The people of California live beyond their means – and the laws of economics, says Evan Newmark in the Wall Street Journal. Excess might be what they do best but it’s coming back to bite them right about … now.

On Tuesday, Californians went to the polls, summoned by Governor Arnold Schwarzenegger to vote on a range of measures designed to keep the budget — with a shortfall, estimated at $US21.3 billion and growing — in balance. The eighth largest economy in the world is in trouble.

But they were unmoved. The vote failed, and in such a catastrophic manner that Schwarzenegger’s career is now on the line, says Mike Harvey in The Times:

Voters said that they disliked the specifics in the measures — including a spending cap, some tax increases and borrowing against lottery revenues — and they punished Mr Schwarzenegger for making them go to the polls again so soon after the presidential election.

In fact, Californians voted very much in line with human nature. It is telling that the one ballot measure that passed was the “one that prevented lawmakers and constitutional officers from getting raises in times of fiscal distress”, says Jennifer Steinhauer in The New York Times. It was “a sort of chin-out electoral scowl by voters”.

Now, because they refused the rest of the measures, California will face “annihilating” cuts across the state. The one good news story is that Obama’s administration withdrew the threat to rescind $6.8b in federal stimulus money.

But the fact that Californians were able to affect the Budget in such a way is highly unusual — and the result of California’s “brand of direct democracy, which is unique in extent, complexity and misuse”, says The Economist.

When it comes to budgets, in most US states, the legislature can pass a budget by simple majority vote, says Time. But in the Golden State, a constitutional rule requires a “two-thirds majority in the legislature to pass either a budget or new taxes. Meanwhile, the state’s nearly 100-year-old system of ballot initiatives has progressively tied state government in Gordian knots.”

It’s enough to have people talking about a Constitutional overhaul which, if it took place, would be the first in 130 years.

Pity they didn’t vote out the real problem when they had the chance, says George Will in Chicago Tribune. Schwarzenegger’s “governance-by-attention-deficit-disorder has involved flitting from one trendy irrelevance (e.g., stem-cell research) to another (e.g., cooling the planet) while the state has sagged.”

But the LA Times is more keen to blame self-interested Californians than the “man who came to America with nothing but a jar of protein powder and a nice pair of 36D-cup breast”. Bill Maher explains:

…our state is designed to be ungovernable because we govern by ballot initiative, and we only write two kinds of them: “Spend money on things I like” and “Don’t raise my taxes.” More money for teachers and firefighters? Check “yes”! High-speed rail? “Cooool!” Drug treatment for former child actors? “Sure, why not?” But don’t even think of taxing me for any of it.

Bailouts have been given to banks and cars, but now people are bringing up the “b” word for California. Such a bailout would expose the weak link in the US system of governance, writes Pascal Zachary, The Guardian:

So-called “unitary” nations such as Britain, France, China, or Kenya essentially have a single set of government obligations: one national police force, one employer for all public school teachers, one overall pension system, etc. By contrast, the US has an “asymmetric” form of government, which allows many overlapping government entities – 7,000 in California alone – to incur debts, hire and fire employees, and impose taxes.

Bailing out California before fixing its system will mean all “Obama can do is shovel money into the bottomless pit of California’s political system”, says Megan McArdle in The Atlantic.

Fox News‘ Glenn Beck says the same thing, but more baldly. Addressing the rest of America, he asks “so what does this mean to you, if you’re someone who doesn’t live in California?” The answer to his rhetorical question:

Plenty.  The ugly truth is that when one of the 50 states has trouble keeping their lights on, they come to Washington with their hands out and they want Congress to put some of your money into them.

It’s all earned California that most backhanded of compliments: “Think of Italy … that’s California, with even better food and no parliamentary system,” says Timothy Egan in the NYT.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey