California continues its tumble into the economic sea. In his Inaugural Address, the Governator promised a “post-partisan” world, but we see evidence of some post-partisan depression. His first big initiative is a proposal for universal health coverage. As part of this sweeping and enormously expensive proposal, he will require all businesses with 10 or more employees to offer insurance to their workers or pay 4 percent of their payroll into a state fund.
We should note for the record that virtually all manufacturers voluntarily provide health care to their employees, a record of which we are rightfully quite proud. But the operative word here is, “voluntarily.” Mandating coverage has one effect: driving small companies out of business, and out of the state.
California is already losing jobs in droves to neighboring states and ranks at the bottom for state migration, i.e., people fleeing the state. They sure aren’t leaving because of the weather — it’s the economic climate that’s killing them.
The latest actions by the Governor will only hasten the exodus. Health care is a thorny, bedeviling and incredibly complex problem. Simple — and politically popular — bromides like this do little to tackle the problem. At the end of the day this will only serve to worsen the economic health of the Nation’s most populous state.
UPDATE: (By Carter Wood, noon): David R. Henderson of The Hoover Institution at Stanford writes in today’s Wall Street Journal that Schwarzenegger is going in the exact wrong direction to achieve lower health care costs:
If a version of Gov. Schwarzenegger’s plan passes, the only thing certain is that there will be more regulation, more government spending and more taxes. A better path would be to deregulate, and thus achieve some increase in the number of insured–without new spending or taxes or regulation.
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