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Jewish World Review Oct. 30, 2002 / 24 Mar-Cheshvan, 5763

John H. Fund

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Blue Gray: California's governor answers a Nobel Prize winner with obscenities | All Ely Dahan wanted was a brief conversation with California's Gov. Gray Davis of California about an exciting article by a Nobel Prize winner that had just appeared in The Wall Street Journal. Mr. Dahan, a UCLA business professor, thought the article had valuable insights into California's electricity problems. What he got instead was a highly agitated governor ignoring the policy points, cursing the Journal as "f---ing a--h---s," and declaring: "They don't see the world realistically." End of conversation.

Gov. Davis's outbursts aren't unusual. Just this Sunday, a profile in the San Francisco Chronicle noted that "his temper and foul language are legendary." A 1997 profile by the liberal columnist Jill Stewart of the weekly New Times Los Angeles recounted several instances of Mr. Davis "hurling phones and ashtrays at quaking government employees." She concluded that "his incidents of personally shoving and shaking horrified workers" marked him as "a man who cannot be trusted with power."

As governor, Mr. Davis has become legendary for his ability to separate cash from potential contributors. He has raised the astonishing sum of $65 million in order to saturate all of California with his TV ads; on some days they air up to 200 times up and down the state. Critics claim his interest in policy outcomes is in direct proportion to the interest contributors have shown in filling his campaign war chest. Yesterday a federal judge released decade-old documents that contain allegations from former California Coastal Commission member Mark Nathanson that Mr. Davis, the state's controller at the time, had asked Mr. Nathanson to give special consideration to Davis campaign contributors. Mr. Nathanson, who was later convicted of bribery, asked at the time that his allegations "remain under seal because he fears that those against whom he provided information will retaliate against him or that he will be the target of physical violence."

Mr. Davis's campaign dismisses the Nathanson documents as "baseless charges made by a man who is a convicted felon, admitted perjurer--in an attempt to get his sentence reduced." Nonetheless, the campaign took the precaution last week of having its lawyer send a letter to California TV stations warning them not to air the charges in campaign commercials for Bill Simon, Mr. Davis's GOP opponent.

Mr. Davis's lack of interest in the public-policy process that Prof. Dahan wanted to talk with him about helps explain how the governor muffed California's energy crisis in 2000. By not raising electricity rates enough to bring down demand, he forced the state to commit to horrendously expensive long-term energy contracts that are weighing down its economic recovery.

Mr. Dahan's encounter with Mr. Davis came on Friday, Oct. 18, after the governor had finished a taping of CNN's "Moneyline," hosted by Lou Dobbs. Prof. Dahan approached the governor along with several students. Mr. Dahan wanted to discuss an article he had just read in the Oct. 16 Wall Street Journal by Vernon Smith, a George Mason University professor who the week before had been one of two winners of the Nobel Prize in Economics. The article, "Power to the People," explained how California could take advantage of the fact that the cost of producing electricity can vary along with its pricing. California's energy crisis was born because of a state rule imposing on utilities an "obligation to serve" all customers "could not be met at times of severe stress because the unresponsive demand exceeded energy supply, and the shortfall was met by rolling blackouts." California utilities lost some $14 billion trying to avoid those blackouts. A small fraction of that would have solved the problem if utilities had been allowed to "sell less to consumers by offering a discount if they consumed less."

Mr. Dahan doesn't recall the specific words Mr. Davis used to trash the Journal, but he agrees "the cursing wasn't helpful." "I was disappointed that he didn't want to engage me on what a very smart Nobel Prize winner had written," he told me. "Perhaps the governor was still upset over what Enron had done to mess with California's market."

Jonathan Young, a junior at UCLA who was present for the governor's comments, said he was surprised at the vehemence with which the governor reacted to Prof. Dahan's question. A self-described "leftist," Mr. Young says other students who were present were also taken aback by the governor's obscenities. A CNN staffer says students told her they couldn't believe this was the same man who had minutes before calmly answered questions on television.

Ben Shapiro, a UCLA student and columnist with Creators Syndicate, said that when he called the governor's office for comment, spokesman Gabriel Sanchez told him: "I'd be very careful not to use unverified info. That could be slanderous. You weren't there, I wasn't there, you didn't hear it." Mr. Shapiro says "the implicit threat to sue was obvious." My own conversation with Roger Salazar, the governor's campaign press secretary, was much more cordial. "I don't remember the governor using that language," he told me. "He said something about the Journal wanting him to give the energy companies a 400% increase in rates, and that was a crock."

The issue here isn't how often Gov. Davis loses his temper or what he says about the Wall Street Journal. Before his office began to resemble a political favor factory, I used to praise Mr. Davis for breaking with much of his party on economic issues. In late 1999, I wrote an editorial for the Journal hailing him as "California's Tony Blair."

But those were the halcyon days of the Internet bubble, cheap energy and a state budget that hadn't yet soared out of sight. Now California faces mammoth problems, including a $25 billion deficit that the Legislature has papered over in an election year. So far no one--Mr. Davis, the Legislature, or his Republican opponent--has adequately explained how it will be handled next year. Ditto with the state's structural problems with its energy market. "I guess I just hoped the governor would be more interested in learning about possible solutions to the energy problem," says Prof. Dahan. So did we.

Mr. Davis is favored to win re-election next week, so he will likely have four more years in office before the state's two-term limit eases him out the door. With no more campaigning in sight, and no need to raise campaign cash, perhaps there is hope the governor will return to the spirit of his 1999 inaugural address. In it he pledged to "govern neither from the right nor the left, but from the center, propelled not by ideology, but by common sense." There hasn't been enough common sense in California lately, but next year will represent a new term and a fresh beginning for whomever is elected governor next week.

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©2001, John H. Fund