Politicians, being what they are, tend to have an inflated view of what they can do. Some claim to create jobs while others claim to raise taxes. In truth, they are limited to passing political laws. Once enacted, those laws run into the laws of economics – which have never been repealed and have been largely the same since the beginning of time. The results are often different than those intended – and so it is for Jerry Brown, whose policies fly in the face of economics and Californians are paying the price.
Few can doubt the magnitude of the economic problems facing our once Golden State. Unemployment is above 12% and underemployment is above 20%. Over 1.3 million less people are employed today than a decade ago. California homeowners have lost over $1.7 trillion in equity in the last 4 years – an amount nearly equal to the entire state economy. That combination has resulted in California suffering the worst of the nation’s foreclosure crisis including startling figures such as in Fresno, where 46.7% of the mortgages are under water, i.e. the mortgage is larger than the home value.
California businesses face taxes among the highest in the nation, even higher regulatory burdens and, just around the corner, potentially large workers’ compensation rate increases. It’s no wonder CEO Magazine ranks California 51st in the nation (behind Puerto Rico) as a place to do business.
All combined, these economic problems have resulted in revenue problems for California governments because people without jobs don’t pay taxes; homeowners without equity spend and borrow less; and businesses with mounting costs have lower profits. That’s economics – not politics.
For Jerry Brown, however, economics remains a mystery to say the least.
(more…)
Follow Us on Twitter
Subscribe via RSS
Got a Tip?