California, a Broke State, Reels as Voters Rebuff Leaders:
Direct democracy has once again upended California — enough so that the state may finally consider another way by overhauling its Constitution for the first time in 130 years.
The problem is simple. Voters approve services through ballot measures, and reject taxes which might result in revenues to pay for those services, through simple majorities. Fair enough. But the legislature needs a 2/3 vote for tax & budget related actions. So the problem here is that the stupid electorate is complemented by a paralyzed legislature.
In the age of Animal Spirits, Predictably Irrational and How We Decide it seems ridiculous to continue to bow before the dogma that the American voter is smart. They’re not. If they can’t be trusted to make rational decisions in their personal financial decisions, how do you expect they would make rational decisions in regards to public finance?
When it comes to non-financial issues I think the argument for ballot measures is more plausible. Consider Oregon’s experience with assisted suicide. The electorate approved guidelines for this practice. The legislature balked. And the electorate approved assisted suicide again, by a much larger margin. This was a debate about matters of values and principles. Values and principles have little to do with rationality or reflection; rather, they’re generally rooted in emotions and Zeitgeist. Something like assisted suicide, or decriminalizing marijuana, might have significant social impacts, but the direct and impact fiscal impacts are minimal or moderate. In contrast decisions about funding many public services exhibit myriad complex opportunity costs.
Of course one might be careful about over-reading what’s going on in California. This is a state which has over 10 times the population of the original American republic at the founding. Direct democracy in such a massive and fissiparous polity might simply be far more difficult than it would be in a state with a smaller and homogeneous population.
In any case, I tend to agree with Megan McArdle in regards to a possible bailout….
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