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There’s a
very entertaining, but terrifying book by Laer Pearce, “Crazifornia: Tales from
the Tarnished State—How California is destroying itself and Why It Matters to
America.” I recommend everyone read it because it lays out the template for why
California will go belly up and why the nation is at the precipice of doing the
same thing.
For some
thirty years the author has been helping corporations and local government
agencies cope with California’s regulatory jungle. As he puts it, “Crazifornia reveals a state that has
become so misdirected, ungovernable and untenable that the primary driver of
change has become the catastrophe.” Following the recent elections a recent
Wall Street Journal editorial opined, “So now Californians will experience the
joys of one-party, union-run progressive governance.”
Though it
may defy belief, Californians voted to let the state tax them more to 13.3% and they gave Democrats a
supermajority in both houses while killing a ballot initiative that would have
barred unions from automatically withholding money from worker paychecks for
political spending. The public service and other unions own California. Add
that to a history of progressive politics and you have a recipe for the total
disaster that confronts the state and the nation these days.
Laer calls
it a laboratory for liberals. “California has become tax-crazy, imposing the
nation’s highest unemployment tax and personal capital gains tax rates. And
it’s near the top on income taxes, corporate tax rates, and corporate capital
gains tax rates.” If this sounds like where America is heading if the Bush tax
cuts are not extended and as the many hidden Obamacare taxes kick in, you’re
right. And the only thing the President keeps talking about is taxing the rich
who he defines as anyone earning $250,000 or more. For the record, $250,000 is
only one quarter of a million, despite his blather about millionaires and
billionaires.
Laer
points out that California’s taxes are currently causing 150,000 residents to
flee the state each year. “In fact, Los
Angeles alone has lost more households than New York, Miami, and, incredibly,
the economically decimated city of Detroit…combined.”
How crazy
are Californians? They have amended California’s constitution 513 times in 130
years or almost four constitutional amendments each year, year in and year out,
since the state was founded. By contrast, the U.S. Constitution has been
amended 28 times since it was ratified. That includes the ten Bill of Rights
amendments introduced in 1789 by James Madison and included in 1791.
What do
the Californians get for their taxes? Not much. It ranks 48th among
the states in elementary school rankings in reading and 49th in
science. Not much value for the high rate of per-pupil spending. Its teachers
are the highest paid in the nation.
California’s
public workers are the second highest paid in the nation. The unfunded liability of their pensions and
health-care benefits is estimated by Stanford University to be $500 billion—a
half trillion dollars. If you love bloated bureaucracy, you will love
California.
California’s
obsession with spending on every liberal program proposed is such that, by
2009, the government was so much in debt it began to issue IOUs instead of
wages. Its unemployment rate had risen to more than 12%, the highest figure in
70 years. Currently, the state has $73 billion in outstanding bonds for capital
projects and $33 billion in voter-authorized bonds that the state hasn’t sold
because it cannot afford higher debt payments.
The result
of this fiscal insanity is that “In 2010, at least 204 companies said goodbye
to the state, exactly four times more than fled in 2009. The exodus surged to
more than 280 companies in 2011, when they left the state at a clip of 5.4
companies per week.” This just leaves joblessness and economic stagnation in
its wake.
In
addition to its unions, the other factor pushing California into the grave has
been its obsession with the environment. Unelected green regulators, influenced
by environmental lobbyists, celebrated when a Green Chemistry Initiative passed
in 2011. It is 92 pages that list chemicals that cannot be used in
manufacturing or anything else.
Despite the
fact that there is no global warming, the California Global Warming Solutions
Act of 2006 requires the state’s “greenhouse gas emissions to be reduced to
1990 levels by 2020.” One single volcanic eruption will negate all of it and
California has four of them.
The Environmental
Protection Agency Administrator, Lisa Jackson, speaking in 2009 at the
Governor’s Global Climate Summit in Los Angeles, said that all fuel economy and
greenhouse gas standards have their “roots” in California and the rest of the
nation is finally “catching up with what’s happening” there.
In November, California’s cap-and-trade
program kicked in and businesses will be charged for emitting carbon and thus
passing the costs along to consumers. It mandates a 30% reduction in emissions
from cars, trucks, utilities, and other businesses by 2020.
As a
result of the 2006 Global Warming Solutions Act, the Governor’s Office of Small
Business concluded that implementing the law will cost an average $3,857 per
household and $49,691 per small business. In jobs alone, it will cost 1.1
million as companies leave and tax revenue as people leave with them.
Carbon
dioxide is essential for the growth of every form of vegetation on Earth and
thus all live on Earth. It plays no role in the climate, nor of any warming
which comes solely from the sun.
California’s
Legislative Analyst estimates that the cap-and-trade scheme will cost
businesses as much as $14 billion a year.
California
is seeing its refineries close and its utilities able to provide only two
thirds of the energy its citizens require to turn on the lights. This is
happening in a state that was once a giant in oil and gas production. Between
1960 and 2010, California’s population more than doubled from 16 million to 38
million, its freeway system expanded, and its electricity demand increased
five-fold.
The EPA
will shortly announce a slew of new regulations that will have the same effect
on the rest of the nation, only there will be no place to go for most
Americans.
As the
nation faces a “fiscal cliff”, Laer wrote that “The state’s education and
fiscal systems and its economy all have collapsed, yet in the face of these
serial calamities, the state hasn’t fixed anything.”
As of this
writing, Congress has done nothing to save America from the fiscal collapse
facing the rest of us.
© Alan
Caruba, 2012
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Alan Caruba's commentaries are posted daily at "Warning
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