Professors Criticize Meg Whitman's Economic Policy Plans

Read Professor Michael Reich's report, the letter supporting it and Meg Whitman's policy plans »

Reich's analysis of Whitman's economic policy proposals

Whitman's 48 page policy plan "Meg 2010"

The letter criticizing Whitman's proposal, signed by 20 economic experts

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Economists across California, including seven UC Berkeley professors, penned an open letter earlier this week to Californians calling gubernatorial candidate Meg Whitman's economic agenda "dubious" and detrimental to the state's ongoing budgetary dilemma.

The Aug. 10 open letter addressed to "Californians" was signed by about 20 California economic experts and was attached to a report by UC Berkeley economics professor Michael Reich, criticizing the economic policies outlined in Whitman's 48-page booklet, "Meg 2010."

In the report, Reich says Whitman's plans to reduce state employees, lower taxes, cut government spending, reform welfare and invest $1 billion in higher education are "based on faulty economic theories and on studies that are fundamentally unsound."

Whitman's proposed policy focuses on reducing "wasteful" state spending, reducing the number of state workers by 40,000 and fixing California's "failing schools." Her proposals also include lowering certain taxes in order to create two million new jobs by the beginning of 2015.

The letter states that Whitman's proposals would reduce the state workforce by 25 percent, thus reducing state services.

"Whitman proposes to reduce the state workforce by 40,000 workers, excluding the University of California system, corrections and public safety," the report reads. "Most of the cuts would fall on education, health and human services."

But Stanford University economics professor Michael Boskin insists Whitman's plan is designed to encourage economic growth and improve the efficiency of the state's government.

"Her plan is designed to make California more competitive and finally put a stop to the state's chronic budget crises," he said in a statement. "Meg Whitman has a well-planned road map to create new jobs, reform California government spending and encourage businesses to grow and thrive in California."

Reich's assessment goes on to criticize the candidate's plans for education, stating Whitman would reduce overall educational spending, but that California schools need more resources, not less.

Additionally, Reich states, though Whitman's proposals include a much needed increase in higher education funding, her campaign material "does not specify how she will pay for this increase." Darrel Ng, a spokesperson from Whitman's campaign office, would not comment on the report.

Whitman's booklet states "Meg will invest $1 billion of the savings from her welfare and other budgetary reforms into the UC and CSU systems."

The report states since Whitman's Democratic opponent, State Attorney General Jerry Brown, has not released an economic policy plan, a side-by-side comparison was not possible.

Still, both Whitman and Brown have stressed throughout their campaigns a need to improve the state's higher education institutions.

"Higher education is the key to California's long-term economic success," said Sterling Clifford, a spokesperson for Brown. "Meg Whitman's allotted $1 billion towards a lot of things ... I don't think you can take her exact dollar amount plan seriously."

An ideal plan to improve higher education would be to increase funds to the UC system by creating new taxes on oil drilling and for some of the state's wealthier residents, Reich said in an e-mail, but Whitman's plan incorrectly diagnoses the state's needs.

"Like her predecessor, she is promising much more than she can deliver," he said in an e-mail. "All politicians do that to some extent, but this is really egregious and many of her policies take the state in the wrong direction."


Contact Matt Burris at [email protected]

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