Arnold Should Return to Hollywood

When Arnold Schwarzenegger ran for governor in 2003, his supporters touted his independence, outsider status, and inspiring life story as the quintessential American dream. His detractors mocked his inexperience, but he indeed stood as a great example of what was possible in America.

This immigrant worked tirelessly and rose to the top in the private sector as a giant on the silver screen. He entertained millions, created vast amounts of wealth, and even used his fame to educate the public about the importance of personal health and, in a twist for Hollywood, market economics and individual freedom.

Oh, how the mighty fall. The governor is struggling, once again, to negotiate a budget. He seemingly becomes embroiled every year in these protracted showdowns, resulting not in responsible budgets but burgeoning deficits and growing bureaucracies.

He tries to hold the line, threatening to veto the Democrats’ plan, but it is stunning how far that line has shifted. He began promising a dose of economic conservatism after the fiscally reckless and profligate years of Gray Davis. Instead, he has overseen the state budget climb by 39% since he took office.

Arnold always had a soft spot for spending programs, vowing five years ago to produce a massive bond package to finance the school system. Since then he has saddled us with several large bonds and many billions in new spending projects.

So now he is fighting over relative trivialities, while accepting in principle California’s leviathan government and new tax increases.

This marks a sad time for the state but also a personal tragedy. Schwarzenegger had an amazing career as an entertainer. The governorship has only diverted his invaluable time toward intractable political disputes and symbolic battles over nothing. We are no better off than we were under Davis, and meanwhile the private sector has lost a talented and socially conscious actor.

The only solution to the state’s ills is libertarian reform. The government should shut down prisons and free nonviolent offenders such as drug convicts. It should liquidate its many billions in unneeded assets. It should close down entire agencies and leave their functions to the market. This would truly stimulate the economy.

But these measures would be too much for a governor to do, even if he wanted, without strong public support. With almost 40 million residents, America’s most populous state is especially difficult to tame. Perhaps there can never be a semi-functional political system as long as the state is so big, larger than most nations. In any event, genuine, sustaining reform requires a revolution in public opinion first.
Republicans often say we need a successful businessman, small-town leader, or citizen whose accomplishments are outside politics to shake things up in Washington or the state capitals. But those who work in the market labor under a totally different system, set of incentives, and institutional dynamic.

The government’s defining character renders it immune to fundamental reform by outsiders. Unlike the market, government finances itself through coerced taxation, not honestly earned profits. It maintains dominance through the threat of violence—police and imprisonment—not through voluntary exchange. Government power corrupts and cannot be purged of its intrinsically coercive and political nature. Outsiders cannot stay outsiders long once inside the halls of power.

Like Ronald Reagan before him, Schwarzenegger was the Hollywood rogue conservative who would finally produce fiscal restraint and meaningful reform. But also like Reagan, he has overseen a staggering growth in government while confusing the dialogue and giving free enterprise a bad name. Markets are free insofar as they are left alone by the state. An alleged free marketer wielding and exercising considerable government power ceases to be a true friend of the free market.

Some of his films have not been the highest of art, but even Schwarzenegger’s flops were great achievements compared to what he has done as governor, or what we can expect anyone like him to do in his place. If he wants to contribute to society, he should resign, leave the dismal world of politics to the corrupt and power-hungry, and return to the private sector where he can once again make a difference. There might still be time for him to do a cameo in the fourth Terminator film.