Monday, January 19, 2015

California is Better Than. . .Russia?

Alex McLeod at SASH May 2013 (Jerry Brown).jpg
Governor Brown (From
Alex McCleod)

Bloomberg News wants to spin the Second Jerry Brown Administration as a resounding success.

Their latest article is desperation draped in journalism:

California is overtaking Brazil as the world’s seventh-largest economy, bolstered by rising employment, home values and personal and corporate income, a year after the most-populous state surpassed Russia and Italy.

Should we all throw a party, or throw ourselves off a cliff?

The boom-and-bust undercurrents have not changed in California. The Prop 30 tax hikes which shored up public schools are set to expire soon.

Some of the highest performing schools in the state receive the least funding. It's a criminal redistribution of wealth which punishes excellence and rewards incompetence and corruption.

California has a stronger economy than Russia?

The country of Los Angeles has more economic strength than Russia, but only because Russia's entire infrastructure and financial sector is in epic free fall, and the only saving moves left from its president Vladmir Putin rely on invading neighboring countries and deflecting national attention away from his increasing domestic failures.

People are dying off in the former Soviet Union faster than families can reproduce and replenish the country. Alcoholism and other individual pathologies have pushed up the mortality rate in that country.

For a publication to claim that California has a larger economy than Russia is like boasting about a pound of weight loss compared to Jabba the Hutt.

There is nothing to boast about in California at this time.

Jerry Brown created much of the mess which he is forced to contend with. Democrats in Sacramento have been handing out taxpayer dollars for pensions and benefits to curry favor with the very public sector unions which Brown helped to create during his first tenure.

Why would Californians want to send the cause of the problems back? The Republican Party bears some of the blame, for not forming strong, lasting relationships with new demographics in the state. The public sector lobby, including the prison guard unions and the unmovable bureaucracy, created more problems, too.

But wait. . .California is better than Italy and Brazil, too!

Italy is one of the struggling European economies struggling with Greek levels of debt, massive unemployment and racial unrest. For Western economists, Italy is the new Sick Man of Europe, also contending with an ageing population, grown men who never away from home, and migratory unrest from North African terrorists as well as large displaced populations looking for anything better. Recent public demonstrations have headline activists raging against the Islamicization of their society. Public works projects remain indefinitely on hold in Italy because every time contracts dig a ditch or remodel a building, they discover more ancient artifacts, and are forced to put the project on hold.

Italy is a receding economy, where natives themselves are moving elsewhere for the better life. Not much of a challenge to be better than Italy.

Forget Italy, then, and look at Brazil, where the immense disparities of wealth, even during the World Cup, were on full display. The corruption is not endemic, it is essential in that country. The favelas are completely overrun with crime and death, and the government, right to its claims of progress on the national flag, has done nothing. Whatever wealth and prosperity one may find, goes to relatively few, with all too many finding few opportunities to succeed.

To compare California to these third world economies doers not command any respect or relevance. Besides, in California specific corporations are doing well, including the labor unions, but with five cities having already gone bankrupt, plus a severe drought killing off agricultural production, business is not necessarily booming.

Oil exploration and fracking are saving California's economy, and yet liberal Democrats in Sacramento want to halt drilling and fracking. "Drill, Baby, Drill" is a Republican mantra, and the only momentum for an otherwise moribund economy.

While media pundits will argue that unemployment is down, they forget to mention the tens of thousands who have given up looking for work. Entitlement spending has increased, and tax receipts are headed for another hit. What little success has emerged in California is exactly that, very little, and compared with failing states across the global, even a small town is on better fiscal footing.

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