A LAUSD bus driver joins school workers at SEIU Local 99, which represents about 30,000 support workers, as they march at Marlton School in February 2018. (Al Seib / Los Angeles Times)
40 years as a one-party state has made California very vulnerable to bear markets, like the one that we’re experiencing right now. Sometimes black swan events can come in the form of a virus and the effects move down the money digestive tract to the California taxpayer. Watch out taxpayers, pensioners, younger government employees and the whole gamut of local governments.
There are two bears stalking the state. One is the huge bond and pension indebtedness and the other is the public employee unions. The second one gave birth to the first one.
A local newspaper headline announces bankruptcy in Stockton, California June 27, 2012. (REUTERS/Kevin Bartram)
Here’s the scenario. Unsustainable defined-benefit public employee pensions – the most expensive to maintain, as opposed to the defined-contribution kind – requires a high rate of return to successfully service the payouts to retirees like my wife and I. The coronavirus bear market has shattered the 7 percent rate of return to adequately fund CalPers, CalSTRS, and any others out there. The pension bear was beget by the public employee union bear, the most powerful lobby in Sacramento. Who’ll make up the loss? If you said the taxpayer and lower-rung government employees, move to the front of the class.
The pension fund managers will go to the one-party state, which is housed in the state capital, to make ends meet. These clowns will then try to bilk more out of the “rich”. Already the top 1% of the state’s income earners account for 50% of the state income tax, which contributes 60-70% of the dough to the state’s coffers. What’ll happen? You guessed it: capital – meaning the “rich” – have already begun to flee to places like Incline Village just across the border in Nevada. Others seek refuge further points east. For a state that prides itself in its open heart for refugees, why is it so intense about making them?
Watch for how totalitarian taxation leads to totalitarianism. The State Franchise Tax Board is already manning up to scowl the nation for what it considers its truant millionaires and billionaires. We’ll see what the Supreme Court has to say about California’s attempt to fleece the new-found residents of other states. Does a state have the power to enter another state – literally or digitally – and force that state’s residents to prove that they didn’t spend 6 months in the People’s Republic?
The next in line to the guillotine will be local governments. To meet their pension obligations, they’ll have to layoff workers. It’s highly unlikely that the state with one of the highest combined rates of taxation in the nation can squeeze any more out of local residents. To pay the bill, they’ll have to raise the contributions from a shrunken workforce.
And what’ll happen to current retirees (like myself) whose retirement decisions were based on contractual obligations over a 30-year career? I’m nervous for the bear in the woods. Little did we know that Reagan’s 1984 commercial would have relevance beyond the Soviet threat. Watch the 1984 ad below to get my point.
The situation is clearly laid bare in a podcast interview of state Senator John Moorlach (R., Costa Mesa) by Will Swaim of the California Policy Center. You can listen to the discussion by clicking on Moorlach’s picture.
A sign calling for utility company PG&E to turn the power back on is seen on the side of the road during a statewide blackout in Calistoga, Ca., Oct. 10, 2019. (Photo by John Edelson/AFP)
In my mid-twenties, I was trying to find a way to turn my History/Religious Studies degree into meaningful employment to support what was to be a burgeoning family. While in grad school, and taking a cue from a friend, I explored two avenues of study for employment: urban planning and teaching. I ended up in teaching. It slowly began to dawn on me, though, that the education and training in these fields was a grand muddle. Delving into urban planning wasn’t really scholarship but indoctrination into an ideology. Teacher training courses were frequently excursions into Summer-of-Love hippiedom and John Dewey’s socialism – a socialism applied to the classroom.
Inside the Haight Ashbury Free Medical Clinic in its earliest days. The clinic opened on June 7, 1967. Many of these people would go into the college schools of education, the teachers of teachers.
Parents, beware, your schools are hip deep in the junk to an even greater extent today. The balderdash remains and accounts to some extent for our population of college snowflakes.
Muddling (i.e., the action or process of bringing something into a disordered or confusing state), in fact, is what we do. Take for instance the ideology/science muddle. It’s the essence of environmentalism, or the effort to stitch together science factoids in support of a political scheme – i.e., socialism. What happens in real life when a muddle is at the root of public policy? A mess!
No better example can be found than in the latest craze to sweep the hominid world: greenie (“sustainable”, “renewable”, etc.) energy. Toward that end, we have the crazy-quilt of “net metering”. What’s that? It’s a ploy to bilk one energy consumer to benefit another. How? Stay tuned.
I was reading about it this morning. 40 states plus DC have elaborate schemes to force utility companies to buy the extra and unreliable electricity from mostly rooftop solar panels of homeowners – net-metering. Sounds like a great gig for the soccer mom/dads of suburbia. Right? No, it falls into the too-good-to-be-true category.
The burlesque of net-metering.
The problem lies in the “unreliable” part of the ruse. No one wants to buy a good or service if it cannot be expected to be there when needed. It’s every bit as true when contracting for lawn-mowing service as it is for PG&E or, up here, Northern Lights. The sun doesn’t align itself to the wishes of Alexandria Ocasio-Cortez (AOC). The utility must revamp it’s grid for the on-again/off-again nature of rooftop solar. The utility’s legal mandate to provide reliable 24/7 energy must be made to mesh with the unpredictable production of soccer mom/dad’s pigeon-shading solar panels. That’s expensive for the utility company to make work and maintain. It’ll show up in your bill, or in utility bankruptcy, or, also as in California, poorly maintained power poles going up in flames. The consequences of the muddling of “unreliable” with “reliable” will appear in many ways, many of them not good.
The alternative is simple. If you want the things, you pay and take full responsibility for them. Sounds like something that my dad told me when I was a teenager. Don’t try and get somebody else – the utility or the consumer who prizes simple reliability – to pay for your actions. But the allure of the seemingly something-for-nothing – either through tax rebates, subsidies, utility mandates, or all of the above – allows soccer mom/dad to delude themselves. The scheme is more productive of delusions than reliable energy.
For those attuned to the scam, the scheme is sold as a sacrifice for the good of the planet. Remember though, “sacrifice” is the very essence of utopia-mongering. You know, the ends-justify-means stuff. Or, as Nikolai Yezhov, head of Stain’s NKVD (Bolshevik secret police) would put it, “When you chop wood, chips fly.” AOC has interesting company.
Nikolai Yezhov, far right, next to Stalin.
Don’t buy into the racket. Furthering our descent into third-world status won’t alter India’s and China’s belching of CO2. The planet won’t be saved, our grid will resemble Venezuela’s, and we will have proven that a “smart” grid is essentially a “dumb” one. What does that say about us?
Currently, I’m in a spat with Walmart. No, my complaint isn’t about Walmart as an unabashed exploiter of the working poor, the complaint common among illiterate social justice warriors. Au contraire, I’m referring to Walmart’s gradual alignment with the cultural left. Surprise, surprise.
What drew back the curtain was the company’s new policy on guns and ammunition. An emotive reaction to a horrible incident like the one at the El Paso Walmart is understandable, but don’t mistake “understandable” with “reasonable”. For many reasons, much in Walmart’s new stance on guns is absurd. More about this later.
Walmart’s approach is encapsulated in this memo to employees shortly after the El Paso shooting. It can be found here: https://corporate.walmart.com/…/mcmillon-to-associates-our-….
John McMillon, President and CEO, of Walmart.
A Wikipedia search of the memo’s author, John McMillon, President and CEO, uncovered more. Guns and religion are two of the most salient issues in the culture war. And McMillon weighed into both. In 2015, McMillon proclaimed that a “religious freedom” bill before Arkansas Gov. Asa Hutchinson “threatens to undermine the spirit of inclusion present throughout the state of Arkansas and does not reflect the values we proudly uphold”. Cut through the gobbledygook and we see that Walmart has joined the LGBTQ crusade to punish religious dissenters for disagreeing with them. McMillon sounds like Pelosi. Religious freedom laws have become a necessity as government agencies and commissions under the sway of the powerful LGBTQ lobby have targeted private individuals for taking the Bible seriously. Talk to Jack Philips, or take a look at the Houston mayor’s attempt to subpoena pastors’ sermons, or governments’ efforts to force religious organizations to facilitate abortion.
Jack Philips of Masterpiece Cakeshop and the target of legal action by Colorado’s Human Rights Commission. Their actions against Philips were overturned by the U.S. Supreme Court.
But now we have the big cheese at Walmart declaring “inclusion” trumps (no pun intended) “religious freedom”.
A scan of the company’s website will find it littered with the eco-lobby’s hobby-horses. I suspect that the “suits” in charge at Walmart chafe at those viral pics of unsightly-dressed shoppers. They want to upscale the company’s image by showing that they too are like the swank Malibu types with fashionable views to go along with a fashionable look.
A page from the “Global Responsibility” link on walmart.com.
McMillon’s personal history, though, presents a conundrum. He’s a born-again Christian. He’s also a lifer Walmart employee. On the religious angle, he’s confused in trying to mesh his haute couture views with Jesus of Nazareth. As an employee, he’s been in management for at least 20 years, and much of that in corporate management. Somewhere along the line he has absorbed many of the values of a university’s Sociology faculty. It’s a familiar development in the backgrounds of many corporate execs.
Wealthy people in today’s world seem to be attracted to wokeness like a moth to light.
Progressive/left protesters crowd and shout into Rep. Chris Stewart’s (R, Utah) townhall in Salt Lake City, March 31, 2017. George Frey/Getty Images
Our times seem to be especially fraught with some of the worst invective, character assassination, and outbursts of anger bordering on rage. Disruptive chants and slogans have replaced reasoned discourse. I’ve complained about this often. Astonishingly, it has taken place at a time when we are spending trillions on education. As it turns out, mass education hasn’t produced mass wisdom. The situation raises serious questions about our educational system. Are we educating citizens or producing close-minded activists?
Watch this episode of young climate-change activists making demands at a recent (August 22) DNC meeting in San Francisco. The Sunrise Movement is most certainly the Sundown Movement, the sundown of reasoned discourse.
Very little intelligent dialogue takes place, nor is there any evidence of its presence in the short cognitive histories of these young people. They jump from rash conclusion to street activism with nothing prior or between.
The same is true in much of our political landscape. Brusque knee-jerk reactions take the place of thoughtful discussion and civil discourse. I doubt if the groundwork in the form of sufficient knowledge has been made in order to make it possible. So, it’s back to chants, slogans, disruptions, and hectoring. I cringe just thinking about what will happen if Pres. Trump gets the chance to fill another Supreme Court vacancy.
In the case of the above video, the instigator is the previously-mentioned Sunrise Movement. When I look into the faces of these young people, I slump into depression thinking of what our media and schools have done to their minds. All is not lost though. There are still a few golden and older voices in the wilderness, even if they’re no longer with us. Two of those voices belong to the late Milton and Rose Friedman. Their legacy continues in the Free to Choose Network. Airing this month on Amazon Prime Video are “The Real Adam Smith: Ideas That Changed the World” and “Sweden: Lessons for America?”. I viewed both recently.
The first should be a must-see for Pres. Trump and some of the hosts on Fox News. Are you listening Tucker? The second one should be required viewing for – wait, it’s a list – Alexandria Ocasio-Cortez, her political soul mates, the activist base of the Democratic Party, Bernie Sanders, much of the rest of Democratic Party’s wannabee presidents, and those protesters pushing their way into the DNC’s meeting in San Francisco.
Pres. Trump reacts to trade issues in the same way as a developer dealing with his project’s immediate circumstances and the relevant people before him. Tariffs for him are like the rent charged in Trump Tower. It adds to his bottom line. The “trade deficit” is treated as a debt or loss in his books. It isn’t quite that simple. Tariffs are taxes paid by consumers in one way or another. Call it a value-added tax on imports, and operates in like manner. As for the “trade deficit”, it is just one component in the balance of payments. A shortfall in it will lead to surpluses in the other two components: the financial and capital accounts. The importer gets dollars and we get their goods. The dollars end up in financial instruments (bonds, government debt for example) and foreign direct investment.
For Trump, the dollars flow in the pockets of foreign fat cats as they live in, get this, a non-dollar society. How does that work? It doesn’t. The fat cat must translate his dollars into his country’s currency to buy that swank penthouse in Shanghai or keep the Benjamins to spend them on a Montecito mansion. He’ll need renminbis in the PRC or hand over the dollars to the old-moneyed seller in posh Montecito. Another option is parking the money in our government debt. Whichever way, dollars eventually come back here.
Dollars or renminbi (yuan).
Could trade deficits have downsides? Yes, they could. Some regions could fall into depression as they lose out in the international competition. The social effects of economic decline aren’t pretty. Shuttered factories and businesses, distressed neighborhoods, family breakdown, substance abuse, people locked into a cycle of life with few prospects, and welfare dependency are symptoms of the malaise.
Abandoned and dilapidated factory complex in Detroit, Mi.Injecting opioids.
This is one weak spot in the film. Free trade has a ying and yang quality. It works best among countries with free economies, more or less. The role of similar social expectations and norms among nations can’t be counted out. I suspect that the PRC sees trade as another weapon in the long twilight struggle for national and ideological dominance. If their people get richer in the process, that’s icing on the cake. The country is certainly one for us to be very leery.
Nonetheless, the first film – “The Real Adam Smith” – lays out a useful primer for the value of free trade, one that Trump and his courtiers should understand. It might restrain them in their enthusiasm for punishing our literal and natural allies with tariffs. But we can hold two ideas at the same time (per Hillary’s iteration, and true). President-for-life Xi may be Trump’s friend, but he isn’t ours.
The second film – “Sweden: Lessons for America?” – is a necessary corrective to a popular urban myth for self-styled urban sophisticates. They pride themselves in being smarter, more intelligent, and better informed than the rubes. For them, the right side of the political spectrum is populated with Morlocks.
The Morlocks in the 1960 movie, “The Time Machine”.
The prejudice was on full display when Paul McCartney accepted the Library of Congress Gershwin Prize for Popular Song in 2010 and bellowed this insult at ex-President George W. Bush while President Obama and wife were in attendance: “After the last eight years, it’s great to have a president who knows what a library is.”
McCartney and Pres. Obama at the award ceremony, June 2010.
Ironically, the rank condescension of an accomplished pop music star is rooted in a profound ignorance that is common in places like bein pensant circles in Georgetown. For the beautiful people, all the smart people are on the left side of the spectrum. In reality, they’ve adopted John C. Calhoun’s outlook, but the target isn’t African-Americans. It’s anyone who might wear a tool belt, pay a mortgage, attend a Bible-believing church, and just might register Republican. Johan Norberg, the documentary’s host, unwittingly presents proof of the presence in chic quarters of the “Ignorant” stamp on the forehead with a frequency equivalent to tattoos in the crowd of heavy metal concertgoers. Norberg does it by shattering their fantasies about Swedish socialism.
Bernie Sanders has frequently tried to distinguish himself from the brutal socialism in the Soviet Union and Mao’s China. He does it by attaching his socialist vision to Scandinavian “social democracy”, not Pol Pot. Alexandria Ocasio-Cortez , a younger Bernie Sanders with different genitalia, imitates him. Both invoke the experience of “democratic socialism” in Scandinavia.
CNN quotes Bernie Sanders as follows: “I think we should look to countries like Denmark, like Sweden and Norway and learn what they have accomplished for their working people.” The Danes recoil from the “socialist” label. Danish Prime Minister Lars Lokke Rasmussen responded in a speech at Harvard’s Kennedy School of Government, “I would like to make one thing clear. Denmark is far from a socialist planned economy. Denmark is a market economy.”
Danish Prime Minister Lars Lokke Rasmussen at Harvard’s Kennedy School of Government, October 30, 2017.
Bernie and AOC continue to maintain that these countries are working examples of a successful socialism. They try to do so, in spite of the Scandinavian leaders’ rejection of the “socialism” label, by emphasizing “democracy”. It’s rhetorical sleight of hand. The fact of the matter is that the scheme is all about government control. It matters little if the control is exercised through a small claque of ideological oligarchs or a mob of 50% plus one. Private property becomes meaningless if it is at the mercy of any assemblage of 50%-plus-one. “Democracy” is the cover for all sorts of sins.
To say it is “democratic”, also, doesn’t mean the administrative state goes away. Rules to avoid chaos and give direction will have to be promulgated by a commissariat approaching the size of the Soviet Gosplan. The likes of Bernie and AOC have all kinds of social and eco “justice” to pursue. AOC helped author one incoherent version of the Green New Deal and Bernie later came up with his own monstrosity. Whichever of the two routes you take, you’ll end up in the same place: central planning!
Rep. Alexandria Ocasio-Cortez and Sen. Ed Markey (right) speak during a press conference to announce Green New Deal legislation on Feb. 7. Saul Loeb/AFP/Getty Images
Plus, the two carnival barkers act as if nothing has happened since the heyday of Scandinavian socialism in the 1970’s. It’s here that the Swede, Johan Norberg, and “Sweden: Lessons for America?” clears away much of the verbal smog. To make it simple for Bernie and Alexandria, Sweden had a free market economy, lost it, then gained it back. How did they do it? They reined in their “social democracy”. Business taxes were lowered; pensions became contribution-based rather than benefit-based; universal school vouchers were implemented to the point of private high schools becoming half of all high schools; unions became cooperative rather than combative; the vaunted universal health care system is remarkably decentralized with vouchers and a growing number of private healthcare providers; and on and on and on. In many ways they are freer than us.
Bernie wishes that we could be more like Sweden. Oh really, Bernie? I don’t think so. There is one area that should especially draw the ire of Bernie and much of the Dem Party. Sweden makes everyone pay taxes. If you will receive government benefits, you will pay. They don’t have a tax structure that attempts to shoulder the burden of government on the pocketbooks of the wealthy and the businesses who are the engine of jobs. They tried that in the 1970’s and saw their economy slump and businesses flee. Don’t doubt for a moment that Bernie and AOC won’t try to inflict the horrible history on us.
Really, the amazing part of the story is the abject ignorance of the story. Bernie, AOC, and the like, stop history in the 1970’s. Democratic socialism’s failures are deleted from the record so they can ignore Scandinavia’s movement toward free markets. Our democratic socialist icons take the system of its heyday, pretend the failures and reforms didn’t happen, and attribute the successes of its reforms to the socialism of the earlier misbegotten period. This is circularity with a huge bite out of its circumference. It’s nonsense.
In Scandinavia, particularly Sweden, Adam Smith has made a comeback … out of necessity. Socialism failed. In America, especially among the Democratic Party base and millennials, Marx is making a comeback. Go figure. AOC tries to distance herself from Marx to be more politically palatable. So does Bernie. Yet, do they really understand Marx? I kinda doubt it. Marx is socialism with an eschatology. Strip the violent eschatology and you still have socialism. Our lefty politicos want socialism to be elected into power. But does the means of implementation matter? Socialism is socialism and it doesn’t work. Isn’t the emphasis on 50%-plus-one just another attempt at putting lipstick on a pig?
A return to a sound understanding of human nature and the modes of social organization that are attuned to it would be huge step forward in removing needless chatter and destructive venting. I doubt, though, that it will ever get a hearing in today’s toxic climate. Too many people just don’t know a damn thing. Many of them are on the left, but that won”t stop them from being oh so confident. There is nothing more dangerous than an over-confident ignoramus.
Democratic Party presidential contenders debate, 7/30/19.
The morning after last night’s Democratic Party debate I was reading Jay Nordlinger’s story (National Review, 7/29/19) about the Russian dissident Mikhail Khodorkovsky, now in exile in Britain. It brought to mind an inextinguishable need in the enthusiasts of socialism, whether openly declared or as quiet fellow travelers (much of the Democratic presidential field), to constantly point to a non-existent, never-realized form of it. It’s a phantom only possible in the mind’s eye of the true believer and nowhere else. Bernie exhibits it in great bounty, and so does an increasing portion of the party’s activist base, the party’s stable of presidential candidates, and its giddy zealots in Congress (the dimwit Squad for instance). In addition to Stalin’s Socialist Realism in art, we must add Socialist Longing – the longing for a future and purer socialism that somehow will get it right – to the doctrines of the Church of Socialism.
Bernie sounds like he was mentally put into a cryogenic state during his glory days of the 1970’s and 80’s. Mentally, he’s still honeymooning in the Soviet Union. Khodorkovsky mentioned the everywhere-stated party slogan: “The Party solemnly promises that this generation of the Soviet people will live under Communism.” Bernie is stuck there as well. For Bernie, the promise is always in the future, or in a northern European country that, in reality, shed much of its experiment in socialism. Bernie’s socialism is the Sweden of 1970, for example, not the Sweden of today.
Does he know that Sweden isn’t far behind the US in Heritage’s economic freedom rankings? (The US position was bolstered by the recent tax cut law.) Still, Sweden has no minimum wage law, abolished its inheritance tax in 2004, and let go of much of its state-owned enterprises. It’s vaunted public healthcare system is remarkably decentralized, a far cry from Bernie’s sovietized Medicare for All. Bernie’s idea of socialism is the failed version, and can’t point to a functioning one this side of North Korea and Cuba.
Bernie wants to impose something that Sweden ran from. Does he know it? Don’t know, but the longing continues for a decrepit idea in the hope that it will be magically transformed into a success. Bernie is the chief exponent of a made-in-America cargo cult.
One evening I received a call from one of my students in my community college Physical Geography class. He was disappointed in his grade and begged for a higher one. This was his second time around but couldn’t show much improvement. I told him that I couldn’t in good conscience raise his grade as it would be unfair to the other students. He pleaded, “If I don’t get a higher grade, I won’t graduate and I won’t rise to anything in my life.” My heart sank after hearing this. I proceeded to dispel him of the crazy notion. It may be crazy but it is instilled in the young from pre-school on. How did we get to this place?
Somehow, going to college has become our society’s default path to personal advancement. Call it degree inflation. The relentless drumbeat of “college, college, college” has warped public policy with its plethora of taxpayer subsidized financial aid, degraded entry and instructional standards, and produced new “soft science” degree fields that have little bearing on real learning and improved abilities and does much to produce alienated and disgruntled students with a bent for political activism.
Oberlin College students protest a bakery for alleged racism. Later, the college incurred a $44 million judgment for defaming the owners and an employee.
And it fabricates a raft of “disparate impacts”, that old bugbear of civil rights warriors since the 1960’s. College degrees aren’t distributed evenly among social groups, and some groups have protected status in law and court decisions (the Civil Rights Acts and the Griggs decision). As the college degree becomes a de facto test for employment, the brunt will fall disproportionately upon these groups. A new college-industrial complex has taken shape to provide new barriers to job entry and advancement, whose relevance to work performance is more hypothetical than real. The case is laid out beautifully by Frederick M. Hess and J. Grant Addison in National Affairs, “Busting the College-Industrial Complex” (see here).
I suspect that a social bias is at work in this call of “college for all”. Most people making the push come from social strata who predominate in college admissions. It’s how they did it; it’s how their parents did it; it’s how everyone in their well-to-do neighborhood does it. When they get into positions of influence, it’s their preferred prescription for everyone to reach elevated levels of esteem. For them, anything else is for the hoi polloi.
Pres. Obama with daughter Malia, who attends Harvard, and Pres. and Mrs. Clinton with Chelsea who attended Stanford.
Illogic abounds in the process. On the one hand, they complain about the escalating cost of college; on the other, they push as many people as possible into it. It’s as if college advocates want to suspend the relationship between demand and price. You can’t, and when you try, the disjunction will show in other damaging ways.
To put it bluntly, college isn’t for everybody. Nor should it be. Anyway, the heralded thing is debased beyond recognition. Many of our young would be better served if they looked elsewhere for personal growth.
Substitute Gavin Newsom for Brown. Gavin’s got more hair, and its gelled, but the straitjacket fits just as snugly.
I’ve previously posted about the new federal tax law’s possible effects on California and the rest of the deep blue states. Ditto about California’s astronomical gas prices. More has come to light, so the need for “Part II”.
I. California and Blue State Taxes.
April 15 has come and gone. Many Californios – of which I used to be one, like millions of others scattered throughout the country – and others in deep blue states are cutting checks to the IRS instead of receiving refunds. Curtailing SALT (the federal tax subsidy to high-tax states, the Hillary electorate) and the home mortgage interest deduction (HMID), and a few other tax changes, have wreaked havoc with their expectations. Now, they really know what it means to live in a high-tax state.
Michael Ramirez / Weekly Standard
First, lower refunds across the country are expected since withholding was reduced in each one of your paychecks. Paychecks were bigger as the feds took less. We could go back to the old system of the feds lopping off more from each one of your paychecks and giving a pittance back at the end of the tax year. Let’s face it; withholding is a scam.
Second, the caterwauling from California about getting less from the feds than they send to DC has reached a fever pitch. The only problem: it probably isn’t true. George Skelton in the LA Times raised serious doubts, as does Ann Hollingshead with the Legislative Analyst’s Office and the Tax Foundation (see here).
The old wives’ tale was born of a flawed study with gimmicky assumptions. Among other things, not properly accounted was California’s peculiar demography. The state’s age pyramid is distorted with a mass of the young and proportionally fewer elderly. I suspect that’s probably due to massive foreign immigration over the past 5 decades and the hemorrhaging of retirees to other environs. As a result, the accounting contains less federal Social Security and Medicare payments. How much of this is due to the policies championed by the state’s ruling party? Hmmmm, I wonder.
Also, the military draw down since the end of the Cold War didn’t help. Still, in the end, the accounting gimmicks in the earlier study exaggerated the monies going to DC and undervalued the monies to the state. It’s just more proof of Disraeli’s old line: “There are three kinds of lies: lies, damned lies, and statistics.”
As for the clamps on the HMID, any adverse effects can be traced to California foot-shooting. Real estate is very pricey in the state, and getting pricier. It’s a good bet that much of the state’s middle class have mortgages that greatly exceed the limits in the tax law. Why is that? You need look no further than the Leviathan of taxes and regulations smothering housing in the state. Eco-craziness and taxaholism leaves a hangover. It comes in the form of homeless encampments – the usefulness of human poop maps (SF, but applicable elsewhere) as a result – skyrocketing rents, and a strangulation of supply.
Aiming a cocked-and-loaded gun at your foot is an appropriate metaphor.
II. California’s Gas Prices.
Self-serve gasoline prices at Chevron in Malibu exceed $4 a gallon mark on April 15. (Al Seib / Los Angeles Times)
Once again, foot-shooting reigns supreme regarding the state’s astronomically high gas prices. But the mandarins of the ruling party are looking for scapegoats. A Berkeley prof of Business Administration, Severin Borenstein, gave the goons ammunition by apparently identifying a 24-cent “surcharge”, an amount that he couldn’t account for. The near-socialist ruling party didn’t need much of an excuse to go on a jihad against capitalism. Borenstein gave them one.
Prof. Severin Borenstein, UC Berkeley
Well, Severin, here’s one factor that you didn’t think of: the state has so mangled the market for fuel that supply and demand have nowhere to reach but up. Sorry, Newsom and the other chiefs of the ruling party, you can’t suspend the laws of supply of demand like you tried with immigration law. There’s no such thing as a sanctuary from supply and demand. The Soviets took that route to prosperity, and discovered poverty and social collapse.
The peculiar CARBOB blend, cap-and-trade, greenie taxes, and the constant finagling of CARB (Ca. Air Resources Board) have given the state the least consumer-friendly fuel market in the country. Such markets still have supply and demand. It’s just that they intersect at a place above almost any red state. Call it the lefty “surcharge”.
A beleaguered California resident?
This postscript to previous posts only makes the plight of blue states bleaker. The fact that this is democratically-chosen bleakness doesn’t alter the reality. If you want the clowns, accept what happens when you’re ruled by clowns.
And that includes sending more money to the state, any metroplex in the state, and DC. And add to it the high prices for almost anything, including gas. I guess that you get what you vote for.
A Berkeley economist has got the “woke” doofuses running the California madhouse – aka state capitol – in a tizzy over the state’s high gas prices. The number cruncher gave them an excuse for a pogrom [mass violence against a minority] against the oil industry in the state, shape-shifting blame from themselves to the buccaneers of capitalism. Now that’s quite a trick.
Gasoline prices have jumped nearly 60 cents in the past month in Southern California. The average price of $4.30 for a gallon of self-serve regular in Los Angeles County Thursday is the highest in California. The statewide average is $4.20 a gallon. (ED JOYCE/KPCC)
Below is a map of current gas prices by county. Notice the flaming red of California.
Let me count the ways that the screwballs – not Exxon/Mobil – have shafted the California motorist, starting with cap-and-trade. Back in 2015, people knew that the thing would hike fuel prices 11-13 cents per gallon by its lonesome. The dream was to dent global warming; the reality is to dent residents’ pocketbooks. (see here)
Let’s not forget that the state wacks each gallon of gas with a 41.7 cents/gal. levy – soon to rise to 43.7 cents. Couple that with the 18.4 cents federal tax and a commuter starts right out of the gate with each squeeze of the pump handle over 61 cents in the hole, second highest in the nation.
California seems to be always red on these matters. This map sets the combined gas tax burden in the state at almost 66 cents per gallon as of 2015:
It doesn’t stop there. California demands boutique fuels: unique fuel blends just for the not-so-golden state. In fuel-speak, it’s called CARBOB and according to experts, “CARBOB is even more expensive, and is the main reason why California gasoline prices are typically higher than anywhere else in the country.” (see here)
The result is a stunted and mangled market within the narrow confines of one state. Those kind of markets don’t work very well. You can’t impose some of the highest gas taxes, pursue the fantasy of counteracting China and India with California’s adherence to a cap-and-trade straitjacket, and play footsie with fuel blends and not get jacked at the pump. Get real.
It’s simple economics, or – better yet – it’s simple math. I guess it goes to the difference between knowing economics and math and actually believing in them. Apparently, some people think that they can suspend the rules with no ill-effects.
How about a mandatory blood test for those folks in the clown car called the California State Legislature?
Shriner clowns or the California State Legislature in a parade?
I was listening to Pandora’s “Cool Crooners” station this morning. A thought occurred: What makes Frank Sinatra, Frankie Valli and the Four Seasons, Dean Martin, Nat King Cole, and Tony Bennett, among others, stand head and shoulders above your uncle Fred who just so happens to have a good voice as he works at being a very good CPA? Is their success an accident? Certainly, many factors account for their fame, but in the hustle and bustle of life they congealed into excellence. They had a special talent.
Joseph Schumpeter, Austrian economist
What’s this got to do with economics? A lot. The economist Joseph Schumpeter made it abundantly clear. The economy rides on the backs of a few very talented risk takers, whether it be Henry Ford or Jeff Bezos. The accomplished few weren’t just a collection of lucky mediocrities. At the core, this is a remarkably different story than the one peddled by the Democrats.
To justify their love of the state – the key plank of Progressivism – the Dems have convinced themselves of the bottom-up falsehood. In a nutshell, their favorite suggestion for the economic riddle is to confiscate from the rich, deposit the takings in the government, and then have public employees scatter a portion of the proceeds to the hoi polloi. Leaving aside the absorption of a sizable slice of the booty by a hungry bureaucracy and the political chicanery that is endemic to government, the gimmick remains pure, unadulterated economic nonsense.
It’s as if the Dems will create jobs by punishing job-creators. That’s right, they believe that they can confiscate from the people making thousands of jobs and expect the poorer rungs to more than take up the slack with their limited and desperate consumer spending. The rich guy and gal (or the 38 other genders) can’t help creating jobs, even if they fritter away their gains on yachts, private jets, and California coastal real estate. Talk to the guys and gals building the mansions, making the yachts and fancy jets, or the hirelings who maintain or captain them. How many jobs can we expect from a Section 8 housing recipient?
Section 8 housing recipient
Let’s face it, the donkey party isn’t about economic sense. They’re all about class identity – as well as the other identities on their long scroll – and class victimhood. They’ve got too much Marx rolling around in their heads. In the end, the scheme won’t pencil out. These materialist levelers forget that the economic pie isn’t a static thing. Yes, some peoples’ slice grows bigger than others, but in reality, all slices expand. That’s the beauty of a growing pie. The pie is dynamic, not static.
The Lefty alternative is like what happens when the Chinese bound the feet of young girls. Everything gets mangled. Specifically, it’s a mad scramble to take as much for yourself from the only treasure chest in the room. The government becomes the weapon to wield against your rivals. In the end, you’ll find the chest empty, and more than that. It just got smaller.
Now you end up like North Korea. What rich person – you know, the guy or gal who made all those jobs possible in the first place – will wait around for Bernie Sanders, et al, to confiscate their gains? The Sanders crowd will only be able to do it once. The next year, the successful are gone –- along with the jobs.
The UK called it the “brain drain” of the 50’s, 60’s and 70’s. Many talented Brits escaped their country’s King Kong taxman by fleeing to the US. The Beatles even made a song about it (George Harrison’s “Taxman”). Nancy Pelosi and company want to replicate the Labor Party’s economic reign of terror.
For Trump’s America, the proof is in the pudding. CBO numbers on the post-Republican tax cut economy are out. The tax cuts are a financial winner; unemployment is at historic lows (for all of the Democrats’ favorite identities); GDP is growing faster than Paul Krugman’s reputation is declining; wages are rising; and corporate profits are bountiful enough to demand more workers – i.e., more jobs and higher pay – and pay more lucrative dividends. Either way, it all adds up to an economic renaissance.
It’s the same playbook of the 1946/1948 Republican Congresses, JFK, and Reagan. The only response of the Democrats is the caterwauling about the filthy rich, with their emphasis on “filthy”. They deserve to be relegated to the place that used to be reserved for the psychotics, but, today, congregate in the tent cities of the Dems’ strongholds in the LA-to-Seattle corridor.
