IBD Takes Down CA Gov Brownie

Investor's Business Daily takes down the myth that CA Governor Jerry Brown has led a California comeback.

This kind of reality-check reporting is crucial to California residents, and readers, as major newspapers either applaud California's plodding economic progress, or ignoring the harsh, unsparing undercurrents: a state awash in regulations, drowning in debt, yet throwing every bathtub progressive policy in the arsenal, making a bad situation worse.

The piece praises Republican nominee Neel Kashkari as a libertarian. In fact, that kind of leadership (not necessarily the candidate) is exactly what the state of California needs, yet the voters do not want, or are not informed enough to recognize the need for.

Brown's Turnaround Of California Is A Mirage

Mon, Oct 13 2014 00:00:00 E A18_ISWwa

What is a mirage? An alluring image in the middle of a desert, one which invites wandering, thirsty souls to seek respite from the interminable heat, yet deceives them in the end.

Mirage in the Mojave Desert

California is a desert, and the water supplies are drying up. Farmers are reaping one of their weakest crops in years. This mirage of a glistering Golden State is not just a deception, but a fatal fraud which drives people away from true sources of health and rescue.

Governor Brown has only made matters worse, and the complicit media (combined with a complacent electorate) has hastened this misty demise.

Elections: California Gov. Jerry Brown looks to have an insurmountable double-digit lead over his Republican challenger, Neel Kashkari. But that's built on a media-fed myth of a California "turnaround" under the incumbent.

Yes, it is the left-leaning, liberal-loving media which has propped up Governor Brown, just as the same conglomerates have protected President Barack Obama from the brunt of corruption, failures and scandals which define his Presidency.

Recent polls taken in the Golden State's gubernatorial race show Brown coasting with an average 19-point advantage over former Bush Treasury official Kashkari.

Kashkari, an engaging and smart son of Indian immigrants, has described himself as a "free-market Republican" and a "libertarian" on social issues, including supporting both abortion rights and same-sex marriage.

A true libertarian would recognize  the importance of life as well as choice, and would have pressed to remove the government from marriage altogether. I do not accept this argument, at least regarding Kashkari's stance on these life issues. Besides, how can Kashkari call himself a libertarian when he supervised the massive TARP taxpayer-funded government bailout? And vote for anti-liberty President Obama, twice?!

But while Kashkari's stances on the issues would seem to fit California's quirky, left-leaning electorate, the 76-year-old Brown is the prohibitive favorite to win a fourth term.

Blue California is all dried up

Part of left-leaning includes not just social (in reality, moral) issues, but the argument for Big Government as Big Panacea for all of the human condition's ills. Left-wing liberalism does not stop at the bedroom, but infiltrates every aspect of our lives, public or private.

One reason is an incessant media drumbeat of how Brown has turned the state's economy and budget around. Another is a moribund California Republican Party that does little to dispel that notion.

After more than a decade of nonstop fiscal crises, Californians like the idea their state is once again fiscally solid and economically healthy. If only that were true.

People want to hear good news, and all the more since California is the "tropical Detroit". Who wants to leave this beautiful state, especially if you live in Southern California?

Just last week, the Cato Institute's "Fiscal Policy Report Card on America's Governors" gave Gov. Brown an "F", "the worst score of any governor."

The Cato Institute is the rock-steady Libertarian policy think-tank, an institution which has defended its ideological independence soundly, even rejecting a change of ownership to the libertarian-minded industrialists the Koch Brothers.
Why did the Cato Institute stab the friendly LA Times agenda in the back?

The state's renowned Gov. Moonbeam "increased taxes on families and businesses and expanded the government, hampering the Golden State's competitiveness," the report found.

Brown has rammed through several major tax hikes, including one that boosted the top individual tax rate to 13.3%, a $6 billion increase. He tried — but failed — to boost taxes on cigarettes by $1 a pack. Worse, he has done nothing to reform California's insanely complex and unfair tax code.

But by far Brown's biggest sin has been in expanding the state's byzantine and notoriously incompetent government through massive spending hikes — with virtually no cuts in the state's 519 agencies. That's right: 519.

Agencies, regulatory burdens, tax hikes. The report neglects to mention the crisis of illegal immigrants, the plundering of the welfare state, potentate public sector unions., and the costly failure of our California public schools, suffering with a decrepit infrastructure, poor financing, and sclerotic work rules which punish the best and pass the buck on the rest (Mark Berndt, anyone?)

In 2012, the state's general fund spending totaled $86 billion. This year, in a budget Brown characterized as one of "restraint and prudence," he will spend $107 billion — a 24% increase in just three years.

Most state citizens don't know it, but the state is basically bankrupt, with $340 billion in unfunded pension related liabilities. Think of Detroit with nice weather.

Vanity Ballroom, abandoned - Detroit, Michigan

The mirror-image mirage breezes in again. Detroit is the future of union-bullied statehouses, where entitled-to-retire has replaced right-to-work, where welfare has replaced a work ethic, where grievance and victimization define the daily lives of residents, at least those who have chosen to live off government largesse or run for office to manage it.

Now Brown wants to build a white elephant high-speed rail system that's estimated to cost $70 billion but which will carry few people — further bankrupting the state.

Kashkari's stance against the "crazy train" has been one of his strongest lines of attack. Yet any Republican running for office on a limited government platform would demand the demise of this terrible waste of time, money, and California resources.

Nor will the picture get any brighter. A massive exodus of businesses and entrepreneurs, coupled with an offsetting influx of unskilled immigrants, means California's population is getting poorer, less educated and less-skilled by the day.

So, more people are moving into California? Not productive members of society, necessarily, but unskilled labor with easy access to government subsidies. This cycle of dependence, entitlement, and poverty is bankrupting the state.

Of course there was a brief influx of revenue into state coffers, despite the grim economic news. Most businesses did not have the opportunity to transfer their tax status before the 2012 Prop 30 tax increases kicked in. What will happen two years from now, when there are no more wealth creators to tax? The poverty rates of unskilled immigrant labor (legal or not) will offer no increase in income tax revenue, since their stagnant wages set them up for income tax credits.

Where will the revenue come from? School board members in the South Bay have shared with me their apprehension about Sacramento's loose promises on funding. The Los Angeles County Library system has actually cut hours of service, even if certain library branches are now open more days out of the week. Whatever financial improvements claimed by county and city leaders, these finances will not last for long.

California's 24% poverty rate is the worst in the nation. It has 12% of the U.S. population but a third of its welfare recipients. Meanwhile, the state has lost 160,000 mostly middle-class citizens a year to other states.

Google. . .searching for a new place for business

The makers will not pay for the takers forever. As British Prime Minister Margaret Thatcher argued repeatedly: "The problem with socialism is that sooner or later, government runs out of other people's money." Other people are running with their money to business friendly states which treat wealth creators with respect.

Businesses are leaving too. Google, Intel, Apple and a host of others have made clear that future growth won't take place in California. One hint why: In 2014, U.S. CEOs rated California as "the worst state in which to do business" for a 10th year in a row.

Forget Toyota, Tesla, Charles Schwab. Ouch! Too bad most Californians are not interested in the opinions of the "hated" CEOs.

California has the highest state income tax in the nation, the highest sales tax, the second-highest gas tax and the highest corporate tax rate west of the Mississippi. It's also the only state to have imposed a "cap and trade" tax on its businesses and citizens, one that studies show will have no impact on global warming.

Cap-and-Trade, by the way, was Republican Governor Arnold Schwarzenegger's legislative love child. Yet unlike his real love-child (born out of wedlock to the housekeeper), the Terminator left office in 2011 without having to pay for the baby he sired. The poor as well as the wealthy are footing the bill for his political peccadillos. Electricity rates are rising, especially in Northern California, and the Sacramento political class has no interested in gas or oil exploration. Democrats are now running on a statewide moratorium for fracking, too.

Meanwhile, the American Tort Reform Association has ranked the state "the worst judicial hellhole" for a second year running.

Tort reform would be a win-win for Democrats and Republicans, but not for lawyers. Lawyers are the heart of the special interests in Sacramento, where the previous Assembly Speaker, John Perez, was not just a lawyer, but a labor union advocate: the worst of both worlds.

Tort reform is a must in the state of California, and a relatively easy sell to otherwise liberal voters.  One proposition passed a few years ago, which would prevent law firms from shaking down small businesses for easy settlements, since most businesses cannot afford the long-term legal fights to preserve their integrity and credibility.

Civil damages are so high, for health care practitioners as well as entrepreneurs, that insurance rates have risen exponentially, hurting their profit margins and their financial capacity to provide goods and services. Despite the Democratic rhetoric against these reforms, they have passed statewide. In 2012, an initiative to require GMO labeling on all California foods failed as well. Passage of that law would have created not just regulatory burdens, but opened up a campaign of lawsuits for greedy trial lawyers.

The economic impact has been predictable. As a recent UCLA business school economic forecast noted, "even though the number of jobs is now higher than any time in the past, the state remains below its potential output and employment. That we are entering the sixth year of expansion illustrates just how painfully plodding this recovery process has been."

When liberal UCLA calls foul on the claims of economic recovery, Democratic Party leaders, including Governor Jerry Brown, cannot hide behind their media-hyped mirage of "The California Comeback". The California Come-On would have been more accurate.

Heckuva job, Brownie.

Good one, IBD.

 

No matter how strong the media fawning may be, Governor Brown has done hell of a job, literally, to California. All the talking heads and friendly smiles from government elites cannot put a happy face on the tired, tried, and trite hollow points. California is bankruptcy, morally as well as financially, and everyone is either hoping that the costs do not catch up with them, or they catch another train out of town before the deluge his.

 

California residents need more reporting that cuts through the pink clouds of LA Times hope-and-change, and reveals that confidence in the future begins with a distrust for the state, minimal intervention, and drastic cuts in public spending, dependence, and public sector unions.