In his recent hearings, California Assemblyman Roger Niello (R-Fair Oaks) asked what government does “that makes it difficult for you [business] folks to be successful.” Predictably, those testifying complained about the egregious burdens California’s bureaucracy has imposed on them. One even threatened to move to Wyoming. Said another: “I fear the government, because they will bankrupt me”
The hearing also mentioned the Republicans’ Varshney report — a study that claims California’s attempt to regulate greenhouse gases with AB32 makes the state uncompetitive. No one mentioned, however, that the report was decidedly partisan, and has been thoroughly debunked. For example, “The report’s authors assess estimated costs of implementing AB 32 – $25 billion – but willfully ignore AB 32′s associated savings of more than $40 billion.” says one economist.
In fairness to “folks” decrying regulation and bureaucracy, finding fault with bureaucracy is like shooting fish in a barrel — not too difficult. But that’s to be expected; government can’t even guarantee that requiring motorists to drive on the right-hand side of the road is always going to produce perfect outcomes.
If such hearings were completely truthful, businessmen would also be thanking their lucky stars they had the infrastructure and human capital available in California now. After all, those are what really distinguish doing business in the sixth largest economy in the world (California) from Outer Mongolia, or Wyoming, for that matter.
The hearing was a particularly striking display of chutzpah since a large part of our current economic woes stems from too little regulation. Democrats were complicit, repealing Glass-Steagall at the Republicans’ request, but Republicans were the ones who controlled the Finance committee, not Barney Frank, when the Bush administration rejected mortgage market regulation. Former Republican congressman Mike Oxley said that the Bush White House gave the House’s regulatory proposal the “one finger salute.”
When they aren’t complaining about regulation, you can still hear Republicans like Niello and Tom McClintock yearn for a “tax cutter” like Ronald Reagan. Reagan did cut the top progressive income tax on rich “folks” roughly in half, but between him and his successor, the payroll tax quadrupled. To recap: rich “folks” got a big tax break, but poor folks got their taxes quadrupled, and the Reagan deficits were the biggest ever. Yet it’s supposedly liberals who want to “tax and spend”!
The current public policy debate is the end-game of a long-term Republican strategy called “Starve the Beast.” Essentially, they want to cut government revenues without cutting spending, making deficits so large that they appear sensible when cutting even the most popular social programs. That’s why, although he didn’t run on that platform, after exaggerating its financial predicament, Bush tried to privatize Social Security as his first order of business in his second term.
So Niello’s hearing is yet another bit of evidence that, no matter what the facts, the Republican narrative remains constant: We must reduce taxes and regulation, even if lack of effective regulation produced the current less-than-optimum outcome. And although “deficits don’t matter,” no matter how low they are, taxes are too high, especially on the wealthy.