One of my realizations emerging while writing this blog over time is the fact that some days there is nothing to write about, while other days topics are plentiful. Today is a day where possible topics emerged from several different directions. The first possible topic could have been nicknames for currency. Our U.S. dollar has several nicknames including the term buck. The Canadian dollar is also called the loonie. Leave it to the Canadians.
Another possible topic could have been about urban farming. It appears that this phenomenon is prevalent in Oakland, not just Detroit. People are using vacant lots in urban areas to farm. This includes raising animals which are then killed for meat. When I read this article in Business Week this morning it made me think about Michael Moore’s movie from 1989, Roger and Me. There was a scene where Moore visits a laid off auto worker who is selling Rabbits as either pets or for meat. The term that is used to describe this activity is locavore. However, due to concerns from neighbors the practice of killing chickens for food has been suspended in Oakland. I wonder if people who are opposed to killing chickens even wonder where their chicken nuggets come from?
The winner for today however, the topic I want to address, involves California. My family moved to California in 1959, and we lived there for many years. I grew up on the beaches of California, married, and had a family for myself. I responded to the call of the Northwest and moved here in 1977. I have many wonderful memories of California, and will always have a warm spot for the warm sun of the beaches. However, California is in trouble. In fact, I think our nation can learn a lesson from how California has dealt with, or not dealt with, their fiscal problems.
Michael Boskin and John Cogan write about California in today’s Wall Street Journal. They state, “California’s rising standards of living and outstanding public schools and universities once attracted millions seeking upward economic mobility. But something went radically wrong. . .” The writers argue that legislators and governors of that great state “built a welfare state on high tax rates, liberal entitlement benefits, and excessive regulation.” They cite the following evidence as proof of this reality. From the mid-1980s until 2005 the California population had grown by 10 million people. Medicaid, not Medicare, recipients grew by 7 million in the same timeframe, while the people who were paying for this, tax filers, only grew by 150,000 people. On top of this the prison population grew by 115,000 people. Even if the tax filer number is off by a zero, instead of 150,000 people the actual number being 1,500,000, the ratio of entitlement recipients to revenue generation is appalling.
California’s economy, which used to outperform the rest of the country, now substantially underperforms. The unemployment rate is 10.9%, and with only12% of the U.S. population, California has one third of the nation’s welfare recipients. California has some significant problems, even the Lakers are in trouble.
Governor Brown has his hands full. Everybody looked to the Governator, Arnold, to fix the problems, but he too had issues. However, Brown just may be the leader that California needs at this point in time. The state has a strong and diverse population. 37% Hispanic and 13% Asian gives California a strong diverse foundation in a strongly diverse global environment. But just like the U.S. California is in dire need of a new sense of Fiscal Sociology. The tax system needs to be fixed.
Governor Brown “is a man of ideas, having run for president in 1992 on a bold flat-tax agenda. Instead of still more antigrowth tax hikes, he should break the grip of the state legislature of his party’s special interests – public employee unions, trial lawyers, teacher unions, and extreme environmentalists.” The only way Brown will be successful is if he takes the same road as Governors Giuliani, Jeb Bush, Christie, and Cuomo. This means that Brown will need to put on his big boy pants, and lead the state to recovery. I hope for the warm sands of Manhattan that he is able to accomplish the task.
And that is my thought for the day!