California Declares a Fiscal Crisis! You Think?

After various special sessions of the Legislature, assorted cries from the heart of our Governor, and the usual media sensationalism about an amorphous “they” who did this to us, California is once again broke.

Very broke, it seems, this time around. The only mystery is whether the annual shortfall is to the tune of $20, $25, or $30 billion. (Remember, we cannot print money, though I suppose we could sell bonds to the Chinese in hopes of undercutting the Fed; or we could ask everyone of us 30 million-plus residents to donate $1,000 to Sacramento this year—and in fact every year.)

There are no longer many people here of character and civic-mindedness stepping forward to inform us that we have spent like crazy; and to suggest a modest return to per capita spending levels, adjusted for inflation, of about 5-6 years ago; and to create a more attractive climate for businesses to operate and relocate here. Instead, there will be a common narrative that ensues, one that I would call the five-step, since in my fifty-five years in the state it is becoming all too predictable.

1. The Reality. No one will discuss the mass exodus of a particular type of taxpayer. Thousands of highly-educated, highly-paid Californians the last decades have cashed out their ample housing equities, and left the state due to high income and sales taxes, poor schools, high crime, and an unworkable bureaucracy. We don't seem to regret why they leave, and whether it says as much about us as them. Many move to nearby low or no income-tax Nevada, Utah, and Oregon where they can commute, work over the Internet, and take advantage of far cheaper costs, but still enjoy a Western-state informal lifestyle. Anyone who flies out of the state gets a good aerial view of these expatriate border cities, these post-California communities—strange phenomena that seem to be referenda on relative state government.

There is no longer the nucleus for any organized tax-payer revolt as in the 1970s; so when the mob-like chorus chants 'Soak the rich!' and the “they should pay” rhetoric heats up, the targeted now flee rather than fight.

The number of those with bachelor’s degrees who flee is made up by those without high school diplomas who arrive. The state is tailor-made to destroy the 200-acre farmer or independent small businessperson who deals with new myriads of state regulations, fees, income and sales taxes, mandates and environmental, as well as social, and cultural disdain.

And California is tailor-made to enhance his law-suit-minded employee who slips on his shop floor; the official in the state-owned car who shows up to fine him for the inorganic two-by-four spotted in the farm brush pile; and the drunk driver without registration, license or insurance who plows through his orchard, fleeing his wrecked car carcass and thousands in damages behind—without punishment but with a possible legal grievance for the farmer’s pipeline standpipe being in his way, some thirty yards in from the road. I kid you not.

I say all this sine ira et furore, because it is a done-deal, and I accept that I used to know dozens of such entrepreneurs and now know very few in agriculture. And in the place of the occasional mosquito abatement officer, I encounter a plethora of ubiquitous mobile clerks. A call to an EPA officer might get through much more quickly than in extremis to a constable. We need a pause and philosophical reexamination of what creates and what monitors and regulates wealth.

2. The Taboo. No one is to mention the presence of several million illegal aliens in the state that might make California’s meltdown a little bit more severe than say Montana’s or Utah’s. To do so is to be labeled racist, nativist, and indulging in illiberal scapegoating, even though it is a question of funds not culture, much less race. We dare not explore the reality that very hard-working young Oaxacans come illegally across the border at 18, work terribly hard for 20 years and contribute mightily to the economy, but by their late thirties and forties—still often without legality, without a high-school diploma, and without English—either become mired in low-income, perennial entry-level jobs, or are finally worn out by sending half their hourly wages back to Mexico, or have been cited, arrested, or jailed for various activities, or have become injured in jobs on ladders and on their knees that take a terrible yearly toll on one’s body, or due to smoking, dietary changes, psychological stresses, or alcohol have premature serious illnesses, or have several children in need of special bilingual prep or anti-poverty program attention. Any illegal alien is one tragedy, or chance mistake away from financial oblivion.

There are thousands of exceptions to that narrative (and they are now the hope of the state), but it is an accurate enough politically-incorrect generalization to explain at least some of the state’s structured deficits. Far better it would be to let in a finite number of Mexican nationals, do it legally, try to insist on high school diplomas, and ensure there are citizen sponsors on this side of the border.