A little over a century ago, Californians created a new way to make their laws. After decades in which the Southern Pacific Railroad used its monopoly power to dominate the state’s economy and purchase most of its legislators, angry voters swept a new generation of progressives into power in the election of 1910.
Led by Republican Gov. Hiram Johnson, back when his party stood for something very different than it does today, California progressives not only regulated the railroad but also established three forms of direct democracy: the initiative, the referendum and the recall.
In giving the public the right to bypass the Legislature and vote directly on new laws and regulations, they believed they’d inoculated California against the rule of big money. Legislatures might be periodically corruptible by business interests, they reasoned, but even the most powerful corporation couldn’t purchase a majority of the entire electorate.
Would that this were still true. In last November’s election, big money persuaded California voters to reject two ballot measures that would plainly have benefited them, Propositions 8 and 10.
Proposition 8 would have stopped kidney dialysis providers — a field dominated by two large corporations — from overbilling both their patients and insurers. Though polling just weeks before the election showed the measure leading by 13 percentage points, those two companies spent a combined — and mindboggling — $101 million on a saturation media campaign to defeat it (total spending on the No campaign came to $111 million), with ads insisting it would diminish patient care.
As relatively few voters had any direct knowledge of the topic, the media blitz sufficed to doom Prop. 8 at the ballot box.
Proposition 10 would have repealed a state law that blocked cities and counties from enacting rent control ordinances. With the cost of housing soaring to levels that have led many thousands of Californians to flee the state, and millions of tenants to spend more than half their incomes on rent, an observer who knew nothing of campaign finance might have thought the measure had a good chance of passing. But tenants and their friends can muster only a fraction of the sums that real estate interests can invest in campaigns, and though one foundation did raise serious money on Prop. 10’s behalf, it was dwarfed by the $72 million that property owners spent to defeat it. Much of that $72 million came from the private equity firms, led by Blackstone, that own tens of thousands of homes and apartments across the state.
But in last November’s election, California voters also elected the most progressive crop of lawmakers to come to Sacramento in 60 years. And in a stunning reversal, that Legislature, in the session just completed, overcame the opposition of financial interests to enact versions of the two measures voters sent down to defeat.
With a firm grasp of the scope and particulars of the dialysis companies’ profiteering, they passed a law curtailing those practices. The bill is now with Gov. Gavin Newsom.
The Legislature also enacted legislation establishing statewide rent control, to which some of Prop.10’s big-money opponents acquiesced after negotiations with Newsom. The governor is expected to sign the bill.
The legislative session just completed represents a triumph of progressive lawmaking the likes of which the state has seldom experienced. The only two predecessors that come to mind are those of 1959 — the first year of Pat Brown’s governorship, when the state created the greatest public education system in the land, funded by taxing high earners at a higher rate — and 1911, Hiram Johnson’s first year as governor, when the railroad’s money changers were chased from the Capitol.
Johnson and his fellow progressives would doubtless have welcomed the subsequent bursts of legislative liberalism. But they might well be confounded by the way that the laws regulating campaign finance have grown so friendly to wealth that it can now dominate the initiative and referendum processes they launched as a counterweight to corporate influence. They would surely demand — as should we — a new legal order that again breaks big money’s hold on the ways we make laws.
Harold Meyerson is editor at large of the American Prospect and a contributing writer to Opinion.