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Ed Driscoll

“California, Here We Come”

September 29th, 2009 - 12:49 am

In the New York Post, E.J. McMahon writes:

How much, specifically, should the [New York State] Legislature reduce school aid? How about forcing action, for once, on Medicaid? And what’s happened to the promised cost-saving reforms to New York’s unaffordably generous public pensions?

Paterson keeps talking about the need for reductions, but has yet to publicly propose any. Instead, he’s been squandering precious time, claiming he would prefer to reach some budgetary consensus with the nation’s most discredited and dysfunctional Legislature.

The resulting leadership vacuum all but sucked the air out of the Red Room during last week’s “leaders’ meeting” at the state Capitol.

“I am asking that the Legislature find ways to address this structural [budget] defect before we get into very, very serous trouble,” Paterson said.

But it’s obvious that New York is already in “very, very serious trouble.” And Paterson by now should have done much more to start addressing it.

After all, in the absence of a specific gubernatorial proposal for balancing the budget, the Assembly and Senate have had nothing to react to — and no reason to convene the special session that the governor says is essential.

The stage for this looming disaster was set by the April deal on the 2009-10 budget. Paterson and his fellow Democrats in the Legislature agreed to a noxious stew of tax and fee increases, temporary federal aid and increased spending — all in the face of a severe economic downturn whose full impact had yet to be felt in New York.

Surprise, surprise: The tax hikes have brought in lower-than-projected revenues as the economy continued to weaken. Passage of a federal health-care-reform bill could make matters worse — either by raising federal tax rates on New York’s high-income households, or by increasing the state’s Medicaid spending or some combination of both.

Meanwhile, Paterson disclosed last week that the estimate of this year’s deficit has risen from $2.1 billion to $3 billion. His budget-crunchers were already projecting some cash-flow problems under the lower number; at this rate, New York will be stiffing vendors and inviting a credit-rating downgrade by spring.

California, here we come.

And speaking of which, the No Oil for Pacifists blog notes that “California Government Admits Regulations Kill Huge Numbers of Jobs”:

Regulations on small businesses in California have cost the state 3.8 million jobs, according to a report quietly released by Gov. Arnold Schwarzenegger’s office this week.

The report, authored by Sanjay B. Varshney, the dean of the business school at California State University Sacramento and Dennis H. Tootelian, a marketing professor at Sacramento State, totaled the “direct, indirect and induced” costs of regulation to calculate the [burden of] $134,122 per small business in 2007 and caused about one job loss per small business.

“This study provides the most comprehensive and complete analysis of the total regulatory burden in California,” the authors wrote in their findings.

They relied on data compiled by Forbes and used a complicated formula to calculate the primary and secondary costs of regulations. They concede that “much more work will need to be done to determine the exact nature of potential remedies to the regulatory burden.”

So regulations cost the average small business $134 thousand dollars? How about some examples of that? Recall this from June:

Bureaucrat scuffs dream of homeless shoe shiner

He sleeps under a bridge, washes in a public bathroom and was panhandling for booze money 11 months ago, but now Larry Moore is the best-dressed shoeshine man in the city. When he gets up from his cardboard mattress, he puts on a coat and tie. It’s a reminder of how he has turned things around.

In fact, until last week it looked like Moore was going to have saved enough money to rent a room and get off the street for the first time in six years. But then, in a breathtakingly clueless move, an official for the Department of Public Works told Moore that he has to fork over the money he saved for his first month’s rent to purchase a $491 sidewalk vendor permit.

“I had $573 ready to go,” Moore said, who needs $600 for the rent. “This tore that up. But I’ve been homeless for six years. Another six weeks isn’t going to kill me.”

Even the bootstrapping homeless sidewalk vendor has to pay off the Government Mafia. It is far easier for him to be homeless in San Francisco, and when he tries to help himself, some bureaucrat has to push him down. Indeed, the homeless flock to San Francisco. Just one reason why California has nearly a third of the welfare recipients in the country.

So, the bottom line is that the California legislature manufactures job-killing regulations, then has to create the biggest welfare program in the country to care for the out-of-work and ne’er do wells. These people have too much time, too much influence and too little sense.

There is hope — a movement in California to change the full-time legislature to a part-time legislature. Of course, nothing energizes government workers like the thought they might lose their plushy do-nothing jobs.

Prediction: Part Time Legislature in a Landslide next November!

I hope so, but given this state’s race to the bottom, I wouldn’t count on it. No Oil For Pacifists adds, “The total California labor force stands at 18.3 million people, down from an all time high of 18.5 million, as people have started to leave the state for who knows where.”

That’s the subject of this amusing San Diego Union-Tribune cartoon, found via Theo Spark — though in terms of states with the friendliest business climates, corporations would be better off in not heading all the way east, in contradistinction to the time of Horace Greeley:

theo3

Given enviropocalyptic policies such as this, who can blame them?

And finally, in the midst of an economic crisis that’s virtually entirely created by rapacious and out of control government regulations, the New York Times frets the failure of socialism to catch on even more than it already has in the original blue states.