Straight Out of California

It’s the old cliché – people move to California, and specifically Los Angeles, and maybe more specifically the beach here, to reinvent themselves – to start over, with a fresh slate or whatever, as someone new. And the sunshine and palm trees are nice too – as are the surfers and the young babes on rollerblades, in the tiniest of bikinis, gliding by as the sun sets in the Pacific after another perfect day. The past disappears. But then you soon find the place is real enough. People work, at real jobs, and they pay taxes, and of course they vote – for quite predictable politicians, who promise this and that, even if no one believes them. It’s not that much different than Cleveland.

But it is a little different out here. That first year out here, in the early eighties, it was voting at the Beaches Administration Building on the strand in Manhattan Beach, not far from that funky little first apartment on a narrow street a few steps from the sand. Yeah, you could watch the surfers while standing in line. And that year it was casting a vote for Jerry Brown – the guy they called Governor Moonbeam, as he was a little odd and used to date Linda Ronstadt. But he did get things done. And we just brought him back as governor again – now old and bald, and newly nasty, but still a master at that odd business of state budgets and legislation. The Austrian bodybuilder turned Hollywood action hero, Arnold Schwarzenegger, just didn’t work out. No one in the state legislature would listen to him – his charm and threats were no more than Hollywood actor tricks – and he left a real mess. And now the state is pretty much broke and Jerry Brown probably can’t save the day this time.

But we do what we can with California politicians. And everyone has had a taste of that – this is the state that gave you Richard Nixon then Ronald Reagan. And you might remember we sent one of the oddest senators ever to Washington, S. I. Hayakawa – the fellow who wrote those amazing books on sociolinguistics and liked to tap dance – literally, not figuratively – and during that heated 1978 Senate debate over those treaties to transfer possession of the Panama Canal back to Panama said this – “We should keep the Panama Canal. After all, we stole it fair and square.” He was cool.

But now things aren’t cool – and the polling place here in Hollywood is one of the union halls down the block on Sunset Boulevard – the International Cinematographers Guild. There’s not a surfer in sight and the issues are now more dreadful, and more national. And in Salon, Andrew Leonard takes us back to the last election out here:

When Meg Whitman ran for governor of California in 2010, the former eBay CEO told voters that her business background made her the right choice to boost job creation in a state troubled by high unemployment. Sound familiar? It’s the same spiel we hear from Mitt Romney every single day.

Yes, that was the pitch:

The issue of employment dominated the race for governor Thursday as Meg Whitman slashed rival Jerry Brown for failing to offer a plan to create jobs while she unveiled a glossy, 34-page booklet on the subject that she plans to mail to voters across California.

As she campaigned at a flashlight factory in sweltering Ontario, Whitman reiterated her economic proposals: enacting targeted tax cuts that she believes will spur job creation, streamlining regulations and competing with other states for businesses.

It is the typical Republican pitch, what you hear from Romney and everyone down-ticket from him this year – and it didn’t work out here. Meg Whitman spent one hundred forty-four million dollars of her own money to win – and she didn’t win. It was a bad investment, and some of us half-joked that we were worried that she’d sue the voters of California for breach of contract – she didn’t get what she paid for, damn it. She was a masterful businesswoman, with deep pockets, after all.

But she didn’t sue, and Leonard tells the tale of what happened next:

As a consolation prize for getting clobbered by Jerry Brown in the gubernatorial election, Whitman landed a plum job of her own – CEO of Hewlett-Packard, a company that, like California, has been going through some tough times. But this week Whitman made clear that as a business leader, her approach to job creation doesn’t quite mesh with her political promises. Multiple media outlets are reporting that HP is planning to cut its workforce by around 30,000 jobs – a number that accounts for 7-8 percent of HP’s total workforce.

That’s odd for a masterful Job Creator, and Leonard sees things this way:

Whitman’s decision will probably result in some layoffs in California, but it wouldn’t be fair to label her an outright hypocrite on the basis of this strategy alone. Downsizing may well be the right course for Hewlett-Packard, which is having a hard time adjusting to an era where computing is moving to the Smartphone and leaving the PC far behind. But there’s a data point in the New York Times’ report on the layoffs that deserves close attention: “China, which is one of HP’s highest growth areas, will probably be spared.”

Hey, Republicans always say let the markets work and just get meddlesome government, with its stupid taxes and even stupider regulations, out of the way – and all will be wonderful. The free market will fix things, for everyone. The Invisible Hand of Competition will generate the greatest good for the greatest number, as firms must offer the best product at the lowest cost to make any money at all.

It’s a nice theory, and Leonard notes that it’s actually working here:

Hewlett Packard, by its own admission, now derives around 60 percent of its revenues from overseas. China is the world’s fastest-growing market for computer gizmos. Cutting staff in China would be suicidal. And HP’s behavior is in no way extraordinary. In April, the Wall Street Journal reported that between 2009 and 2011, fully three-quarters of the new jobs created at the 35 largest U.S. multinationals were overseas. And this isn’t just about offshoring to cheaper labor. Overseas is where the demand is.

This is then the free market at work. But it has nothing to do with creating jobs here:

The job creation plan outlined by Whitman when she ran for governor included cutting red tape, lowering various government fees, and tax breaks. Again, it’s an agenda that maps quite closely to Romney’s – and that’s no accident: Whitman was Romney’s finance chair during his 2008 campaign, and hosted a California fundraiser for him in March. But while cutting regulations may boost corporate profits, it doesn’t do a darn thing for boosting demand. HP is probably more likely to take the money saved via a tax break and spend it on a new R&D center in Shanghai than it is to staff up in Silicon Valley.

Still, Romney says we need a free-market businessman like him as president, as Obama doesn’t understand the real world out there, and he does. Let the markets work. Get the government out of the way. But Leonard thinks otherwise:

All of this explains why having an illustrious business resume doesn’t mean that one is automatically qualified to occupy the White House in a time of economic stress. Business executives have a mandate to act in their own self-interest – to seek profit by any means, including downsizing in the U.S. and pouring resources into China. That’s why HP’s “Government Affairs” page stresses its support for ” free trade and the reduction of barriers across borders,” even in the face of growing evidence that outsourcing to China has a negative impact on U.S. job creation.

This is pretty simple stuff:

A political leader is supposed to think in terms of the larger public interest – which means things like figuring out how to fund education or pay for the social welfare net that protects the unemployed and feeds the hungry. California’s voters figured that out when they rejected Whitman.

Well, maybe we did figure that out – or maybe we just didn’t like her very much, and we really missed our Governor Moonbeam. But if you want government to be run like a business, well, people do see how businesses run. And Romney might have a problem running America just like Bain Capital. In government you can’t fire people who don’t toe the line – you have to deal with the folks in Congress, men and women who have their own interests and agendas, and you have to deal with their odd egos. No CEO faces that – his or her problem employees are soon gone. And you cannot dismantle unprofitable subsidiaries and sell off the parts for whatever profit can be salvaged from what’s hopeless, and then pay back your investors. None of what you’re dealing with – like the Coast Guard or the National Weather Service – was set up to make money after all. Yes, out here we’re glad Meg Whitman isn’t running California like she’s now running Hewlett-Packard, which she is actually running quite well. And do we want Romney to run America just like he ran Bain Capital, which was, too, a smashing success? People do see how successful businesses run, and thus America can learn things from California. And by the way – sorry about Nixon and Reagan – but such things happen now and then.

But the appeal of the free market, which will fix all our woes, persists. And Steve Kornacki offers an interesting analysis of how that in now tying up the Republicans in knots:

House Republican leaders put out the word on Wednesday night that they’ll be prepared to swing into action if the Supreme Court invalidates President Obama’s healthcare law next month.

The political necessity of this was obvious: “Obamacare” itself doesn’t tend to poll that well, but some of its individual components do, and when voters are asked which party they trust more on healthcare, Democrats enjoy a clear advantage. So if the court does away with the law, it will be hard for Republicans to hit the campaign trail this fall without having some sort of plan that they can point to for dealing with the issue.

But the plan, such as it is, is free-market healthcare. Without any government involvement at all, insurance companies will compete with each other to sell the best insurance possible, at the lowest cost, to anyone who wants to buy it – because they want lots of money. This will drive down costs and improve healthcare all around, and the government doesn’t have to do a thing, and really shouldn’t do a thing. In fact, that’s the last thing you want.

But it’s a bit more complicated than that, and Kornacki cites a Politico item indicating that the Republicans also want to protect themselves from Democratic attacks. They don’t want to cut off provisions of the law that are actually popular:

If the law is partially or fully overturned they’ll draw up bills to keep the popular, consumer-friendly portions in place – like allowing adult children to remain on parents’ health care plans until age 26, and forcing insurance companies to provide coverage for people with pre-existing conditions. Ripping these provisions from law is too politically risky, Republicans say.

They may be free-market guys, but they’re not going to commit political suicide by being too strict about it all. And Kornacki points out the obvious:

The problem, as critics were quick to note, is that the popular components of Obamacare are only made feasible by the unpopular parts. Forcing insurance companies to cover preexisting conditions only makes sense with the individual mandate that Republicans abhor, since it compels young and healthy people who would otherwise forgo coverage to enroll too.

Jonathan Chait explains it clearly enough:

Covering the uninsured requires resources. Except for the young and healthy, who choose to forgo insurance, those who lack insurance are either poor or sick. It costs more to insure them than they can afford to pay. Insuring them means somebody has to cough up money.

Republicans don’t want to cough up money to cover the uninsured because they have more important uses in mind.

Those would be tax cuts for the wealthy. And thus the New York Times reported here that the House Republicans were prepared to consider an array of only minor measures that might bring down insurance premium rates slightly:

Republicans are dusting off proposals that date back more than a decade: allowing individuals to buy health insurance across state lines, helping small businesses band together to buy insurance, offering generous tax deductions for the purchase of individual policies, expanding tax-favored health savings accounts and reining in medical malpractice suits.

But Kornacki notes how the severely free-market folks killed that right away:

By late Thursday morning, just hours after the GOP leadership’s plans were leaked, Rep. Paul Ryan threw cold water on the idea that Republicans would offer any specific legislation before the November election, telling the Washington Examiner: “Now, we’ve got nine weeks of session left. Do we want to cram through our own 2,700 page vision? No, that’s what the country hated. But do we believe in patient-centered health care and market-based medicine? A lot of us have put time and effort into this, yeah.”

And by the end of the day, Politico reported that a revolt had broken out on an influential conservative Google email group that GOP House leaders monitor, where the sentiment seemed to be that publicly supporting any components of Obamacare – even the popular ones – would amount to a sellout of conservative principles.

And then things got hot:

Cognizant of the conservative anger, Dave Schnittger, Boehner’s longtime deputy chief of staff, sent a separate email to a small group of fellow leadership aides Wednesday night, saying that, during his weekly media availability, the speaker would “knock down” the plan that had leaked.

So we have this:

One of the first moves Republicans made when they reclaimed the House in 2011 was to pass legislation repealing the healthcare law. It was a symbolic move, since it had no chance of clearing the Senate, but it was also billed as the first step. Soon, Republicans insisted, they’d unveil a new, better plan to replace Obamacare. More than a year later, that plan still hasn’t seen the light of day, and if the events of the last 24 hours are any indication, there’s not going to be one before the election – or maybe ever.

And Steve Benen covers this too:

For about three years now, congressional Republicans have sworn up and down that they’re hard at work on a health care reform package of their own. It’s going to be awesome, they said, and will meet Obamacare’s goals without all that unpopular stuff.

Sensible people gave up on actually seeing this vaporware quite a while ago, realizing that “repeal and replace” was a rather pathetic scam. But with the Supreme Court ruling on the Affordable Care Act due fairly soon, and with the possibility of a Republican White House and a Republican Congress on the horizon, there’s renewed interest in what, exactly, GOP policymakers intend to do on the issue.

Well, they’re free market guys, but they’re not sure they want to offer that, although the Paul Ryan crowd makes no exceptions to their grand theory, which really ought to work – in theory. And the Paul Ryan crowd won:

House Speaker John Boehner (R-Ohio) reiterated Thursday that he wants to repeal all of President Obama’s healthcare law if the Supreme Court doesn’t toss out the entire statute.

“We voted to fully repeal the president’s healthcare law as one of our first acts as a new House majority, and our plan remains to repeal the law in its entirety,” Boehner said to reporters. “Anything short of that is unacceptable.”


Let’s not brush past too quickly exactly what this means. The only “acceptable” outcome for Romney is one in which tens of millions of Americans lose their health care coverage, seniors pay higher prescription drug costs, small businesses lose their tax breaks, and the deficit goes up by hundreds of billions of dollars over the next decade.

And this is a change:

No one seems to remember this, but in September 2009, Louisiana Rep. Charles Boustany (R), the Republican who delivered the official GOP response to President Obama’s speech on health care reform, made an interesting declaration, telling MSNBC “about 80%” of the Democratic proposal is acceptable to Republicans.

Soon after, none other than Eric Cantor, now the House Majority Leader, said Republicans and Democrats agree on 80% of the health care reform measures.

Keep in mind, these comments came when the public option was still a key component of the Democratic plan – which suggests by the time the proposal was being voted on, Republicans liked more than 80% of Obamacare.

So the real question is this:

If Republicans intend to get rid of “the entirety” of the law, including parts that enjoy overwhelming public support, why should voters back GOP candidates?

But why did anyone vote for Meg Whitman? Ed Kilgore sees where this is heading:

Best anyone can tell, the only post-ObamaCare actions we can count on Republicans to take involve the Ryan Budget’s attacks on Medicare and Medicaid, plus that “market-based vision” which essentially means pushing the whole country into the individual health insurance market and then encouraging insurance companies to discriminate to their heart’s content by allowing them to circumvent state regulation via interstate sales. From the point of view of the uninsured, and those paying exorbitant premiums for crappy coverage because they are sick, this “vision” is a reversal, not just a “repeal” of the progress made under ObamaCare. Between the green light they want to give insurers to discriminate, the discouragement of group coverage through elimination of the employer tax subsidy, and the vast restriction of Medicaid eligibility the Ryan budget would force, we could be looking at a significant increase in the ranks of the uninsured. I don’t expect Republicans to brag about all that, but the truth is repealing ObamaCare is the least of the damage they are promising to inflict.

But they are proposing a fully free-market solution. No Plan is the plan – get the government out of everything – the Invisible Hand will take care of you.

And out here we decided we preferred Governor Moonbeam, again, to the Invisible Hand. Meg Whitman knew how to make big money, and still does. Good for her. But so what? Yes, government should be efficient and not waste money on nonsense, and we all can argue endlessly about what’s the best way to spend the funds available from all we pay in taxes. But even the mellow folks out here in La-La Land figured out that government is not just another business, exploiting all the resources available to turn a healthy profit. We just want things to work – for the general welfare of the people, like it says in the Constitution – and as the surfers say, that’s real gnarly.

Here – amazing pictures of surfers – maybe those will help.

About Alan

The editor is a former systems manager for a large California-based HMO, and a former senior systems manager for Northrop, Hughes-Raytheon, Computer Sciences Corporation, Perot Systems and other such organizations. One position was managing the financial and payroll systems for a large hospital chain. And somewhere in there was a two-year stint in Canada running the systems shop at a General Motors locomotive factory - in London, Ontario. That explains Canadian matters scattered through these pages. Otherwise, think large-scale HR, payroll, financial and manufacturing systems. A résumé is available if you wish. The editor has a graduate degree in Eighteenth-Century British Literature from Duke University where he was a National Woodrow Wilson Fellow, and taught English and music in upstate New York in the seventies, and then in the early eighties moved to California and left teaching. The editor currently resides in Hollywood California, a block north of the Sunset Strip.
This entry was posted in California Politics, Free-Market Capitalism, Government is the Problem, Low Taxes and Little or No Government, Mitt Romney, Repeal of Healthcare Reform and tagged , , , , , , , , , , , , , , , , . Bookmark the permalink.

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