SACRAMENTO – Advocates for government “solutions” for everything from health care to education argue that some aspects of life are just so darn complicated that only a centralized authority with taxing and spending power can handle such matters. Yet whenever we look at those areas of life dominated by the government, we find nothing but convoluted messes, political corruption and mismanagement.
And so in Sacramento last week, state legislators passed a water deal that will ultimately send a huge bond to voters for their approval. The deal, however, will satisfy no one, fix no significant problem and is awash in the wasteful pork-barrel programs people have come to associate with government spending.
State Senate President Pro Tem Darrell Steinberg, D-Sacramento, right, laughs at a comment made by Gov. Arnold Schwarzenegger concerning the Legislature’s passage of a package of water measure’s, at a Capitol news conference in Sacramento, Calif., Wednesday, Nov. 4, 2009. The $11 billion plan provides funding for new dams, groundwater cleanup, conservation and habitat restoration.
For instance, the Sacramento Bee reported Wednesday that a “nonprofit tolerance center in midtown Sacramento, championed by state Senate President Pro Tem Darrell Steinberg, could get a vital economic boost from an unlikely source: a mammoth $10 billion water bond proposal.” A tolerance center? Steinberg said he was proud of the pork project, but agreed to drop it when it became clear that it could jeopardize the bond measure in the Assembly.
California legislators just couldn’t help themselves. And they couldn’t help but ladle the legislation with big-government-style enforcement mechanisms and efforts to force urban residents to cut water usage by 20 percent. Just wait until the Water Police start cracking down on landscaping and carwashing, which already is happening to some degree.
Yes, it’s perfectly legitimate to float bonds for capital expenditures that will outlast the term of the bonds. So much of this legislation is pork. And given the wastefulness endemic in the state’s budget, it’s reasonable to think a sensible budget could have accommodated the water infrastructure spending without having to take a loan for 30 years.
As OC Tax’s Reed Royalty told the Register, it would also have been better to use revenue bonds and “pay as you go” financing from water agencies (rather than general-obligation bonds). But look how water agencies spend their money – their top priority seems to be dramatically hiking employee pay and pensions rather than doing the public’s business, as a recent Metropolitan Water District fiasco makes clear.
Tell me again why government is the solution to this situation. The government agencies charged with maintaining the water supply have neglected it for decades as government has spent increasing amounts of money on its employees and on should-be-private programs such as tolerance centers. Government neglects infrastructure. It often uses its power to social engineer (use less water!, use transit rather than roads!, etc.) rather than meet the needs of the public. Yet no one in Sacramento has seriously raised privatization issues that offer hope for the future.
Water policy, indeed, is horrifically complicated. I do not know how to privatize the system, although there are many ways that market mechanisms can be included in the process – such as a system whereby farmers can sell their water rights to urban users and thus divert water to its highest and best use without confiscation of water rights. I do know that in the current world, powerful constituencies, such as environmentalists and developers, hijack the decision-making process for their own ends. That’s politics. Government projects are, by nature, political projects, in that decisions are made in the political arena by interest groups and politicians rather than by economics and consumers. Therefore resources are squandered, and great needs go unmet. Political decisions are rarely noted for their long-term thinking – long term means the next election.
Lots of things are complicated – food production, air travel, the printing of newspapers. No individual can grasp how to make all these moving parts come together at the right time. There’s a great old libertarian book, “I, Pencil,” which explains the surprising complexity involved in bringing a simple writing implement into being. Same goes for water. We don’t know exactly how a market-based water system would work, just as we don’t know for sure how a market-based education system or health care system would come into being. But we do know that those areas of life where the market is freest are those areas of life where the products are the finest, the consumer is king and the prices keep heading downward as quality goes up.
It is those areas of life dominated by government where crucial investments are ignored, scarcity is most pronounced, quality is shoddy, and prices (taxes and debt) keep getting higher. In all market systems, there is a limited but crucial role for the government (enforcing contracts and maintaining the rule of law, for instance), but the key word is limited.
There’s got to be a better way to maintain the state’s lifeblood of water resources, although the folks at the tolerance center in Sacramento no doubt would have been happy with the status quo.
Steven Greenhut is director of the Pacific Research Institute’s Journalism Center. Write to him at [email protected].