Southern California is renowned for its delightful weather, particularly along the coast. The sun shines vibrantly each day, humidity is low, and a refreshing breeze from the Pacific creates an idyllic atmosphere. It’s hard to match this charm.
However, every beautiful rose has its thorns, and Southern California is no exception. The region grapples with challenges like traffic congestion, high living costs, and significant urban decay, which detract from its allure.
Yet, it’s essential to recognize that things could be much worse. State governance, taxation, and the general public’s decisions have taken a turn for the worse. They often hinder the financial rewards of hard work by taxing those who earn and reallocating funds to failing ventures, such as bullet trains and unsustainable public pensions, which significantly drain wealth.
If there’s one place where the insatiable greed of the political class rivals that of anywhere else, it might just be California. Their appetite for wealth redistribution knows no bounds. No matter how much they extract, it’s never sufficient, and they continue to overspend the money they’ve taken from others.
California’s current state is a stark contrast to its past. Not too long ago, governance was minimal, and the expansive open spaces allowed trailblazers and innovators the freedom to thrive.
Those Were the Days
Take, for example, the Los Angeles Basin before World War II. In those pre-concrete days, the area attracted a colorful mix of eccentrics and visionaries. Howard Hughes, for instance, embodied the spirit of innovation, dreaming up aircraft designs and testing them, often with spectacular failures, in Beverly Hills.
Consider also Simon Rodia, an Italian immigrant, who inexplicably spent 33 years constructing the towering Watts Towers in his backyard amidst the Watts neighborhood. Today, these once-derided structures stand as a National Historic Landmark.
Then there was Griffith J. Griffith, a mining magnate whose infamy grew after he shot his wife in a Santa Monica hotel. To atone for his crime—and to reduce his prison sentence from a potential life term—Griffith donated vast land for Griffith Park and funded the city observatory, ensuring that some green spaces remain amidst urban sprawl.
Back then, government was limited, and resources felt abundant, ushering in a lengthy property boom that lasted through the subsequent fifty years.
Even the most outlandish business ideas had a shot at success. For instance, John Clearman purchased an old mail service boat, transported it from Long Beach Harbor, and transformed it into a thriving hotdog stand for commuters in the San Gabriel Valley.
Those days are long past, and nostalgia fills the void for what once was…
Jerry’s Definitive Moonshot
Today, the collective mindset of California’s government and its electorate often seems misguided. They persistently enact damaging policies characterized by elevated taxes and exorbitant living costs.
These decisions have continuously hindered the state’s progress, causing an exodus of some of its most talented and industrious residents.
As noted by Tom Gray and Robert Scardamalia in their report, The Great California Exodus: A Closer Look, individuals have migrated in large numbers to states like Texas, Nevada, and Arizona over the last 20 years, attracted by better job prospects and lower taxes. On average, California has seen a domestic out-migration of approximately 225,000 people annually, resulting in lost income of $5.67 billion to Nevada, $4.96 billion to Arizona, and $4.07 billion to Texas.
During this same period, California’s government has persisted in raising taxes. However, these increases merely embolden “public servants” in Sacramento, leading to unchecked spending. From 2000 to 2010, California’s governmental expenditures rose 42 percent per capita without improving the state’s condition.
Then there’s Governor Jerry Brown, a familiar figure who previously served in the late 1970s, earning the nickname “Governor Moonbeam” for his unique ability to capture the attention of the public. Since resuming office in 2011, he has continued to engage this voter base.
Most recently, Governor Brown orchestrated what can only be described as a definitive moonshot. He convinced voters to approve Proposition 30, which raised both sales and income taxes under the guise of funding education and public safety. This legislation allowed Sacramento to reallocate existing educational funds for other purposes, compensating with the new tax revenue.
Analysts predict that the additional funding from Proposition 30 will reduce the projected budget deficit for the 2013 Fiscal Year to $1.9 billion, down from an earlier estimate of $15.7 billion. Nevertheless, history shows that such plans often do not unfold as intended, and it’s likely that the impending California exodus will redirect tax revenue to neighboring states that appreciate their citizens.
Perhaps one day the state will make a course correction. Yet, that remains to be seen.
Sincerely,
MN Gordon
for Economic Prism
