Your eyes on California Government

With Jerry Brown running for governor — again — I might as well tell my Kathleen Brown Story.

Because of Wilson’s tax increases in 1991 and 1993, California was not enjoying the economic recovery that the rest of the nation was. The Jobs Gap, as I since have called it, was 2 percentage points above the national unemployment level (like now, in 2010), and wouldn’t drop below the 2-point level until 1996, after most of Wilson’s 1991 tax increases had expired.

Wilson was eminently vulnerable, especially on the tax issue.

During the campaign the summer of 1996, Kathleen Brown twice visited the editorial board at the Orange County Register, where I then was an editorial writer. Both times, I said, “You should talk to Dr. Arthur Laffer. He helped design Prop. 13, Reagan’s tax cuts, and tax cuts around the country and world. He’ll help you design a tax-cut proposal you could use to beat Wilson.” (I later found out that it was Laffer who designed brother Jerry’s flat-tax proposal during Jerry’s 1992 presidential run.)

Both times, she agreed to talk to Laffer, who then was down in La Jolla.

A couple of weeks after our second meeting, Kathleen came out for tax increases, and lost big. Wilson, behind in the polls, no longer had to defend himself on the tax issue. He then surged ahead using his infamous “wedge issues,” especially Proposition 187, which would have cut off funding for illegal immigrants.

Then as now, Laffer was one of my sources on economics stories. Some years later, around 2002, I called him about an issue, then said, in passing, “In 1994, I told Kathleen Brown to call you. It’s too bad she never did. She would have been a lot better than Gray Davis,” then the governor, soon to raise taxes and be recalled.

Laffer replied that she did call him. She discussed some economy-boosting tax-cut ideas with him. But shortly after that, she surged in the polls, and her staff convinced her that she should call for higher taxes to solidify her liberal support in November.

Sic transit gloria mundi.

Laffer in 2006 got tired of fighting California’s high taxes and decamped to Tennessee, which has no state income tax, along with 20 staff members.

Will Jerry make the same mistake as his sis? I doubt it. Whatever you think of him, he’s a savvy politician.

– John Seiler