Monday, October 09, 2006


The Austrian Champion vs. the Greek Challenger

Saturday night I heard and watched the debate between the incumbent Governor, Arnold Schwarzenegger and the challenger, Phil Angelides. As a debate, I thought it was a draw. Each man landed a few blows on his opponent, but neither was seriously wounded by the encounter. As a fan of the Greek, I had hoped that Angelides would be able to trounce his opponent and expose him to the public as a fraud, a liar, and a man unfit to continue in office. That didn't happen. I imagine that fans of the Austrian hoped that their man would demolish his opponent. That didn't happen either.

For those of you who didn't watch it, the debate format was supposed to consist of questions from the moderator which each man in turn would try to answer. His opponent would try to discredit or dispute the answer. There were to be no opening statements.

Wishful thinking! Instead of answering the first question, Mr. Schwarzenegger gave his opening statement. Mr. Angelides did the same. The rest of the hour went according to plan, with each man answering questions in turn. The other man would then challenge the answer. At one point in the "discussion," each man was allowed to ask his opponent a question.

I don't remember the discussion question by question and I didn't try to keep any kind of score. I know that the central question of the debate, and of the present election campaign here in California, is how to deal with the problem that State revenues fall short of State expenses by about three billion dollars a year. One way to phrase the question is, how should a governor act to remove this structural deficit? From what I could distil from the questions and answers, charges and counter-charges, the candidates had two different answers.

Mr. Schwarzenegger would not increase taxes. He would try to trim expenses and would try to promote a business boom. A boom would produce more tax revenue at the present rates. He was asked what he would do if, instead of a boom, there was a recession. His response to that question was that he wouldn't answer hypotheticals.

Mr. Angelides would also try to trim expenses. He said that, as State Treasurer, he had reduced the cost of the Treasurer's Department by nine percent. He didn't say in actual dollars how large was the reduction. (He could have reduced staff from eleven persons to ten to achieve a nine percent saving.) He didn't say he would urge a tax increase. He said that he would reduce taxes on middle income families (say, 75,000 dollars a year) and "ask" the wealthy Californians to help make up the deficit. I presume he meant an increase in the income tax on wealthy persons, although he might have meant that he would ask for voluntary contributions. I'm sure he meant a tax increase on the very richest individuals.

Talking about taxes (and especially about the need to increase the rates) has become a "third rail" of California politics. It's clear to me, as it was to Republican Governor Wilson fifteen years ago that the only realistic way to solve the deficit problem is to increase the tax rates. In particular, the top income tax bracket in California should be raised from its present value of 9 1/2 percent to 11 percent, or even more if necessary. Whoever is elected Governor next month will have to consider that option seriously. Neither candidate wants to talk about it candidly at present. Schwarzenegger denies the necessity for a tax increase; Angelides talks about increasing the contribution by wealthy taxpayers to the operation of the State.

I don't know how many minds the debate changed. It didn't change mine. I'll still vote for Phil, not Arnold.
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