Dear Speaker Pelosi, Can California Have $25 Billion?4 min read

For a while now, the federal government has been handing out money to private business. Mostly banks, but a few insurance companies and the possibility of the Big 3 Automakers. It’s raining cash if you happen to be “too big to fail.”

Meanwhile, the state of California is bleeding red ink, laying off workers and cutting the services Californians count on in poor economic times. So, hat in hand, off we go to the feds:

“Led by California with a $28 billion hole in its budget, 41 states are in financial trouble, and many of their leaders are looking to Congress to bail them out. State officials are hoping to join the ranks of the financial industry and auto manufacturers, who’ve found a sympathetic ear on Capitol Hill. They’ve found some key supporters: House Speaker Nancy Pelosi and other top Democrats are promoting aid to states as part of a broad stimulus package that could inject more than $300 billion into the ailing economy….

“Speaking Wednesday before a Chamber of Commerce group in Fresno, Calif., Schwarzenegger said that “government is really at fault” and that Washington was obligated to “get us out of this mess.” “(McClatchy 11/14/08)

The economy stinks, that much we all know. Sure, we’re tossing everything up at the wall hoping it sticks. But, here is one simple statement of fact: Money that comes in to the state goes out almost immediately in the form of services to those who most need it. It gets recycled as state employees that would have otherwise been on the chopping block retain their jobs. And of course there is the fact that by spending a little money now to retain a decent level of services, we can save ourselves a lot of money on the back end on prison and other corrective, and expensive, services.

Yet there are those who simply see the states as profligate dens of the mythical “waste, fraud, and abuse.” Unsurprisingly, one such opinion, by the Manhattan City Institute’s Steve Malanga, appears at Rupert Murdoch’s Wall Street Journal:

“Thus, when practically every day the federal government is defining downward the very notion of what constitutes fiscal responsibility, the states know they are hardly the most reckless supplicants in Washington. Unfortunately, more federal aid all but guarantees they won’t use the current crisis as an opportunity to put their fiscal houses in order — setting the stage for worse problems to come.”

While it is true that California’s 2/3 system of governance has built a budgetary house of cards, simply letting that house of cards collapse is no better than letting GM and Ford simply disappear. Apparently Mr. Malanga would like to see the states get taught a lesson just like some would have beaten into the banking system’s hide. But while conservatives are lining up to give money to AIG, perhaps they should take some of that time to consider just who they are teaching a lesson.

Are they teaching a lesson to the 6 year old who now has a first grade class of 45 kids and doesn’t have any actual contact with his teacher. I’m sure his not being able to read will really teach the Mike Villines of this world a huge lesson.

Are they teaching a lesson to the state’s seniors? To the disabled? I’m sure Dave Cogdill will repent once he sees a few thousand more homeless mentally ill across our state.

Or perhaps not, but the lesson’s worth a shot, right Mr. Malanga?

Brian Leubitz publishes, the leading California progressive blog covering California politics and policy, and is a candidate for Vice-Chair of the California Democratic Party. He holds a law degree from the University of Texas and a Master of Public Policy (M.P.P) from the Goldman School at The University of California, Berkeley. After practicing law in San Francisco, Brian transitioned into politics and launched Calitics .com in 2005. He has worked on several campaigns in the state, including the Yes on 93 (term limits reform) and the No on 98/Yes on 99 (eminent domain and property rights) campaigns. He currently is a member of the Democratic State Central Committee, serves on the CDP’s resolutions committee, and is on the boards of the San Francisco Young Democrats and the Alice B. Toklas LGBT Democratic Club.