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Continued thoughts….(8:45 a.m.):
Don’t worry. We’ll always have Steven Pearlstein. His column today, “California’s Wipeout Economy,” addresses a favorite topic around here, which we cast as California’s hostility to business as evidenced by high taxes, ever-increasing regulations, rampacious unions, environmental utopians and the apotheosis of these all, Jerry Brown.
Following a trip to California, Pearlstein identifies the macroeconomic trends that have laid the state low:
It is hard to overstate how reliant the Southern California economy has always been on population growth to drive its economic growth — in oversimplified terms, building houses for the next wave of home builders. In the beginning, the early developers could be pretty confident that if they built it, they would come — from the Northeast and Midwest, and then from all corners of the globe. But in recent years, this perpetual growth machine has pretty much run out of steam as residents old and new confronted the realities of two-hour commutes, bad air, a shortage of water and a backlash against illegal immigration.
Moreover, without the steady growth in tax revenue that came with population growth, the Ponzi scheme that passes for public finance in California was suddenly and painfully revealed. Much of the blame lies with public employee unions and a handful of other special-interest groups that have essentially hijacked political control of state and local governments. Now, despite decades of high taxes and rapid growth, state and local governments find that they not only don’t have the revenue to provide even basic services, but are saddled with hundreds of billions of dollars in unfunded pension liabilities and infrastructure needs.
It’s “the backlash against illegal immigration” that people are reacting to? The backlash? What a strange comment.
Investor’s Business Daily also examines California’s woes today in its editorial, “California’s Hefty Union Dues“: “Organized Labor: The state that led the way in giving labor push-button power to organize against private-sector taxpayers now stands — if you can call it standing — as a cautionary tale.”
Ah…to end on at least one positive note about California, here’s John Doe singing “Golden State” from last year’s South by Southwest festival.
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