Sunday, January 10, 2010

Texas v. Unionocracy of California: Exhibits A to E

Exhibit A: California has lost more than one million jobs in the last several years, while employment levels in Texas have remained relatively stable.

Exhibit B: In early 2006, California's unemployment was actually slightly below Texas, but is now 4.3 percentage points higher than Texas (12.3% vs. 8%).

Exhibit C:

One-way rental rates for a 26-foot truck from U-Haul:

From Dallas to San Francisco: $734
From San Francisco to Dallas: $2,116

From Houston to Los Angeles: $706
From Los Angeles to Houston: $2,051

In other words, it’s almost three times more expensive to rent a truck to leave California (from San Francisco or Los Angeles) and move to Texas (Dallas or Houston) than it is to leave Texas and move into California, suggesting that there is a huge outmigration of trucks and people away from California to Texas.

Exhibit D (via Nick Schulz):

Both states have similar demographics (although California has many more Asians). But California has what should be significant advantages—it is much richer ($42,102 per capita GDP to $37,073) and it spends 12% more on educating each student than Texas. Despite this, Texas kids are one to two years of learning ahead of California kids of the same age. And blacks, whites, and Hispanics all do better in school in Texas than they do in California.

Exhibit E: George Will offers some insights into California's problems in his column today:

California, a laboratory of liberalism, is spiraling downward, driven by a huge budget deficit.

William Voegeli tartly says that "Rome wasn't sacked in a day, and California didn't become Argentina overnight." Indeed. It took years for liberalism's redistributive itch to create an income tax so steeply progressive that it prompts the flight from the state of wealth-creators: "Between 1990 and 2007," Voegeli writes, "some 3.4 million more Americans moved from California to one of the other 49 states than moved to California from another state." (U-Haul truck rental rates above demonstrate the high outbound demand for people and trucks leaving California.)

It took years for liberalism's mania for micromanaging life with entangling regulations to make California's once creative economy resemble Gulliver immobilized by the Lilliputians' many threads. It took years for compassionate liberalism to make California's welfare menu contribute to the state becoming an importer of Mexico's poverty. It took years for servile liberalism to turn the state into what Voegeli calls a "unionocracy," run by and for unionized public employees, such as public safety employees who can retire at 50 and receive 90 percent of the final year's pay for life.

George Will's Conclusion: California's economy is being suffocated by the weight of government.


At 1/10/2010 11:21 AM, Blogger PeakTrader said...

California to Solve Budget Crisis With Make-Believe?

SACRAMENTO — Call it budget magic.

Need an extra $2.3 billion? Easy — just make people pay more of next year's taxes this year, by increasing paycheck withholdings and estimated tax payments.

How about selling a chunk of a state insurance fund? That's good for a cool $1 billion on paper, even if experts say it's highly uncertain the sale would fetch that much, if it can be executed at all.

Expenses still too high? Here's a really creative one: Push back state employees' monthly paychecks in June 2010 by a single day — from June 30 to July 1 — and thus onto the next fiscal year's books. Just like that, $1.2 billion "saved."

"Basically you use one receipt to pay for another and keep shifting it down the line, kind of like what Bernie Madoff did," he explained. "You can keep borrowing from Peter to pay Paul, as long as you don't run out of Peters."

Ultimately, Sacramento's number-crunchers believe an economic recovery will rescue the state from a Madoff-like fiasco. When the economy picks up, the thinking goes, tax revenue will shoot up and allow California to square its expenses with actual revenue.

When Schwarzenegger last week criticized the Democrats for including one-time "gimmicks" in that plan, a reporter pointed out that he had done the same thing.

"Very good point," the governor responded.

At 1/10/2010 11:51 AM, Anonymous Anonymous said...

"Very good point," the governor responded.

Of course, if Arnold had been a DemoSocialist, that question would have never been asked.

At 1/10/2010 2:04 PM, Anonymous Anonymous said...

For union members, life is good. California teachers earn 25% more than the national average, even though some of the most incompetent, indifferent or downright dangerous of them cannot be fired because of concessions won by the teachers’ unions. The SEIU is so powerful that some of its members were able to listen in on a phone call between the Obama administration and the state – which resulted in the President’s threat to withhold stimulus money if the cash-strapped state made even modest cuts in the salaries of unionized home health care employees. In fact, state government is routinely held hostage by public employee unions; not surprising when one considers that California is home to 356,000 state workers – 9.3 of them for every 1,000 residents.

Similarly, if one is an illegal alien or in need of public aid, California works well, offering a panoply of health and other welfare services with few questions asked. Just last week, in fact, Democrats in the state legislature opposed requiring welfare recipients who failed to complete a drug treatment program to take random drug tests in order to continue receiving benefits. And California spends in excess of $5 billion per year on illegal immigrants and their families, offering a menu of health care services that includes non-emergency care, long-term nursing home care, and abortions.

To pay for all of this, California has the highest top personal income tax rate and the highest sales tax rate in the country. Corporate taxes are high, too. And yet regular taxpayers have little to show for the exorbitant sums extracted from them by state government.

California is Liberalism's "Canary in the Coal Mine"

At 1/10/2010 2:20 PM, Anonymous Benny "Tell It LIke It Is Man" Cole said...

Well, if you have seen the pensions and pay of CA firefighters and policemen, you might agree with this simple analysis.

Los Angeles POlice Department officers now have a three-day workweek, and can retire after 25 years of service--no one in the private sector gets a deal like that. Oh, and six weeks off to start, and full medical, dental etc.

Still, CA has Prop 13--commercial property taxes are fixed, while TX has "tax to highest and best use" even if the property owners do nothing with the property, they can be taxed as if the land were developed to highest and best use. This can and does lead to escalating taxes on commercial property.

If we are to simple-mindedly acribe growth to one measure or fact, we could say CA needs to abandon Prop 13, and tax commercial property to highest and best use, in order to obtain TX style growth.

Of course, when Will or any commentator selects a few facts and builds a case, you end up with a weak case.

Indeed, CA needs to limit public spending to a certain fraction of GDP, and start whacking pensions and pay of public servants.

But no one has been willing to take on firefighters and police, usually the largest share of city budget outlays. They have powerful unions and make campaign contributions.

At 1/10/2010 2:49 PM, Anonymous Anonymous said...

Texas is good now, but have you seen its state government's spending curve? It's out of control.

Importing Katrina refugees, who for all practical intents and purposes are 100% Democrat, royally screwed up Harris country's political demographics and are a substantial enough voting bloc that even state-level elections are affected.

At 1/10/2010 4:01 PM, Anonymous Norman said...

Too bad none of our CA media outlets would dare run your piece. We should all be up in arms but we are not. Frustrating.

At 1/11/2010 12:07 PM, Blogger RaplhCramden said...

California has plenty of problems due to its "liberal" policies. Unions are a problem, particularly for education. What I don't get from this post is
1) What does increased unemployment in 2008 have to do with Unions or taxes, which policies have been in CA for decades?
2) International immigration more than balances domestic emigration in CA, why give the misleading impression people are fleeing from when they are still on balance flocking to?
3) CA income tax is 9.3% flat on income over some fairly large exclusion. Flat on the margin isn't that what flat taxers wish for? Yet Exhibit E cits our steeply progressive income tax.

IMHO conservatives lose a lot of smart potential customers, because for every real effect, they politicize it five-fold. Intelligence hates exaggeration and flees from it. CA has real problems due to its liberal choices, but the smart solutions are 1) honest and 2) moderate.

At 1/11/2010 2:14 PM, Anonymous Anonymous said...

3) CA income tax is 9.3% flat on income over some fairly large exclusion.

California has 7 tax brackets. Technically, they might not call the last one a bracket, it's a 1% Mental Health Services surcharge.


At 1/11/2010 3:54 PM, Blogger RaplhCramden said...

I stand corrected on CA state tax. It is indeed a graduated rate.

At 1/12/2010 2:32 PM, Anonymous Junkyard_hawg1985 said...

Frankly, California is heading for default of their debt. The current CA constitution requires that after education spending, bondholders must be paid next. In November, CA voters will likely call for a constitutional convention and this provision will be stripped. Soon after, CA will go into default, then I expect a repudiation of their debt by a democratic legislature.

This will not be the first default of an American state. Following the financial panic of 1837, nine states defaulted on their debt in 1842 and five states repudiated their debt (MI, MS, LA, AR, FL). These five states had something in common. Following the financial panic, these states more than doubled their debt outstanding over the next five years. the primary sources for debt increases: bank bailouts and large infrastructure projects. We are currently doing at a federal level what these five failed states did following the 1837 panic.

At 1/14/2010 12:37 PM, Anonymous Brad S said...


Got any proof of Katrina "refugees" effecting elections? Both the Harris County Judge (chief executive of county) and the Harris County DA are Republicans. Just because the county voted for Obama, doesn't mean that the hometown of the Bush family has gone fully over to the Dems.

At 1/14/2010 12:43 PM, Anonymous Brad S said...

"Frankly, California is heading for default of their debt. The current CA constitution requires that after education spending, bondholders must be paid next."

Don't quote me on this, but if worse ever came to worst, that constitutional requirement that education be honored first would be waived. Of course, the fact that public service spending would get first claim over bond indebtedness is nonsense. Most every other state/local government that issues General Obligation bonds requires that those bonds be paid first.

At 1/14/2010 3:33 PM, Anonymous Anonymous said...

Just because the county voted for Obama, doesn't mean that the hometown of the Bush family has gone fully over to the Dems.

There were ~200,000 Katrina evacuees, about half of which stayed in Houston. Houston's population pre-Katrina was ~2 million. That's 99.5% Democrat voters constituting a cool 5% of the total population. How could they not sway elections? Their loss makes no difference to New Orleans, which like Chicago has too many Democrats for losing a few, or even a lot, to matter. You may have noticed there were only Democrats in the mayoral runoff election.


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