This from Dan Walters on the State Budget and Davis' latest hackfraud
Maybe Davis is promising us a four year recession.
Dan Walters: Davis touts job creation to begin second term -- but to what avail?
By Dan Walters -- Bee Columnist
Published 2:15 a.m. PST Tuesday, January 7, 2003
Gray Davis had a problem. He was about to be inaugurated for his second term as California's governor, but his re-election margin had been lackluster, the polls indicated that his popularity remained low, and he faced an immense state budget deficit.
Davis' aides were, one surmises, instructed to develop an inaugural theme that would deflect the onus for the budget crisis away from the Democratic governor and strike some positive note. And what they conjured up was, in purely political terms, brilliant. Davis could simultaneously blame a sluggish national economy for the state budget crisis, promise to make job development the overriding focus of his second term and, as a bonus, take a shot at the Bush White House in a political triple play.
Thus was born Monday's platitude-packed inaugural address, one that Davis delivered to hundreds of attendees -- mostly business executives, fellow politicians and labor leaders -- inside Sacramento's ornate old Memorial Auditorium.
Citing "a severe budget shortfall," Davis told his audience -- and the state -- that "We are not alone. This is a national problem. Across America, unemployment is up. Exports are down. Growth is stagnant. Markets are at near-record lows. America needs an economic plan that puts our people back to work -- and I call on Washington to act." Then he added, "From this day forward, the first goal of my administration will be creating new jobs and improving California's economy ... and I will direct every resource at my command to re-energizing our economy. In the days to follow, I will be releasing details of a new California Jobs Plan. With this new initiative, I am setting a statewide goal of 500,000 new jobs over the next four years."
The four semi-specific steps Davis announced were a speedup in state housing and school construction bond financing, making the state "more small-business friendly," making California the nation's "arsenal for homeland security," and promoting biotechnology .
That's what Davis said, and as far as it went, it sounded plausible. But what he didn't say undercuts his message at every level -- beginning with the simple fact that California's economy isn't in dire straits. While employment growth and other economic measures are off their highs, we know now that the late-1990s boom was an unsustainable bubble, inflated by billions of speculative dollars being sunk into thinly based dot-com start-ups. And except for the technology-heavy Bay Area, the state's economy is perking along quite nicely, or at least normally. Employment surpassed 16.5 million in December for the first time in history, and the unemployment rate, 6.4 percent, was virtually unchanged in a year and much lower than the 10 percent levels experienced during the true recessions of the early 1990s and the early 1980s.
The budget crisis is not the product of an economy going into the tank, as Davis insists, but resulted from the fact that he and legislators of both parties squandered the income tax windfall from the dot-com boom, committing the state to billions of dollars more in spending (and tax cuts) each year than it could afford once the economy returned to normal levels.
Even if California needed massive job creation, what Davis proposes is, at best, symbolism. His self-proclaimed goal of "500,000 new jobs over the next four years" is laughable. The state has averaged more than a quarter-million new jobs a year for the past decade, and if we created only a half-million new jobs over four years, it would mean the state was experiencing a serious recession.
Finally, his pledge to make California friendlier to small business belies the fact that he has presided over the greatest increase in business expenses in living memory, including multibillion-dollar boosts in energy costs and expansive new workers' compensation, unemployment insurance, hourly wage and "family leave" benefits. They may have been justified -- or not -- on their own merits, but collectively, they have made California a very expensive venue for business, with a very uncertain long-term impact on job-creating investment.
During his speech, Davis called for "hard work, hard truth and hard choices" on the budget crisis. He delivered, however, anything but "hard truth" about the debacle or its underpinnings. It was soft evasion.