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by
Seth Sandronsky
October
2, 2003
As
the top GOP candidate in the California recall vote, Arnold Schwarzenneger is
down on government spending and taxing under Gov. Gray Davis’
administration. An excess of both are
causing job losses, the actor said in the recent gubernatorial debate, likely
his last.
Arnold
is a millionaire who blames “special interests” connected with the state
Legislature and Davis for harming the state’s business climate and budget. There is some truth in this.
Davis
and his advisers did fail to see the predictable shrinking of the stock market
bubble, and resulting slide in capital gains tax revenue. But so did most other politicians and
pundits in the state and around the country.
They
were under the sway of financial market frenzy. Remember their blather about a “new economy” of ever-rising stock
prices that had arrived?
There
is a similar blindspot on the recall campaign trail about California’s housing
bubble. It is worthy of a thought
experiment.
Think
about what Arnold has said or not said about this bubble in California real
estate. Now consider one part of it,
home refinancing, that has been a crucial source of economic stimulus as the
“jobless recovery” continues.
People
using their homes as automated teller machines has spurred some job creation in
California’s construction and service sectors.
Without that stimulus, unemployment in the state would be higher.
Speaking
of joblessness, the weak recovery from recession in the state has breathed life
into Arnold’s campaign. He has pinned the blame for economic growth that is not
fast enough to cause employers to hire many new workers on state Democratic
politicians and their smooth “special interests.”
However,
four of America’s 50 states have had negative employment growth this year, as
reported in the Sept. 26 edition of the Sacramento Business Journal. Arnold appears unwilling to discuss the
state being a part of this nationwide trend.
Meanwhile,
state worker job cuts will deepen economic contraction already underway in
California. Under Davis, the layoff
process has begun, with at-risk workers being notified.
The
last hired will be the first fired.
They are the sacrificial lambs for the state’s political class.
On
that note, Arnold’s strategists are striving to blame Davis for capital
flight. That is, California businesses
that have relocated out of the state.
But
capital flight is a regular feature of the U.S. economy within and between
states. Corporate media rarely analyze
this.
The
absence of political debate about capital flight reminds one of John Dewey’s
observation: “politics is the shadow cast on society by big business.” Firms in California and nationwide always
look to set up shop where wages, government regulations and taxes are low to
boost the bottom line.
One
effect is a gradual lowering of wages and the living standards of working
people. Politicians make this “race to
the bottom” possible in ways big and small.
Apparently,
California’s working people are supposed to believe that Arnold will protect
them from the harm of capital flight.
Exactly how he will do so is unclear, as the leading actor candidate
tries to “fake it until he makes it” into the governor’s office.
Polling
questions and media discussions on the issue of capital flight and California’s
working people would help state voters.
In this way, they can make a more informed choice about whether to
accept or reject Arnold on Oct. 7.
Governor
Schwarzenneger, or not?
* Under
Bush, U.S. Economy Recovers, Unlike Workers
* Risky
Business: U.S. Borrowing And Foreign Lending
* In
California, The Ballot Box And The Market
* Globalize
That: Capital Flight to China
* In
US, A Job-loss Economy Emerges
* For
Black Teens, Jobs Crisis Worsens
* A
New Day for Affirmative Action?
* In
California, A Racial Wolf in Sheep’s Clothing
* In
U.S., Slow Growth, Excess Inventory and Mounting Debt