We have all heard about California's budget woes, but the story that is not often told is the one describing its origins. A couple of months back, The Economist had a special section dedicated to the subject, which interestingly began with the creation of the state in the 1850s.
Their northern neighbours like to remind visitors of the famous fork (somewhere in today’s Idaho) in the Oregon Trail that led the wagon trains to the Pacific coast. The builders and settlers, goes the story, followed the Snake and Columbia rivers and became Oregonians and Washingtonians. The gamblers and risk-takers turned south on the California Trail over the Sierra Nevada, ready to strike it big or not at all.
Indeed, California even today amplifies its boom-bust cycles. Consciously or not, it has built a tax system that is not only incomprehensible to its citizens but unusually volatile, relying disproportionately on income taxes, and especially on the capital-gains taxes of its wealthiest residents. When times are good, taxes spout. When times are bad, revenues disappear. The state, constitutionally barred from running deficits (as the nation as a whole may), thus expands and contracts in an automatic and anti-Keynesian wave pattern that exaggerates ups and downs.
With its origins in various rushes, the Californian character changed the system of representation that it employed.
California’s democracy is not at all like America’s, as conceived by founders such as James Madison. The federal constitution is based on checks and balances within and among three and only three branches of government—executive, legislative and judicial. That is because Madison feared that popular “passions” would undo the republic, that majorities might “tyrannise” minorities, and that “minority factions” (ie, special interests) would take over the system. America’s was therefore to be a representative, not a direct, democracy. “Pure democracies have ever been spectacles of turbulence and contention,” Madison wrote, “and have in general been as short in their lives as they have been violent in their deaths.”
The frontier mentality changed things a bit. As historian Frederick Jackson Turner argued, the first settlers who arrived on the east coast in the 17th century acted and thought much like Europeans. But as they moved west, American identity continually reformed itself as civilization butted up against the savagery of wilderness. The article explains,
This notion did not travel well to the vast emptiness of America’s frontier. The likes of August Schuckman were rugged individualists who trusted themselves more than any representative to run their affairs. So they instinctively embraced a direct and participatory form of democracy which they imported (with consequential alterations) from Switzerland, adding a fourth branch of government to the three existing ones.
For much of the 20th century the resulting governance structure did no harm because voter initiatives were used sparingly. But then, starting in 1978, the culture and system mutated. Jerry Brown was governor when Californians passed Proposition 13, ostensibly an anti-tax measure but in reality a fundamental constitutional change with vast, and mostly unforeseen, consequences. It led to hundreds of ballot measures as citizens increasingly legislated directly and in tense competition with their own representatives.