California’s Greek Tragedy

Michael J. Boskin and John F. Cogan, Hoover Institution, Michael 13, 2012

Long a harbinger of national trends and an incubator of innovation, cash-strapped California eagerly awaits a temporary revenue surge from Facebook IPO stock options and capital gains. Meanwhile, Stockton may soon become the state’s largest city to go bust. Call it the agony and ecstasy of contemporary California.

California’s rising standards of living and outstanding public schools and universities once attracted millions seeking upward economic mobility. But then something went radically wrong as California legislatures and governors built a welfare state on high tax rates, liberal entitlement benefits, and excessive regulation. The results, though predictable, are nonetheless striking. From the mid-1980s to 2005, California’s population grew by 10 million, while Medicaid recipients soared by seven million; tax filers paying income taxes rose by just 150,000; and the prison population swelled by 115,000.

California’s economy, which used to outperform the rest of the country, now substantially underperforms. The unemployment rate, at 10.9%, is higher than every other state except Nevada and Rhode Island. With 12% of America’s population, California has one third of the nation’s welfare recipients.

{snip}

Meanwhile, the state lurches from fiscal tragedy to fiscal farce, running deficits in good times as well as bad. The general fund’s spending exceeded its tax revenues in nine of the last 10 years (the only exceptions being 2005 at the height of the housing bubble), abetted by creative accounting and temporary IOUs.

Now, the bill is coming due. After running a $5 billion deficit last year and another likely deficit this year, Gov. Jerry Brown’s budget increases spending next year by $7 billion and finances the higher spending with income and sales-tax hikes. Specifically, he’s proposing a November ballot initiative raising the state’s top income tax rate to 12.3%, making it the nation’s highest, and raising the basic state sales tax rate, already the nation’s highest, to 7.75% from 7.25%.

{snip}

The state’s progressive tax-and-spend experiment is broken, threatening basic services, from courts and parks to education and health care for its most vulnerable citizens. Mr. Brown’s tax initiative only exposes the state to an ever more dangerous roller-coaster ride.

No wonder many Silicon Valley CEOs say they won’t expand in California because of high taxes and burdensome regulation. And no wonder net migration has recently reversed, with hundreds of thousands of workers and their families leaving the state in search of better opportunities.

{snip}

Many Americans fear the federal fiscal train wreck will turn us into Greece. But, barring major change, they need look no further than California to see what this future portends. Relying on ever-higher taxes to fund payments to an outsized population of benefit recipients is a recipe for exporting prosperity. {snip}

No one should write off California. It still has great strengths. And it can turn some of its short-term challenges, such as the pressures from ethnic and linguistic diversity (the state is now 37% Hispanic and 13% Asian), into long-term strengths in the global economy. But the political class must face up to the reality that services will have to be far more carefully targeted; the tax system overhauled with lower rates on a broader base of economic activity and people (almost half of all Californians pay no state income tax); and inefficient state programs reformed to spend less and produce far better outcomes.

{snip}

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  • ageofknowledge

    They are going to push hard for tax increases this year… lol. As if anyone in this state, except 0.1% of the population have any money left.

  • Long a harbinger of national trends and an incubator of innovation,
    cash-strapped California eagerly awaits a temporary revenue surge from
    Facebook IPO stock options and capital gains.

    That one sentence tells you a lot about what’s wrong with California.  It used to be that it could rely on tax revenues from serious manufacturing.  Now, it’s desperate for taxes collected from people’s financial transactions relating to a social networking website going public.  America makes webpages, China makes manufactured goods and mines rare earth metals — it’s called “winning the future,” we might want to look into it.

    No wonder many Silicon Valley CEOs say they won’t expand in California because of high taxes and burdensome regulation.

    At this rate, I expect a lot of the SV big names to move out of the state in the next 5-10 years lock stock and barrel.

    No one should write off California. It still has great strengths. And it
    can turn some of its short-term challenges, such as the pressures from
    ethnic and linguistic diversity (the state is now 37% Hispanic and 13%
    Asian), into long-term strengths in the global economy.

    There you go, I wonder how long it would take before these authors proved that they, too,  are oblivious dorks.   California is a financial and economic sink hole, yet it’s got all that strengthening diversity!  Head scratchin’ time. 

    The Hoover Institute is “conservative,” for the record.

    • Oil Can Harry

      Are the Hoover neocons so clueless that they didn’t notice California’s decline began in the ’80s when the Third World invasion kicked in, followed by White Flight to other states? 

      The incredible irony: the most important and dynamic sector of the Golden State’s economy is Silicon Valley. And who founded Silicon Valley? The heroic William Shockley, a man schoolchildren across America are taught to hate.

      • Yes, they are that clueless, and addicted to their own ideology.

        Most of this article blames liberal economic ideology for the decline and fall of Mexifornia.  While I don’t think liberal economic ideology isn’t much agreeable, it didn’t cause these problems by themselves.  There are plenty of white countries, states, provinces, counties and cities where liberal economics are the order of the day, yet they’re still peaceful and prosperous.

        • JohnEngelman

          Social Democracy only seems to work in countries where nearly everyone is white.  
           
          The New Deal was possible in part because the Immigration Act of 1924 curtailed non white immigration, and because Jim Crow laws restricted most blacks to second class citizenship. Many white blue collar workers would have been conflicted voting for Franklin Roosevelt if those votes entailed accepting equality with non whites. 

        • JohnEngelman

          Yes, they are that clueless, and addicted to their own ideology.     
          – Question Diversity
              
          The Hoover Institution propagates opinions that are congenial to the employer – investor class. This article condemns restrictions on the wealth and power of employers and investors, while praising immigration, because a heterogeneous work force is difficult to unionize, and because more immigrants mean higher prices, lower wages, and higher profits. 

    • Energizer2112

      At least the author admits that diversity is a “challenge”! That’s quite a risky concession in an article making its way to mainstream net outlets.

  • In Ford’s movie (Steinbeck’s novel) “The Grapes of Wrath” people during 1930s crisis move to California  in search of better life. Where would they go now ?

    • JohnEngelman

      In the first “Karate Kid” movie a mother and her son moved to California. In the most recent “Karate Kid” movie a mother and her son moved to China. 

  • These geniuses don’t (or refuse) to see that its the diveristy that is the problem. 

    • JohnEngelman

      I think a lot of the trouble is caused by population growth from whatever source. More people mean less of everything good to go around. The relationship between population and standard of living can be expressed by the following equation:
       
      (natural resources x level of technology) / population = standard of living.  
       
      It also helps if the population has a high average IQ. 

      • Bon, From the Land of Babble

        John, a lot of the problems are caused by massive population growth from the destitute  Third World — colonization by those who pay no taxes but demand services such as free food and housing, free medical care, free schooling — AND, the added luxuries of free cell phones, free cable TV, free computers, free gas (which they are receiving!!).

        The Equations looks like this:  (Massive destitute Third World immigration + massive growth of non-taxpaying base + increasing demand for government services) – (massive decrease of taxable population + demise of manufacturing and business base + massively underfunded pensions + socialist legislature) = implosion + riots.

        I invite anyone and everyone to come and look  around S. California (or N. California for that matter, ask Up to My Neck) and tell me the boarded up businesses, abandoned manufacturing plants, for sale signs on many homes, the deteriorating infrastructure such as pot-holed roads, the Hispanic-centric schools aren’t a strong sign of end times, that the tipping point has not already long been reached. 

        Los Angeles is the Capital of the Third World.

        Line up for the Los Angeles trash and graffiti tour!!  Make sure your bullet-proof vest is properly fastened and keep your head down!!  And for God’s sake don’t make any motions with your hands!!  You might be shot.

        Bon

        • JohnEngelman

          I would like to exclude all third world immigration, but mine is a minority persuasion in the Unite States. When I moved to San Jose, California in 1977 I became the apartment manager of a rooming house in downtown San Jose. Three of the tenants were on welfare. They were not nice people. I did not like them. Nevertheless, you exaggerate how well welfare recipients live.  

          • Bon, From the Land of Babble

            John, please don’t patronize me by telling me I don’t know what I’m talking about when I do.  I find your words to me highly insulting when I have not insulted you as so many others here do.

             I work every single day of my working life with the welfare population of the state of California — so-called dirt poor Hispanics, before that, I worked with dirt-poor blacks.  The area I work in is a supposed “ground zero” of joblessness, welfare and hopelessness.  We are a targeted area for lavish federal funds and benefits.

            I call it as I see it and I have a lot of first-hand, hard experience with the welfare population of California — do you?  

            I assure you I do not exaggerate, I don’t have to.Every one of my students, with few exceptions, has the latest smart phone, the latest fashions including weaves,  hair extensions, expensive fake nails,  the latest basketball shoes, iPads that they are told NOT to bring to school, Dr. Dre headphones that cost over $200.  They are dropped off in late-model SUVs including BMWs.  I witness this every morning. Yet every single one of my students, bar none, is on the free lunch program and receives a free metro bus pass (among other things).

            I attend meetings twice a month at a headquarters that abuts a large Section 8 housing project — with a guard-gated entrance and satellite dishes on the top of each unit.  I have been warned NOT to park in the Section 8 parking lot, which I must drive through to reach where I’m going because I will be towed immediately.  The lot is full of  very large, late-model cars.  City workers are always fussing around the project filling in pot holes, trimming bushes and trees and repairing units.  I see this every time I go.  The one next to it, I’m told, just installed a large swimming pool with a possible water park planned like the one in another dirt poor area of the valley. 

            Many of LAs poor work under the table for cash — I’ve read reports of up to 40% of LAs economy is cash-based.  Therefore, the so-called ‘dirt poor’ show no income so welfare is used to buy accessories including vacations and the latest electronic gadgets.  EBT cards are not supposed to be used at fast food restaurants but I passed a very popular one yesterday with a large sign outside stating “EBT CARDS WELCOME!”

            Again, John, how would you solve California’s severe budget deficit problem?  I’m really interested in your answer.

            Bon

          • JohnEngelman

            The people I knew on welfare rented small, one room apartments. They shared bathroom facilities with other tenants. They had no kitchen facilities at all. They had no cars, no telephones, and only a few articles of worn clothing. This was before Proposition 13 was passed. I suspect conditions have gotten worse since then. 

          • MikeofAges

             Just a small point, but EBT food benefit cards can be used at participating restaurants only by people who do not have food preparation facilities, i.e. the homeless and perhaps a few other people. Their accounts are set up so that they can do that.

            Perhaps people who receive cash benefits can withdraw them at the ATM terminals at these restaurants. I am not sure how that works. Well, cash is cash. Fully liquid and negotiable. If nothing else, you can withdraw it at the bank  ATM and walk it to the local eatery. Same diff.

          • Bon, From the Land of Babble

            I passed a Wendy’s on the way home today — with a large sign in the front window clearly visible from a main road:

            EBT CARDS WELCOME HERE!

            Bon

  • IstvanIN

    3rd world population = 3rd world society = 3rd world economy.  Very simple.  California was great when it was white.

  • holyflower

    California: 1960 percent non-Hispanic white: 92

    See 1960 Census data for California; scroll to Table 14:
    http://tinyurl.com/2bvoy3a

    [Calculation: White population (14,455,230) divided by Total population (15,717,204) = 92 percent]

    California: 2010 percent non-Hispanic white: 41
    http://tinyurl.com/6cj8bap

    Paradise lost.

  • IstvanIN

    “The most difficult thing of all is to see is what is
    right in front of your eyes.” Goethe.

  • IstvanIN

    For the same reason Mexicans can not enrich Mexico.

  • MikeofAges

    Better to think of Anglo California as an aberration of world history, the confluence of several specific demographic events and an seemingly endless river of “free” money flowing into the state.

    Demographic events:  The Gold Rush. The movement west after the Civil War. The rise of Los Angeles, during and after World War I. The Dust Bowl. The Aerospace and  defense boom during World War II and the subsequent Cold War. The “hippie” disapora of the 1960s and 70s. Each of these events brought an English speaking population of European descent into California, who then left a subsequent demographic footprint. Some immigrants spoke Italian, Portuguese or other European languages, but their descendants became English speakers.  The last such event was 40 years ago, and there never will be another. Demographically, Cailfornia’s black population can be regarded as a “tag along” that came with the Anglos. If it declines, it will never be replenished.

    “Free” Money: From the Gold Rush through the Aerospace and Silicon Valley eras, California have lived on money flowing in from somewhere else, and had its cultural attitudes and sense of privilege and superiority, both in Coastal and Inland California were formed by that fact, something which California society has always refused to openly recognize.

    First, during the Gold Rush, money came out of the ground.

    I assume that the exports of California gricultural products began in the era after the Civil War, and in the 20th Century became the  inconceivably vast enterprise we know today.

    The rise of Los Angeles was fueled by the development of Hollywood and the entertainment industry and by the rise of the aircraft industry in Southern California. Both of these industries brought money in from the outside.

    Defense dollars probably started coming into California as early as the late 19th Century. When World War II came around, this turned into a flood which watered the California economy for  more than three decades. Well, “even great rivers go dry”, and that is what happened to this  one. For whatever reason, the federal government turned off the tap in the late 1970s. Ever since then, the Golden States has not been quite so golden.

    Liberals like to blame the decline of California on Proposition 13, an initiative passed by the voters in 1978, capping property taxes, which had been so high up till then that some were forced out of their home due to their inability to pay them. Nevertheless California still had one the highest income taxes and one of the highest sales taxes in the nation. Still does.

    The rise of Silicon Valley was another event which brought outside money and new populations into California. But the Anglo migrants brought in by this boom have left few descendants. The economic impact of Silicon Valley has been more uncertain that most are aware of. From a peak in the 1980s it declined precipitously an actus production went offshore. Now it has come back to a considerable degree, but with a professional workforce heavily skewed toward East- and South- Asians, who now are putting down their demographic footprint.

  • What ever happened to the talk of spliting CA in 2, the conservative parts of the state just so happened to have the water supply as well.
    http://www.huffingtonpost.com/2011/07/11/california-split-county-s_n_895029.html

    • Xanthippe2

      That was back in the days when the North was pretty much White and the South had a lot of non-Whites.  “NorCal” and “SoCal” are the now the terms rival Mexicans use.  There are not enough majority White areas left to split away.

  • Bon, From the Land of Babble

    No wonder many Silicon Valley CEOs say they won’t expand in California because of high taxes and burdensome regulation.

    In his Sate-of the State address this past January, California governor Jerry Brown said: “ California is still the land of dreams. . . . It’s the place where Apple . . . and countless other creative companies all began.”

    Fast forward to March: Apple announced it was building a $304 million campus in Austin with plans to hire 3,600 people to staff it, more than doubling its Texas workforce.

    And no wonder net migration has recently reversed, with hundreds of thousands of workers and their families leaving the state in search of better opportunities.

    In the past 10 years, 2 million Californians have packed up and left.

    In 2011, more businesses (254) quit California than the year before (202), which was a high-water mark over 2009 (51). Last year, roughly five businesses left in any given week, one more than left in each week of 2010 when the average was 3.9.

    Relying on ever-higher taxes to fund payments…

    California’s income tax, 9.3%, kicks in at $46,349 in annual income for those who file as individuals.

    Then there’s the highest sales tax (7.25%, plus local levies in some areas) in the country, the fourth-highest capital gains tax (9.3%) and the second-highest gasoline tax (an average of 65 cents a gallon).

    to an outsized population of benefit recipients is a recipe for exporting prosperity…

    With 12% of America’s population, California has one third of the nation’s welfare recipients. The nation’s most populous county spends well over half a billion dollars annually just to provide illegal immigrants with welfare food stamps.

    Jerry Brown’s budget increases spending next year by $7 billion and finances the higher spending with income and sales-tax hikes. 

    Laffer’s Curve, M. Brown?

    Yesterday it was reported that tax revenue was down 22%

    Answer?  Gut Prop 13, raise taxes, and “turn diversity into long-term strengths.

    I feel like a a rat going down on a sinking ship.
    Bon

    • JohnEngelman

      Anyone who works for the government depends on a fairly high level of taxation. Republicans who receive money from the government seem to have the attitude, “We deserve it. Those people over there do not.” Those Republicans overestimate the cost of programs they dislike; they underestimate the cost of programs they like; they ignore their dependency. 

      Republican tax haters even overestimate the amount of money they pay in taxes.

      • Bon, From the Land of Babble

        John, California is decidedly in socialist hands, and that includes Schwarzenegger when he was governor, now it is much worse as Brown calls for even HIGHER taxes on FEWER taxpayers and FEWER businesses.

        According to a 2009 study commissioned by the California legislature, state regulations cost almost $500 billion per year, or five times the state’s general-fund budget. These regulations ding the average small business for some $134,122 a year in compliance and opportunity costs.We have massive underfunded pensions, including mine, the teachers’ pension (I already assume the balance is 0).  Woe be to anyone who thinks he’s going to be supported by a pension in California!!  In 50 years, career politicians in the legislature, making the highest salaries in the nation, have destroyed my home state by over-taxing and over-regulating it into bankruptcy.What was it Margaret Thatcher said about socialism eventually running out of other people’s money?  Or that Milton Freidman quote that no one listens to about massive immigration and a welfare state as a recipe for disaster?California Laffer’s Curve Proves Socialism isn’t Funny.Bon

        • JohnEngelman

          You complain about under funded government pensions and declining infrastructure; then you complain that taxes are too high. I hope I am not the only person reading your post who finds your complaints inconsistent. 
           
          The Laffer Curve lead to the popular delusion that tax cuts generate more tax receipts than tax increases. It is not true. 

          • Bon, From the Land of Babble

            John, what do you not understand about a declining tax base and exploding, welfare-eating non-tax base?  The situation we have in California is not sustainable.  Also, just 1 percent of California’s taxpayers are paying 45 percent of the state’s income tax revenue, which now funds half the budget.

            It is suicide to depend on such a small number of taxpayers to fund California’s budget.

            And, taxes ARE too high.  When is enough enough?  What happens when there’s no one left to tax?  Will the feds provide a bail out for California? — a bail out that is a band-aid method only unless austerity measure are imposed.

            Yet, Gov. Brown calls for more “taxes on the rich”…

            In recent years the number of upper-income earners in California has radically shrunk — by a third between 2007 and 2009 alone. Apparently, wealthy Californians are either fleeing to nearby no-income-tax states or have become less well-off after years of economic downturn, higher taxes, and overregulation of business. 

            Meanwhile, the number of California’s Medicaid recipients grew at 70 percent of the general population increase over the last two decades.

            In short, there are no longer enough rich Californians to tax further to make up the state shortfalls. Nor can Californians explain why nearby states, with far less natural riches and without state income taxes, seem to be no worse off than California.

            Even the socialist LA Times reports:

            “The growth of the state’s $2-trillion economy has slowed dramatically. Since 2000, the state’s economy has grown significantly more slowly than the rest of the nation. Last year, California ranked 34th in real GDP growth. That sluggish growth has burdened it with among the highest unemployment rates (10.9%) in the nation. If businesses heed Forbes’ advice to avoid the state, the situation will only worsen.

            “Let me ask you this, John:  What do YOU think is a solution for California’s economic problems??

            Bon

          • JohnEngelman

            “Let me ask you this, John:  What do YOU think is a solution for California’s economic problems?? 
            – Bon, From the Land of Babble
             
            Considering the growth in the population, and the fact that computer technology reduces the value of jobs most people can learn, while increasing the economic value of a genius level IQ,  I do not think the widespread prosperity of the post World War era is possible. I would stop third world immigration.
             
            I would also repeal Proposition 13. 
             
            In the San Francisco Bay area where I lived there were restrictions on high rise development. Those artificially increased the cost of single family housing, and contributed to urban sprawl as people lived long distances from their places of employment in order to find affordable housing. I would repeal those restrictions, and encourage high rise development near BART and Southern Pacific train stations in order to encourage the use of public transportation. 

          • JohnEngelman

            What percentage of the California budget pays for welfare?  The following statistics were true before President Clinton signed the Welfare Reform Act of 1996.

             
            ———————————- 
             
            in 1992, AFDC formed only 1 percent of the combined federal and state budgets. Food stamps also took up 1 percent. Both programs cost $24.9 billion each, comprising 1 percent each of the combined federal, state and local budget of $2,487 billion. (1) 

            Comparing the size of federal AFDC to other federal programs puts a great deal in perspective: 

            Federal AFDC Expenditures as Compared to Federal Spending in Other Areas (1993) (2)Agency $ billions
            ————————–
            AFDC 12
            Medicaid 76
            Medicare 131
            Defense 281
            Social Security 305
            http://www.huppi.com/kangaroo/L-runawaywelfare.htm

             

        • JohnEngelman

          Or that Milton Freidman quote that no one listens to about massive immigration and a welfare state as a recipe for disaster?                                                                               
          – Bon, From the Land of Babble                   
                                               
                                                             
          On several occasions I have quoted Paul Krugman on the topic: “open immigration can’t coexist with a strong social safety net; if you’re going to assure health care and a decent income to everyone, you can’t make that offer global.”
          http://krugman.blogs.nytimes.com/2010/04/26/the-curious-politics-of-immigration/       

          • MikeofAges

             Reality out of Paul Krugman? Another intellectual who surprisingly seemed to  go for the same idea was James Baldwin, whose writings carried the strong implication that you can only not have Social Darwin in one country by having Social Darwinism between countries. Never said it word for word, mind you, but the idea was there. The Black Nationalist movement either never got the message, or knew and chose to pursue other aims regardless of the price. I think the latter. Jusdge the cause by the effect.

        • JohnEngelman

          California is decidedly in socialist hands. 
          – Bon, From the Land of Babble
             
             
          Definition of SOCIALISM1
          : any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods2a : a system of society or group living in which there is no private propertyb : a system or condition of society in which the means of production are owned and controlled by the state.http://www.merriam-webster.com/dictionary/socialism  Socialism, as commonly defined, does not exist in California, the United States, nor under any democratic government.  Nevertheless, as an ideal socialism is becoming more popular in the United States.http://www.huffingtonpost.com/2011/12/29/young-people-socialism_n_1175218.html   This is probably because the rich keep getting richer, as the standard for most Americans declines. http://www.nytimes.com/2010/07/26/business/economy/26earnings.html?pagewanted=1&_r=1      http://online.wsj.com/article/SB10001424052748703440604575495670714069694.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsThird http://www.nytimes.com/2010/11/24/business/economy/24econ.html?_r=1  

  • Xanthippe2

    Baasically what went wrong was “diversity.”  Everything was great when the state was super majority White (fewer people were a plus too).

  • Xanthippe2

    Bet the Hoover Institute hacks stay pretty much in Palo Alto, Menlo Park, and Atherton.  It would be so easy for them to experience the enriching diversity of East Palo Alto, but do they?  Naw.  Bet they even stay out of the safer, but still Brown and run-down Redwood City.

    • JohnEngelman

      Affluent conservatives, like affluent liberals, come into contact with few blacks. These few are exceptional, or they occupy subordinate positions without resentment. Regardless of political persuasion the affluent suffer from what George Orwell called “money sheltered ignorance.” We suffer from their policies. 

      • Old Soldier

         Yeah, imagine working at the Hoover Institute and the only black you come in contact with is Thomas Sowell. That would really skew your opinion.

        • JohnEngelman

          You are forgetting the deferential and elderly black gentleman who cleans out your office, as well as the polite middle aged black women who work in the cafeteria.  

  • you should see the droolers they give financial aid to at the UC system these days: half these kids don’t even make it to junior year and we’re handing them $50,000 on some egalitarian fantasy.

  • KenelmDigby

    And yet, ‘smart economists’ lecture us at every possible opportunity on the need to increase immigration in order to ‘boost the economy’.

    • JohnEngelman

      Whenever someone says that a policy will “boost the economy,” you should ask, “Whose economy?” Increases in immigration benefit the immigrants, and those who hire them. They jeopardize those who already live in this country. 

  • Energizer2112

    I’m mostly worried that California’s parks, coast, and forests, truly among the most beautiful and precious on all of planet Earth will ultimately wind up in the hands of exploitative and corrupt Third World caretakers. The catastrophe looms.

    • MikeofAges

       That’s what you’re worried about? The surviving children of Calfornia’s historic majority daily suffer “death by a thousand cuts” in the state’s public education system, K through PhD, and out on the street, and you’re  complaining about the view? Choice.

  • JohnEngelman

    California’s rising standards of living and outstanding public schools and universities once attracted millions seeking upward economic mobility. But then something went radically wrong as California legislatures and governors built a welfare state on high tax rates, liberal entitlement benefits, and excessive regulation.                                                                                                                                                                                          
    –  Michael J. Boskin and John F. Cogan, Hoover Institution, Michael 13, 2012             
                                                    
    The article does not document that tax rates and “excessive regulation” have increased since, “California’s rising standards of living and outstanding public schools and universities once attracted millions seeking upward economic mobility.”  
     
    “High tax rates,” and “excessive regulation” have always been chronic complaints of the business community, whose interests are advanced by the Hoover Institution.  
     
    What I suspect is that the quality of life in California has declined because the population has grown, and the average IQ has declined through third world immigration. The article does not address problems caused by a higher population, because population growth from high birth rates, immigration, or both benefits the employer – investor class. By the law of supply and demand it means higher prices, lower wages, and higher profits.  

    • MikeofAges

      The aerospace dollars which flowed in during the Cold War made the California of which you speak. The federal spigot turned off in the late 1970s and the “golden” era of California came to an end.

      • JohnEngelman

        Military spending increased during the 1980s. 

        •  If military spending and the size, scope and cost of our mammoth federal government are tied to California’s fortunes then California ought to be going through a Golden Age, a Trillion dollar+ per year military fueled economic Renaissance. It should make they 50s and the 60s look like pikers in comparison.

          Instead it is tens of billions in debt and has hundreds of billions of “unfunded liabilities” like their pension plan, CALPERS. California is the opposite of what you’d expect if military spending and federal government spending made their economy shrink or grow.

          • MikeofAges

             Federal spending and California’s fate were linked. California stopped getting those massive infusions of aerospace and defense dollars in the late 1970s. The decline of California dates from then. Liberals blame Prop. 13, but don’t want to admit that Cold War spending, not their “specialness”, built their paradise. Runaway immigration finished the job.

            Only those who are immune to accusations of racism, the East Asians and South Asians, can continue to self-separate and function as an educated class in California.

            See my other posts in this thread.

        • MikeofAges

           Didn’t go to California like it once did.

  • sbuffalonative

    The reason the Hoover Institute won’t tell the truth about what’s really causing these problems is because they, like the Cato Institute, believe that large populations are good for business; the more people, the lower the wages, the higher the profits.

    The origins and the quality of people are relevant only in that lower IQ populations are easier to exploit than higher IQ populations.  

    • JohnEngelman

      What is more, a heterogeneous work force is more difficult to unionize than a homogeneous work force. 
       
      Finally, as the non white population increases, more lower income whites vote Republican. The fact that the American working class has always been more heterogeneous than the working classes of European countries is the main reason the American working class has never developed a socialist consciousness.  

  • It isn’t a Greek tragedy. It is an African abomination, Asian Atrocity and Mexican Monstrosity.

    Ask any White who used to live there in the 1950s, early 1960s before it went to Multicultural Hell.
    It was pretty much paradise. Pretty sad to hear, honestly.

  •  The state is 37 percent brown, 13 percent yellow and 6 percent black according to the U.S. census. The most often claimed ancestry is NOT one of the 4 principally claimed ancestries (German, Italian/Irish at about a tie and Black) it is MEXICAN at 30 percent. The state has at a minimum, 2.6 million illegal invaders. Felon invader parasites. 2.6 MILLION. Wow, look at all that diversity. What a strength!

    With all of that “strength” how can California be such a basket case?

    •  What was the edit? I want to know why this place “moderates” left and right. Hey, its a good thing I didn’t say the “J word” or my above comment would have lasted for 8 minutes instead of 8 hours.

  •  I wouldn’t be surprised if California ultimately splits in two. It’s the only way the northern half can avoid becoming as Mesicanized as the southern half already is.

  • MikeofAges

     The truncation of the white worker in Silicon Valley did begin in the mid-1970s, but only on the lower level of the workforce at first. The programming and engineering workforce became heavily  East Asian and South Asian only later. As of now, a large number of shops (work groups of programmers or engineers) are either all-Chinese, all-Indian or, in some cases, all-white or nearly so.

    Illegal as hell, but they still do it. Only legal persistent legal action — anti-trust and civil rights lawsuits will stop it. Another issue is different qualifications for native-born and foreign-born guest or resident alien workers. Some foreign born workers are the products of programming and engineering boot camps or other training which is not available to native-born workers. In some case they come here essentially unskilled in the work they are hired to do, and with only the possible capability of becoming competent. Native born workers with closely transferable skills or the capability of being trained are  not hired, and the requirement to seek native born workers is skirted by advertising in obscure venues.

    Repeat, the only way to combat this is persistent legal action. Those whites who are capable of cohesion and focused action, such as firefighters and law enforcement officers, do make progress. So have organized women. The system we lived under, the affirmative action system, was cleverly designed to plug into the psychological weaknesses of people of white, European descent. The belief that there is a natural “way” things are supposed to be. Whining and flight, rather than action, as a response when things do not go that way. The willingness of the upper classes to sacrifice the lower. Preoccupation with what happens to other people rather than promoting what we want for ourselves.

    If you analyze at the anti-affirmative action utterances of most white people, the sum of what they wants turns out to be nothing for everyone.

    Taking away from disadvantaged minorities their gains, and demanding nothing for ourselves in the form of educational opportunities, particularly on the graduate and professional level, and demanding nothing that would help us enter the careers we want to pursue. Nor do we propose developing more native-born scientists and engineers. So what if some small number of them are black or Hispanic and some are percentage are white women? Native born should be the focus, not women and minorities.

    Nothing for everyone will never fly as a political agenda. Not unless you figure out a way to make the deal exceptionally entertaining.

    Now whites have to compete also against native born Americans of South Asian and East Asian ancestry who are highly dedicated to academic success and little interested in the ideal of the “well-rounded” person. Of course high-achieving young people, regardless of their racial and ethnic ancestry, do not need special outreach to be recruited into technical and scientific careers. Other people may. It is foolish to focus outreach on disadvantaged minorities, and that effort is likely to be relatively unavailing. Not entirely fruitless. But relatively unavailing. Better to focus on a population which historically have proven its ability to produce scientist and engineers when it is given the chance. 

  • California is living proof that liberalism destroys.

  • ageofknowledge

    ^ Cosigned by a Californian.

  • MikeofAges

    Actually, the black population in  Oakland has been declining. Oakland also has the oldest black population of any Northern city. Very slowly, blacks are retreating from the North, which they have found in the long run often to be an incompatible environment. Especially with the loss of industrial jobs over the decades. Blacks may be slow to react, but in the end even  they can figure out that you can only go so far in demanding benefits and set-asides from a place you cannot, for the most part, fully adapt to.

    Lived there, sort of by accident, for a year about 20 years ago. Left because I didn’t like the white people. Interesting place, that East Bay. A whole society, black or white, educated or not, which lived off the federal budget. If you were not one of them politically, you would never get a literal dime of it though.