Ten good reasons to recall Gray Davis

Human Events, Aug 18, 2003

State Attorney General Bill Lockyer (D.) refused to join the lawsuit, citing the fact that Budhraja had recused himself from some of the energy deals.

Davis and some of his California apologists-including the members of the California Public Utilities Commission-are still blaming power suppliers and traders for "manipulating" the market and withholding power capacity. But the California Independent System Operator challenged this theory in a credible rebuttal last October. Moreover, even if the Davis defenders are right, it does not change the fact that Davis's administration approved contracts for ridiculous prices.

The state's negotiators shocked one energy trading manager at the Bonneville Power Administration in Oregon, who was quoted in the Wall Street Journal in March 2001. "They agree to prices that make you wonder," he said. "You'd at least think they'd check to see what the prevailing price is before throwing out their offer."

It also does not change the fact that Davis had the power to remove caps on residential energy prices, but failed to do so for purely political reasons. He thus removed economic incentives for both conservation and increased energy production. The San Francisco Chronicle recently defended Davis's handling of the crisis by arguing "there was no public will to raise rates for consumers." But this misses the point entirely. Instead of making residential consumers pay market prices for their own electricity-a move that could have cost him politically-Davis instituted random, rolling blackouts that created chaos and severe economic damage in many parts of the state. His failure to remove the residential energy price caps also meant that electricity rates had to be raised on businesses, further harming the state's tax and employment base.

Budget Deficit Deception

"California is not suffering a revenue shortfall. In the first four years of this administration, revenues have increased 25% while inflation and population combined have grown only 21%. The problem is that [general fund] spending has increased 40%."

These words are McClintock's, and they provide the only explanation anyone needs for the $38-billion state deficit that was recently resolved through borrowing and budget trickery. The problem is a liberal state legislature and Gray Davis, who has repeatedly signed off on wild, irresponsible spending increases.

Davis signed the state's 2003 budget on Sept. 5, 2002. That budget only wiped out that year's $23-billion shortfall through similar accounting trickery, but it was crucial to Davis's hotly contested re-election campaign that he sign it and showcase purported spending "cuts." In reality, the tough decisions about budget cuts were put off until after the November 5 election.

Asked that day whether he would raise taxes after the election, Davis ducked. "I have no expectation one way or another," he said.

Just three months later, Davis announced that the budget deficit was actually $34.8 billion-roughly half the size of the state's general fund and more than most states' budgets. He then began drawing up plans to raise taxes.