Bryan Caplan  

Myth of the Rational Voter, California Initiative Edition

Guys in Suits... Personality and Econometrics...
From Time, of all places, comes this column by Joel Stein:
It turns out that letting me vote on stuff is a bad idea, for much the same reason that giving me a credit card was a bad idea: I love stuff and hate paying for it. And it turns out there are a lot of people just like me. On May 19, California voters knocked down all five of the budget-cutting and tax-raising propositions designed to save the state budget from being $21 billion short. We already had the worst credit rating of any state.
The highlight of the piece comes from an interview with former CA governor Gray Davis:
Looking to complain to someone about the stupidity of this initiative system, I called former California governor Gray Davis, who got voted out of office through a recall petition. "I'm not for scrapping the initiative process," Davis said, to my shock. "I believe voters generally make good decisions." Even a recall, it seems, can't stop a politician from kissing up to voters.
HT: Jessica Pellien

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COMMENTS (5 to date)
Wm Tanksley writes:

I was rational when I voted "no" on all of those. I'd do it again. Those were purely awful.

I think the worst was how they were marketed. For example, 1A was named as a Rainy Day Fund improvement, and its summary talked about that. Not until the "fiscal impact" statement did it mention -- obliquely -- that it was going to increase revenues through extensions of the recent tax increases.

I don't see how that's even legal; it seems like deliberate concealment.

The rest were either similar (i.e. pretending that 'borrowing' from future lottery revenue was a legit part of reworking the lottery), or so complex that I couldn't decide.

Voting no to all was rational.

Crawdad writes:

I'm going to jump in with Mr. Tanksley above. How exactly was it irrational for California voters to give a big thumbs down on tax increases when the folks in Sacramento have absolutely no history of fiscal restraint?

Mace writes:

I thought that the initiatives were simply the attempt by our politicians to off-load the political risk onto the voters, i.e. "how can we be blamed if the people vote themselves more tax increases?" More rule by deception as the previous commenter so correctly identifies.

Not much leadership in this state, if any at all. Unfortunately, they'll all probably get re-elected. No wonder the talented, higher income earners are leaving the state.

El Presidente writes:

This is a touchy subject for me, but I'll try play nice with the other boys and girls. :-)

First of all, none of the ballot propositions that were rejected were anything but temporary band-aids for the fiscal and economic problems California has.

The problems were created largely by another proposition, Prop 13, passed in 1978. It capped property taxes at 1% of assessed value at time of purchase or major improvement and annual increases in assessed value at 2%. Take a look at the rate of inflation since then. You'll notice that this MAXIMUM annual increase isn't enough to keep pace even if 1% of assessed value was the correct rate to begin with, and the date-of-purchase catch results in inequitable outcomes for no apparent reason. So, you have to plug the hole with other revenues since cutting things like police, fire, public education, and public infrastructure is very very difficult both logistically and politically. We now have fairly high sales taxes in the more populous counties and one of the most progressive income taxes of any state in order to offset the proportionally declining property tax revenue. That leaves government revenues highly vulnerable to economic cycles. This is our biggest fiscal problem.

The economic problem is that by favoring land over labor or capital in state tax policy for the last 30 years we have encouraged flat and wide development (think MRTS), which increases transaction costs (i.e. transportation) and infrastructure costs and decreases the efficiency of infrastructure. Thus, we now make greater investment to get smaller returns. This has caused our proportional expenditures on public education, infrastructure, etc. to change as cuts were made, whether or not efficiencies could be found, and priorities were enshrined in the state constitution. Thus, we bleed for the profit of land speculators and try to infuse enough blood to keep our vital organs from failing.

To somebody who hasn't studied the fiscal and economic history of California, this may seem like a simple instance of irratinal voters. To somebody who has, it is much more complex. I don't hear much criticism of those 'irrational' voters who thought they knew what made good fiscal and economic policy in 1978, at least not on this blog. I wonder why that is? That's not true; I don't wonder. Funny thing is, now we have proof they were wrong and it falls on deaf ears.

Jeremy H. writes:

More evidence counter to the claim that the public is not libertarian.

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