SELLING EFFICIENCY ISN'T EASY. Fiscal policy problems confront both major parties. Crooked Timber's Ted Barlow sees a problem for President Bush: " But right now, it seems that two of the most significant parts of Bush’s legacy, the war on Iraq and the tax cuts, are not just controversial but actually unpopular. In a significant way, Bush won’t be able to run on his record." Something similar appears to have happened in California. Here's The American Prospect's Harold Meyerson, only two years ago: "California is more than just the Democrats' electoral anchor, however. Increasingly, a number of its cities are coming to look like Justice Louis Brandeis's 'laboratories of democracy'--enacting minimum wage, health care, and worker-rights ordinances that would normally be the responsibility of the federal government (if only the feds could be interested in the conditions of working-class life). In city after city, a civic left has emerged in California, with the state's new-model labor movement--the most dynamic in the country--at its core."

Opinion Journal got in a bit of pre-recall snarking, with "What Californians have witnessed is what the modern liberal coalition looks like in power: a gerrymandered majority dominated by the "progressive" special-interest trinity of trial lawyers, unions (especially of public employees) and environmentalists.

"Their priorities are the transfer of wealth from working people to an ever-expanding public sector; more mandates and rules on business that enhance union power but reduce the ability to invest at a profit and create new jobs; and of course legal standards and workers' compensation loopholes that create more openings for trial-lawyer assaults," and the best Tapped's Matthew Yglesias could do by way of a counter-snark was a bit of tu quoque.

We deserve better. Democratic politicians have historically paid a little more attention to the Welfare Economics Paradigm than Republicans, but their attempts to sell corrective taxes (consider the carbon tax on fossil fuels) or approximately corrective taxes (licensing fees based on the weight of the car) have generally flopped. The Republicans, on the other hand, have been more prone to criticize tax-and-tax, spend-and-spend than to propose equivalent measures (tradeable permits, congestion fees on roads.) Their failings have been as bad when it comes to in-kind employee benefits. Governor Schwarzenegger is going to face that squarely when he attempts to square his plan to bring businesses back to California, which might involve ending the mandate that all but the businesses with very small work forces pay for health benefits with the efficiency gains in pooling risks implicit in insurance programs, meanwhile balancing the incentive employer-paid benefits provide to rely more on overtime and expand workforces slowly against the moral hazard that accompanies workers choosing larger pay packets without insurance. Whew. I get a headache just arranging all the ideas. Perhaps it is a bit much to ask for a political party to present a coherent, efficient, taxing and spending policy that appeals to allocative efficiency.