James Pethokoukis

Politics and policy from inside Washington

California’s warning for Obama

July 7, 2009

A great, great piece by Joel Kotkin on what went wrong with the Golden State (via Instapundit):

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.)

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.

Comments

Dear Mr.James,
I came to know that,California State is facing terrible financial crisis from my twitter friends.
Here, Indians still have a green pasture thinking of America.
My friend had suggested instead of spending huge money for Michael Jackson!s funeral,they can contribute California State for day today functioning.
After reading,collecting relevant details from knowledgeable sources,America is still facing financial crisis.
Unless and until,No existing economic theories holds good.
Always ,there should be growth of manufacturing sectors,constant monitoring by government agencies,people have tendency to save for rainy days,good record of exports -all these basic economic measures may reduce deficits of California!s bad economic secnes.
Your article is for policy formulators for future corrections.

 

California is unique. Starting with proposition 13, they “democratized” the budget process, taking control and responsibility away from the elected officials. They caved in to populist drivel, and now they suffer. In good times, they had no authority to save the excess revenues OR cut taxes as new programs were voted in, and in bad times, they have no authority to raise taxes or cut spending to meet the shortfall.

They’ve been spending every last penny when there was extra, because it’s easy to get the voters to collectively play Santa Claus. Getting the same voters to see common sense and approve austerity measures is a different story. Apparently, they believe they can blackmail the rest of the nation into letting Big Unk rescue them because they are another “too big to fail” entity.

Um…I don’t recall any state in this nation ever agreeing with having our taxes used to directly subsidize the bloated excesses of one state. Maybe they should secede. Foreign aid doesn’t seem to require our approval, and their odds would be better.

Posted by Brian Foulkrod | Report as abusive
 

The connection between the blog’s quote and its title is unclear to me and, judging from the comments to far, to other readers as well.

Posted by Tom Burton | Report as abusive
 

The governor was himself a famous movie actor. He knows best how celebrities evade taxes. He knows best how to levy taxes on them with himself out of hook. It’s absurd California is poorest with richest population.

Posted by Yamayoko | Report as abusive
 

Calling on Obama….LOL
George (Saulrose) not spelled right, was the money behind Obama’s campaign. George is Kissinger’s buddy. That is what they do’ is break the currency of a country…Do you realize since Obama took office, forget what Bush spent, Obama has double the currency in circulation. Now they are talking about another stimulus, not to give to us of course. There is not one economist that says we can recover from this. They can’t go to a one world currency until they break the US dollar.
Get real and wake up people!

 

What has Obama actually done to help the country out. He spilled millions of dollars into circulation only for top management to get their bonuses. I understand that Obama needs to repay the favor for the money he received during the campaign, but his actions are seriously discouraging. Everyone was looking for a hero not a fraud.. He promised to take the troops out of Iraq only to send them to Afghanistan.. Is this what we can come to expect from the new President? And internally he is doing very little.. Again, establishing a dominant role in resource rich Africa has been top priority while homeland agendas come second if not last..

 

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