Editorial: Dreamin’ and hard economics 

In the week following Gov. Arnold Schwarzenegger’s State of the State speech, the fallout continues — predictable, given the governor’s big and bold ideas. When it settles, weird compromises will abound, with the governor’s "post-partisan" vision altered — altered by the partisans who won’t go away.

We salute the governor for thinking big. Dramatic visions, involving glorious goals and a pioneer spirit, define not just Schwarzenegger’s charmed life, but California itself. "If you talk about the Illinois dream or the Delaware dream or the Kentucky dream," the governor said, "no one would know what you meant or what you’re talking about. But our dream — the California dream — ah, that means something. People understand it."

No slightto those other states, mind you, but he was right. Migration from those states, indeed from the world, has continued for more than a century and a half because people expected to enlarge their possibilities through the individual freedom that seemed more available in the Golden State.

That freedom was enhanced, arguably, by large public works projects such as California’s once-enviable highway system and its still-impressive north-to-south aqueduct. But if mobility and water facilitated freedom, it remains debatable whether other programs will act in such redeeming ways.

It is one of the incontestable lessons of the last century that an ever-enlarging role for government tended to choke individual liberties. With his "post-partisan" epiphany, Gov. Schwarzenegger believes that old ideological conflict has ended.

He advances the idea that by attacking the problems of universal health care and climate change, Sacramento can reconcile the market economy with state planning. "How can we plan for 20 or 30 years when we can’t even meet our needs today?" the governor asks rhetorically.

What never changes, however, is that entrepreneurs plan dynamically while bureaucrats plan statically. Gov. Schwarzenegger insists that mandatory health insurance will not be run by government, but by fixing demand he creates what economists call "moral hazard," enabling insurance carriers to raise the price of premiums.

Some questions are begged: What about struggling middle-income families who can’t meet the premiums contemplated? And what about companies whose margins won’t allow them to cover associates as mandated? San Francisco’s supervisors, in their micro-model, thought they could push such questions over the horizon. Thanks to some restaurateurs, they’re learning otherwise in court.

If the governor thinks he can fix those problems with further edicts, he will not be planning for the future, but planning chaos.Call us worry mongers, but we hate to think what such a formula, if invoked in the name of combating global warming, will do to personal transportation.

Already, legislative Republicans complain they have been dealt out of the "post-partisan" game. We’re in for some serious times.

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Staff Report

Staff Report

A daily newspaper covering San Francisco, San Mateo County and serving Alameda, Marin and Santa Clara counties.
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