California’s Famous 1978 Proposition 13 was Perverted by
Proposition 10 – The Unholy Trojan Horse
This article deals with the California’s 1978 Propositions 13 and 10 and their social, moral and fiscal consequences that Gov. Jerry Brown seems to have grasped recently for good or evil. There is a move afoot to repeal Proposition 13.
Manipulation of taxes and interest rates are tools for societal change if allowed into the hands of despots. California after World War II experienced tremendous growth. Counties and municipalities went on such a heavy spending spree; they outran their supply of money and therefore continually raised property taxes to irresponsible levels. Pressure grew as the elderly were being forced out of their lifelong homes because they couldn’t pay the ever increasing property taxes that were
based on increased property values.
At the time, education in California was the envy of the world, so people with skills flocked there to accelerate its growth and reputation as the greater Silicon Valley and Breadbasket of the world. California was also a usury law state, limiting lending interest rates to a maximum of 10%.
In the 1970’s a group of well meaning Republicans led by Howard Jarvis wrote what came to be known as Proposition 13. It limited property taxes to about 2% of assessed value, among other restrictions. The proposition passed with a clear 65% majority and property taxes soon fell to prescribed levels. Proposition 13 has become a nationally recognized generic definition of property tax reform. “As goes California, so goes the nation” – God help us!
Few recall the other events leading up to the election that paralleled Proposition 13. It was the drying up of capital so it was difficult to buy a home, automobile or refrigerator. Industries could not borrow funds for operations. Word was out that with California being a usury law state; the lenders were withholding loans there and other usury law (usually Bible Belt) states.
Usury law states followed a Biblical norm of capping interest rates at 10%. That was not enough for the money changers! Perhaps this is also why the Jewish custom in ancient times was to celebrate a Jubilee Year every 25 years wherein all debts were forgiven and each generation had a chance to start over. That apparently didn’t last any longer than Jesus’ Disciples in the Book of Acts experimenting with the disaster of Socialism.
Enter Proposition 10 - California voters were given an option by voting for Proposition 10 on the same ballot as 13. Proposition 10 was the repeal of the usury laws so lenders would again finance California’s needs at “competitive” interest rates.
The unintended consequences were swift in coming:
County and municipal tax revenues dried up to the point that schools, parks, roads and public safety suffered for lack of operating capital.
Desperate communities turned to the State for funds to support their obligations. The state pleaded poverty shortly after and turned to the Federal Government. The Feds were seemingly reluctant, but it was apparent that there were devious minds at work, seeing an opportunity to further undermine states rights.
Property owners rejoiced over the lifting of the burden of high taxation. Howard Jarvis was, and still is, a hero.
The Feds have long yearned to have a more active role in health, education and welfare and took advantage of the California dilemma. They even set up a Department of Education to “help” poorer school districts by drawing funds from wealthier ones. Note that when “progressive” President Obama was sworn in, his first act was to cancel a very successful academic program at the beleaguered Washington, DC School district to the dismay of students (all black) and their parents. Paying off
“progressive” unions is more important than educating kids.
Schools and their districts often and should reflect the personality, resources and wealth of the communities they serve. Bakersfield College, one of the nation’s premier junior colleges, has a huge campus plus several satellites. There are more students at BC than were at the University of Illinois main campus when I attended there in the mid 1950’s. Because of Kern County’s oil and agricultural wealth and the avid interest in sports of local fans, it also features an 18,000 seat double tier stadium; all built with local donations and tax dollars, the way the locals wanted it built. Try that one today unless it’s a bit of pork to placate the opposition to a draconian bill!
By the way, junior colleges have been the butt of fiscal restraints in recent years, given the “progressive” attitude that every child should go to Harvard - God help us, our Constitution and private enterprise! Junior colleges better serve the employment needs of the local community; are more efficiently run than the effete universities and their too often arrogant academics who are grossly ignorant of free enterprise capitalism in a representative Constitutional Republic.
Underclassmen at the universities get instructors and masters degree candidates to teach their entry level courses. Junior colleges feature Masters and Ph.D.’s on their staffs, plus real experts from local industries and professions. Note: among the 35 or so czars in the White House, not one would know how to serve up a hamburger at McDonald’s, much less tell the rest of the country how to live under “progressive” totalitarianism.
Most teachers are dedicated to their calling and usually earn less than their friends in private business, but about the same as most “public servants” (an archaic term with government workers now making about 60% more than the taxpaying private sector.) Fledgling teachers unions saw the opportunity for power and joined the rush to federalized education. We are paying the price both in cost and the destruction of our children.
Then along came Lyndon Johnson’s Great Society that put the finishing touches on creating a dependency class and a huge government “welfare industry” that feeds on it.
With government intrusion in the education (including environmental “education” in Cartesian half-truths largely proven false, but still pursued) and welfare fields, driving up costs and putting draconian restraints on free enterprise. The economy has been drained so that employers and the medical industry - once like pre-1938 Austria – the envy of the world found it rough to support traditional employee health plans. Enter the government that caused the problem clucking its collective tongue and proposing to force its inefficient, corrupt and expensive plans on the people. Of course, the perpetrators exempt themselves and their satraps from subjection to their disasters.
The poor were always taken care of through dedicated medical professionals, drug companies, church and foundation related very high class facilities – Shriner’s Hospitals, St. Jude Research Center, Mayo Clinic, Cedars-Sinai hospitals, to name a few. These were vilified and restricted to the point that we have now been burdened with a 2,700 page health care bill accompanied by 17,000 pages of regulations to date. Most intelligent voters know Obamacare must be repealed or the nation will die.
Proposition 10 - Interest rates on auto, home, appliance, inventory and business loans skyrocketed just as the Japanese were becoming competitive in manufacturing – especially in vehicles with great fuel economy.
High interest rates were a favorite tool of “progressive” Federal Reserve Chairman Paul Volcker during the Carter Administration. Volcker understands what it takes to push a society off balance to achieve nefarious ends. High taxes, inside stock manipulation and high interest rates have a devastating effect on the economy. Low interest stimulus money, created against new and unrequited debt are just as effective in bringing down an economy to better control the populace.
High taxes actually reduce government income because the available money in circulation is reduced, thereby stifling business. Financiers call the rate of circulation of money, “velocity.” Under the Obama “Stimulus” Bills – under whatever name, velocity is reduced to a crawl, yet the “progressives” want to raise taxes!
Stock manipulation can wrest control of a company from those who took the risks to build it. Oftentimes bankers and investment houses collude to put a company under stress to drop its stock value. Credit lines are restored after the thievery is accomplished.
High interest rates as experienced under Paul Volcker launched societal changes the nation has deteriorated under ever since. With home loan interest in the 12-18% range, up from 4-7%, more than doubling monthly payments. Homebuyers, usually young entry level couples, could not qualify on the husband’s paycheck alone. A benevolent government changed the qualification standards to include the wife’s income. Women usually had a hard time buying property as sole owners, but a couple could achieve the American dream of owning a home. The net result was that the wife had to find a job.
What were the consequences?
Financial pressures on families as well as emotional pressure for the wife especially to remain the heart of the home.
With babies on the way, the wife was forced to cut her employment short to birth and mother a child. More financial pressure.
Divorce rates skyrocketed as either financial pressures destroyed relationships or the wife found a new love interest out in the working world. If she had feminist tendencies, she might abandon her family to “find herself.”
Child care became a problem, so government got involved in the day care business, beginning the fulfillment of the feminist dream to have the state raise children. More financial pressure on family, church, community, state and happily for the “progressives,” the Federal Government.
The Equal Rights Amendment pushed by feminist “progressives” included a woman’s right to choose. Like “hope and change” today means dumping the Constitution for a move to global secular (atheist) government, “right to choose” means abortion on demand, not a reasoned decision with or without believing in the sanctity of life. After all, how can a liberated woman maintain a career if she’s burdened with the natural process of assuring the continuation of the species?
Pure economics: The National Association of Life Underwriters once did a study – 1973 - about the cost of receiving aid from various levels of society:
1. I need a dollar - you give me a dollar
2. I need a dollar, the Red Cross has to raise $1.20
3. I need a dollar, the state has to tax you $2.00
4. I need a dollar, the federal government has to tax and borrow $4.00
Only a “progressive” could think $4 taxation for $1 services is a good idea. After all, it’s all about power, isn’t it? Just think about all those EBT cards being lavished on the new dependency class at $4 taxpayer cost for every dishonest dollar spent at the big box store.
Think about it and remember what the Pope said about subsidiarity and solidarity.
Jerry is a retired engineer with strong experience in environmental innovation which he still applies today with 2 clean water and energy saving technologies. His life avocation in writing and study of philosophical and biblical themes as they apply to the body politic's spiritual warfare. He survived stage 4 Non-Hodgkin’s Lymphoma in 2006; now in excellent health. A graduate of the University of Illinois (1958, Industrial Engineering), Jerry had post graduate studies at both the University of San Francisco and the University of Santa Clara in California between 1961 and 1963 (Logic, Marketing). As co Founder and seminar presenter he was awarded a Ph.D. in Philosophy at Valley Christian University operating under California private-post secondary statutes for mid career student, VCU was the pioneer external degree school for mid career students. Its course structures were picked up by several well known Christian colleges. Hosted local broadcast radio and TV shows, "Religion on the Line" and "The News Firm" (jointly with wife, Joanne), respectively. Jerry has published several books that are available at Amazon. Jerry is available to speak as a visiting lecturer at the high school, college or community organization level. Jerry is married 55 years to Joanne Dean Todd – 3 children, 8 grandchildren.