Californian Democracy: Paving the Road to Ruin

As California goes, so goes the country. Do you remember when these words were proudly spoken by champions of populist democracy determined to make California the model for national progress? From public education to universal healthcare to labor-friendly workplace laws to progressive taxation to environmental leadership, Californians were going to show the rest of us backward Americans what happens when Power to The People becomes more than just a slogan.

Could anyone ask for a better environment in which to test this muscular model of democracy? And what a test it was as Californians pioneered the ballot initiative to make the law exquisitely responsive to the will of The People.

Large enough to be a country in its own right, blessed with an abundance of natural resources, powered by a diversity of industries, home to some of the world’s top universities, and incubator of a storied entrepreneurial culture that is the envy of the world, California has all the resources any body politic could ask for.

The People have been living large, awarding themselves a 50% increase in the state budget over the past seven years. In order to pay for this cornucopia of largesse, personal and corporate income tax rates are among the highest in the country. The sales tax is on its way past 10%.

California is staring at a $42 billion state budget hole – the largest of any state shortfall in the nation’s history. The People have defaulted on more mortgages than the citizens of any other state. California’s general obligation bonds are rated lowest in the land, lower than even postdiluvian Louisiana, making it increasingly difficult and expensive for The People to borrow money. Unemployment is ten percent, and rising fast. One of four of The People’s children are dropping out of school. The list of broad-based dysfunction grows daily as the state teeters on the edge of bankruptcy.

Is it a surprise that citizens and business have begun fleeing? California lost more people to out-migration in 2008 than any other state, according to U.S. Census estimates. 2009 is shaping up to be even worse. The People are voting, all right. With their feet.

If you enjoyed watching billions get ineffectively squandered bailing out incompetent bankers and zombie car companies, you’ll love watching what’s left of your tax dollars get shipped off to California.

Despite the governator’s road-to-Damascus centrist conversion, California’s blue and red tribes remain locked at each other’s throats. Each claims that giving in to the other would precipitate disaster, as if disaster hasn’t already struck. So what is the classic Californian remedy for this gridlock? Lawyers are busy dismantling the last vestige of legislative checks and balances, which is the requirement that state budget bills achieve a two-thirds majority in order to pass. Apparently, The People want more power. Damn the minority, full speed ahead!

Can you imagine how California’s woes would be compounded if politicians in Sacramento had the power to issue their own currency? How long do you think it would be before the Sunshine State started to look like Bolivia?

Californians upset with the cultural backwardness of less enlightened Americans used to threaten secession. Sounds good to me; don’t let the door hit you in the keister.

Could California’s nightmare presage what the rest of us might expect as we empower our federal government to do “whatever it takes” to “fix the economy,” as if it were a broken watch?

As Congress doles out billions to anyone willing to prostrate themselves at the Capitol steps, are you surprised that those remaining productive elements of society hunker down in fear, not knowing what fresh outrages tomorrow might bring? What will stop ever more resources from being shifted into the public sector as The People shout down the minority, whose prior contributions to the mess have rendered them as impotent as they are intellectually bankrupt?

Could it be time to pause a moment and reflect on what we are doing to ourselves or are we happy behaving like a man with a raging fever who bursts into a pharmacy and starts randomly ripping open bottles of medicine, swallowing whatever pills he can get his hands on hoping that something – anything – might work?

Restarting the engine of our economy will take more than asking The People which tribe to let run amok. The illusion that either has the solution is the source of the problem.

Please, put the circus on hold and let’s turn off the TVs and get back to work. We can bake our own bread.

Bill Frezza is a partner at Adams Capital Management, an early-stage venture capital firm. He can be reached at bill@vereverus.com. If you would like to subscribe to his weekly column, drop a note to publisher@vereverus.com.

Like any typical free marketeer, he and his ilk always forget to mentioned the generous and friendly illegal immigration atmosphere CA had to provide cheap labor for farms and businesses, plus new voters to tip the balance of consumers of govt services versus the ones who must pay for it. It is also the state with the most H-1B and H-2B workers. Who says globalism and free trade does not lower the wage and standard of living of Americans??? CA is the center of free trade with Asia. Look at them now. In 2009 the conservatives will abandon the GOP because the party abandoned them, and the blue collar Dems will slowly learn that the gentry liberal Dems control their party and will abandon them also. 2012 will begin a third party in the US made up of blue collar Dems and truly patriotic GOP. Peace, prosperity, JOBS and common sense. Buy American, hire American, US trade secrets and inventions stay in US, foreign students should not have access to US trade secrets and inventions, and to the hell with the world. Study how ancient China had 500 years of prosperity with the secret of silk. US should do the same with their advanced technologies, manufacturing and economy.

The majority of voters of California are morons, and have a legislature and governor to match. Despite being 40 billion in the hole, just last November they voted to waste 10 billion on a down payment for a high-speed train between northern and southern CA. Even proponents (including Arnold and the Dem legislators) say it will cost at least 40 billion to build, if it ever is at all. Which means figure at least 100 billion in the real world, plus billions more every year to run it, since passenger trains never pay for themselves. All this for something that will take three times as long as an airplane. Oh, but it will create jobs!

Even more rapidly than the rest of the country, California descended from a state with a very small % of “takers” — those who consume more government services than they pay in taxes — and high % of “makers,”

into a state with a huge, dependent class, most of whom vote. And they vote to take more and more and more, driving out more and more makers.

Exactly and precisely. California has always been a little bit ahead of the country. In the 1960s it embraced Ronald Reagan before the rest of the nation did in the 1980s. California adopted the tax cutting Prop 13 measure in 1978 before cutting taxes was popular several years later. In the 1990s California turned solidly blue as did the rest of the nation in the 2006 and 2008 election cycles. Look at an election map for 2008. California wasn’t the only blue state on it. Yes California has embraced socialism but so has much of the rest of the country as well. California isn’t the only state that BHO carried nor is it the only state with a solidly left congressional delegation. What in the name of God has happened to states which used to have rock solid electorates like North Carolina, Virginia, Indiana, New Hampshire, Colorado, Nevada. etc?

20% of the people in LA County are on some form of welfare.

Please note that California is also perilously close to VOTING FOR gay marriage, which will in effect, force all businesses, charities, hospitals, organizations to RECOGNIZE and SUBSIDIZE homosexual "marriage" regardless of whether or not it goes against your personal or institutional moral values.

With this, you now pave the way for MORE IMMIGRATION. How ? All you have to do is "marry" someone who is gay (or pretends to be gay ) and you'll now have the basis for legal residency.

Catholic organizations, hospitals and charities and schools will suddenly be forced to subsidize the healthcare and all other benefits which will accrue to gay partners.

Why do I say this ? The most recent Proposition 8 vote won by only a margin of 52-48%. Think about it -- close to HALF of Californians are saying that they FAVOR gay marriage !!

I've lived in California for over 30 years. I've seen the decline and made mental notes of the causes of the problems. These are my opinions but I believe them to be accurate:

1. Way to much immigration (both legal and illegal). There are far too many people who don't understand the responsibilities of being a citizen in a democratic republic.
2. Entitlement mentality. Many Californians seem to think that they are entitled to a lot of freebies. Even "native" Californians have this mentality. It's either taught in the schools or is in the ether.
3. Education. California is near the bottom in K-12 education. The problem is that the school systems cannot absorb the number of third world students that are presently enrolled. Despite increases in funding, it isn't enough. California could triple the amount spend on education and it would not make a bit of difference.
California's higher education system is TREMENDOUSLY overrated. Yes a couple of the UC branches are very good, but after this the quality goes downhill VERY quickly. The CSU system is a joke with perhaps one or two exceptions. There are a few top notch private schools.

4. Democratic Party- The immigration situation has made the Democratic Party the majority forever. The overwhelming majority of these newly minted immigrants will vote for the Democrats. It's in their nature to ask for handouts from government.
5. Population Growth- There has been way too much growth in too short a peroid of time. This type of growth puts stresses on the infrastructure that are too great to manage. Water is going to be a huge problem going forward. California does not have the water for 20 million more people. I don't know what we are going to do.
6. Environmentalism out of control. I could write a book on this. Needless to say so call environmentalists will block anything they can so no other reason than to be obstructionists.

Californians upset with the cultural backwardness of less enlightened Americans used to threaten secession. Sounds good to me; don’t let the door hit you in the keister.

LOL!! The (soon-to-be-defunct) SF Chronicle did a story years ago on the history of California seccession efforts. They wanted to slice it every which way--north-south, east-west, three pieces, etc., but if IIRC it was always about one group of Californians trying to scrape another group off their heel (right vs. left, etc.).

good summary.

I would add the stranglehold the public employee unions have had for the last 20 years. They can provide campaign donations (read bribes) to the very politicans they negotiate their contracts with and who approve those contracts. It's a direct conflict of interest.

They opposed an initative which would have required them to notify their memebrs that they have a right to withhold the percentage of their dues which go to political issues and campaigns.

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