Political Animal

Blog

July 25, 2014 8:39 AM Cali Rally

By Ed Kilgore

It’s not really news any more that all the conservative doomsaying about California has turned out to be wildly off-base. But Paul Krugman decides to rub it in today, particularly in terms of the actual impact of Proposition 30, the 2012 ballot initiative that authorized a more progressive income tax structure, and Obamacare implementation, which California took on agressively:

Needless to say, conservatives predicted doom. A representative reaction: Daniel J. Mitchell of the Cato Institute declared that by voting for Proposition 30, which authorized those tax increases, “the looters and moochers of the Golden State” (yes, they really do think they’re living in an Ayn Rand novel) were committing “economic suicide.” Meanwhile, Avik Roy of the Manhattan Institute and Forbes claimed that California residents were about to face a “rate shock” that would more than double health insurance premiums.
What has actually happened? There is, I’m sorry to say, no sign of the promised catastrophe.
If tax increases are causing a major flight of jobs from California, you can’t see it in the job numbers. Employment is up 3.6 percent in the past 18 months, compared with a national average of 2.8 percent; at this point, California’s share of national employment, which was hit hard by the bursting of the state’s enormous housing bubble, is back to pre-recession levels.
On health care, some people — basically healthy young men who were getting inexpensive insurance on the individual market and were too affluent to receive subsidies — did face premium increases, which we always knew would happen. Over all, however, the costs of health reform came in below expectations, while enrollment came in well above — more than triple initial predictions in the San Francisco area. A recent survey by the Commonwealth Fund suggests that California has already cut the percentage of its residents without health insurance in half. What’s more, all indications are that further progress is in the pipeline, with more insurance companies entering the marketplace for next year.
And, yes, the budget is back in surplus.

Krugman concedes that California still suffers from high housing prices (boy, does it ever!), and suggests that those complaining of “too much regulation” in the state should really focus on local land-use restrictions that boost housing costs in myriad ways.

Personally, I’m just glad that I’m not actually living in the dystopia I’ve been reading about from practically the moment I arrived in the Golden State.

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

(You may use HTML tags for style)

comments powered by Disqus