Corporate triumph in California

Published : Nov 07, 2003 00:00 IST

Arnold Schwarzenegger with wife Maria Shriver at an election rally. - STEPHAN SAVOIA/AP

Arnold Schwarzenegger with wife Maria Shriver at an election rally. - STEPHAN SAVOIA/AP

A legislative device enacted to empower people enables the political Right to effect the recall of California Governor and the election of action movie star Arnold Schwarzenegger in his place.

SUSAN MURPHY of Balboa Island, California, awoke in the morning after the historic recall election of her Governor, "grabbed a cup of coffee, stumbled to my computer and opened an e-mail message from my sister in Michigan that simply said, `The sound you hear is the world laughing at you'."

Indeed, much of the planet could not believe what was happening to the Golden State: a Governor elected by due process only 11 months earlier had been removed in favour of a movie actor with no political experience and little articulated vision for the future. If California is the future of the world, as is so often said, then we are all in for a very uncomfortable time.

In late July 2003, the California authorities declared that in October the State's registered voters would be able to recall their Governor, and that they would be able to select his successor at the same time. Democratic Governor Gray Davis not only has a personality that matches his name, but has also been vastly unpopular as a result of the economic downturn in California. One hundred and thirty-five people filed papers to seek the governorship, from well-known politicians to people from the pornography business, from small business owners to actors.

The United States is not used to such political diversity, and the campaign quickly earned the title of being a circus. Along came action movie star Arnold Schwarzenegger, who fittingly announced his candidacy on a late-night television show, then travelled around the State in a testosterone campaign of issue-less images. His entire campaign boiled down to one phrase: Hasta La Vista Davis (Goodbye, Davis), a phrase he uttered to iconic effect in his vastly popular Terminator series of movies. The joke became reality on October 7, when 60 per cent of the registered voters voted overwhelmingly to remove Davis, and when almost 50 per cent of those who voted chose Arnold over the entire field. Out of the circus emerged the colossus who will now run one of the largest economies in the world.

GRAY DAVIS may count himself as another victim of the Enron fallout. In 1996, the California Legislature ended the regulation of the energy industry and opened the door to Enron-like firms. A slew of firms from the U.S. south, known quickly as the Confederate Cartel (Dynergy, Reliant, Duke and Enron), swept into the State, took over the power sector and oversaw the power failures across the State in the summer of 2001.

In mid-April 2001, Loretta Lynch of the Public Utilities Commission explained: "We must recognise that the so-called invisible hand of Adam Smith was Enron and their fellow gougers picking the pockets of Californians in late 2000 and early 2001 as a direct result of Enron's influence and participation." In April 2002, the State filed a lawsuit against the cartel to recover close to $1 billion in damages, as well as $12 billion from federal regulators for their blindness. Nothing came of it, but Davis' energetic attacks against Enron won him re-election in November to another term in the Governor's office.

The cash crunch from the Enron fiasco came alongside the decline in the economy of Silicon Valley, and in the technology sector in general. California boasts an economy of $1.3 trillion, the largest for any State in the U.S. This vast economy, however, suffered a $38 billion deficit in early 2003, and with the low bond rating it found it hard to borrow money to balance the budget. Stuck in an anti-income tax climate, Davis had no room to move to put the financial house in order. As a result, to forestall the haemorrhage in the State's budget, the Davis administration cut $12 billion in State services, borrowed $11 billion from various sources and raised taxes in regressive areas (such as excise and automobile tax) to the tune of $4 billion.

Such measures turned off the electorate, who did not have the surplus income to cover what global corporations like Enron had stolen. Davis followed the classic neoliberal maxim: fund private theft with extortion from the public till. This was his ultimate downfall.

A large number of people from across the State voted to recall Davis. Some voted on partisan grounds, being eager to get a Republican in office. Others felt frustrated with the lack of clear leadership as the economy went into a spin, and as more and more union jobs were lost to the wave of privatisation and globalisation. But most of the voters bore a deep animus against the regressive taxation put in place to recover the State's wealth plundered by Enron-like firms.

Davis tried his best to deny the depth of this anger. He concentrated his efforts on making the population see the recall effort as part of a "vast right-wing conspiracy". Democratic Senator Hillary Clinton made the phrase popular when she used it to describe the network of power that tried to impeach her husband President Bill Clinton, and that continues to go after Democrats across the country. Liberals have a point when they say that there is a well-funded effort to use non-electoral means to keep the Right in power. They point to several recent events as illustrations: the impeachment effort against Clinton, the Supreme Court's intervention on behalf of George W. Bush in 2000, the effort to redesign the congressional districts of Texas so as to benefit the Republicans, and the recall effort in California. Davis said he would fight the effort like a "Bengal Tiger", but he misread the depth of popular anger against him. He was right, but he was not the right man to fight the "conspiracy".

The California recall does have all the marks of the right-wing, but there was no conspiracy involved here. Everything happened in the open: Congressman Darrell Issa put up $1.7 million of his car-alarm fortune to remove Davis, "Rescue California" hired young people to collect the 897,158 signatures for the recall of a Governor (12 per cent of the electorate). So far, the Right had been driving the process, but on July 4, the U.S. Independence Day, 1.2 million people willingly put their signatures to the petition, more than sufficient for the recall to go forward. In other words, the Right properly gauged the frustrations of the population and took advantage of the failure of the liberals to deliver a solution to the crisis. On July 23, California's Secretary of State ratified 1.3 million signatures and set the process in motion.

The effort was the brainchild of the Right, who initiated it, funded it, and distorted the deep economic crisis into a problem of Davis' management. The Right's trick was simple: it camouflaged the role of global corporations in the fleecing of California and set the blame at Davis' door.

Davis is the first Governor to be ejected since a recall election in 1921 removed the Governor of North Dakota. Despite all the support he got, Davis could not stave off the effort. Bill Clinton came to Davis' aid, so did all 10 Democrats who are in the race for their party's presidential nomination, so too did many movie stars and personalities, and indeed the major trade unions. None of this helped. The "vast right-wing conspiracy" awoke a sense of anger harboured by the electorate that could not be stemmed with pleas from popular figures for trust in Davis. They went with Arnold instead.

In 1911, California Governor Hiram Johnson pushed a Bill through the legislature to ensure that if the people do not like their leaders, they might recall them. Johnson came to power as a Progressive, eager to do battle with special interests on behalf of the people. He spent his career doing battle with the big corporations of his day, notably the railroads. Johnson, like other Progressives, took umbrage at the cosseted political system set in place by the first generation of Americans. In fear of the masses, the Founding Fathers avoided direct democracy for representative democracy, so that it is not a direct election that selects the President, but the Electoral College. In California, the two Senators used to be elected by the Legislature, but Johnson's government turned that power over to the electorate. The people, by the recall, could now also remove their Governor.

Johnson also created means by which the people can write laws (the initiative) and undo the laws written by the legislature (the referendum). The theory of representative government is that the people select representatives who then vote in the best interests of their State, not necessarily as the people decide. The Progressives turned power over to the people directly. The Progressives wanted to remove the shields that protect the elite political class from the people.

Hiram Johnson would be terrified by what his reform has wrought: a procedure that can be so easily captured by the forces of big corporations who can conceal their misdeeds, go after a beleaguered Governor and send in their own agent to take power. In any other country, this would be called a coup.

In California, the media want to give Arnold a chance to prove himself.

Minnesota's Governor Jesse Ventura, a former professional wrestler and entertainer, has been frequently compared to Arnold. They acted in a movie together and have respect for each other; Ventura also gave Arnold some public advice to disregard the media. However, even this entertainer had the sense to see that there is something wrong with the way the Right pushed the California recall. On August 12, in a television interview on the recall, Ventura asked his host "If the Republicans are making the deficit the major issue, correct?" Then, he said, "Yet, nationally President Bush is cutting taxes. He's increasing spending by 14 per cent, and he's creating a larger national debt. That's OK to do that national, but let's take a Governor out at a State level for the identical issue almost."

When the press asked Schwarzenegger if he had a budget proposal for the State, he replied, "The public doesn't care about figures." He offered no coherent plan to rescue the State, preferring to campaign on the anger against Davis. "I feel the people of California have been punished enough," a campaign statement reasoned. "From the time they get up in the morning and flush the toilet they're taxed. When they go get a coffee they're taxed. When they get in their car they're taxed. When they go to the gas station they're taxed. When they go to lunch they're taxed. This goes on all day long. Tax, Tax, Tax, Tax, Tax."

California is the home of the anti-tax revolt. In 1978, its voters passed Proposition 13 to freeze property taxes, indeed to roll back some of the taxes that went towards the creation of a very strong public school system. Proposition 13 is one of the causes of the long-term decline in California's infrastructure and of the government's inability to tax the rich for the public good. When multi-millionaire investor Warren Buffett reached out to Arnold and asked him to challenge Proposition 13, to overhaul the entire fiscal architecture of the State, Arnold told him to do 500 push-ups and never touch that holy cow again. Prop 13 allowed the propertied to hold onto their wealth, send their children to private schools and shield themselves from people of colour and immigrants. Prop 13 is the guardian of the wealth of the white propertied. Davis and the Democrats intimated that one long-term solution for the State might be in its repeal, or else in further income and property taxes. Arnold pledged to hold the line, and he won their generous support.

As long as Arnold held the no-tax line, nothing hurt him. Not his lack of any coherent programme for the State's recovery, not the serious charges that he has disrespected women in his movies and statements, not that he has sexually assaulted women, nor even that he has admired Adolf Hitler and that he consorted with former-Austrian President Kurt Waldheim after the latter had been found to have Nazi ties. In the 1990s, Arnold supported the anti-immigrant Proposition 187 (to disallow undocumented workers from using state services), and even as he backed away from this, he cherished the architect of Proposition 187, former Governor Pete Wilson, as one of his main advisers. Latinos, many from immigrant families, came out to vote for Arnold. Nothing slowed him down.

The media incorrectly said that Arnold had replaced politics with entertainment: the fact is that his campaign did not go into details because it is only the most recent episode in the three-decade-long insurgency of the middle class against government.

This class of people tend to believe that their own prosperity is being curtailed by governmental regulation, and not that the lack of such regulation allows big global corporations to fell the American Dream for everybody. The white middle class, particularly, made common cause with the elite to defend the right of those with property, even as it is this middle class that will join those with less wealth to pay for the crisis in the long run. This is not the first time in U.S. history that racist populism has propelled a politician to power.

Susan Murphy's sister is right: the world is laughing at California. But the real laughter comes from the halls of global corporations, such as the Confederate Cartel, who have once more ducked the bill that should have been paid by them. Arnold is going to forward that bill to unborn generations. There is no laughter from them.

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