Conservative Politics Profits From Schwarzenegger's Win.(ISSUES & INSIGHTS)(VIEWPOINT)

Byline: LAWRENCE KUDLOW

Are conservatives underestimating the significance of Arnold Schwarzenegger's election to the California governorship? I think they are.

The Austrian-born actor's stunning victory could be as path-breaking as the Proposition 13 ballot initiative of 1978. That property-tax-hike recall set the stage for a national taxpayer revolt. It emboldened Ronald Reagan to firmly embrace supply-side tax cuts that had been proposed to him by economist Arthur Laffer, Rep. Jack Kemp and others.

Post Proposition 13, broad-based tax cuts became a staple of federal and state political life, lasting right up to the tax cut signed by President George W. Bush in May.

No two historical episodes are ever completely alike. But, like Proposition 13, Schwarzenegger's campaign victory is an overthrow of the old-liberal order in Sacramento -- a political regime that decimated California's businesses and economy with high-tax, high-spend and overregulation policies.

Give Business A Boost

On the campaign trail, Schwarzenegger was fond of saying, "The problem is not California, the problem is Sacramento." Schwarzenegger's statehouse victory represents the re-emergence of an important idea: It is time to set statewide policies that will promote the creation of new businesses in increasingly left-wing California.