THE TREND IS HIS FRIEND: Late last night, I was talking to a friend about Schwarzenegger’s chances of getting reelected in 2006. My take? The trend is his friend. California’s economy was already showing some signs of life even before Arnold got elected. And it should benefit from the strengthening economy throughout the country. If it does, Arnold can take the credit for it. If it doesn’t well…
I realize that California’s economy is much more than Silicon Valley. But the end of the Internet boom makes a good starting point to track California’s recession. Considering that dotcoms started going bust around 1999 or 2000, and the NASDAQ cratered in April of 2000, back when Clinton was still in power, and their anti-trust rulings against Microsoft were certified by a judge, that will be six years of recession for the Golden State. That doesn’t seem possible–but if that’s the case, whoever’s in charge should get the blame at that point.
Along similar lines, Jay Bryant writes:
If he goes against the lessons he supposedly has learned from Friedman and raises taxes, Schwarzenegger may balance next year’s budget on paper, but he will doom the state to an ongoing downward spiral in which each year’s budget will be harder and harder to balance, as businesses, people, and tax revenues suffer.
A Friedmanesque fiscal policy is the best way to restore budgetary sanity in Sacramento. Combined with an improving economy (likely nationally in 2004, and in which California will share to the extent its business climate improves, something the Governor can impact directly), such reforms could indeed mean that Californians could, within the next year, feel they were distinctly better off.
These actions, however, will also trigger an unending spate of “ketchup as a vegetable” stories about the heartlessness of the new regime. Either Schwarzenegger has the courage to put up with such criticism or he doesn’t.
A popular and successful Schwarzenegger can be a huge boost to the California GOP, raising unprecedented money for its local candidates; he could even possibly put it into the Bush column in 2004, although this is far less certain. At least the Democratic candidate will have to spend some money there, unlike Gore in 2000.
Conservatives need to forget about social issue criticisms of the new Governor and keep the pressure on for him to follow his Friedman instincts on fiscal policy.
Exactly. Of course, having Warren Buffett on his team will be worrisome.