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December 05, 2012 11:21 AM Golden State Rebound

By Ed Kilgore

As aficionados of conservative punditry probably understand, there is no recent staple of right-wing journalism hardier than the Dysfunctional California meme. The Golden State, were are told, illustrates the Grecian Formula of Ruin that progressives are determined to impose on the entire country: greedy union bosses conspiring with growth-hating environmentalists and deadbeat minorities to despoil pristine suburbs, destroy agribusiness, drive out private capital, and sink the state into bankruptcy, counting on their socialist allies in Washington to bail them out by looting the hard-earned dollars of virtuous red-state producers. Joel Kottkin has been writing this same story for decades now; it’s also Victor Davis Hanson’s Great White Whale.

Imagine the cognitive dissonance created on the Right by this lede from Matthew Garrahan in yesterday’s Financial Times:

After a decade marred by ballooning budget deficits, rising unemployment and swingeing cuts in public services, California’s economy may have finally turned a corner.
The state was hit hard by the financial crisis, with the rate of mortgage foreclosures and unemployment much higher than the national average. Regular budget deficits forced the state to slash public services and two years ago it even had to offer IOUs to its creditors in lieu of cash.
But jobs growth in the Golden State, an economy larger than those of India or Russia, has outpaced the national trend in the US in recent months. California’s Legislative Analyst’s Office is projecting a $1bn budget surplus by the 2014-2015 fiscal year, as $6bn of new tax revenue is due to flood into state coffers after voters passed a staggered tax increase on individuals and families earning more than $250,000 and $500,000 a year.

Now this could turn out to be an excessively optimistic assessment, for several reasons, among them the pent-up desire for more than moderate spending increases on education (where austerity measures have bitten deeply over the last few years in particular) and corrections.

But the very idea that California is headed anywhere other than straight to Hell is a problem not just for Grecian Formula enthusiasts like Kottkin and Hanson, but for all conservatives whose use of the Golden State as a cautionary tale in national fiscal and economic debates is in danger. You mean tax increases on the wealthy might actually help, not hurt? Horrors!

So I expect that we’ll see an enormous amount of pushback against the California Rebound story, replete with predictions that the job-creators of the state will immediately pick up and move to Texas, where policymakers understand that economic growth is inherently incompatible with unions, environmental protection, and the coddling of low-wage workers, who ought to be damn grateful for everything they get. And no hippies, either!

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.

Comments

  • paul on December 05, 2012 11:43 AM:

    Wow, and here I thought that the disaster in California was a perfect example of what happens when a small minority of anti-tax loonies takes advantage of quirks in legislative rules to prevent a government from engaging in fiscal sanity. Silly me.

  • Grincheuse on December 05, 2012 11:47 AM:

    As a genuine high-income individual affected by the tax, I can say for sure that there's no way that I'm moving to the CSA. We visited Texas last May. Horrible doesn't begin to describe it. I lived briefly in Alabama many years ago which is both weird and horrible. I tried to talk the old man into Portland for a few years, but that was an attempt to join my own tribe (Multnomah county was 75-25 in favor of PBO in the last election).

  • awake 108 on December 05, 2012 11:49 AM:

    It was the people of the state who began to wake up to the fact that the repubs at the state capital were stopping any forward movement in the state. They also went aroung the trojan horse partyGOP and voted themselve a tax increase to help pay off our debts, created by the refusal of the repubs to raise taxes to pay for the growth that was going on in the state. They also voted out the repubs

  • exlibra on December 05, 2012 12:12 PM:

    You mean tax increases on the wealthy might actually help, not hurt? -- Ed Kilgore

    Yes but you all's rich people are all Hollywood homo moguls, who deserve to be fleeced. Our own holy woodies are all good, upstanding men, who need to be coddled. See the difference?

  • schtick on December 05, 2012 12:20 PM:

    The whole problem when they, whomever "they" happen to be at the time, manage to get a surplus, they never try to put back helpful programs or monies they've taken away from helpful programs, they end up given themselves a raise and another tax break for the people that caused the problem.

  • James on December 05, 2012 12:38 PM:

    Wow! I was feeling all down in the dumps and saddened about the general state of the universe due to GOP inherent cruelty and intransigence, until I read this righteous rant. I am now invigorated and ready to rejoin the battle royale. Thanks!

    I'm a Californian, of course.

  • martin on December 05, 2012 12:51 PM:

    Well, the porn industry in LA has threatened to move out because of the new condom rule, you think Gov Perry might come up with a few tax breaks to lure this multi-billion dollar industry?

  • deanarms on December 05, 2012 12:54 PM:

    Actually the problems California has been enduring for the last few decades demonstrate the failure of Republican policies. Starting with Prop 13 and continuing into these goofy procedural rules requiring some form of legislative supermajority to raise taxes, the state (particularly its educational system) has been starved for revenue, forcing all sorts of deficit spending to maintain a baseline of services. Finally, Jerry Brown got a tax increase passed, after forcing through a dracopnian state budget, and things are turning around. Democratic solutions to problems Republicans caused.

  • jjm on December 05, 2012 12:57 PM:

    California is golden again. It's a great state, with a great governor! And the people are more and more enlightened.

    The only mistake Jerry Brown ever made was, in his first go around as governor, to build up a surplus. He might have, and with hindsight, should have spent it then as wisely as he spends now: on infrastructure, energy efficiency etc.

    Instead, the GOP vultures saw that pool of money as rightfully theirs, so persuaded voters that government took too much in taxes. We've now awakened from the GOP/conman nightmare.

  • bdop4 on December 05, 2012 2:41 PM:

    The last surplus we had was after Brown's first term. The first thing Gov. Deukmejian did was blow it by giving taxpayers a refund. With Prop. 13 enacted, no tax bill ever saw the light of day and projects became funded solely through bond propositions, which combined with the Enron fleecing and the housing bubble bursting, constitutes most of our current debt.

    Businesses constantly threaten to move from California, but they find what Grincheuse observed: who the hell wants to move from golden Cali to Texas or Alabama?

    Not I.

    With Democratic vsuper-majorities in both state houses and the governorship, we have finally come full circle and can start passing substantive legislation. I think Brown will act as a "governor" to keep the state legsilators from over-reaching. It's important that we make solid gains with whatever tax revenues are generated.

  • punaise on December 05, 2012 2:51 PM:

    now, if we could just fix Prop. 13 - the root of most of CA's problems to begin with!

  • exlibra on December 05, 2012 2:57 PM:

    schtick @12:20 and jjm @12:57 are absolutely right about any possible surpluses: if you do find extra money, invest it in things that profit the whole state. Don't let it lie around, or the Repubs will pocket it next chance they get.

    Same thing happened on the national scale, with Clinton't surplus. As early as '98 (IIRC), Krugman was warning about it; use it or you'll lose it, he said (or words to that effect); don't just pat yourselves on the back for having produced it, don't sit there admiring it as it lies on the table, because, before you know it, it'll disappear down the Republican gullet. And, as ever, he was soooo right...

  • MuddyLee on December 05, 2012 3:10 PM:

    Note that Mitt Romney has made California his primary residence -not Texas or anywhere else in the confederate states that actually voted for him. Let California's tax increases on the rich be a model for the rest of the country.

  • garymar on December 05, 2012 8:03 PM:

    "Grecian Formula"! Ha ha!

    I'd bet dollars to donuts that George W Bush learned to say "Grecian" after watching all those late-night Grecian Formula commercials during his coke-snorting years.