Schwarzenegger Finally Learns: Freedom Is Profitable, Statism Starves

Throughout the course of American history people have prospered when government expansion and regulatory polices have been kept in check. On the national level during the 20th century this was evident during the administrations of Calvin Coolidge (1923-1929) and Ronald Reagan (1981-1989) -- both drastically cut taxes, defended the private sector, curtailed the size and scope of government, and witnessed unprecedented economic booms. Conversely, people have suffered during administrations like Jimmy Carter’s (1977-1981) where taxes and regulations were rampant.

In other words, freedom is profitable but progressivism, or “liberalism” as it is known today, is not.

And this appears to be a lesson that California’s Governor Schwarzenegger has finally learned, albeit reluctantly, as he is aggressively pursuing a way to open a portion of California waters to offshore drilling.

California currently faces a state deficit of more than $23 billion, which is the result of years of Democrat-run state legislatures, budget-busting spending, and exacerbating tax rates. Between the state legislature’s liberalism and Schwarzenegger’s “green agenda,” California has been transformed into the People’s Republic of California and the coffers have gone dry. Or to put it as NBC anchor Brian Williams did on July 21, 2009: “California is our biggest state in terms of population and it long ago ran out of money.”

Things are so bad that some state agencies have already begun issuing IOUs to banks instead of real payments and some businesses within the state are “[trying] to pay their employees … [and] their vendors … with IOUs.” No wonder there’s a mass exodus from the state among those who still somehow possess the means to get out.

In the midst of this statewide implosion, Schwarzenegger wants to work out a lease for Plains Exploration & Production Co. that would allow them to drill off the Santa Barbara coast for 14 years and would net the California budget $2 billion in royalties throughout the lease. Moreover, as part of the lease agreement Plains Exploration & Production Co. would “advance an immediate $100 million to the state to address urgent cash-flow needs.”

While this is all good news for financially strapped Californians, many legislators in the state oppose the lease on the grounds that it’s a “sweetheart deal for one oil company.” And Democrat John Garamendi, the state’s lieutenant governor, framed his opposition to the proposed lease by ratcheting up the criticism of “big oil.” He said, “Big oil has been sitting at the governor’s right hand throughout [Schwarzenegger’s] administration.”

It should come as no surprise that a politician like Garamendi, who picks up the “big oil” refrain so effortlessly, not only opposes the plan for offshore drilling, but actually contends that the best way to make up the state’s monstrous budget shortfall is to raise taxes on oil and gas producers within the state.

Not surprisingly, the Orange County Progressive is also trying to rally opposition to Schwarzenegger’s plan. Their contention is that Schwarzenegger is the “biggest environmental hypocrite” ever, because his plan, if adopted, would create “the first new offshore oil lease off the California coast in 40 years.” It’s hard to fathom how these folks can go 40 years without offshore drilling and, upon finding themselves in the quagmire they’re in now, continue to push for a sustained moratorium on such drilling. It’s like watching Democrats in D.C. spend us into poverty with a stimulus bill, then disregard it’s utter failure as they seek to pass a second one.

Some of the opposition to Schwarzenegger’s plan is just laughable. Like those who dismiss the $100 million which Plains Exploration & Production Co. would immediately advance to the state of California if the lease gets finalized. These naysayers mock the cash the lease would garner up front by calling it “a statistically negligible amount given the state’s overall crisis.” Only liberals would dismiss $100 million in debt reduction on the grounds that it’s “statistically negligible.”

Although Schwarzenegger is not without his flaws and liberal tendencies, he’s right on this one. He realizes his state needs money -- both the $2 billion over the next 14 years and the $100 million California will receive as soon as the lease is signed.

Hopefully he’s realized the bigger lesson behind this mess as well. Namely, that big government tends toward bankruptcy but freedom is profitable.