Michael O'Hare's got the best analysis of Schwarzenegger's State of the State speech. My reaction is simpler: infrastructure good, massive debt bad. Schwarzenegger's allergy to tax increases, even moderate ones, will badly harm the state. Weirder yet, he's not even pretending to justify his opposition on economic grounds, not with his proposed $1 hike in the minimum wage. Now, I like hikes in the minimum wage and welcome the boost, but there's no tangible difference for business between a sales tax and a minimum wage increase, save that the sales tax is more diffuse in its impact. So what's the dividing line for a governor who, just a couple years ago, vetoed a minimum wage increase? So far as I can tell, it's 40 percent in the polls.
Chastened by his defeat in last year's special election, Schwarzenegger's adopted a new script: borrow and spend liberal. And if he's dreaming bigger than almost any progressive in public life, it's because he's courageously declared himself exempt from the laws of economics. Spending is popular, but taxes are not. Schwarzenegger, ever the opportunist but never the governor, has simply sidestepped the contradiction. Unfortunately for me, my sister, my brother and my friends, a tax deferred is not a tax denied, and when the federal and state houses are eventually forced back to fiscal order and all those delayed bills begin coming due, the reckoning is going to be immense.
