Recall “the gringo dollar system”?
Copyright Ó 2003, by Alec Rawls
The back-story to California’s upcoming recall election is the destruction of the state’s economy by the liberty-hating Democrat legislature. They hate gun rights, they hate school choice, but the liberty they hate the most is economic liberty. Governor Davis gets to be the poster boy for this anti-capitalist leftism because he single-handedly struck the biggest blow when he refused to let the state-regulated consumer price of electricity rise during the electricity crisis.
Now Democrat replacement candidate Cruz Bustamante wants to do the same thing with gasoline, proposing a state constitutional amendment that would allow the state to dictate gasoline prices.<![if !supportFootnotes]><![endif]> The only difference is that Bustamante is also a racist who refuses to renounce his ties to the Nazi-like Chicano student group MEChA, which promotes racism on college campuses throughout the southwest.
MEChA’s founding slogan is: “For the race, everything. For those outside the race, nothing.”<![if !supportFootnotes]><![endif]> MEChA is also a leftist anti-capitalist group, proclaiming in its founding document that: “Our cultural values of life, family, and home will serve as a powerful weapon to defeat the gringo dollar value system and encourage the process of love and brotherhood.”
Of course, rejection of the “gringo dollar value system” is not a “bronze” innovation. One hundred million were murdered in the last century in the name of this same leftist vision of “brotherhood and love.” Luckily Bustamante cannot run for the office of communist dictator, only governor. Still, as Davis proved, having an economic-liberty hater as governor is quite bad enough. With Bustamante planning to repeat Davis’s electricity crisis mistake, it is worth reviewing the consequences of contempt for freely negotiated market prices, and the economic liberty that flows through them.
Price elasticity estimates indicate that, when California’s electricity crisis started to hit in 2000, the consumer price of electricity would only have had to about double to bring demand into line with supply, and only for the year two it would take for new supply to come online.<![if !supportFootnotes]><![endif]> When instead Governor Davis refused to let the regulated consumer price rise, low consumer prices caused demand to remain unmoderated, which caused wholesale prices to spike by factors of 50 to 100, with the difference between the wholesale and the consumer price covered by state borrowing.<![if !supportFootnotes]><![endif]>
More than half of California’s 38 billion dollar budget deficit can be attributed to this entirely unnecessary expenditure.<![if !supportFootnotes]><![endif]> Many years of high taxes will be necessary to pay off this debt. An equally large long term expense is the long term contracts for electricity that Davis signed at the height of the crisis. Generators offered lower prices in 2001 in exchange for doubling long term prices and Davis signed many years worth of such contracts.<![if !supportFootnotes]><![endif]>
Saddled with these gigantic burdens, California just can’t compete. The proprietor of a local quickie-mart showed me his electricity bill: $2500/month, or about the same as rent. Most companies, even if they just have a building full of computer users, are electricity intensive. Add in the high taxes, and they want to be anywhere but here.
Davis turned a modest short term problem into a huge long term problem. Out of pure old-fashioned capitalism-hating leftism, he sent a torpedo square amid-ships into the state’s economy. Davis has truly earned his way out of office. Bustamante, in wanting to make the identical mistake with gasoline, has earned his way out of office before the election.
But the Democrat-leftist hatred of economic liberty goes far beyond Soviet style rejection of freedom of contract in the setting of prices. They hate freedom of contract and freedom of association generally. Like Davis, Bustamante will sign every liberty-hating bill the Democrat legislature sends down, and they are sending plenty.
Freedom of contract and association
One new law allows men who want to dress as women to sue for employment discrimination.<![if !supportFootnotes]><![endif]> What? You didn’t promote that 250 pound bald man wearing a dress and a push-up bra? See you in court. And what sane jury would ever believe that this person's grotesque behavior did not hold back his career. You're screwed. In California, it is now in effect the employers job, not the employees job, to keep the employees career on track, so long as the employee dresses shamefully.
This follows California’s expansion of anti-discrimination law three years ago to cover sexual-orientation. <![if !supportFootnotes]> <![endif]> Companies in California now have to worry about getting sued for everything under the sun. They have to watch everybody’s race, everybody’s sex, everybody’s sexual orientation, everybody’s religion, everybody’s dress, everybody’s age, everybody’s disability and try to make sure that no-one has any way to claim discrimination or harassment. That’s an impossible order, when everyone has million-dollar incentive to interpret every slight or setback as discrimination or harassment, in a state where politically correct jurors strive to honor every victim claim.
Only liberty can judge merit. Companies have full incentive to hire and promote the best employees. Turning the job of judging merit over to dizzy jurors on the he-said she-said merry-go-round of tort law strips liberty of jurisdiction and replaces it with Russian roulette. Do business in California, shoot yourself in the head.
Of course California Democrats are not content just with government oversight of merit either. They also want government to trump merit, as with the use of affirmative action. Another example is the crazy bill that just breezed through the state’s lower house, holding companies liable for damages whenever any employee promotes another employee he has a romantic relationship with, regardless of the merits of the promotion.<![if !supportFootnotes]><![endif]> Any company doing business in San Francisco will simply have to leave. Imagine being liable for which homosexual employee is promoting which homosexual love object when half of your employees are promiscuously sleeping with each other? “Merit not mating” is the bill’s catchphrase, but that is a misnomer. The bill has nothing to do with merit. It is only anti-mating. But how can anyone think that it is the government’s job to be anti-mating?
Holding both houses of the legislature and the governor’s rubber stamp, the Democrats are laying into the state’s economy like the iceberg that sank the Titanic. The only immediate hope for California is veto power. Mr. Schwarzenegger may be a pretty weak veto, being a leftist himself on half the issues, but at least he would throw some sand into the Democrats’ now unchecked drive to self-destruction.
Defenders of Bustamante’s MEChA affiliation, like Los Angeles Times editor Frank del Olmo, have tried to deny the racist nature of the organization by saying it has outgrown its 60’s ideology, but MEChA’s new constitution, adopted in 1995, reasserts that its primary objective is “liberating Aztlán.”<![if !supportFootnotes]><![endif]> “Philosophy Papers” and “Goals and Objectives” amended as late as 1999 also continue to affirm MEChA’s founding document, El Plan de Aztlán, as the group’s guiding vision.<![if !supportFootnotes]><![endif]>
Aztlán is a mythical Aztec homeland that includes the entire southwestern United States, from Texas to Oregon. According to El Plan, “Aztlán belongs to those who plant the seeds, water the fields, and gather the crops and not to the foreign Europeans.” This is an anti-American organization that rejects the principles of individual liberty in favor of group rights. Their version of democracy is representation of groups by quota, with “equal representation of Chicanas and Chicanos.”<![if !supportFootnotes]><![endif]> As with their envisioned future state, everyone else’s quota is zero. “For those outside the race, nothing.”
Their radical-leftist anti-capitalism is also current ideology. At MEChA’s annual conference in 2000, the keynote speaker opined that: "Capitalism is the root of domination. Racism and sexism exist because capitalism requires it."<![if !supportFootnotes]><![endif]> Yup, it’s hard to think of anything more oppressive than freedom. Bustamante examples this ideology with his championship of every Democrat attack on economic liberty. Prices are to be set by the state, not by individual agreement. Merit is to be judged by the state, not by individuals, and is to be trumped by the state to implement racial preferences.
Bustamante is Mechista to his core. He is a racist national socialist (for the nation of Aztlán). In fact, he has made it semi-explicit that he is running for governor, not of California, but of Aztlán. When asked to name what state services he would deny to illegal aliens, he answered that people who are here illegally have “a right to citizenship,” so long as they work and pay taxes.<![if !supportFootnotes]><![endif]> To Bustamante, this means that illegals should actually be treated as citizens. There is nothing he would deny them. In effect, he does not recognize the United States as a sovereign nation, just as MEChA does not. This is far different than advocating easier legal immigration. This is contempt for American law.
In itself, flouting the law is as American as apple pie. We pass illiberal laws all the time and, because we love liberty, we break them all the time. But Bustamante’s contempt for law has a seedier source. It stems from a racist-leftist America-hating ideology. Bustamante and his MEChA organization are cadre of radical leftists who espouse the most explicit racism while proclaiming that the real racist force, the great enemy to be destroyed, is American liberty.
Latino students who are thinking of joining this group be warned: you will be marked for life. This country will not long tolerate your Nazi party. If Bustamante wins, the inevitable demise of California will take his leftist-racist cause down with it.
Alec Rawls is a Contributing Editor of The Stanford Review. He is currently writing a book on republicanism. Contact email@example.com.
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<![if !supportFootnotes]> <![endif]> See Townhall columnist Bruce Bartlett’s 9/2/03 article: “Gasoline price controls would be a disaster,” available at: http://www.townhall.com/columnists/brucebartlett/bb20030902.shtml.
<![if !supportFootnotes]> <![endif]> This phrase is prominent at the beginning of MEChA’s founding document, “El Plan Espiritual de Aztlan” (sometimes “El Plan de Aztlan”). This document, along with other main MEChA documents, can be found at the San Diego State University MEChA website: http://www.angelfire.com/sd/MEChAdeSDSU/. On Bustamante’s continuing allegiance to MEChA, see the Fox News story “Bustamante Won't Renounce Ties to Chicano Student Group,” 8/28/03, available at: http://www.foxnews.com/story/0,2933,95871,00.html.
<![if !supportFootnotes]> <![endif]> If elasticity of demand is about -.2, then a doubling of prices will cause peak demand (about 50,000 megawatts) to fall by 20%, or 10,000 megawatts, leaving necessary leeway under peak supply (about 50,000 megawatts) to weather demand and supply variations without running into capacity limits (which is what causes extreme price spikes). According to The Federal Energy Regulatory Commission, -.2 is a safely conservative estimate for the price elasticity of demand for electricity. See http://www.dramcoalition.org/Resource-88/Comments%20FERC%20RTO%20Cost%20Benefit%2002-04-09.doc.
<![if !supportFootnotes]> <![endif]> August 1999 prices for electricity averaged $40/mwh. In April, 2001, forward contracts for August were hitting $750/mwh. In December 2000 spot prices hit $5,000/mwh. See “Markets indicate even higher prices for summer power,” San Jose Mercury News, 4/11/2001.
<![if !supportFootnotes]> <![endif]> Compared to electricity costs of $7.4 billion in 1999, costs were $27 billion in each of 2000 and 2001. See “Buckets of trouble: Tracking down the billions of dollars the energy crisis cost California,” The San Francisco Chronicle, 4/27/03, available at http://sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/04/27/BU52810.DTL. Figuring that if prices had been allowed to work, electricity costs would have doubled to about $15b per year, the unnecessary costs absorbed by the state amounted to an extra $12b per year, or $24b for the crunch years 2000-2001. Some estimates of total costs run to $70 billion and up. Ibid. If the consumer price had been allowed to rise, total cost would have been about $15b, none of which would have been paid for by tax revenues, which is another important distinction. A dollar of tax revenue takes substantially more than a dollar out of the economy, since the distortionary effects of taxation also have to be weighed.
<![if !supportFootnotes]> <![endif]> Davis signed about $43billion in long term contracts at the height of the crisis. See “California to hand back energy purchasing to utilities,” San Jose Mercury News, 12/30/02, available at: http://www.consumerwatchdog.org/utilities/nw/nw002951.php3. Article also notes average long term contract price of $70/megawatt-hour, about double the non-crisis California price. Note that this non-crisis price was already about double the non-crisis price in the Pacific Northwest and other competing regions. See “Buckets of trouble,” op. cit.
<![if !supportFootnotes]> <![endif]> The bill is AB 196, amending the California Fair Employment and Housing Act to include transgender employees and tenants, signed by Governor Davis on 8/3/2003. More details can be found at http://www.transgenderlaw.org/carelease.htm.
<![if !supportFootnotes]> <![endif]> For an analysis of the 1999 anti-discrimination laws, see http://www.brgslaw.com/articles/perceptions.html.
<![if !supportFootnotes]> <![endif]> The bill is AB 1229, 2003, sponsored by Palo Alto representative Joe Simitian. Text of California legislative acts are available at http://www.leginfo.ca.gov/bilinfo.html. 1229 amends California’s existing employment discrimination law so the earlier mentioned extension of anti-discrimination law to cover sexual orientation can be viewed here as well.
<![if !supportFootnotes]> <![endif]> Olmo wrote an article to this effect in the Los Angeles times, 9/7/2003, titled “Mechistas? It's Mucho Ado About Nada,” available at: http://www.azteca.net/aztec/mecha/mechaLATimes.html. MEChA’s 1995 constitution is available at the University of Michigan MEChA website: http://www.umich.edu/~mechaum/mecha.htm.
<![if !supportFootnotes]> <![endif]> Available at the San Diego State University MEChA website: http://www.angelfire.com/sd/MEChAdeSDSU/.
<![if !supportFootnotes]> <![endif]> From “Philosophy Papers” as amended in 1999. Available at http://students.seattleu.edu/clubs/mecha/Philosophy.htm.
<![if !supportFootnotes]> <![endif]> Conference quote is from the mayorno.com website, compiled by Hal Netkin. Mayorno carries exposes of Mechista candidate for mayor of Los Angeles, Antonio Villaraigosa. Citation is available at: http://www.mayorno.com/WhoIsMecha.html.
<![if !supportFootnotes]> <![endif]> Reported by Debra Saunder’s in her Townhall column “Citizen Bustamante,” 9/28/2003, available at: http://www.townhall.com/columnists/debrasaunders/ds20030928.shtml.