Suicide California Style; Driving the bus off the cliff in Sacramento

California is in the midst of the worst budget crisis in its history. The state is $41 billion in the hole and the State Assembly still dithers onwards putting the hard decisions off till October. The major banks, according to the Wall Street Journal, have informed the state that they will not accept the state’s IOU’s. This is a very bad thing. It is the height of irresponsibility in itself, but when considering the seriousness of the crisis, the leadership should be tarred and feathered.

To give one a sense of the outright crazo stupidity of the leadership, one must consider Karen Bass (D – Wilshire/Los Angeles) the Speaker of the Assembly. Remember, the state has already cut many employee’s salaries and forced many  to take furloughs as well as an interim measure, and yet Ms. Bass, when asked by Tavis Smiley on June 15 the simple question “we know that today is the deadline for a balanced budget and  obviously it’s not going to happen today” responded:

“well actually in fact we have a budget that is in place”

Today, July 11, there is no budget in place. When asked why the State legislature did not cut their own salaries and budgets when cutting others,she replied that she had two children in college, a non sequitur.  Ms. Bass should realize that a lot of us are making similar sacrifices. She, on the other hand, is driving the state over the side of a cliff while enjoying all the perks and entitlements of the office.

So far, the state has taken only very limited half measures, and the latest fantasy of the Left seems to be that it was all the fault of Prop 13 . This is patently false. When enacted, Prop 13 limited the property tax  on residences to 1% of the full cash value of the property at the time of sale. The Democrats argue that this has crippled the state. However, California also allows a 2% annual assessment increase, and has the highest turnover of residential sales in the nation. Thus every time the property sells it is reassessed and property taxes levied accordingly. In addition, hundreds of thousands of new homes have been built in the state, and under Mello-Roos legislation, most areas with significant construction levied a 2%+ tax for a fixed period of time, usually 5-10 years, in order to pay for infrastructure, so those costs have been covered.

The reality is that California has experienced record state tax revenues from all sources for nigh on 20 years, and in the past several years has managed to outspend this by 20+%. In 2008, when the state was faced with a $20 Billion imbalance, the difference was 25%. Since Arnold Schwarzenegger was elected, the state’s population has slowed growth considerably, and yet the state government has added over 100,000 jobs. Whole new classes of employees such as home health care providers (unionized by the SEIU) have been created.

But it gets worse. California has 12% of the nation’s population, but over 30% of it’s welfare recipients. To top it off, the Democrats in the state legislature refuse to allow any investigatory function to probe fraud and abuse of the system. That same refusal holds true for the home health care sector, where suspicions of abuse are rife. There is simply no accountability for most programs today. California has become a magnet for graft. And the mayor of San Francisco, Gavin Newsome, who wants to run for governor, announced that he wants all the food in San Francisco government facilities under his jurisdiction to be organic. This is not fiction. It is our reality.

The Central Valley, one of the most productive agricultural regions in the  world, is being starved for water by the decision by a Federal appellate judge to turn off the floodgates to protect the Delta Snail Darter, a potentially endangered fish that may or may not be indigenous to the Sacramento River. As a result, orchards that take 20 years to bear fruit are dying, and the agricultural industry has crashed. The official unemployment rates in Fresno and Bakersfield and Modesto are 15-20%, but the casual rate, after the unemployment runs out, is over 30%. And this is hitting hardest those who can afford it the least. Family farms and farm workers. Life is tough enough in the Valley. Now some judge in San Francisco has made it impossible. Where are the United Farmworkers on this issue?

Drive through the business parks in Southern California. The most common sign in many now is “For Lease”. Tens of thousands of jobs have been lost, especially in manufacturing. Fishing grounds have been closed because of overfishing. The forests have been closed for logging. Even slant drilling for offshore oil has been blocked as the price of oil has risen.  But Senator Dianne Feinstein recently got an exception from the Interior Department that will allow a company in which her husband has a significant financial interest in to mine gold in Northern California. Where are the LA Times and San Francisco Chronicle on this story?

If you have studied economics, it is well understood that wealth is only created by four industries; manufacturing, real estate, natural resources, and agriculture. Everything else is a service industry. The state government of California has created a perfect storm that has brought all four pillars of our economy to their knees. Basic wealth is what pays the taxes for government and for schools and for doctors and for transportation and for laundries and for the movie industry. Much of our economy is built on disposable income, and without the fundamentals it will all eventually collapse.

Go to Sacramento and speak with our legislators and you will find so many one note Charlies it’s scary. Whether it’s gay rights or protecting developers or environmentalism or the unions, so many of our legislators have either been bought or have such a limited range of knowledge we may never get out of the mess we’re in. California is fighting for its life. There are common sense solutions, but far there is little common sense being applied. Do we stand and watch as the bus tumbles end over end down the side of the cliff or do we act?