Financial Times has an opinion piece on California’s budget crisis that I found very interesting. Give it a read.

There were two specific passages that struck me – if only as pithy expressions of truths I see as obvious. One is the description of how Californians have abused direct democracy:

In voting on “propositions” … citizens of the Golden State have stood up consistently for two principles: the state should provide vastly more services to its citizens, and citizens should pay vastly less to the state.

That’s a perfectly rational way to act, of course. If you ask me if you can give me something, of course I’ll say yes. If you ask me if I want to pay for it, of course I’ll say no. Perfectly rational – though totally irresponsible. Such thinking, however irresponsible, is widespread, and not just in California.

We had a classic case of it a couple years ago in the little community where I live in the Chicago suburbs. In the nineties our local school board behaved very irresponsibly and got into a tremendous amount of debt. Because our community has no industry and no retail bigger than grocery stores, our tax base is entirely residential and property taxes are extremely high; residents therefore have resisted school tax increases (which are proposed every election), so spending had to be cut and the debt has been being paid down slowly for the past ten or twelve years, but is still substantial.

A couple years ago, the proposal for increasing taxes was once again put on the ballot, together with a proposal to replace the existing high school, at a cost of several million dollars. When looked at together, there were four possible ways I could vote, three of which made sense:

• I could vote No on taxes and No on the building plan, reasoning that we didn’t need a new campus, at least for now, and that we could continue paying down the debt slowly.

• I could vote Yes on taxes and No on the building plan, reasoning that we didn’t need a new campus, but that we should be paying down the debt more quickly.

• I could vote Yes on taxes and Yes on the building plan, reasoning that we needed a new campus, and that with that added expense, it was necessary to increase taxes.

• I could vote No on taxes and Yes on the building plan … oh, wait, no I couldn’t, unless I was reasoning that we needed a new campus, but I didn’t feel like paying for it.

Can you guess the results of the election?

The second item of interest in the FT article was this assessment of our two parties:

It is an enduring mystery why US pundits should see a difference between the philosophy of Democrats (who stand for spending more than you raise) and the Republicans (who stand for raising less than you spend).

It stung, because it’s too close to the truth. There was a time when Republicans believed in fiscal responsibility, but the brand was severely tarnished, if not destroyed, by the behavior of George Bush and the Republican congressional leaders of recent years.