Professor Edward Leamer disagrees with Arnold
Schwarzenegger’s stances on taxes, Proposition 13 and budget
caps.
Professor William Ouchi lived “a few doors down”
from Schwar-zenegger before the actor-turned-politician became
famous.
What the two professors have in common is not just their
affiliation with The Anderson School at UCLA ““ both men are
working with Schwarzenegger, advising him on issues relevant to his
campaign for governor.
Leamer is a member of Schwarzenegger’s 18-member economic
recovery council, which met last month at a Los Angeles hotel.
Others serving on the council include academics from various
universities in California and elsewhere, as well as
businesspeople.
At first glance, it might seem odd that Leamer and
Schwarzenegger are working together, that the two have met in
private and discussed numerous issues.
While Schwarzenegger has said he would not raise taxes if he is
elected governor, Leamer said he is in favor of raising select
taxes if the economic situation calls for a need to increase
revenue.
Leamer also differs from Schwarzenegger in his view on
Proposition 13, an initiative passed in 1978 that put a cap on
California property taxes.
Leamer said property taxes, which are not subject to the ups and
downs of the economy, provide a predictable source of income.
Leamer added that with Proposition 13 in place, California’s
revenue has become increasingly dependent on the economy.
“The state is forced to rely on sales tax and income tax.
… So we move from a stable source of tax to a much more volatile
tax base,” he said.
Leamer and Schwarzenegger are also at odds on the issue of
budget caps. While Schwarzenegger is in favor of capping the state
budget at the current level of spending per capita, Leamer said
capping spending in such a way is a good idea only in theory.
“State governments do things for us. … This is one of
those cases where you have a sensible idea that has unintended
consequences in the long run,” he said, adding that in the
past, increased spending per capita has provided Californians with
new projects and services.
Though Leamer and Schwarzenegger hold different perspectives on
key aspects of economic recovery, Leamer said the economic recovery
council’s purpose is not to reconcile differences between its
members and the candidate.
“They weren’t afraid to have a diversity of opinion
presented to Schwarzenegger,” Leamer said.
James Doti, president of Chapman University and a member of the
council, said the fact that he disagrees with Leamer on the issue
of tax cuts did not detract from the quality of discussion at the
council meeting.
“It’s a difference of opinion. I have respect for
his views and I think he articulates them well,” said Doti,
referring to Leamer.
Eugene Fama, a professor of finance at the University of
Chicago, said during the meeting, council members shared their
perspectives on economic recovery. Schwarzenegger remained largely
silent, Fama said, choosing instead to absorb information.
Leamer, who is not paid for his participation on the council,
said it makes sense that he is working with Schwarzenegger because
he thinks of himself as an “independent, objective source of
information.”
He added he would be happy to give the advice to any of the
other candidates, and in fact, provided independent candidate
Arianna Huffington with advice about the economy prior to joining
Schwarzenegger’s council.
And despite a difference of opinions, Leamer said when he met
privately with Schwarzenegger, the candidate was “thoughtful
and interactive.”
“I spent a lot of time with him, and I was surprised at
how much time he was willing to spend with me,” Leamer
said.
Ouchi, who recently completed a research project on 223 schools
in six districts including the Los Angeles Unified School District,
is not a member of Schwarzenegger’s economic council.
Instead, he is serving as co-chairman of the candidate’s
educational task force.
Former Los Angeles Mayor Richard Riordan and Lisa Keegan, chief
executive officer of the Education Leaders Council, an organization
that advocates for education reform, are also co-chairs of the task
force.
Like members of the economic recovery council, advisers who
participate on the educational task force are unpaid. Ouchi said
the motivation behind his involvement on the task force is largely
an effort to ensure Schwarzenegger is as well informed as
possible.
“I think that there’s a good chance that he’ll
be our next governor, (and) I want to do what I can to make sure he
has good advice,” Ouchi said.
Ouchi, who served as Riordan’s adviser and then chief of
staff from 1993 to 1995, added that he was acquainted with
Schwarzenegger before he joined the task force, as the two lived
near each other in the past.
Ouchi’s influence on the task force is far-reaching, and
among other contributions, he wrote a position paper for
Schwarzenegger that was distributed to each of the committee
members.
One of Schwarzenegger’s main focuses in regards to
education is shifting control of local schools from a state level
to a local level, and Ouchi said this focus was one he recommended
to the candidate.
“Every school has a different situation. … They have a
different collection of children, and they have different kinds of
needs,” Ouchi said.
“If you tell all schools they have to be staffed the same
… that they all have to use the same books, then you’re
treating them as if all the children are the same,” he
added.
Ouchi said if the recall election takes place on Oct. 7, it is
unlikely the task force will have time to meet again. However,
Ouchi said if Schwarzenegger is elected, he “intends to get
the group together immediately” to develop plans.