Backstory: Two states, one big top

By Michael Green

Hurry, hurry! Step right up and see the greatest show on Earth! Watch as California's governor begs businesses that have moved to Nevada to come home! See smoke and hear cheering crowds as he claims to have created a more favorable business climate than the girlie men who run the Silver State!

Granted, Arnold Schwarzenegger is more clown than ringmaster. But if you think California is a circus, you need to look into Nevada's past, present and future.

The irony of the past is that Schwarzenegger has been reduced to doing what Nevada used to do: trying to attract money and investment from its neighboring state because the till was empty. Part of Nevada's problem was that so much of its money already had gone to California--from the Comstock Lode's halcyon days, when the Bank of California ruled.

But by the 1930s, Nevada's mining and ranching economy wasn't enough. The state didn't just make divorce and gambling more available. Nevada advertised itself as "One Sound State" to try to draw new residents and let everyone know that Nevada's policies favored business, not to mention rich folks looking for a place to reside without income and estate taxes.

It worked. Max Fleischmann (as in yeast) and automaker Erret Cord moved to Nevada, bought land and made their contributions. In Cord's case, that also meant trying to take over Nevada politics through his connections to Sen. Pat McCarran's machine.

That didn't quite work. Cord and friends anointed Attorney General Harvey Dickerson as Democratic gubernatorial candidate in 1958 and sat back to congratulate themselves on their success. Meanwhile, Grant Sawyer rode attacks on them to victory in the primary, won the general election and led a reform administration.

But their efforts failed for another reason: Casinos had become more important to the economy than a few rich ranchers. Like mining and railroads before it, gaming became the center of Nevada's prosperity and thus its politics.

Nevada no longer advertises itself as "One Sound State." But the theory survived. Its freeport law made it easier for companies to warehouse goods here, since they wouldn't suffer the same high taxes they had to pay in other places. Nevada has maintained its tradition of encouraging business with favorable tax and regulatory policies.

This growth tied Nevada ever more closely to California. The more important tourism became, the more important it became for those masses to fill Interstate 15. Not that such connections were new--from their beginnings, Reno has been an adjunct of San Francisco and Las Vegas the easternmost suburb of Los Angeles. Nevada benefited from California's prosperity.

Yet Nevada hasn't been a mirror image of California, unless you notice that mirrors reverse views. Many have considered California increasingly loony in recent decades--whether it's Marin County's pot-smoking hot tubs and the People's Republic of Berkeley or Orange County, which has residents so right-wing that they would consider the Review-Journal the journalistic equivalent of a communist newsletter.

California's penchant for taxation and regulation prompted Proposition 13, which drastically changed the state's tax structure. Nevada almost followed with Question 6, which failed partly because a legislature run by DINOs (Democrats in Name Only) slashed property taxes and hiked sales taxes.

Thus the ironies of the present and future. California has become more of a laughingstock for its tendency toward government by initiative, meaning its general election ballots make War and Peace look like My Pet Goat, the only book George W. Bush has read since stealing the White House. California government increasingly became the tool of special interests, which helps explain its budgetary mess and recalling one gubernatorial sellout to big business in favor of another.

Many Nevadans have sneered at California's government without noticing that this mirror reverses nothing. For years, gaming has spoken loudly and carried a big stick in Nevada politics. Not, as Mr. Seinfeld would say, that there's anything wrong with that, because even if it can be disturbing and annoying, that industry merely does what industries elsewhere do.

Nevada also mirrors California's style of electioneering. In case you haven't noticed, the local news seems to focus almost daily on this or that ballot initiative. Most are designed not to restrict government, but to cripple it. After all, that's what makes us all happy and attracts business, right?

As to happiness, please try living without government. Get rid of schools, roads and police (indeed, the shame is that when Assembly Republicans would support only a $704 million tax hike instead of the $836 million the majority agreed to, Gov. Kenny Guinn didn't simply shut down the state and send everyone home--some might have learned from the experience).

As for attracting business, Schwarzenegger's budgetary magic includes trying to decimate California's renowned universities. Do you think computer and engineering firms want a state with no educational foundation--for themselves or, for that matter, for the families of their highly educated employees? Does anyone remember how much harder it was for Nevada to diversify economically without more and better colleges and universities?

Some of the know-nothings determined to move Nevada further back into the Middle Ages claim we're imitating California. No, California seems to be imitating us. Heaven help us both.