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  1. #1
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    Default If human beings still have the power to learn from example...

    (doubtful) then please read this article about the reasons for the economic collapse of a state called California. Most of you don't trust me because I (am correct in how I) see the world differently from a sane/slightly right of center perspective, but regardless, the author's assessment of the situation is pretty much spot on, an endorsement made with my 5 or so years of careful attention to the the politics of this state. It's actually quite humorous as well.

    Who Killed California's Economy? - Forbes.com

    Who Killed California's Economy?
    Joel Kotkin, 07.07.09, 12:00 AM EDT
    There are five suspects, from the governor to the constituents themselves.
    pic

    Right now California's economy is moribund, and the prospects for a quick turnaround are not good. Unable to pay its bills, the state is issuing IOUs; its once strong credit rating has collapsed. The state that once boasted the seventh-largest gross domestic product in the world is looking less like a celebrated global innovator and more like a fiscal basket case along the lines of Argentina or Latvia.

    It took some amazing incompetence to toss this best-endowed of places down into the dustbin of history. Yet conventional wisdom views the crisis largely as a legacy of Proposition 13, which in effect capped only taxes.
    Article Controls

    This lets too many malefactors off the hook. I covered the Proposition 13 campaign for the Washington Post and examined its aftermath up close. It passed because California was running huge surpluses at the time, even as soaring property taxes were driving people from their homes.


    Admittedly it was a crude instrument, but by limiting those property taxes Proposition 13 managed to save people's houses. To the surprise of many prognosticators, the state government did not go out of business. It has continued to expand faster than either its income or population. Between 2003 and 2007, spending grew 31%, compared with a 5% population increase. Today the overall tax burden as percent of state income, according to the Tax Foundation, has risen to the sixth-highest in the nation.

    The media and political pundits refuse to see this gap between the state's budget and its ability to pay as an essential issue. It is. (This is not to say structural reform is not needed. I would support, for example, reforming some of the unintended ill-effects of Proposition 13 that weakened local government and left control of the budget to Sacramento.)
    Basically, the government was raking in large surpluses from the property taxes and riving people out of their homes because of the inordinately high rates and not giving all that extra revenue back to the tax payers. Once that was stopped, sensible property taxes resulted in higher revenues for the state from a lower tax burden on the citizens, which again proves the old fact of nature: lower taxes usually results in more revenue.

    But the fundamental problem remains. California's economy--once wondrously diverse with aerospace, high-tech, agriculture and international trade--has run aground. Burdened by taxes and ever-growing regulation, the state is routinely rated by executives as having among the worst business climates in the nation. No surprise, then, that California's jobs engine has sputtered, and it may be heading toward 15% unemployment.


    So if we are to assign blame, let's not start with the poor, old anti-tax activist Howard Jarvis (who helped pass Proposition 13 and passed away over 20 years ago), but with the bigger culprits behind California's fall. Here are five contenders:

    1. Arnold Schwarzenegger

    The Terminator came to power with the support of much of the middle class and business community. But since taking office, he's resembled not the single-minded character for which he's famous but rather someone with multiple personalities.

    First, he played the governator, a tough guy ready to blow up the dysfunctional structure of government. He picked a street fight against all the powerful liberal interest groups. But the meathead lacked his hero Ronald Reagan's communication skills and political focus. Defeated in a series of initiative battles, he was left bleeding the streets by those who he had once labeled "girlie men."

    Next Arnold quickly discovered his feminine side, becoming a kinder, ultra-green terminator. He waxed poetic about California's special mission as the earth's guardian. While the housing bubble was filling the state coffers, he believed the delusions of his chief financial adviser, San Francisco investment banker David Crane, that California represented "ground zero for creative destruction."

    Yet over the past few years there's been more destruction than creation. Employment in high-tech fields has stagnated (See related story, "Best Cities For Technology Jobs") while there have been huge setbacks in the construction, manufacturing, warehousing and agricultural sectors.

    Driven away by strict regulations, businesses take their jobs outside California even in relatively good times. Indeed, according to a recent Milken Institute report, between 2000 and 2007 California lost nearly 400,000 manufacturing jobs. All that time, industrial employment was growing in major competitive rivals like Texas and Arizona.

    With the state reeling, Arnold has decided, once again, to try out a new part. Now he's posturing as the strong man who stands up to dominant liberal interests. But few on the left, few on the right or few in the middle take him seriously anymore. He may still earn acclaim from Manhattan media offices or Barack Obama's EPA, but in his home state he looks more an over-sized lame duck, quacking meaninglessly for the cameras.

    2. The Public Sector


    Who needs an economy when you have fat pensions and almost unlimited political power? That's the mentality of California's 356,000 workers and their unions, who make up the best-organized, best-funded and most powerful interest group in the state.


    State government continued to expand in size even when anyone with a room-temperature IQ knew California was headed for a massive financial meltdown. Scattered layoffs and the short-term salary givebacks now being considered won't cure the core problem: an overgenerous retirement system. The unfunded liabilities for these employees' generous pensions are now estimated at over $200 billion.
    356,000 state/union employees whom we owe over $200 billion. What si that like... 1% of the state's population?!

    The people who preside over these pensions represent the apex of this labor aristocracy. This year two of the biggest public pension funds, CalPERS and CalSTERS, handed out six-figure bonuses to its top executives even though they had lost workers billions of dollars.

    Almost no one dares suggest trimming the pension funds, particularly Democrats who are often pawns of the public unions. Some reforms on the table, like gutting the two-thirds majority required to pass the budget, would effectively hand these unions keys to the treasury.
    Republicans have become EQUAL pawns to the unions and special interests. The grip the legislature with steel hands coated on gorilla glue.

    3. The Environment

    Obama holds up California's environmental policy as a model for the nation. May God protect the rest of the country. California's environmental activists once did an enviable job protecting our coasts and mountains, expanding public lands and working to improve water and air resources. But now, like sailors who have taken possession of a distillery, they have gotten drunk on power and now rampage through every part of the economy.

    In California today, everyone who makes a buck in the private sector--from developers and manufacturers to energy producers and farmers--cringes in fear of draconian regulations in the name of protecting the environment. The activists don't much care, since they get their money from trust-funders and their nonprofits. The losers are California's middle and working classes, the people who drive trucks, who work in factories and warehouses or who have white-collar jobs tied to these industries.

    Historically, many of these environmentally unfriendly jobs have been sources of upward mobility for Latino immigrants. Latinos also make up the vast majority of workers in the rich Central Valley. Large swaths of this area are being de-developed back to desert--due less to a mild drought than to regulations designed to save obscure fish species in the state's delta. Over 450,000 acres have already been allowed to go fallow. Nearly 30,000 agriculture jobs--held mostly by Latinos--were lost in the month of May alone. Unemployment, which is at a 17% rate across the Valley, reaches upward of 40% in some towns such as Mendota.

    4. The Business Community


    This insanity has been enabled by a lack of strong opposition to it. One potential source--California's business leadership--has become progressively more feeble over the past generation. Some members of the business elite, like those who work in Hollywood and Silicon Valley, tend to be too self-referential and complacent to care about the bigger issues. Others have either given up or are afraid to oppose the dominant forces of the environmental activists and the public sector.


    Theoretically, according to business consultant Larry Kosmont, business should be able to make a strong case, particularly with the growing Latino caucus in the legislature. "You have all these job losses in Latino districts represented by Latino legislators who don't realize what they are doing to their own people," he says. "They have forgotten there's an economy to think about."

    But so far California's business executives have failed to adopt a strategy to make this case to the public. Nor can they count on the largely clueless Republicans for support, since GOP members are often too narrowly identified as anti-tax and anti-immigration zealots to make much of a case with the mainstream voter. "The business community is so afraid they are keeping their heads down," observes Ross DeVol, director of regional economics at the Milken Institute. "I feel they if they keep this up much longer, they won't have heads."

    5. Californians

    At some point Californians--the ones paying the bills and getting little in return--need to rouse themselves. The problem could be demographic. Over the past few years much of our middle class has fled the state, including a growing number to "dust bowl" states like Oklahoma, Texas and Arkansas from which so many Californians trace their roots.

    The last hope lies with those of us still enamored with California. We have allowed ourselves to be ruled by a motley alliance of self-righteous zealots, fools and cowards; now we must do something. Some think the solution is reining in citizens' power by using the jury pool to staff a state convention, as proposed by the Bay Area Council, or finding ways to undermine the initiative system, which would remove critical checks on legislative power.

    We should, however, be very cautious about handing more power to the state's leaders. With our acquiescence, they have led this most blessed state toward utter ruin. Structural reforms alone, however necessary, won't turn around the economy's fundamental problems and help California reclaim its role as a productive driver of the American dream.

    Joel Kotkin is a presidential fellow in urban futures at Chapman University. He is executive editor of newgeography.com and writes the weekly New Geographer column for Forbes. He is working on a study on upward mobility in global cities for the London-based Legatum Institute. His next book, The Next Hundred Million: America in 2050, will be published by Penguin early next year.

  2. #2
    Minister of Propagandhi ajblaise's Avatar
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    This has been a good 30 years in the making. Time to repeal Prop 13.

  3. #3
    Senior Member Feops's Avatar
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    Both the article and your preface are pretty heavily peppered with I'm-right-ism and wording tailored to ridicule, rather than just discuss the issues.

    I can't give it a proper consideration because it's obviously an emotional, non-neutral writing. I immediately suspect omissions and distortions to make ones case.

  4. #4
    mountain surfing nomadic's Avatar
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    While Calfornians pay so much in federal taxes, why do we have one of the lowest rates of police per capita, teachers per capita, firemen per capita, etc...?

    Total Teachers (per Capita) > Elementary & Secondary statistics - states compared - StateMaster

    California already has one of the LOWEST teachers per capita out of any state.

    Meaning we spend less on teachers per tax paying citizen than most other states.

    Even though we PAY MORE PER PERSON in federal taxes. We get LESS federal money PER PERSON than other states.

    Does it make any sense that California pays so much in taxes, yet has one of the LOWEST TEACHERS PER CAPITA out of any state?

    While California can support the rest of the country during prosperous times, this economic downturn is too much for Califas to handle this time. Considering how much California supported the rest of the US during good and normal times, this economic downturn which is worse in California than other states is too much. A federal bailout is justified.

  5. #5
    Habitual Fi LineStepper JocktheMotie's Avatar
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    Quote Originally Posted by Feops View Post
    Both the article and your preface are pretty heavily peppered with I'm-right-ism and wording tailored to ridicule, rather than just discuss the issues.

    I can't give it a proper consideration because it's obviously an emotional, non-neutral writing. I immediately suspect omissions and distortions to make ones case.
    To be honest the complete failure of California's social and political structure speaks for itself.



  6. #6
    mountain surfing nomadic's Avatar
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    Quote Originally Posted by JocktheMotie View Post
    To be honest the complete failure of California's social and political structure speaks for itself.
    How so? Please elaborate...

    I can see how the political structure is prone to criticism, i.e. congressmen are not aggressive enough in congress in getting Calfornia's share of funds like senators and congressment from other states do.

    But social wise? It's actually pretty great here. There used to be more freeway shootings, but you don't see that nowadays bc I'd imagine people cut down on the road rage.

  7. #7
    Senior Member Feops's Avatar
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    Quote Originally Posted by JocktheMotie View Post
    To be honest the complete failure of California's social and political structure speaks for itself.
    The failure exists speaks for itself but the causes do not. If they did, the author wouldn't need to implicate and sensationalize to follow through on his account of things.

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    Quote Originally Posted by Feops View Post
    The failure exists speaks for itself but the causes do not. If they did, the author wouldn't need to implicate and sensationalize to follow through on his account of things.
    "sensationalize" If you mean call it out for what it is, then yes. What's wrong with that? I do it all the time with people I feel are stupid or don't know wtf they're talking about. Some things must be said, especially when the most verbal and loudest people who speak on the issue sell abject lies, thus necessitating an occasional shout from the other direction in order to be heard.

    Modern Nomad, I have no reason to debate any of CA's issues with you, because it's plain as day how you've been ingrained and imbued with the power of the kingdom of ignorance. far be it from me to dethrone you.

    For the rest of the readers, CA has the highest paid teachers in the nation bar none and yet we have the highest dropout rates and very low performance. One side of the argument derived from teachers unions and sheeple who think more money = everything better believes that pumping more money into the school sytems is how you boost performance. Any thinking person knows that's not true, and that it depends mostly on the system and its ability to hire good teachers who meet the needss of the community. Californians pay a great deal to the education system and we indeed get very little return, but it's not because we don't have enough teachers. It's because those teachers that we pay excessive amounts to aren't able to keep it together in a state where classrooms are often filled with (I'm sorry to say) uncooperative children and the system is burdened by systematic inadequacies and bureaucratic mess.

    There is are fundamental problems with the education system, but it is not at the level of not providing enough money, it's in not getting anything good for the money we do spend. Just like how our budget problem is not due to not getting enough money, it's because we're spending it too much and unwisely. Only the ignorant dumbasses suggest that there are no issues with waste and overspending. they have their heads so far up their asses and into Neverland that not even the terminator could reach in and pull them out.

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    mountain surfing nomadic's Avatar
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    Quote Originally Posted by Risen View Post
    Modern Nomad, I have no reason to debate any of CA's issues with you, because it's plain as day how you've been ingrained and imbued with the power of the kingdom of ignorance. far be it from me to dethrone you.

    For the rest of the readers, CA has the highest paid teachers in the nation bar none and yet we have the highest dropout rates and very low performance. One side of the argument derived from teachers unions and sheeple who think more money = everything better believes that pumping more money into the school sytems is how you boost performance.
    Dood, California has one of the lowest teachers per capita out of any state in the USA. (THIS IS NOT SALARY, BUT TEACHERS PER PERSON!)

    I'm not sure what a debate about how to structure a school curriculum has to do with that. We spend less money per student than everyone else does. Thats already a heavy disadvantage to begin with.

    Proportionately, are you saying California spends more per resident than other states do? That is clearly not the case, so Im not sure how this "overspending" applies. Clearly "overtaxation" and "underfunding by the Federal government" applies.

    You can't argue with numbers. So throw some out. Yes California teachers are the nations highest paid, but California's income and living expenses are pretty high. But then again, how does that matter when it comes to spending PER CAPITA???

    Come on man. You can throw whatever crazy theory at a number, but that number will still be there.

    Let me summarize:

    1) California spends less than others PER PERSON
    2) California taxes more than others PER PERSON
    3) Calfornia has less teachers PER PERSON
    4) California has higher incomes PER PERSON, but in a downturn economy like this, 1,2,3 is too much to handle. And 1,2,3, exists because we pay more federal taxes than we get in federal funds. It used to be covered by rising property taxes, booming economy, but that is no longer booming to make up the shortfall.

    No article says what I say. Its all original stuff homie. So call me what you want, but ignorant is hardly the right word. =) And ask yourself who between me and you doesn't have the power to learn from example?
    There is are fundamental problems with the education system, but it is not at the level of not providing enough money, it's in not getting anything good for the money we do spend. Just like how our budget problem is not due to not getting enough money, it's because we're spending it too much and unwisely. Only the ignorant dumbasses suggest that there are no issues with waste and overspending. they have their heads so far up their asses and into Neverland that not even the terminator could reach in and pull them out.
    I agree that money is not well spent, not effectively spent in general. But thats what happens when you have politicians doing budgeting, instead of economic experts and policy wonks. Look at the Obama stimulus plan, a lot of it was wasted on political considerations. But the structural issue of federal balance of payments deficit still remains and spending money wisely doesn't make up for per capita spending and per capita taxation that California gets the short end of the stick on.

  10. #10
    Senior Member lowtech redneck's Avatar
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    Quote Originally Posted by Modern Nomad View Post
    I'm not sure what a debate about how to structure a school curriculum has to do with that. We spend less money per student than everyone else does. Thats already a heavy disadvantage to begin with.
    California is 23rd as far as education spending by pupil is concerned. Do you know who is first (by a large margin)? Washington D.C. The quality of public education in that city is notoriously bad...

    And if you resent that your state subsidizes other states, then maybe you should actively oppose politicians who support policies in favor of nationally centralized redistribution of wealth, and start supporting politicians in favor of federalism.

    As far bailing California out of a mess it not only got itself into, but has been trying (through the policies supported by its politicians) to inflict on the rest of the nation as well...hell no.

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