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April 26, 2004

Arnold

The reviews are still out on our movie star governor, but one thing is clear: he can get things done. Whether those things are right or not is another thing altogether. His latest accomplishment, worker's comp reform, may not actually achieve what it is intended to do, according to the Economist:

The governor hopes that these costs will now fall by up to 30%, thanks to tighter controls on a worker's choice of doctor and stricter limits on pay-outs. He may be right, but there is no guarantee that the savings will actually be passed by the insurers to the employer: in order to win Republican backing, the new reform leaves rates unregulated. That could be a mistake: when rates were deregulated in 1993, the perverse result—after an initial burst of rate-lowering competition—was higher premiums to pay for increased benefits.
Another market failure for the books.

Now he'll have to grapple with the budget, and we'll see whether he will use his powers of persuasion to address the structural deficits in the state budget. He may have a secret weapon: "One little-publicised provision gives the governor the right to suspend its strictures if a 'fiscal emergency' arises." This was, in fact, one of the reasons I opposed Prop 58. Providing that kind of power to a single person seems an extraordinarily dangerous thing to do. However, the centrist "unelectable via the normal process" governor may be willing to oppose the anti-tax foes within his own party and raise certain taxes: "he mused in a rare interview that perhaps his anti-tax stance was 'wishful thinking.'"

Guess we'll have to wait and see.

Posted by glyphic at April 26, 2004 03:55 PM

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