California: Big Government Cannot Save You

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The Failed Promises of the Socialist Utopia

 

Big, Centralized Government doesn't solve problems; it creates large unintended consequences.  

 

California state government is a perfect example of socialism gone amuck, the failures include: the huge Health and Human Services budget, underperforming schools, the state's role in the Student Loan Crisis, businesses (employers) leaving the state, ridiculous infrastructure spending, the demise of agricultural production, and the wildfire crisis. This list is not all inclusive, there many more programs in which centralized control has failed the citizens of California.

The Huge Health and Human Services Budget: $149.3 billion (47%) of the state budget goes to providing basic human services. And yet the state has the largest poverty problem in the nation; and the problem is growing larger, not smaller. State giveaways do not solve the social issue they are intended to resolve; they are like a bandaid covering a wound that will not heal. The solution is not the continued pouring of tax dollars without the intended outcome of moving people off of social safety nets; i.e., to solve such issues as poverty, homelessness, food security, and the healthcare crisis.  

Underperforming Schools: Over the past 50 years, there has been a steady decline in the quality of the California public education system, moving from being one of the best in the world to being nearly the worst in the country. This is not because of low teacher pay, the teachers union pension is a major contributor to the state's trillion dollar unfunded liability issue. The issue is centralized regulation with few options, and, pushing an aggressive liberal social agenda rather than educating children. 

The Student Loan Crisis: The student loan industry is exploiting citizens with over $1.6 trillion in debt; quite easily $3 trillion in short order. It is quickly becoming the largest form of debt in the country and it is causing major shifts in our cultural norms (e.g., home ownership, marriage, child rearing); it is a crisis. This crisis is the responsibility of both federal and state governments. What started the crisis is a matter of debate, but the major factors are states' reduction in their higher education budget, availability of "free" money for college, and the state university systems not offering scholarships from their fat endowments. In other words, the monies the state has taken out of higher education budgets, or hoarded in endowments, is riding on the backs of its citizens as crushing debt.

Businesses Leaving the State: Small business comprise more than 99% of the state's businesses and employs 50% of its workforce. With that said, not only do small businesses need to survive the high business failure rate, generally about 66% in the first ten years, they must deal with one of the most oppressive states toward business. Not only are the taxes among the highest in the nation, California has onerous business regulations. More than 1,400 businesses exit each year to states like Florida and Texas.

Ridiculous Infrastructure Spending: Everyone knows about the crumbling roads and bridges while Californians pay one the highest per gallon gas taxes and car registration fees. Only after being able to defeat the measure to repeal the latest tax increase, did the state open up the purse strings and start major work on roads and bridges for a little while (i.e., Gavin Newsom recently directed monies from the gas tax be allocated to climate change programs). But, the biggest boondoggle of them all is the failed $900 billion high speed rail project. Rather than completing the conventional rail joining NorCal and SoCal on the coast with lateral lines going inland, the state opted for this major pork project benefiting powerful legislators' districts, and rewarding power brokers and financial political supporters. 

The Demise of Agricultural Production: Some of the richest farmland in the world exists in California. And yet, agriculture represents less than 2% of the state's $3 trillion economy; the amount of farmland in California has steadily decreased since 1960. Cash crops are king: cannabis, nut and fruit trees, grass-fed cattle, dairy cows, cotton, rice, strawberries, and grape production (huge input for state wineries) rule supreme. Partly because drought in recent years, but mainly because of inadequate water management, increased regulation, and taxation by the state, the economics of farming in California have shifted. The result, a small percentage of the farming is traditional row crops, outside of land leased to grow crops used in processed food production. In fact, the largest portion of the produce at the state's grocery stores is shipped from Mexico, Central and South America. 

The Wildfire Crisis: Yes, the drought is a contributor to the wildfire crisis. But it's the state's regulation of forestry practices that is the primary factor for the uptick in wildfires. For more than 100 years, California's hostile regulation of the forest industry has led to overgrowth and dead wood for wildfire fodder. The good news is nature is taking care of the state's forest problem. But at what cost, each year lives are lost and billions of dollars in homes, businesses, and natural resources are destroyed by wildfires. It's convenient the state has been able to use PG&E as a scapegoat to cover their transgressions. To be sure, PG&E bears some responsibility for improper maintenance of their infrastructure... but the state bear a bigger portion of the responsibility. 

Summary

 

In general, large centralized, one size fits all, government programs are ineffective. Solutions require the flexibility to be groomed at the local level; creating an interdependence between government, business, and nonprofit organizations. A program that works in one locality may not work, for many reasons, in other locales. Additionally, large government programs are used to seize and maintain power and control minority factions within the state.


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