Chart 3: California Nonfarm Employment History & Forecast Vs. 2.3 % Trend from 1990:3
22000 20,000
T ho usand s
18,000 16,000 14,000 12,000 10,000 8000 1986
1991
1996
H i s t o r y & F o re ca s t
2001
2006
2011
2 . 3 % Tre n d L i n e
Source: UCLA Anderson Forecast (June 2009).
A ROLE FOR LEADERSHIP Some governors have pointed to underlying causes but not the whole picture. As noted, Jerry Brown’s “era of limits” suggested the rising cost of growth and a structural shift. But when it came to the major political consequence of the shift, Prop 13, Brown was either distracted or bemused and—in the end— flipflopped from opposition to the proposition before it passed to support afterwards. 8 7 Deukmejian took the taxpayer revolt as a given and the last gasp of the Cold War helped pull the California economy back on track. In any case, he had little incentive to look for an underlying shift that was being temporarily obscured.
and ultimately did navigate the state out of the budget crisis of the early 1990s. But his preferred remedy, in effect state control of immigration via Prop 187, was doomed to fail since immigration control is the province of the federal government. Subsequent litigation largely voided Prop 187. Finally, neither Gray Davis nor Arnold Schwarzenegger focused on underlying trends. Davis came into office during the dot-com boom when, despite the employment lag shown on Chart 3, the budget position of the state was temporarily strong. Ultimately, Davis viewed his fate as a function of the short-term business cycle. “Nobody seems to understand that the economy is like the tide,” he complained. “When you’re in high tide no one thinks low tide is coming.”8 8
Wilson looked at the demographic element as an underlying cause of California’s budgetary problems
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