As Goes California....

>> Monday, October 5, 2009

...So Goes the Rest of the Nation?

Will California become America's first failed state?
Los Angeles, 2009: California may be the eighth largest economy in the world, but its state staff are being paid in IOUs, unemployment is at its highest in 70 years, and teachers are on hunger strike. So what has gone so catastrophically wrong?

Paul Harris | The Observer, Sunday 4 October 2009

California has a special place in the American psyche. It is the Golden State: a playground of the rich and famous with perfect weather. It symbolises a lifestyle of sunshine, swimming pools and the Hollywood dream factory.

But the state that was once held up as the epitome of the boundless opportunities of America has collapsed. From its politics to its economy to its environment and way of life, California is like a patient on life support. At the start of summer the state government was so deeply in debt that it began to issue IOUs instead of wages. Its unemployment rate has soared to more than 12%, the highest figure in 70 years. Desperate to pay off a crippling budget deficit, California is slashing spending in education and healthcare, laying off vast numbers of workers and forcing others to take unpaid leave. In a state made up of sprawling suburbs the collapse of the housing bubble has impoverished millions and kicked tens of thousands of families out of their homes. Its political system is locked in paralysis and the two-term rule of former movie star Arnold Schwarzenegger is seen as a disaster – his approval ratings having sunk to levels that would make George W Bush blush. The crisis is so deep that Professor Kevin Starr, who has written an acclaimed history of the state, recently declared: "California is on the verge of becoming the first failed state in America."

Read the entire article here


Feodor October 5, 2009 at 8:57 PM  

So goes France?

California has been spiraling down for almost a decade. You recall how long ago the Gray Davis recall was? Because of economic crisis?

So, when the nation as a whole is trying to crawl out of massive hubris on the part of Wall Steet and a non-existent regulatory role by the Bush Administration, what is so surprising that a state on the brink of collapse every summer for eight, nine years, is the weakest among us?

You're trying to make paranoia out of common sense "duh."

Jim October 5, 2009 at 9:49 PM  

I'll clue you into a few things about California that you may not know of may have forgotten.

First, California is governed more by the state ballot proposition than by the legislature. So anybody, organization, interest or company that can get enough signatures to put something on a ballot and raise and spend enough money to talk people into voting for it can pass "laws." There is no deliberation, negotiation, compromise, etc. done by an effective legislature. So stuff gets passed often without regard to sources of funding.

Next, the legislature can't pass a budget without a 2/3 majority. That means that the state goes for weeks or months without a budget and the state is held hostage to the Republican minority who refuses to compromise. So problems get kicked down the road.

Next, California faces a deficit of about $30 billion dollars. Coincidentally, the State of California was bilked out of about $30 billion by the thieving Enron traders in 2000-2001. This is well-documented, and it is also well-documented that the Federal Energy Regulatory Commission refused to do anything about Enron's rape of the state. Just so happens that FERC was headed by Bush appointee selected by Enron's Ken Lay.

California is liberal in some respects compared to other states, more socially than fiscally. California is large and has a large population with large demographic variations.

California's top individual MARGINAL tax rate is 11%.

Where is the failed liberalism here?

Edwin Drood October 6, 2009 at 3:53 PM  

Wow, blame Bush. What a new strategy. Could it be that California's problems stem from a total entitlement society. Tax the rich to feed the poor.

What could have prevented this was Proposition 76, the “Live Within Our Means Act,” (2005). The Governor (and Republicans) warned of a financial crisis and wanted to do something about it. Problem is just about every liberal group (and Democrat) in the state opposed it and defeated it.

Then lets not forget the 3 Billion California spent on Stem Cell research, surely that will pan out any day now and they will be able to sell the cure for cancer or something.

Lets also not forget about all the money California as to spend on wild fires since they refuse to use controlled burning to de-kindle the forest.

California is also choosing this poor economic state with its refusal to irrigate its own farmland. Instead of a heathy economy the state has chosen to save a fish.

This is not Bush's fault (a dumb idea anyway since we live in a republic of independent states) or the Republicans in congress. It is the voters of California, they several chances to stop it and instead listened to liberal/Democrat groups.

Edwin Drood October 6, 2009 at 3:53 PM  
This comment has been removed by the author.
Feodor October 7, 2009 at 5:10 PM  

The voters in California did not choose, nor could have known, the state's investment vehicles -- inescapably involved in credit default swaps -- which collapsed with market over a year ago.

This inordinate burden was added to the state's own doings and so... threatening to become a failed state.

And the responsibility for the unbelievable nightmare of credit default swaps? Greed on the part of fiscal elites and lack of government oversight - a role government has carried out since 1929.

The Bush administration's policies of absent policing (no doubt influenced by the gonzo atmosphere under Clinton) shares blame.

To remove the Bush administration from the calculus just reveals shallow thinking.

Edwin Drood October 7, 2009 at 7:30 PM  

your whole "no one saw this coming" argument kinda falls flat considering the fact that Republicans warned of this exact thing back in 2005.

Feodor October 8, 2009 at 9:25 PM  

If only Bush would have listened.

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