Matt Yglesias

The Madness of “Three Strikes”

California’s “three strikes and you’re out” law has always been nuts, but with federal judges ordering the state to release prisoners in order to ameliorate dangerous and inhumane prison conditions it’s about to get truly insane.

The thing about imprisoning someone is that even though it’s a costly and brutal thing to do, it can bring real gains. A person in a prison cell is a person who’s not out on the street committing crimes. But how well this works has a lot to do with how likely the person you’ve incarcerated actually is to commit additional crimes. And this has a lot to do with age. Criminal behavior peaks in the early twenties and tapers off dramatically after thirty. Consequently, very long prison sentences, especially as applied to repeat offenders, are pretty wasteful. And if you’re facing a court order to reduce your incarceration head count, the sensible thing to do is to start letting older prisoners out. Some of them will probably offend again, but the majority will have “aged out” of serious criminal activity. And older criminals tend to engage in less-risky, less-violent crime that’s not as bad.

But thanks to “three strikes” California mostly can’t do this. Instead of letting out some of the vast number of mostly harmless offenders they have behind bars, they’re going to need to keep them locked up and instead cut loose people with fewer crimes on their record. This is going to be a younger and much more dangerous group and letting them out will lead to higher crime. And that, in turn, will increase demand on the state’s punitive apparatus but it’s not going to magically conjure up any new prison beds and lots of the ones they have will continue to be occupied by oldsters who don’t need to be behind bars.

Direct Democracy in Switzerland

Reader E.R. pointed me to a helpful Joe Matthews op-ed in the Sacramento Bee that attempts to explain why direct democracy works better in Switzerland than in California:

Under initiative-based direct democracy, California politics has become a shooting range that never closes. Dozens of initiatives are filed each year (the record is 152 in 2005). Since Johnson’s time, more than 105 initiatives have been approved by voters. In contrast, the referendum – a ballot measure that allows citizens to reverse an act of the Legislature – is rare. According to the Secretary of State’s Office, only 64 referenda have even been filed in California since 1911.

Why the disparity? The state constitution makes initiatives easier to qualify for the ballot than referenda (the number of signatures required is the same, but sponsors get more time to gather signatures for an initiative) and just as easy to pass at the ballot. A simple majority is all that’s needed.

Swiss direct democracy works in the opposite way. It’s based not on the initiative but on the referendum. The Swiss constitution makes initiatives twice as hard to qualify as a referendum. A referendum needs only a simple majority of votes to pass, but an initiative must achieve a “double majority” to succeed – a majority of the national vote, and majorities in a majority of the country’s 26 cantons, or provinces. Initiatives are thus much less common than referenda because they so often fail – the success rate of Swiss initiatives is just 9 percent. (In California this decade, a historically difficult time for passing initiatives, voters have approved 30 percent of initiatives).

I’d want to see more research before definitively accepting this theory, but it makes sense. And it goes to show that differences in institutional structure can make a very big difference.

Why Does Direct Democracy Work in Switzerland?

Stadttheater, Berne, Switzerland (my photo, available under cc license)

With Brad DeLong’s caveats I agree with him that Christopher Caldwell’s FT article on the fiscal fiasco in California is quite good. But I do have one additional doubt. Brad wasn’t happy about “a pointless and unfair slam at Venezuela.” The slam in question was Caldwell’s “The state’s laws are shaped by plebiscites to a degree unmatched outside of Venezuela.”

That’s not, however, just pointless. It’s actually wrong. California’s laws are shaped by plebiscites to a degree unmatched outside of Switzerland. And yet Switzerland is about as well-governed as anyplace else you care to name. It seems to me that that is what critics of California-style direct democracy need to grapple with. Swiss political institutions are different from California in a whole bunch of ways. But they both rely heavily on plebiscites. And the results are quite different.

A Currency for California

This story is five days old, but it strikes me as something that deserves more attention—there’s a bill being considered in the California Assembly that would have the state accept state-issued IOUs as payment for taxes. That would, of course, give the IOUs some real value to anyone who owes taxes. And that, in turn, means that all kinds of business owners and others would have reason to offer to buy IOUs from IOU-recipients provided they could get some kind of discount. Which is another way of saying that California would be essentially creating a new currency, which James Galbraith suggests over email that we call the “CAIOU” pronounced like “cailloux” (French for pebble), and the discount would be the exchange rate.

In most places I think this would be totally non-viable. But California is very large and California metro areas don’t tend to involve inter-state commuters (it’s not like New York or Philly or DC, in other words) so you could actually imagine this working. And monetizing the state’s debt is something that could look very appealing to legislators once they realize it might be doable. Which doesn’t mean it’s a good idea. For one thing, what California’s already done with the IOUs arguably violates the Constitution’s ban on states creating currency. Thus far, nobody’s inclined to try to do anything about it, but pushing the envelop might force the federal government to try to do something in order to maintain the credibility of its own debts.

Blame Institutions for the California Budget Mess

Kevin Drum says California has been the victim of fantasy budgeting:

Californians are living in a dream world. Prop 13 slashed property taxes and nobody wants to amend it, even for commercial property. Arnold Schwarzenegger got elected in the middle of a budget crisis by promising to cut taxes. When that proved to be an unsurprising disaster, the voters approved billions in borrowing, making the budget situation even worse. It’s easy to blame Sacramento for this mess (and I do!), but the public has been complicit every step of the way.

This is true. Kevin observes that you have your high-tax, high-service states and you have your low-tax, low-service states “but over the past few decades we Californians have somehow concluded that we can be a medium tax/high service state.”

I suppose it strikes me as unlikely that California’s budget problems are unusually intractable because California’s citizens as unusually unreasonable. The crux of the matter, as best I can tell from the East Coast, is that California has a set of political institutions that don’t work. The 2/3ds rule in the state legislation doesn’t make sense, the profligate use of the initiative process doesn’t work, the combination of the two is disastrous. There seem to me to be other sources of institutional dysfunction in California (LA County is almost twice as big as the country’s second-largest, and five of the fifteen top population counties form a contiguous belt in southern California) but those are the big obvious ones. Voters and politicians suffer from similar pathologies all the world ’round. But differences in history and institutions can lead to very different outcomes. California needs not only to come through this budget apocalypse, but to adopt a different institutional model that forces some level of decision-making.

Buy High, Sell Low

I understand that California’s got budget problems, and looking into the sale of potentially valuable state owned land thus has some merit, but it seems to me that it would be pretty unfortunate to sell these parcels amidst a huge recession and real estate bust. The time to sell publicly owned property that’s ripe for redevelopment is when times are good. During good times when there’ll be plenty of buyers you can make sure to sell it to someone whose development plans serve some kind of reasonable conception of the public interest.

Besides which, the smart thing to do would be to monetize those assets during an upturn, and then sock the money to plug budgetary holes during downturns. Or even better, you could use the money to fund capital projects. Currently, we tend to do capital projects during good times when revenues are high, even tough this is also when costs are high. Meanwhile, we sell assets during bad times when revenues are low, even though this is when sale prices are low. The smart thing would be to do the reverse—the overall tax burden would be the same, but we could get much more infrastructure for our money. Not, of course, that sound budgetary practices are typical of state governments in general or California in particular. But our failure to adopt sounded budgeting at the state and local level significantly lowers our economic growth and overall well-being in the long term.

Marijuana Legalization as a Revenue Enhancer

Jesse McKinley takes a look at states searching for unorthodox revenue sources including this one:

Nowhere is that more true than California, where Assemblyman Tom Ammiano, a freshman from San Francisco, made a proposal intended to increase revenue, and, no doubt, appetite: legalizing and taxing marijuana, a major — if technically illegal — crop in the state.

“We’re all jonesing now for money,” Mr. Ammiano said. “And there’s this enormous industry out there.”

I don’t think this is the optimal policy. I fear the creation of a legal marijuana industry with lobbyists and advertising aimed at creating as many problem pot smokers as possible. It would be better, I think, to decriminalize possession and growing for personal use but keep maintain a ban on selling and marketing marijuana. That said, the revenue possibilities of moving to full legalization are pretty tempting. And what Ammiano is proposing would be a significant improvement over the status quo. I think it’s a real sign of the poverty of our policy conversation that this idea isn’t in wider circulation.

Countermajoritarianism in California

As the state of California slides into financial apocalypse because the state legislature’s GOP minority refuses to compromise even a tiny bit in the face of a requirement that a budget pass by a two-thirds vote, it’s time to ponder the perversities of countermajoritarian requirements of this sort. Say that things get really horrible in California as a result of this standoff. It’s possible that the voters will respond by throwing out the minority obstructionists. But it’s also possible—likely, even—that the voters’ sense of accountability isn’t that fine-grained. When terrible things happen, the public decides to “throw the bums out”—i.e., incumbents in general, i.e. mostly Democrats since they’re in the majority.

I’m not sure that will be the consequence, but it’s definitely plausible. And it’s one of many problems with this form of government. Given the realities of public ignorance, bounded rationality, etc. you never get a political system in which voters do a perfect job of holding elected officials accountable for their performance. But for the system to work, it’s important that they do an at least “okay” job. And countermajoritarian rules screw that up. In California’s case, it’s long past time that they find some way to scrap their existing state constitution and write a new one.

California Progress

Not to tell the good people of California how to run their business, but from reading stuff like this it’s clearer and clearer that the state desperately needs a new constitution. You never meet anyoen who thinks the institutions of governance in California are well-designed, or even who denies that the existing institutional configuration makes it impossible to solve any of the state’s problems. But nobody quite seems to want to do anything about it. And yet surely it can’t be impossible to change this stuff — state constitutions used to be re-written all the time.

And now that I think about it, I think maybe I should be telling the good people of California how to run our business. It’s a giant state — one eighth of our population. And it’s a state with a pretty progressive electorate — a jurisdiction that should be open to good public policy. But it’s saddled with institutions that make the adoption of good policy extremely difficult. But on areas where California is able to act, it’s a real national leader. Its combined size and progressivity lets it blaze trails and have broad influence. But that influence is being largely squandered by dysfunctional political institutions.

California Dreaming of a New Constitution

As long as I’m out here in California, let me say that if everyone thinks the current political system in California is completely dysfunction — and everyone does seem to think that — then they should really scrap it and replace it with something new. Get a bunch of shadowy elites together to write a new state constitution. One that’s at a reasonable length (instead of the current 110+ pages and growing) and that appropriately places the bulk of tax and budget authority in the hands of the elected officials who get held accountable when things wind up all screwed up. Then submit that new text as an “amendment” to be decided as a ballot proposition.

Hard to do? I’m sure. But the current system makes it incredibly difficult to ever fix anything in this state.

The Chicken ‘n Egg Menace

Via Dave Alpert, the mayor of Clayton, California takes on the challenge of little girls selling excess produce from their family’s garden on Saturday mornings. Apparently, this violates zoning rules. Mayor Gregg Manning says: “They may start out with a little card-table and selling a couple of things, but then who is to say what else they have. Is all the produce made there, do they make it themselves? Are they going to have eggs and chickens for sale next.”

What’ll be next — a ban on lemonade stands? Probably not. More mayor: “Lemonade stands are technically illegal, but they don’t last long enough to do anything about.” But maybe if future developments allow for more rapid lemonade-detection we can rid ourselves of this scourge.