Over at MarketWatch, Brett Arends slams the argument that California is about to default because of its free-spending ways. After he exposes the lack of facts or numbers to Chris Whalen’s “omg CA default” nonsense, Arends points out that California is actually bailing out the rest of the country:
California bails us out. It has been bailing out the rest of America since, oh, about 1849 – before it even joined the union.
Californians are so productive that every year they send billions of dollars in surplus dollars to the rest of America. Year after year they have sent vastly more in federal taxes than they ever get back in federal spending.
California isn’t our Greece, it’s our Germany. It isn’t Little Orphan Annie. It’s Daddy Warbucks.
Indeed. California gets 78 cents back on every dollar it sends to DC, meaning that nearly one quarter of our federal taxes are siphoned off by the red states (most of whom receive more in federal expenditures than they send in tax receipts).
Arends also shows that over the last 11 years, it’s been California that has produced more economic growth – and that its middling tax rate, its decent wages, and its public services help achieve this goal, rather than retard it:
California’s a basket case? The state has one of the highest living standards in the country, yet over the past 10 years the economy has still grown much faster, per person, than the national average. According to the U.S. Bureau of Economic Analysis, it’s up 15% – compared to 8.9% for the U.S. overall.
It’s grown faster than low tax neighbors like Arizona, Utah or New Mexico. It’s grown three times faster than Texas.
And this was from 1999 through 2009: In other words from the peak of the dot-com years through the depths of the recession. It managed this growth despite the double blows of the tech and housing busts.
Now, one ought to be too careful to not go overboard here. California’s recent economic growth has not been evenly distributed, and poverty has soared since Sacramento began embracing austerity in 2007 – and, surprise surprise, we haven’t seen a decline in unemployment or a spurt of new growth even after 3 and a half years of austerity budgeting.
But Arends’ article is a useful and welcome corrective to the “California sucks” narrative being peddled by “financial analysts” who are actually just spewing right-wing talking points without any regard for the facts.
Perhaps the most interesting thing, however, is how I came to know of this article: Jerry Brown tweeted it. If this means he is going to reject the right-wing arguments about our state’s economy and budget, then we have a fighting chance at not just surviving this downturn, but implementing some truly progressive policy.
I read an article the other day that pointed out that Japan, during what the media still refers to as the “lost decade,” still managed to pay for social services that would make an American drool, including state-sponsored healthcare. Plus, their unemployment rate was an enviable 3%.
So I thank you and Arend and governor-elect Brown for bringing the media hype about California back down to the much-neglected realm of facts and reality. For pointing out that, for all the Texas blather about how much better their Scrooge state works to promote growth, it doesn’t really. It does do a great job of promoting environmental damage, inequality, and misery. And for realizing that Washington can’t afford to let us go bust. After all, how would they fund the pork for all the Republicans in Alaska and Mississippi without us?
Some call this simple assemblage of facts “a does of reality”. I call it “firepower”. God knows we need plenty of it when responding to the right-wing spew in other venues.
I’ve got this article bookmarked and ready to quote. Thanks.
There’s Silicon Valley, Hollywood, and agriculture. The first two are California and California’s a leader in the third.
The comments following that story illustrate a couple sobering realties: 1) many people blindly hate/resent CA and its liberal evil doers, to the extent the two occupy the same mental space, and 2) what little state-level political discourse we have is dangerously polluted by CA conservatives who blindly hate/resent CA liberal evildoers.
Overcoming the second issue will be one of the new governor’s biggest and most important challenges. He will have done the state and the nation a tremendous service if he does nothing else but help unravel the myth of Reagan Claus.
In Automotive Enthusiasts circles you’ll hear it all the time. That CARB though I wouldn’t call friendly to us enthusiasts are often more FAIR than Draconian.
People on the OEM side of the debate (Those that have something to do with the cars coming from Detroit) moan what they call overzealous law makers enforcing our State laws over Federal Law.
Please as smart people say 17 States currently have pollution legislation that mirrors our own. As you would guess most of these State are in the West and Northeast, not the Deep South or the Middle with hardly any population to speak of.
California has the most population which means it has more people paying tax (and cheating tax I might add). That along gives us VAST buying power. I don’t recall Angela Merckel visiting Texas or Ohio…
You see Anti-California BS in the MMS because they know we influence much of what happens in America. The more progressive we become, the more people want to move here to take advantage of it.
When the Dust Bowl ravaged the Mid-West, they came to California. Many people that were in our various wars, came from the South, Northeast or Mid-West, never been to California and STAYED. There was no reason to go home.
Robert is right, we shouldn’t beat our chest too much, there’s way too much work to be done and too much Anti-California Right Wing Rhetoric to squash.