Posted on 03/10/2010 7:20:06 AM PST by george76
California is doomed for two simple but profound reasons: the cost structure is too high for most businesses to survive, and a boom-dependent economy.
The dysfunctions crippling California would easily fill a volume: a dysfunctional Legislature that has been gerrymandered to protect virtually every seat; a dysfunctional proposition system which enables special interests to craft Protected Fiefdoms via the ballot box; recalcitrant public unions who don't see anything wrong with public servants getting 90% of top-pay in pensions while still earning big bucks as "contract employees," an enormous population of undocumented workers who pay only sales taxes, and whose employers pay no payroll taxes, either-- and that just scratches the surface.
a crushingly high costs structure and an economy entirely dependent on the next boom.
California is now the world capital of Denial.
Everyone from the State legislature to union officials to realtors to small business owners are hanging on, refusing to face the fact that there will be no boom to save them and the state, To survive one more year, they're borrowing money, hiding debts and real valuations, monkeying with the books and playing accounting tricks, borrowing from next year's revenues...
California is doomed to insolvency at every level, public and private.
(Excerpt) Read more at businessinsider.com ...
Why I left California after having lived there for 30 years.
Let’s pray that this cancer does not head east.
SJB—it only took the libs thirty years to ruin paradise: 1979-2009.
It’s already in the east... New York.
The only way out is a federal bailout. We need to help them perpetuate their bad policies and irresponsibility. It’s now a policy of the US. We did it for the banks, we did it for the auto industry, we did it for foreign dictators, surely we can throw a few billion (a year) to one of our own states.
Ten years from now, what will they be calling Detroit, New Orleans, and California?
It won’t head just east.
If they are the first to default, every state will chip in to bail them out. If a bank can be “too big to fail,” what about a state with a massive economy?
Nonsense. California will never go bankrupt for the simple reason that it’s a desirable place to live and always will be, barring some major earthquake that takes out the coastline. Plus all the foreign wealth that exists now and keeps pouring in. That being said, the next boom will many years this time, but it will come.
Technology and biotech have also shrunk in the state and “it ain’t” coming back. Defense also is less important. Obama is killing farming and the schools are not as good as they were.
You clearly have a point. Nonetheless, I cannot see too many state governors standing up and telling their citizens that state money needs to bail out California. More likely is a US taxpayer, that is Obama-style, bailout. If the day of reckoning is postponed, it will only be worse -- and that could spread the cancer east.
You too, huh.
I was born and raised in So. Ca., left after 40 years.
Truly sad, Ca was once a great State and place to live.
What’s gonna be the final stake is when Prop 13 is overturned.
The blog this comes from is excellent. It’s on my list of Favorites. You might want to note it:
http://www.oftwominds.com/blog.html
He’s not a regular on Business Insider, which is a lefty (kinda) financial site.
“SJB—it only took the libs thirty years to ruin paradise: 1979-2009.”
Well, for me it was (1976-2006)
In 1976, it was still “Reagan Country”. Paradise on earth, for a 22 year old, fresh out of college, with a high paying job in Los Angeles.
By 2006,much of Los Angeles had become a third world hell hole.
I sold out then, knowing the faux boom would bust.
I also got tired of tripping over illegal immigrants on the sidewalk ;-)
Not sure I agree with you.
Increasingly I’m leery of the prospects, of the entire US west coast, all the way over to Las Vegas. Everything in CA is at long term risk due to lack of adequately huge real sources of fresh water, illegal immigration, the northwest coast from that tiny matter of the Cascadia Subduction Zone.
Everything in the west, is dependent on the worst cases, not happening. I’m not sure that’s a safe bet anymore. No more are the economies and cities in the region robust and resiliant. The job situation is among the worst in the country, even though real estate costs remain almost astoundingly high.
The “reconquista” process is real. If your handle is an indication of where you’re posting from, you should see it all around you. At the moment there’s been a calm before the storm, because the imploding employment prospects have sent a lot of illegals back home. That’s temporary. And would suddenly and dramatically worsten, with any sort of political instability south of the border.
If Meg Whitman wins the election, the collapse will be delayed because she like Arnold, even as RINOs have veto power over the most goofy agenda items of the left. If Brown wins, CA’s pretty quickly toast imho.
I’m happy and grateful that my employer has seen fit so far to keep me gainfully employed, and that’s why I’m still here. Thanks employer :)
But if that ever changes, I’m so out of here.
It is worse than sad...it is trajic!
At least you and I got out before it imploded.
Nah, it’s that a majority of California voters think they can vote themselves into Paradise. They actually believe that bond money is free money, etc. The state will have to go into the shark tank for years, perhaps a generation, before the voters here will change.
tragic, that are ;-)
“What’s gonna be the final stake is when Prop 13 is overturned.”
That will KILL the real estate market.
You're right, it is tragic, it's not so great here in Vegas either as we have the same "visitor" problems here too.
Would love to move to Northern Nevada some day and get away from the cities.
Lord help us all .... this means more immigration out of California.
Here’s what I don’t understand. My brother lives in Folsom, northern CA, and although his electrical contracting business has slowed down, he’s still doing pretty darn well. We hear all the doom and gloom about the CA economy, but it’s like the people there haven’t been told the bad news.
OTOH, here in the Phoenix area, our electrical contracting business is struggling to stay afloat and there is much more a feeling of negativity and desperation among the people I talk to.
Unfortunately, more and more, these practices are not limited to California. Small business is dying in America and nobody wants to face the fact. I think business people are believing in the November election. IF the Democrats retain power, middle class money will be heading for the exits fast.
“Nah, it’s that a majority of California voters think they can vote themselves into Paradise.”
I think that’s 100% true. Look at the electricity “crisis” a few years ago. It was caused by Californians expecting electricity to be created “somewhere else” and magically delivered at no cost in unlimited quantities to their electric outlets.
Look at the “protesting students” walking arm-in-arm with “protesting professors.” The professors want more money while the students want a free education. How is that going to happen?
The real key in this article is that California has become an environment hostile to business and industry. The tech-boom for Silicon Valley is over. The agricultural industry is being ruined by water regulations (although I believe there is some truth to the allegations that this is a means of bankrupting the farmers so that politically connected speculators can buy up the farms for nothing, and then the water will be turned back on).
What little is left is going to leave and that means there won’t be anymore money, free or otherwise.
LOL -- yeah, the liberals and low-lifes from the East who migrated to CA in earlier decades will be heading home. Pay back is hell.
“You’re right, it is tragic, it’s not so great here in Vegas either as we have the same “visitor” problems here too.”
The last time I was in Vegas(about 4 years ago), I was accosted by half a dozen illegal immigrants flipping cards of naked prostitutes in my face. One of them clipped me in the face with a card, and I tossed him into the ground. I just wanted to see the damn water show in front of the Bellagio!
California bump for later...........
CA is too big to fail. And....it’s for the children
I only hope the place can hang in there until the GOP takes congress. Otherwise, (my) federal tax dollars and zillions of tax dollars from civilized red states will end up getting dumped down that same crazy toilet.
I could be be wrong, but I think think that has been made illegal on the strip now, If it hasn't been it should be.
There are usually hoards of those people pushing that crap around the convention center, not so much this year at the CES show though.
If California ends up being bailed out by the feds, that will simply push the fed debt level that much closer to going over the edge into financial chaos. Unfortunately, I fully expect when the California mess comes to a crisis head, the feds will conclude that they have no other option but to bail them out. Our state and federal governments are on a downward spiral into financial suicide.
The best solution would be to divide it into at least three states: A coastal liberal enclave stretching from the beaches of Orange County to Marin County and far enough east to cover left-wing towns like Anaheim, East LA and Sacramento, then a Northern California with a capital in, say, Fresno, and a Southern California with a capital in, say, Palm Springs.
That way, two of the three California states could right their sinking ship of state.
LOL!!
I didn’t mean to imply the states individually would bail out CA. The federal government will use all taxpayer’s “contribution” to “save the union.”
Glad to hear this. I told a friend of mine the next day that Vegas is going to lose a great deal of money, if they don’t put an end to this.
Scott is correct. California is not Iowa. We are producers, and despite the idiots that are running the state we have many things that most states don’t. That is the ability for the people to make their own law through proposition. It gets bad enough we will pass some pretty extreme law that will right the ship. We are the 7 largest economy in the world. It is not likely california becomes a ghost town.
Yeah, that is definitely more likely. Thanks for the clarification.
The parasites that came to CA and ruined it are now headed home to roost.
Lock and load
" Ai gotda vunny veeling dah Reepublucan Potty tinks RINOS are
pure crapola. Chonny, undt Wooty undt ai ghonna ghet jops ass
Val-Mart greetahs, Home Depot paint mixahs, McD's ketchop pumpahs,
undt vaitahs at Ved Lopstah, ven ai loosses mai jop ass govnah."
NOT THE TOP OF THE LIST
“Special Nurse” $350,000+
Municipal railway manager:$325,000+
“Administrative services” department head $280,000+
State college workers salaries:
JEFF TEDFORD UC BERKELEY HEAD COACH-INTERCOLG ATHLETICS $2,831,654
PHILIP E LEBOIT UC SAN FRANCISCO PROF OF CLIN___-MEDCOMP-A $1,979,362
TIMOTHY H MCCALMONT UC SAN FRANCISCO PROF OF CLIN___-MEDCOMP-A $1,945,717
RONALD W BUSUTTIL UC LOS ANGELES PROFESSOR-MEDCOMP-A $1,570,897
RICHARD J SHEMIN UC LOS ANGELES PROFESSOR-MEDCOMP-A $1,195,837
KHALIL M TABSH UC LOS ANGELES HS CLIN PROF-MEDCOMP-A $1,048,891
BEN BRAUN UC BERKELEY HEAD COACH-INTERCOLG ATHLETICS $998,569
http://www.sacbee.com/1098/story/1669273.html
“Let’s pray that this cancer does not head east.
Already has......”
It CAME from the East. A lot of the twacked-out libs we have here in California are from there. This cancer IS the metastasis.. it’s just that the secondary has become the larger tumor.
Glad you got out in time. 2006 was when I left NJ for similar reasons.
I thought NJ would beat CA to the bankruptcy counter. If not, it will be a close second.
The new Republican governor may buy some time, but NJ cannot sustain the debt it has assumed, especially when our generation of civil servants cash in their sick days and start their pensions.
Our whole country is flirting with third world status with the present financial course we are on.
I think rural areas are closer to the “real economy”, whereas large urban areas tend to have been closer to the bubble, and thus affected more by the crash.
Again?
It's been doomed for years now...Or so I am told...
These articles should be numbered!
"California Is Doomed - Article #723"
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