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Opinion: Reforms needed to reverse California decline


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By Michael J. Boskin and John F. Cogan, Wall Street Journal

Long a harbinger of national trends and an incubator of innovation, cash-strapped California eagerly awaits a temporary revenue surge from Facebook IPO stock options and capital gains. Meanwhile, Stockton may soon become the state’s largest city to go bust. Call it the agony and ecstasy of contemporary California.

California’s rising standards of living and outstanding public schools and universities once attracted millions seeking upward economic mobility. But then something went radically wrong as California legislatures and governors built a welfare state on high tax rates, liberal entitlement benefits, and excessive regulation. The results, though predictable, are nonetheless striking. From the mid-1980s to 2005, California’s population grew by 10 million, while Medicaid recipients soared by seven million; tax filers paying income taxes rose by just 150,000; and the prison population swelled by 115,000.

California’s economy, which used to outperform the rest of the country, now substantially underperforms. The unemployment rate, at 10.9%, is higher than every other state except Nevada and Rhode Island. With 12% of America’s population, California has one third of the nation’s welfare recipients.

Partly due to generous union wages and benefits, inflexible work rules and lobbying for more spending, many state programs and institutions spend too much and achieve too little. For example, annual spending on each California prison inmate is equal to an entire middle-income family’s after-tax income. Many of California’s K-12 public schools rank poorly on standardized tests. The unfunded pension and retiree health-care liabilities of workers in the state-run Calpers system, which includes teachers and university personnel, totals around $250 billion.

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Comments (26)
  1. Tahoeadvocate says - Posted: March 23, 2012

    Population grew by 10 million and only 150,000 new taxpayers. When will California realize the few people paying taxes can’t support everyone else.

  2. JoeStirumup says - Posted: March 23, 2012

    Population grew by 10 million and only 150,000 new taxpayers.

    That is hilarious, simply hilarious.

    Let’s hear them liberals defend that.

  3. SmedleyButler says - Posted: March 23, 2012

    Tax filers that have to Pay additional taxes on their income (after they figure out the best way to cheat or not pay at all) are the new 150,000 “taxpayers”. Everybody that lives in California pays numerous taxes every single day. Foxnooze/limbaugh regurgitators have used this easily debunked canard forever.

  4. JoeStirumup says - Posted: March 23, 2012

    Hilarious, simply hilarious.

  5. SmedleyButler says - Posted: March 23, 2012

    This article comes from The Wall Street Journal. It used to be a respected place to get the viewpoints of reasonable conservatives and always was a resource for intelligent debate. Then Rupert Murdoch purchased it and added it to his Fox tabloid reich-wing 99%ers talking points for morons. It has predictably been taken over by their paid hacks.

  6. U Stripum Joe says - Posted: March 23, 2012

    Then Rupert Murdoch purchased it

    That is hilarious, simply hilarious.

    Let’s hear them conservatives defend that.

  7. Parker says - Posted: March 23, 2012

    You know what they say, when you can’t argue the facts, just argue! California is a mess, and that mess needs to be confronted!

  8. dogwoman says - Posted: March 23, 2012

    Can’t argue with the message so they attack the messengers. Good strategy.

  9. JoeStirumup says - Posted: March 23, 2012

    The issue remains the same as the deniers spew their distractions… Honest people reading these posts have got to see that!

    “From the mid-1980s to 2005, California’s population grew by 10 million, while Medicaid recipients soared by seven million; tax filers paying income taxes rose by just 150,000; and the prison population swelled by 115,000.”

  10. SmedleyButler says - Posted: March 23, 2012

    I agree that things are a mess… The facts are that reaganomics is a total failure. The GOP has been taken over by the fringe loonies that have always been around(John Birchers) but are now somehow legitimate voices and the 1%ers play the easily duped, overworked poor slobs that have to get along at work for race to the bottom wages, Or Else! You’re fired. GOP has nothing to offer but their “god, guns, gays, hate government loser bush nonsense.

  11. JoeStirumup says - Posted: March 23, 2012

    ^ That is hilarious, simply hilarious.

  12. U Stripum Joe says - Posted: March 23, 2012

    ^ That is hilarious, simply hilarious.

  13. Honkylonk says - Posted: March 23, 2012

    Just more evidence of the obvious. The founders were wise in structuring federalism around State’s rights, allowing the individual states to serve as laboratories in self government. We can now easily see what works and what doesn’t work. Progressive socialist liberalism is demonstrated to be an utter failure, California is just one of many examples. But we didn’t need to experience the abyssmal failure ourselves if we had only taken the time and effort to learn from other’s mistakes.

    Western Europe is much further down the road than us with Greece, Spain, Portugal and the UK serving as vivid predictor’s of our future, and we’ll be there soon enough if we don’t alter our course back in favor of freedom, personal responsibility and free market capitalism, the very characteristics upon which those founders shaped America to be the greatest and most free nation in the history of mankind.

  14. SmedleyButler says - Posted: March 24, 2012

    The founders were absolutely not free-market libertarians as so many of them try to claim. The Articles of Confederation rather than the Constitution is a much better fit for their twisted beliefs. Try reading some real history instead of the delusional right-wing re-write. Try consortiumnews.com/2012/03/22/did-the-founders-hate-government/ for starters.

  15. JoeStirumup says - Posted: March 24, 2012

    THE ISSUE IS, CALIFORNIA IS DECLINING

    Most honest people recognize that it is the liberal ways of California that is at the root of its decline.

    Some people are just deniers of the truth and you can’t reason with, nor is it worth your time to arguing with them.

    They don’t matter, ignore them.

    The issue is the issue and the facts are the facts.

  16. U Stripum Joe says - Posted: March 24, 2012

    The issue is the issue and the facts are the facts.
    They don’t matter, ignore them.

    Some people are just deniers you can’t reason with, nor is it worth your time arguing with them.

    If you only followed your own advice!

  17. Parker says - Posted: March 24, 2012

    It’s amazing when the simple fact , FACT, that’s expressed how govt. at all levels needs to reduce its expenditures, all the distortion given to that thought! No one has said eliminate govt. But maybe when can somehow reduce its costs to that ancient time of say 15 or 20 years ago?

    I know that sounds radical to some. But I think we can survive at those levels.

  18. SmedleyButler says - Posted: March 24, 2012

    How about if we cut gov’t costs and also go back to the ancient tax rates for the 1%ers of say 15 or 20 yrs.ago…and skip the banking deregulation and the insane wars and the tax cuts for the gazillionaires and… heck the entire bush/cheney nightmare. That would be radical but of course the dittoheads would explode.

  19. Honkylonk says - Posted: March 24, 2012

    Smedley,

    What’s your point? Federalism is simply defined as the process whereby you direct most political questions to the lowest democratic level possible… self government fuctions best when it is closest to the people. Hence, the tenth amendment.

    That was my earlier point, that California (as well as New York, New Jersey, etc.) has been allowed to excercise state’s rights to their heart’s content and the results of their progressive/liberal experiment is catastrophic failure… plain for all to see. On the other hand, Texas, Utah, and other “red” states are more free, more prosperous and as a result of people voting with their feet, populated by more “makers”.

    California suffers as a result of it’s inherently leftist desire to become “Utopian”. In it’s steady wobble towards socialism, it’s swelling ranks of liberals have become too generous in their effort to take care of their greedy constituents (in exchange for votes, of course) creating the welfare magnet we now witness. Greed as defined by liberals is the desire of the one who worked hard and earned the money wanting to actually keep that which they have labored for. Greed as defined by conservatives is the desire of non-producers who won’t work to appropriate a share of the income produced by the effort of others who do… in the interest of “fairness”.

    Californians can continue to vote themselves shares of someone else’s income for only so long, eventually the inevitable occurs, or as Maggie Thatcher put it, “The problem with socialism is that sooner or later you run out of other people’s money.”

    Simple incontravertible fact.

  20. SmedleyButler says - Posted: March 24, 2012

    I’ll bet you would vote for Newt Gingrich in a heartbeat. He also tries to sound like a smart person by babbling tenther, birther, climate change denier, warmongering Islamophobe, homophobe, creationist talibornagain pantload nonsense to the rubes.. AKA the GOP base voter.

  21. biggerpicture says - Posted: March 24, 2012

    “red” states are more free,

    Honkylonk, you mean those states with some of the most stringent abortion laws that make a woman’s CHOICE anything but free, or those that prohibit some people from getting married?

    Don’t ya just love the less government party that feels it’s okay to create more government when it comes to inserting their obscene morality on the rest of us? Are they really the party of “Less is more”, or are they more aptly named the party of “More is less”?

  22. Parker says - Posted: March 24, 2012

    Yes, Bush wrongly, and to this country’s detriment, increased the size of govt! Why the subject always gets changed, I don’t know? But I’m no social conservative. I’ll just cite two former Clinton Admin. officials!, Erskine Bowles and Alice Rivlin, who both say we need to reduce the size of govt!,

  23. dogwoman says - Posted: March 24, 2012

    Smugley, you’re a FINE one to discuss language as propoganda. You’re full of it.
    Bigs, with regards to abortion(!!) Why should a woman be free to murder an unborn child? Choice is whether or not to conceive, not to kill it once that has happened.
    Since YOU changed the subject completely, let me throw this totally off topic question out to ya: If Obama is SO concerned about the death of that Black child who looks like his child would, why isn’t HE concerned about all the black children who have been aborted who would have looked like him? Hmmm?

  24. JoeStirumup says - Posted: March 24, 2012

    As dogwoman points out the subject is changed completely.

    It is a dishonest way to argue and discuss a subject by constantly changing the subject.

    It is a tactic used by dishonest people.

  25. Honkylonk says - Posted: March 24, 2012

    There is an old saying among trial lawyers that goes something like this: “If you can’t argue the facts, argue the law. If you can’t argue the law, argue the facts. If you can’t argue either the facts or the law, blow smoke and attack the other side.” … or as is the case here… fling poo.

  26. JoeStirumup says - Posted: March 24, 2012

    Yes the democrat party mascots – lawyers.