What's The Matter With California?


Just a few years ago there was a NY Times bestseller by Thomas Frank called “What’s the Matter with Kansas?”

The premise was: What’s the deal with these God-believing, flyover, know-nothings in flat-old Kansas? Why do they vote for the GOP, which doesn’t do anything to help the backwards little guy?

Fast forward just a few years and the story is almost exactly the opposite. The once-thriving, liberal coastal states are now on the verge of bankruptcy (especially California, but also New York to a lesser extent) and boring-old Kansas with its un-dynamic, real economy has avoided the worst ravages of the collapse.

Energy analyst Gregor MacDonald takes a crack at the question today, focusing on resource constraints, the crippling car culture along the coasts, the mess with offshore oil and the high cost of feeding the inland agriculture industry with enough fresh and clean water.

Then there’s politics.

There have been several good post-mortems of the horrible mess made by Arnold Schwarzenegger, his unwillingness to reign in Legislature spending, and his belief that rising real estate taxes would allow the state to spend forever.

George Will writes in the Washington Post (via CrossingWallStreet):

Under Arnold Schwarzenegger, the best governor the states contiguous to California have ever had, people and businesses have been relocating to those states. For four consecutive years, more Americans have moved out of California than have moved in. California’s business costs are more than 20 per cent higher than the average state’s. In the past decade, net out-migration of Americans has been 1.4 million. California is exporting talent while importing Mexico’s poverty. The latter is not California’s fault; the former is.

If, since 1990, state spending increases had been held to the inflation rate plus population growth, the state would have a $15 billion surplus instead of a $42 billion budget deficit, which is larger than the budgets of all but 10 states. Since 1990, the number of state employees has increased by more than a third. In Schwarzenegger’s less than six years as governor, per capita government spending, adjusted for inflation, has increased nearly 20 per cent.

Both Reason and The National Review have brought the long knives for Schwarzenegger, as well, in recent months. Yes, it’s political stuff, but when you’ve got The National Review slamming the guy who gave a major address at the 2004 National Convention, it’s not particularly partisan.

The point is: California is a horrendous mess, and it means big trouble for the rest of the country.

The state is clearly too big to fail, so the ongoing financial destruction will probably fall onto US taxpayers. But beyond that, California is home to our most competitive, innovative industries, our most extreme immigration policies, as well as, notes Gregor, some of our most vexing energy and auto issues. It isn’t ridiculous to surmise that as goes California, so goes the nation.

While wondering what the matter was with Kansas was amusing cocktail chatter for New Yorker readers a ew years ago, figuring out the matter with California is a matter of huge concern.

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