent still has me rattled. The problems that plague California politics apply at the national level, too.
THE NEW YORK TIMES