Why media matter

Last week I was in two hotels in Italy.  Every morning, the lobby had the usual newspapers for guests.  I don’t mean a stack of USA Today; I mean five newspapers, all with national circulation (and not even including the Corriere, darn it); maybe we can not count Berlusconi’s Il Giornale.  I don’t mean five tabloid-sized placemats such as all our newspapers have shrunk to, I mean five newspapers of about fifty pages each, perhaps a third ads, the size of what we used to think a newspaper was, like the NYT when it was eight columns wide and needed special folding skills to read standing up in the subway.  If I take out the stack of ad inserts from a Sunday Chronicle, it’s about the size of one of these dailies.

Granted, the Italians keep electing Berlusconi, so news is no guarantee of political maturity or judgment.  But not having it is a guarantee of Big Trouble, and we’re certainly having less and less, in print and otherwise.  Here’s an example of trouble:

Half of California voters want the state’s $20 billion budget deficit solved entirely or mostly with spending cuts not tax increases, even after lawmakers deeply cut state services to solve nearly $60 billion in deficits last year, according to a Field Poll to be released today.

“If it were up to voters, they would cut the budget and what they want to cut is waste, fraud and abuse,” DiCamillo said, adding that it “may be a pipe dream” to think those types of cuts could add up to $20 billion.

May be a pipe dream? Perhaps have a lack of understanding? This degree of total  cluelessness about an enormous unfolding catastrophe has many authors – indeed, that his citizens are in this state of ignorance at the end of his term is probably the most complete and damning condemnation of Arnold Schwarzenegger – but the wasting away of news provision, and the habit of consuming it, are surely high on the list.

European newspapers have a different business model from ours (and Italian TV is more completely in Berlusconi’s toxic grasp than print media), and getting more different.  I fear that Sarkozy’s latest idea is pushing a string, but at least the national government understands how important this problem is.   I am near despair about the prospects for California’s escape from its death spiral, for many reasons, but the Field Poll coupled with the continued shrinkage of American news content through all channels is definitely the cherry on top of my bitterfruit sundae today.

Author: Michael O'Hare

Professor of Public Policy at the Goldman School of Public Policy, University of California, Berkeley, Michael O'Hare was raised in New York City and trained at Harvard as an architect and structural engineer. Diverted from an honest career designing buildings by the offer of a job in which he could think about anything he wanted to and spend his time with very smart and curious young people, he fell among economists and such like, and continues to benefit from their generosity with on-the-job social science training. He has followed the process and principles of design into "nonphysical environments" such as production processes in organizations, regulation, and information management and published a variety of research in environmental policy, government policy towards the arts, and management, with special interests in energy, facility siting, information and perceptions in public choice and work environments, and policy design. His current research is focused on transportation biofuels and their effects on global land use, food security, and international trade; regulatory policy in the face of scientific uncertainty; and, after a three-decade hiatus, on NIMBY conflicts afflicting high speed rail right-of-way and nuclear waste disposal sites. He is also a regular writer on pedagogy, especially teaching in professional education, and co-edited the "Curriculum and Case Notes" section of the Journal of Policy Analysis and Management. Between faculty appointments at the MIT Department of Urban Studies and Planning and the John F. Kennedy School of Government at Harvard, he was director of policy analysis at the Massachusetts Executive Office of Environmental Affairs. He has had visiting appointments at Università Bocconi in Milan and the National University of Singapore and teaches regularly in the Goldman School's executive (mid-career) programs. At GSPP, O'Hare has taught a studio course in Program and Policy Design, Arts and Cultural Policy, Public Management, the pedagogy course for graduate student instructors, Quantitative Methods, Environmental Policy, and the introduction to public policy for its undergraduate minor, which he supervises. Generally, he considers himself the school's resident expert in any subject in which there is no such thing as real expertise (a recent project concerned the governance and design of California county fairs), but is secure in the distinction of being the only faculty member with a metal lathe in his basement and a 4×5 Ebony view camera. At the moment, he would rather be making something with his hands than writing this blurb.

12 thoughts on “Why media matter”

  1. Ok, your post was really about California, but you mentioned Italy, and that is the only place I know something about, because I live there. "The Italians keep electing Berlusconi;" do you wonder why? Almost nobody reads newspapers, and almost everybody watches TV, that's why.

    "Italian TV is more completely in Berlusconi’s toxic grasp than print media" is somewhat of an understatement. Italy has six large national TV stations. Rai1, Rai2, and Rai3 are public channels, owned and financed by the government. Says Berlusconi: "The meetings of the RAI board of directors happen at my home." And the commercial channels Rete4, Canale5, and Italia1 are owned by MediaSet, Berlusconi's company. Italians hear day in day out on TV that their government does great things, and that the opposition are all idiots. Pretty much what Americans heard from the 'liberal media' during the Bush years. Thank goodness for term limits. We need some of those over here.

  2. This post is depressingly self-serving. Your point, it seems, is that the California budget is already bare bones and cutting whatever limited fat it currently contains will not make any substantial dent in the $20 billion systemic deficit at which our state currently operates. Reasonable minds can disagree with this statement. I certainly understand that you have a vested financial interest in not feeling the effects of further cuts, but as a “policy analyst” it would behoove you to engage the arguments of the waste and fraud cutters rather than your current approach which consists, as far as I can tell, of one part hand waving and two parts apoplexy.

    If we are to spitball a way that cutting waste and fraud will return California to budget sanity, it would begin with state employee salaries. Around 200,000 people are employed full-time by the State of California in they are divided into 21 recognized bargaining units. The average base compensation for these public employees is $65,000. I don’t know what take home pay works out to after over-time, but I’ll conservatively assume that it increases to $75,000. Not a bad sum considering California maintains a defined benefit pension plan according to which state employees can retire after 25-30 years of service and receive a pension of 90% of their highest annual pay every year as well as generous health benefits until they die.

    Each of the collective bargaining agreements under which these people work has already expired or will expire in the next few months. Once the CBA expires, the Dills Act essentially permits a majority of the legislature to reset these employees’ salaries. So, if the legislature were to decide to cut state employee compensation by, say, 25%, the state could save $3.75 billion every year in salaries. Presumably, these cuts could fall on the highest paid state employees such that the median compensation would not fall very much.

    Likewise, the state could shift all current and future employees from a defined benefit to a defined contribution pension plan. Projecting Calpers’ underfunding is the stuff of soothsaying, but everything I’ve seen indicates that it’s underfunded to the tune of $40-60 billion. The annual state contribution to Calpers is currently $5.5 billion but credible projections have this increasing to $15 billion within ten years. (Perhaps an argument for socialized medicine but put that argument to the side). These liabilities just reflect vested state obligations so they really can’t be addressed other than through some kind of special tax on pension benefits, but the state could shift all current and future employees from a defined benefit to a defined contribution pension plan and ensure that it doesn’t have to come up with huge sums of money to make current and future employees whole on their defined benefits in future years – a savings of billions of dollars.

    Similarly, the state pays hundreds of people over $100,000 a year to serve on boards that meet fewer than twice a month. This may be small potatoes, but its worth saving that money.

    http://www.sacbee.com/2008/07/16/995141/see-how-w

    Next stop on the slash and burn express would be cutting high-end salaries paid to teachers and administrators in the K-12 system. A glance at the link above indicates that pay to teachers in most CA school districts tops out above $100,000/yr. The proposed 2010-11 allocation to education is $37 billion. $1.3 billion of this goes to Calstrs contributions and about 40% goes to teacher salaries. The state could condition the reallocation of funds to school districts on the districts renegotiating teacher CBAs by cutting teacher and administrator salaries at the high end and on cutting the defined benefits paid in retirement via Calstrs. The Calstrs cuts wouldn’t deliver benefits until years down the road, but a 6% cut to salaries would save about $1 billion/yr. These cuts would also save municipalities money and in response the state could shrink the overall budget and still stay allocate an amount of money to education that conforms to the Prop 98 limits.

    Just for fun, the last sources of savings I’ll discuss are junior colleges and CSU/UC systems. I graduated from UCLA five years ago and have taken a few courses at junior colleges. Whether a given class has 20 students or 2000 doesn’t materially change the nature of these institutions: they are degree mills. At a degree mill, students are going to learn as much or as little as they want to learn and that their class has seven TAs instead of one won’t change the fact that at a degree mill higher learning fundamentally comes down to issues of motivation. I believe Prof. Kleiman’s class of 100 students had three TAs when I took it, perhaps now it has one. I posit that the educational experience is unchanged.

    The proposed budget looks to spend $12.5 billion on these institutions. Cut professor salaries, cut grants to grant students, replace lower level administration and facilities employees with students on work study programs, raise tuition via additional price discrimination on the wealthy, require that junior college students pass an entrance test before transferring into the UC or CSU systems. I understand that you are pissed off at the prospect, but there is money to be saved here.

    Adding all of this up, the state of California has saved something like $8 billion by cutting things that fit my definition of waste. They might not fit yours, but a lot of people disagree with your definition. Saving $8 billion this year permits the state to pay interest on $8 billion less debt. At 6%, the state saves another $500 million next year. This is a path to cutting half of the systemic deficit within fewer than five years. The reduced spending on defined benefit payments kicks in down the road. The state spends money in areas other than those discussed above, and there are opportunities to save there as well (cancelling the high speed rail project comes to mind). As such, one doesn’t have to be ignorant to think that CA should cut waste before resorting to increased taxes as a way out of the budget muck. Rather, it is sufficient that they be informed but willing to accept that if “waste” is cut, the quality of the state’s employees will fall on the margins.

  3. Perhaps for the uninterested student the experience hasn't changed, but for those who are interested it has. Simply because asking a TA to handle 100 students, of which only some percentage will actually know the TAs name, would leave them no time to their own studies.

    Raise taxes, save schooling in California.

  4. Waste and fraud are canards trotted out to appease voters. Who would ever argue against cutting it? And the good news is that if it doesn't exist (at least to levels you had hoped/promised/wanted) you can just cut things that are needed and say they are waste or fraud!

  5. SL, you are entirely right: we can save a lot of money by cutting a lot of corners. But bottom line, you either want to pay for social services or you don't. I do, and I wouldn't mind increasing taxes considerably more to do it. As a school teacher (albeit laid-off, ironic?) this is indeed self-serving. But I also know a bit about teaching. I know that I could make an enormous list of things that my low-SES students were not getting that they deserved to get, not only for the "academic" reasons but for those of simple human equity (poor kids of the inland ghetto should be getting bussed to tide pools & redwoods). The moral premises that lead me to that argument are no different than those that lead me to public education to begin with.

    The problem is with people who either don't want to pay for social services, or those who want them, yet refuse to pay for them. Either way, the result is the same: the needs are not going to be met.

    On the larger CA voter diagnosis, I fear we may just have to drive ourselves into the wilderness before we realize just what that looks like. Although who knows, if media continues to die, those stories won't get told anyway. Maybe we can get Glenn beck to come and do puppet shows for us

  6. Seriously, who wants tax increase? As a Californian I would like to see the budget begin to get solved with some responsibility in Sacramento. Is that too much to ask?

  7. Optometrists in Redding have been counting on the state government to negotiate (with prison guards, with teacher unions, etc) with their long term interests at heart. The incentives on state government, though, are pretty short term: get a contract which will make the pain go away now, and by the way the legislature is term limited so nobody is going to be around to take responsibility when it blows up. This is a tape I have played before – but, Mike, doesn't the fact that Italy still has these swell newspapers and has gone to perdition anyhow argue against newspapers having a protective effect?

    If I ran the zoo – jeez, I don't know. I'm a long way away. Probably declare the calpers and calstrs systems bankrupt, and retroactively lessen the pensions people get from the successor pension organizations state would set up: no $400000 pensions for retired Vernon employees. No calpers-successor pensions exceed twice the median family income, and the pensions should be based on base salary, no top-up for overtime paid during the highest-paid years. Some schlub in Lodi flipping burgers should not be paying taxes to top up pensions because calpers invested in raw land in Vegas.

    The Mark Kleiman suggestions for ways to handle incarceration/house arrest, among other virtues, probably save a lot of money on prisons. I don't know how you handle Jesse Timmendequas/Phillip Garrido, though – when a guy like this is unmasked, the public wants to lock him away and throw away the key. Unless you shoot him, you have to lock him up expensively forever.

  8. Hmm, it seems that draconian cuts in pay and benefits for state workers (which of course would have no effect on the quality of work that they produce, or on the short-term ability to fill jobs vital for health and safety) might get California as much as $10 billion a year. Against a structural deficit of $20 billion a year (after massive cuts). Fail. Versus a revenue increase that averages all of $500 per capita, and could certainly be structured so that the median worker felt hardly anything.

  9. RE: SL Miller – I took several of Kleiman's classes at UCLA from 2005-2007, and I would be hard-pressed to say that 3 TAs is no better than 1 TA. Plus, the TAs are typically PhD students who have studies of their own to worry about. I can't imagine forcing 100 midterms, finals, and essays upon them twice a quarter is more than unreasonable. I'll mostly leave the rest of your comment alone, but will say that a 25% cut for all state worker salaries is ridiculous without a more specific idea of how to go about it. You'll likely never find the political will for such cuts, and you could drive a lot of talent into the private sector. I know this "talent" hasn't gotten us much in the budgetary death spiral of the past decade, but California used to be a haven of outstanding public services and I think a majority residents would like that to return. They just don't understand that they need to pay for it.

  10. A prof at Davis fed a horse one less straw a day. The experiment was interrupted by an exogenous accident (a few days after the horse had learned to live on nothing, it died) but his grant was renewed to repeat the experiment with five horses because of the wonderful results of the early stages.

  11. Eli – Too bad you’ve been laid off. I believe I’ve previously read your comments to posts on this blog and have always found them civil and well reasoned. In the abstract I have no problem with California deciding to dramatically increase its spending on social services. If I received five years notice that for the next four decades California would be a very high tax state that generously compensated its public employees, I would immediately leave the private sector and try to become a high school teacher. I think it would be very rewarding to take children from La Puente to visit the areas around Raymond Carver’s Arcata and John Steinbeck’s Salinas Valley. However, putting aside whether I could even get a job as a teacher due to the credentialing process and the caprice of the CTA/CFT, it’s unclear that allocating more money to various social programs is going to make a big dent in the various inequities you can cite. And anyway due to the vicissitudes of politics I certainly won’t be getting my advanced notice or tax regime certainty. So, I think you’ll agree with me that preferring to go into the “wilderness” is at least a rational choice (though not the one you’d make) when faced an alternative that might be much worse on one dimension (higher taxes) and not necessarily much better on another (slightly improved social services).

    Dave – I still don’t understand why Schwarzenegger was ridiculed for suggesting that we outsource prisons. I don’t see the U.S. Constitution requiring that people be incarcerated within the borders of the state which convicted them of a given offense. If a neighboring state (or country) can lock someone up for $25k/yr when it costs California almost twice that, then to me its just good policy that we send convicts to serve their sentences elsewhere. Also, I commend you for referencing the grill master out in Lodi. A certain subset of the population that has the time to be interested in politics cannot fathom that Joe Schlub in Lodi might prefer to pay $400 less in taxes than enjoy the government benefits that higher taxes on him and wealthier individuals would permit him to receive. What’s The Matter With Kansas? immediately comes to mind.

    Paul – You label my proposed “draconian” wage cuts a fail, I spit on the ground and reply that your tax increases would be draconian. Never the twain shall meet?

    DW- Overestimate that it takes ten minutes to grade an exam, then the upshot of requiring a TA to grade an extra 75 exams twice a quarter is that he or she has to work six weekends a year. I just don’t have any sympathy for the argument that this is asking too much of a grad student whose education is being subsidized by a state with financial problems on the order of California’s.

    As far as a concrete plan for paying for wage cuts, I’d start with getting rid of the overstaffing I perceive to exist at various state agencies. I’ve previously seen the LAO’s reports quoted approvingly on this blog, so here’s one way to save $150 million/yr:

    http://www.sacbee.com/static/weblogs/the_state_wo

    I imagine you can get about half-way to my $4 billion number simply by letting go of people who work ten hours a week and surf the internet or otherwise loaf about the other thirty hours. I’d start chipping away at the other $2 billion by cutting prison guard and CHP salaries across the board and upping their years of service requirement from 25 to 30, maybe you disagree but in my book these folks are eminently replaceable. I’d increase other years of service requirements from 30 to 35. Perhaps a larger study of the topic is in order and I do not have the time to complete it this afternoon.

    Of course there’s no political will for making cuts to public employee salaries and benefits, the legislature doesn’t dare cross the unions. Arnold learned his lesson in 2005 and Meg Whitman recently backed away from a pension reform initiative. Maybe things will change in 2012 after the work of the Citizens Redistricting Commission is done and there are no incumbents in either the Assembly or the Senate. Also, if Abel Maldonado and Charlie Munger’s son have their way and the open primaries top 2 vote getters advance to the general election ballot initiative passes in June, then maybe the legislature will consist of at least a few more sensible people.

    Regarding your idea that Californians want good state services but they just don’t understand that they need to pay for them, I say they are already being paid for. Recent figures show that Californians who work for local governments were paid 7.7%, 9.1%, 11.5%, and 21.4% more than their counterparts in New Jersey, New York, Connecticut, and Massachusetts respectively. California's state employees received 8.6% more than Connecticut's, 13.1% more than New York's, 19.9% more than those in Massachusetts, and 28% more than Maryland's. 5% of California’s population is employed by a state or local government, so these discrepancies add up fast!

  12. Paul, one of the big reasons I come here is that I am a big Mike O'Hare fan. He taught me, long ago and far away, so I watch for his posts and read them. One of his great lines in an earlier post on this blog was that there is no silver bullet for solving the energy problem, more like silver birdshot – make a little bit of progress on a lot of fronts. I think that's a good strategy on the state budget front, too: you suggest solving the whole thing with a Hell of a tax increase. I think taxes are part of it, and thinking about places where the state has committed to unsupportable expenditures is, too. Here's an extremely interesting post from the blog Monkey Cage on the 'state commitments' issue: http://www.themonkeycage.org/2010/03/learning_the… about a Swiss referendum on cutting back pensions, just defeated despite backing from the En Zed Zed, and a previous attempt at cutting back which was successful. The successful one had provisions to safeguard the least advantaged. The more recent was just cuts, as I understand it. In a California context, that might mean you would cut the pension of the former Vernon city manager from $450000 a year to $100000, and keep the $28000 pension of a retired schools janitor the same. Seems like a good idea to me!

    NY Times, couple days ago, had an article about the road to perdition in Greece, and resistance to pension cuts there: http://www.nytimes.com/2010/03/12/business/global… – again, unsustainable commitments taken on by the state, and resistance from those who will benefit to any cut backs.

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