In Defense of Meg Whitman's Voting Record

Judging Meg Whitman's fitness for governor based on her voting record is like choosing an NBA coach based on how he voted for his favorite NBA All-Stars--it's irrelevant, because the job doesn't involve voting. In Meg's case, the relevant record would be her performance running a large, diverse California organization that must contend with state laws and regulations. (Anyone hear of a little company called eBay? Its finances are better than California's, and it hasn't regularly run deficits/losses.)

A governor doesn't vote anyway (s/he may veto bills, but s/he does not vote as part of the governor's job duties). Also, Meg's personal voting record wouldn't be public even if she had voted.

Below, Patrick and I battle it out regarding Meg's voting record:

Patrick: I do not believe corporate governance has any bearing on ability to run this state or any other. Cal has a very arcane budget process. We need professional politicians who know how it works and can make deals. We need to repeal term limits and eliminate the use of initiatives for budget decisions. While eBay is a great company, running eBay is not preparation for running the state. As I see it, there are currently no acceptable choices for governor at this time.

My response: California's political process is actually really simple--a minority can hold up a budget until their demands are met, which forces the majority to work with them and make concessions. Instead of cutting spending, however, previous/career politicians have been punting state expenses into the future or coming up with accounting tricks to mask the expenses. It's reasonable to believe that if we get another "experienced" politician, we'll get more of the same. We need someone who is honest and tough, not a career politician who will give us more of the same. We also need to cut government spending, which has been out of control for quite some time.

Patrick: a majority of the budget is controlled by spending rules passed via initiative. These initiatives have tied very particular amounts and sources of tax dollars to particular programs. They cannot be changed and the funds cannot be moved around. The discretionary portion of the budget where deals can be made is actually very small compared to the whole. The budget is a mess because we have allowed lay-persons to vote on it. Voting in an amateur corporate figure head will not fix this problem. We need to repeal the whole initiative process and allow the budget to be fixed by politicians who know what they are doing.

Me: California's Supreme Court Chief Justice agrees with you. You both believe the problem is the initiative process--which has nothing to do with any candidate's personal voting record. Maybe you should vote against Meg if she refuses to support repealing the initiative process. That would make more sense.

Patrick: [starts to move away from his original complaint about Meg's voting record] Her anti labor and anti environment positions are as equally objectionable as her lack of political experience.

Me: Well, that's different. There is nothing illogical about voting against someone b/c you disagree with her (alleged) anti-labor and anti-environment views. As for the lack of political experience, you might want to reconsider that argument if you voted for Obama or Bush II--neither of whom had political executive experience before becoming President.

Patrick: Lack of political experience as an executive is one thing, and I agree Obama had none (he did have legislative experience at both the state and federal level). A complete lack of political experience is another thing. I just don't think being a CEO qualifies you to be governor. [Me: a good analogy would be, "Driving an automatic transmission doesn't mean she also knows how to drive a stick shift."] If she spends some time as a big city mayor or in the state debate first she would then be qualified.

Me: Okay, you are saying you prefer a candidate who has some experience in politics. That's not illogical. But thank goodness you've stopped citing Meg's personal voting record--which is irrelevant--to support your choice. Peace.

California Legislators Got Drunk on Stock Market Gains

I've been studying California's budget. From 1998 to 2009, California added over 80,000 full time government employees. That means future taxpayers must pay for an additional 80,000+ pensions, lifetime medical benefits, and annual salaries. However, adding 80,000 more government employees is not the major problem, as long as we reform their generous long-term benefits.

The biggest problem is that starting in 1999, California's legislators assumed revenue/tax numbers based on stock market gains/sales and spent accordingly. From 1998 to 2000, spending jumped dramatically, but from 1999 to 2008, expenditures declined only once--right after the tech bubble popped, in 2003/2004. (Note: the tech bubble's peak was in 2000; hit a low in September 2002; and continued in a tight range until 2007.) Basically, it seems our legislators banked on an ever-increasing stock market to finance spending. Oops.

Public sector unions aren't helping. Even though the stock market money isn't there anymore, public sector unions are still acting like it's 2004. Behind closed doors, various unions have negotiated generous benefit packages, such as lifetime medical benefits and pensions. Unfortunately, it is difficult to project the cost of such benefits because no one knows how long a state employee will survive after retiring. As a result, if taxpayers desire consistently balanced budgets, it makes more sense to pay public sector employees higher salaries while reforming their generous benefits. (CalPERS, the state's public pension/health care fund, already has over $200 billion in assets.) Fiscal reform is possible without threatening state workers' job security, because government workers will continue to be unionized--reform would affect only the hard-to-project costs inherent in pensions and lifetime medical benefits.

As far as education is concerned, I am concerned we are spending too much money on it without seeing results. The state's website indicates that approximately 50% of the General Fund is reserved for K-14 education. In addition, California's Constitution requires that school coffers receive first crack at the largess:

"From all state revenues there shall first be set apart the moneys to be applied by the State for support of the public school system and public institutions of higher education."

Education spending is probably a sacred cow that needs to be slimmed down before we see any real change in California's fiscal health.

See here for a detailed webpage outlining the major issues, with plenty of stat-porn for the political wonks.

Bonus: Meg Whitman promises to cut 40,000 government jobs--back to 2004 levels--if we elect her Governor; however, I am unclear how she will accomplish that goal without incurring massive litigation and settlement costs. Perhaps the 40,000 positions she wants to cut are non-union or part-time? If so, then it doesn't appear that cutting these positions will reform the problem of generous public sector benefits, which are typically reserved for full-time government workers.

Meg Whitman is probably the most successful female CEO in Silicon's Valley's history, but I wish she'd be more specific about how she plans on accomplishing her goals. If she does well in the Governor's race, expect to see her as the GOP's Vice Presidential candidate in 2012.