Friday, October 03, 2008

Bail out who?

If you live in a trendy or desirable neighborhood, you know the story: "I can't believe the Simpson place sold for $250,000! Of course, it was those transferees from California that bought it. Boy, did they get snookered!"

California has been suffering from a flight of productive citizens for years now as they tried to escape high prices, confiscatory taxes, and regulations that make the adjective "Byzantine" look completely inadequate. Unfortunately, rather than making them change currencies at the state border, we allowed them to spend their California Monopoly money and candy bar wrappers in the rest of the country as though it were real cash.

And make no mistake, Monopoly money is what it is. California has experienced Wiemar-like inflation, where grocery store cashiers make $12.50/hr, rookie police officers pull down $70k/yr, and the most depressing little 2br/1ba crackerbox costs a cool quarter mil. No wonder that they have a bizarre effect on local housing prices when they're allowed to show up in Des Moines and spend it as though it were real dollars.

Now that the goose that laid the golden eggs has flown the state to escape being eaten, the Cali .gov still has to pass out all the gold houses and rocket cars that it promised voters, and there just aren't the taxes to do it. What to do?

It's obvious! Beg Uncle Sucker for the money! If it works for the Masters of the Universe on Wall Street, it should work for the Governator, too. Just ask for Federal tax dollars from working mothers in Dubuque and Peoria, and that should prop up the decaying edifice of crazy social programs and no-connection-to-reality public servant salaries that are the rule on the Left Coast these days.

16 comments:

Anonymous said...

Well-said!

cheers, erich

Nathan Brindle said...

Yes, California should be left to rot and finally fall off into the ocean as it should have years ago.

Brian J. said...

But California doesn't get a whole dollar back from the Federal government for every dollar in taxes it sends! Dammit, Wyoming is supposed to be subsidizing California, not the other way around!

From each according to their bitter, gun-clingingness to each according to their sheer hipness.

Anonymous said...

Well living here in Cali, I would resent it if it fell into the ocean. Almost as much as I resent its gun laws, but I think that working in the system is better than abandoning it. That being said, My wife bought a house that she could afford and with a 30y fixed. I think that anyone that cannot afford their house should lose it and so be it. Then I could afford to move, or get more houses to rent out to others. And do not hate California so much, for with out it the interstate system would be in a lot worse shape than it is now. Plus you have to store your hippies somewhere, and trust me there are flyover areas in this state and they are strong Republican areas and they donate a lot to our causes.

All that being said, yeah, California is kooky, but I am stuck here, and there are a lot worse places to be stuck.

Anonymous said...

California gets what they pay for. They vote to harbor illegal immigrants in SF - so let SF bail out all of these extra costs. They won't allow for the forestry service to maintain the vegetation in the forests to reduce forest fires - driving up the costs of fire season - so let them fund their expensive fire fighting bill.

The net - let the liberal, uber-rich big mouthed Hollywood airheads put their money where their mouth is and bail out their state. After all, they hid behind the biggest tax shelters in the world, they can afford it.

Nathan Brindle said...

Well, that's true: California is a great place to store hippies.

Unfortunately the prevailing winds still seem to waft the stink into the heartland.

Jenny said...

Ugh..

Seems to me we have two choices for the "bought more than we could pay for" hole we've been digging since LBJ (at least) - deal with the horrific consequences of it a piece at a time, or keep tossing it all to the feds so it can all come down at once.

It's increasingly looking like the latter is gonna be the way we'll choose*. Which will make for some very interesting times in another ten years.

Countries change character markedly in times like that - it will be interesting to see which way we go.






* Among most folks casting their votes, I think that's just short term thinking. I can't help but think there's a few hoping for the cards to fall so they can play FDR again though.

John Stephens said...

Head tax on illegals and hippies, problem solved. Of course you'd need to impose a bag limit, so there'd be some left by the time us East Coast hunters got there.

MJ said...

"And make no mistake, Monopoly money is what it is. California has experienced Wiemar-like inflation, where grocery store cashiers make $12.50/hr, rookie police officers pull down $70k/yr, and the most depressing little 2br/1ba crackerbox costs a cool quarter mil. No wonder that they have a bizarre effect on local housing prices when they're allowed to show up in Des Moines and spend it as though it were real dollars."

Uh... that's possibly true in Beverly Hills/West LA/Santa Monica. It's certainly not true in South Central, the Central Valley, NorCal, the low deserts, or even in the Bay Area outside of central San Francisco. Hyperbole on the level of calling everyone in Iowa farmers, if you will.

The "goose that laid the golden eggs" hasn't "escaped" at all. California's economy is strong, a beacon of light over the darkness that's settled over much of this country's economy. It's the state that's out of money, and its debt is hardly something new, hardly something that just appeared out of thin air because of the overall economic crisis. Since the days before Gray Davis, the state of California has been digging a great money hole for itself (not unlike the United States itself), and that is why the Governator is asking for money. Because the liquid debt the state has been shuffling around is drying up as the banks stop lending so easily. It's a mirror of what will happen on a nationwide basis if this economic crisis isn't solved now.

And America can't ask the Federal Reserve to act as a parachute. Who do you think the federal government would have to turn to if it weren't solved?

Anyway, doubtless I'm wasting my effort hand-holding California-haters through understanding why Arnold made this request. Remind me the next time Iowa has a problem to write my congressperson about why I don't think they need my help.

Tam said...

"Remind me the next time Iowa has a problem to write my congressperson about why I don't think they need my help."

Are you expecting me to disagree? Iowans deserve Californian's dollars to pay their state level debts no more than the reverse.

Anonymous said...

Californian's totally screwed up the housing market here in Vegas. Bastards.Hopefully I'll be able to finally buy a house in a year or two after it all crashes.

shortbus said...

Poof, what are your other two wishes?
http://online.wsj.com/article/SB122305751973202869.html?mod=article-outset-box
:)

Sigivald said...

I don't think "twice minimum wage" is exactly evidence of Weimar-era inflation.

(And mj is certainly right that most of California, by area if not population, is not suffering from price and wage issues such as affect the Bay and the LA area.

I don't think crackerbox houses in Redding or Yreka cost a quarter of a million dollars.

Besides, California property value is "real" value as long as someone's willing to buy at the price someone's selling at; it's no different from the value of property in Kansas or Utah or Arkansas.

It's worth more because there are still, for some reason, lots and lots of jobs in California that pay money good enough to make it worthwhile to live there, and people like the climate.)

BobG said...

"There is science, logic, reason; there is thought verified by experience. And then there is California."
-Edward Abbey

Anonymous said...

Agreed. But I suppose you mean Weimar, not Wiemar.

Tam said...

Yeah. It's tough for me to write this stuff as a functional illiterate; it makes typos hard to catch...