California’s democracy is not at all like America’s, as conceived by founders such as James Madison. The federal constitution is based on checks and balances within and among three and only three branches of government—executive, legislative and judicial. That is because Madison feared that popular “passions” would undo the republic, that majorities might “tyrannise” minorities, and that “minority factions” (ie, special interests) would take over the system. America’s was therefore to be a representative, not a direct, democracy. “Pure democracies have ever been spectacles of turbulence and contention,” Madison wrote, “and have in general been as short in their lives as they have been violent in their deaths.”
This citizen legislature has caused chaos. Many initiatives have either limited taxes or mandated spending, making it even harder to balance the budget. Some are so ill-thought-out that they achieve the opposite of their intent: for all its small-government pretensions, Proposition 13 ended up centralising California’s finances, shifting them from local to state government. Rather than being the curb on elites that they were supposed to be, ballot initiatives have become a tool of special interests, with lobbyists and extremists bankrolling laws that are often bewildering in their complexity and obscure in their ramifications. And they have impoverished the state’s representative government. Who would want to sit in a legislature where 70-90% of the budget has already been allocated?
Lawmaking is the central power of government and requires a deliberative process, what you call "dialogue" in law-making. Such dialogue is lacking in every initiative state. Additionally, an agency implementing the legislative procedures on behalf of the people must be independent of representative government if the people are to become the fourth real check within our system of Checks and Balances. Even without the ability of citizens to legislate, that system is often voided when one political party controls all three branches of government.
The problem we have with governance in the U.S. is not the excess of citizen participation, but the lack of deliberative citizen participation. That is true not only in those states with initiative laws, but in all states and at all levels of government. It has never been easy for people to participate in the political process except under the direction and control of political parties that hold a monopoly over the electoral process.
The answer to the problems of human governance in California and in our nation lies with the people -- not with their leaders. Adding direct democracy to our representative government would correct all of the shortcomings the magazine's report identified and much more.
The enactment by the people of proposed meta-legislation -- the National Initiative -- will empower citizens in all jurisdictions of government as lawmakers, not only solving California's dysfunctional system but that of the more egregious dysfunction of the federal government. Since the Congress will never enact the dilution its powers, the National Initiative must be enacted the same way the Constitution was enacted as the law of the land in 1787-1788. With Article 7 of the Constitution as precedent, we need not employ a convention system. Present technology permits us to ask all American voters if they wish to empower themselves as lawmakers as the Founders had envisioned.