WITH four months left in his campaign for reelection, California governor Arnold Schwarzenegger found himself at odds with the state’s Democratic legislature over the minimum wage-and who could raise it faster.
Although Schwarzenegger had vetoed minimum-wage hikes twice before, his thinking on the subject had evolved. Following the devastating defeat of his government-reform ballot initiatives in the 2005 special election, Schwarzenegger had adopted a make-no-enemies approach to politics. This time, there was no chance he was going to stand in the way of a popular policy, regardless of his professed free-market principles.




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