Billionaires Are Busy Subverting California's Once-Great System of Direct Democracy

Election '16

A few months ago, I attended a large political gathering where a gentleman was handing out flyers which read, “Abolish the Congress and replace it with direct citizen voting by phone or television.”  

A few days later, a newly-arrived transplant to Southern California wrote a letter to The Los Angeles Times. He said he was mystified by California’s method of writing and enacting laws by ballot initiative.  He wondered what happened to the concept of laws being written by elected legislators.

The flyer and the letter represent polar opposite views about direct versus representative democracy.  

The major complaint I hear about the initiative process is that it is dominated by those very interests it was originally designed to overcome.  For one thing, proponents write them as a wish list.  Unlike the legislative process, which involves hearings, debates and compromise, drafters of initiatives often write extreme measures representing their own agenda in the hopes of boosting profits, raising their own political profile, or for simple ego gratification.  

In the upcoming statewide election on November 6th, three examples of what might be called “the billionaire ballot” come to mind:

  • Proposition 33 is being bankrolled almost single-handedly by Mercury Insurance Chairman George Joseph, who has spent $16 million (99.5% of the funds behind the initiative) to charge drivers more for not having continuing auto insurance coverage even if the reason is they didn't drive. Consumer groups who oppose the measure also argue quite convincingly that it would hurt the poor.
  • One of the heirs to the Berkshire Hathaway fortune, Charles Munger Jr., has poured $22 million into the election – in support of Proposition 32, a measure that would sharply curtail the ability of labor unions to raise campaign funds so they can compete in the political process; and into the effort to defeat Governor Brown’s budget measure, Proposition 30.
  • Molly Munger, the other heir to the Berkshire Hathaway fortune is funding an altruistic ballot measure, Proposition 38, which is backed by the PTA and funds education. With two weeks left before Election Day, Ms. Munger, has already spent $31 million on Proposition 38. The problem is it has little public support and is likely not only to fail, but could bring down Brown’s Proposition 30 with it. (Here’s a good rule for billionaires sponsoring ballot measures: start with 60% approval rating, not 40%. If you don't have the public with you at the beginning, you’re not likely to win voters over. And if there's a competing ballot measure, you may end up dooming them both.)

Still, reforming this out-of-control system will be difficult. First, there are widely-divergent views of how best to do it.  And there are powerful forces in this state opposed to any tinkering with the initiative process.  One of these forces is the political consultants who rake in billions on high profile campaigns and think the system is just fine as is. They are part of what Fred Silva of the Public Policy Institute of California calls “the initiative industrial complex.” So I’m not optimistic about attempts to fix the system.

The truth is that the give and take of the legislative process is a much better way to make public policy, especially on complex issues. (For example, the text of Proposition 38 runs thirteen pages in the statewide voter information guide. Is this the kind of measure Hiram Johnson and his fellow progressive reformers had in mind when California adopted the initiative process in 1912?) True, we have to make the legislative process work better by adopting real changes such as real campaign finance reform. (Ironically, this is one reform that may have to be accomplished through the ballot process.) But once accomplished, the initiative may again be employed as it was prior to the passage of Proposition 13 more thirty-five years ago - infrequently.

In the end, I remain fearful of too much direct democracy. Think for a moment: Just how much of the Bill of Rights would we be left with if the person handing out the flyers calling for the abolition of Congress and citizen voting by phone got his wish?

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