California is Destroying Itself. The U.S. is Next.

Canada Free Press – by Alan Caruba

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.

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 ofprogressive politics and you have a recipe for the total disaster that confronts the state and the nation these days.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.”

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.”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.

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.

If you love bloated bureaucracy, you will love California

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

13 thoughts on “California is Destroying Itself. The U.S. is Next.

  1. “As of this writing, Congress has done nothing to save America from the fiscal collapse facing the rest of us.”

    Another useless endeavor re-run of great expectations.

  2. the problem in CA is the one emerging nationwide; the people with no money are passing the laws to keep increasing the taxes on people with money. as poverty increases and living wages are not paid, this trend will continue because the people making money will continue to decrease. It is the end of the America we know.

  3. Crazifornia pretty much calls it.

    Welcome to my nightmare.

    Leave your sanity at the state line.

    Retrieve it on your way out.

  4. Wow! So California is pretty F**Ked up these days, isn’t it? I suppose to #1NWOhatr, that’s actually probably an understatement. lol

  5. I agree there’s a lot of stupid people in California, especially the people who vote in the totally bogus elections thinking their vote matters.

  6. forgot to mention a major business killer, absurd worker’s compensation system, state payroll tax add-ons over federal (EDD, aka Employment Destruction Dept). Teachers’ Union and Prison Guard Union part of the same coin in California, both the most powerful and corrupt unions in the state if not the country. The initiative and referendum process is the biggest joke, except for medicinal cannabis reform, vast majority of measures are bogus bond initiatives with huge backing by public employee unions. People just cannot say no to feel good I & R campaign hoopla “save our parks” “protect our water” “save our schools”. 9 times out of ten, figuratively speaking of course, these I&R “direct democracy” pork oceans are bond scams.

    It’s sad, as a former second generation Californian born in the mid fifties, we remember the hard work state, the can do state, the agnostic cowboy state, Hollywood was a tiny fragment of the economy. Now its all lawyers insurance companies and soon to flounder service industry (gyms and 1 million nail salons opened up with immigrant gold stashed in the underwear).

    Still, this kind of doom and gloom cycle has gone on before, so many people want to abandon their fouled nests elsewhere, especially the east coast, and move to California (Three is Company sit com propaganda show, to wit) , they just cannot make it here and add to a large cyclical demographic component of “families abandoning the state”. In real estate, the same families well entrenched in california for generations (2-4 let’s say) ride it out and the next cycle begins. But that recurring bubble has probably burst for the last time under the weight of the parasite economy that rules there now. Farming is there, surely, it will continue and as economy stagnates, CA’s food industry may still weather or even stay a bit even through all this. Whatever, there will be another mass exodus of wannabe californians as per cycle , the field plowed but the ground may not support “new life” this time, at least for a long while.

    Oh, I don’t live in my cherished state anymore it’s been some years now, running a small business there is a kind of suicide. It’s like Hawaii, if you want a “good job” work for the state or federal govt .

    Good article, thanks..


  7. Look on the bright side. California’s been supported by an under-the-table economy for decades. Construction, food, dope, whatever, they’ll do cash-only or declare a business with one or two employees and actually have a dozen, working under the table. Soon, only the legislators and their corporate pimps will be paying taxes.

    Wouldn’t that be a good trend for the rest of the country to follow?

  8. I agree with NP whole heartedly. This is a good article, and very reflective of what is going on here. California is my birthplace. Yes, I’m still here, but I’m being squeezed out now that I’m on a fixed income. Even the farmers and ranchers are being squeezed out. All the polls taken show that the people didn’t want the California Bullet Train, and yet it went through. Guess who’s land is being taken over for this? Yep, the farmers and ranchers. It’s all about the money here. Never used to be though. It used to be a really nice place to live. Now all we got left is the nice Mediterranean weather. I’m searching for a new state to call my home.

    1. Well with any luck you’re in one of those places where you can sell your modest 1600 ft. “3br ranch” and buy a real ranch here in TX. Why Californians haven’t been doing that is beyond my comprehension.

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