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Kalifornia Leading The Way Over The Cliff
#1
California is really a Study in Economic Stupidity.  It just passed a voter's Initiative which allows for the raising of taxes.  And its certainly a sure-fired way to reach insolvency even faster than before.  

But even before the vote, my hero Dr. Walter E. Williams had a modest proposal for the folks in La-La land, in order to keep the citizenry on the Plantation.  Here it is.

Quote:A Modest Proposal

[Image: 800px-Lublin_-_Majdanek_-_008_-_Barbed_w...htower.jpg]

California was once the land of opportunity, but it is going down the tubes. Several of California’s prominent cities have declared bankruptcy, such as Vallejo, Stockton, Mammoth Lakes and San Bernardino. Others are on the precipice, and that includes Los Angeles, California’s largest city. California’s 2012 budget deficit is expected to top $28 billion, and its state debt is $618 billion. That’s more than twice the size of New York‘s state debt, which itself is the second-highest in the nation.

           Democrats control California’s Legislature, and its governor, Jerry Brown, is a Democrat. California is home to some of America’s richest people and companies. It would then appear that the liberals' solution to deficit and debt would be easy. They need only to raise taxes on California’s rich to balance the budget and pay down the debt -- or, as President Barack Obama would say, make the rich pay their fair share.

           The downside to such a tax strategy is the fact that people are already leaving California in great numbers. According to a Manhattan Institute study, “The Great California Exodus: A Closer Look,” by Thomas Gray and Robert Scardamalia (October 2012), roughly 225,000 residents leave California each year -- and have done so for the past 10 years. They take their money with them. Using census and Internal Revenue Service data, Gray and Scardamalia estimate that California’s out-migration results in large shares of income going to other states, mostly to Nevada ($5.67 billion), Arizona ($4.96 billion), Texas ($4.07 billion) and Oregon ($3.85 billion). That’s the problem. California politicians can fleece people in 2012, but there’s no guarantee that they can do the same in 2013 and later years; people can leave. Also, keep in mind that rich people didn’t become rich by being stupid. They have ingenious ways to hide their money.

           California has one-eighth of the nation's population but one-third of its welfare recipients. According to Businessweek, "it is one of the few states that continue to provide welfare checks for children once their parents are no longer eligible." There’s nothing new about the handout strategy. As far back as 140 B.C., Roman politicians found that the way to win votes is to give out cheap food and entertainment, what came to be known as “bread and circuses.”

           Given the widespread contempt for personal liberty and constitutional values, there might be a way for California politicians to solve their fiscal mess. They can simply stop wealthy people from leaving the state or, alternatively, like some Third World nations, set limits on the amount of assets a resident can take out of the state. This would surely be within their jurisdiction and would not raise any constitutional issues, because it would serve a compelling state purpose. In other words, if California were to set up border controls to stop people, as East Germans did at Checkpoint Charlie, before they cross the state line, such action would be protected by the 10th Amendment.

           The fact that many Californians have managed to get their assets out of the state complicates the issue. Article 1, Section 8 of the United States Constitution authorizes Congress “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” This is known as the commerce clause. There’s no question that people who pull up stakes and leave California affect interstate commerce; California has less tax revenue, and recipient states have more. What California Attorney General Kamala D. Harris might do is sue Nevada, Arizona, Texas and Oregon in the federal courts for enticing, through lower taxes and less onerous regulations, wealthy California taxpayers.

           Were California to take such measures and have a modicum of success, one wonders how many Americans would be offended by such an encroachment on personal liberty. After all, how would forcing an American to remain in a state differ in principle from forcing him to purchase health insurance?
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#2
Here is the first Big move to Exiting the state: Boeing Announces Big Layoffs in Defense Division. Actually, this is a double whammy, because Boeing is reacting to the presidential election, AND to California's tax increase approval. And all the layoffs are occurring in the great state of Kalifornia.

My guess is that California will lose Boeing first, and then Washingston State, as South Carolina is about to be the preferred state of choice with Boeing. SC is a Right-To-Work State, and great for business. Right-To-Work states are going to come out big winners as a result of the Bamster's reelection. Wait and see. S5

Quote:ing announced a major restructuring of its defense division on Wednesday that will cut 30 percent of management jobs from 2010 levels, close facilities in California and consolidate several business units to cut costs.

The company [BA 70.98 0.87 (+1.24%) ] told employees about the changes on Wednesday, in a memo obtained by Reuters and confirmed by Boeing.

Boeing, the Pentagon's second-largest supplier, said the changes were the latest step in an affordability drive that has already reduced the company's costs by $2.2 billion since 2010, according to the memo.

I'm expecting a major recession next year, and companies and citizens, will be voting with their feet. Look for a major shift in demographics to come, with the South and certain western states leading the way.
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#3
They have been for a while now, John. All new production is in our region.

The problem is the workers move. Those Californian utopians will move here for work.

I disagree the Boeing move is related to Obama, it is related to California. Big corps prosper under Obama via access, etc. The days of separation between corps and state is past, any CEO worth a nickel will place their corp inside the winning combo.
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#4
(11-09-2012, 11:50 AM)Palladin Wrote: They have been for a while now, John. All new production is in our region.

The problem is the workers move. Those Californian utopians will move here for work.

Patrick, if you look closely at the voting ratios of each California county, you will see that again the utopians control just a few counties, and they are located in two, or three areas. Also, over 40% of voters are not utopianists.

Quote: I disagree the Boeing move is related to Obama, it is related to California. Big corps prosper under Obama via access, etc. The days of separation between corps and state is past, any CEO worth a nickel will place their corp inside the winning combo.

Right now it is California, but you just wait and see what is going to happen. S5
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#5
Problem for California is those 2 or 3 counties are the majority of the state pop. Don't get me wrong here, I think ObamaCare is negative for small business expansion bigtime, but, some large corps actually benefit from it.

Walmart is for it because their costs relating to it are less than Target's, their main competitors, so they helped Obama pass it via lobbying as a competitive advantage.

Big corps are learning fast to get inside the state. Small ones cannot. The big don't want snot nosed insurgent opposition and with the current fascism will not face it, they can price us out of the market via regulations. For big corps, Obama is a plus, IMO, small is another situation.
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#6
Yeah, its what is called Corporatism/Fascism.

Big corporations love it because it helps eliminate competition.

Big Government loves it because bigger corporations are easier to control than all sorts of pesky little corporations trying to claw their way to the top.

In both cases, inefficiency is rewarded, both groups scratch each other's backs, and the system slowly goes to hell, as other countries climb past the Fascist one. That's why those smaller countries must be kept in line. Tax havens are great examples.

Our Libertarian buddy, Dan Mitchell, comments on this today: How Do You Turn a Leftist into a Warmonger?. And his video below, explains it in more detail.

http://www.youtube.com/watch?feature=pla...lkJBTi58#!
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#7
Quote:San Francisco to foot the bill for sex changes

In the midst of cash-strapped Californians approving new taxes to prevent further cuts in essential state services, San Francisco health officials appear to have found the money to fund what they say is a much-needed service to residents living in the City by the Bay:


The city of misfits has degenerated to a level not seen before, had researchers not wasted their efforts developing anti-viral drugs none of this would be taking place today.
The true purpose of democracy is not to select the best leaders — a clearly debatable obligation — but to facilitate the prompt and peaceful removal of obviously bad ones. 
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#8
(11-09-2012, 11:59 PM)WarBicycle Wrote:
Quote:San Francisco to foot the bill for sex changes

In the midst of cash-strapped Californians approving new taxes to prevent further cuts in essential state services, San Francisco health officials appear to have found the money to fund what they say is a much-needed service to residents living in the City by the Bay:


The city of misfits has degenerated to a level not seen before, had researchers not wasted their efforts developing anti-viral drugs none of this would be taking place today.

This thing with Kalifornia is going to be very interesting ahead. They are definitely going to have to declare bankruptcy, or get a monumental bailout. And you can bet your bippie they will try for a bailout from the Bamster. And he will do his best to offer it to them. With what I don't know. Probably all that Fed printed money.

And that is where the Dumbasses had better grow a spine and get their proverbial Shit together, because cowardly behavour is not going to be accepted there. If that bailout comes to pass, critical mass may be reached earlier than expected.

Its going to be a very interesting affair to witness, to say the least.

Incidentally, if the Islamo-Kooks need a place to commit nuclear terrorism, I have some recommendations for them.
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#9
Tony Bennett is going to have to redo his signature song to keep up with the times. "I left my D*ck in San Francisco".
The true purpose of democracy is not to select the best leaders — a clearly debatable obligation — but to facilitate the prompt and peaceful removal of obviously bad ones. 
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#10
(11-10-2012, 08:50 AM)WarBicycle Wrote: Tony Bennett is going to have to redo his signature song to keep up with the times. "I left my D*ck in San Francisco".

S2S2




They obviously left something else, somewhere else, before arriving there as well. LOL!

I know this is a bit callous of me. And I also know that sex selection is a complicated thing in the process of creating a person. And its more than possible to realize that occasionally this process can go haywire. And victims of this problem(life's roulette) really do need to get themselves somewhat straightened out. But expecting everybody else "to 'fix' it for you" is a bit much.

Perhaps the city government is footing the bill, and the rest of the country isn't?
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#11
I would be interrested to see a timelined analysis of the process of haing transgender surgery being passed as covered vital healthcare service.

This is the result of gay lobbyism. They have friend who want to do such surgery, or they want to do it for themselves (thought that could just one or two persons in the whole office) and they know all gays will praise them for that.

For me it's not worse than other lobbyism (why, because it's about sex?), for other things as useless as this.
The degenerescence it's not about a handfull of transgender (always been there) but about irreal frivolity of management.
These poeple are making a joke of their job.

How they still have balls to lobby for more expenses I don't know. But I know they soon won't have balls anymore and maybe that will make them less combative.
(Note that some of the poeple agreeing with this are women - interresting-)

They still don't see the Cliff coming. This is frighthening.
All the gay millionaires are going to lend the city of S.F. or the state of California, all happy that it's pro-gay.
Let's see when the whole pyramid from counties to the Fed is going to crumble...
By buying insolent bonds at inflated price they are digging the precipice even deeper. And they stil dare call that flight to safety. LOL!
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#12
I thought Boeing was based in Seattle.
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#13
(11-10-2012, 05:44 PM)Ron Lambert Wrote: I thought Boeing was based in Seattle.

They are, but they have several other branches, California being another. And there is one in South Carolina, which is not a union shop. Its the only location that isn't union controlled.

Now, when push comes to shove, and survival is on the line, where do you think Boeing is going to start moving its assets?
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#14
The tax proposition was completely unnecessary. The 'rats in California now have a complete SuperMajority of the legislature and executive. They are free to pass what ever tax, spending and debt legislation they choose. The problem is that they now OWN it ... completely ... lock stock and barrel. Who do you blame for failure when you're the only ones on the horizon? I suppose there are some odds that they could blame a complete catastrophe on an Earthquake ... but that seems pretty thin ... although the Dems sure seem like they've become particularly fond of natural disasters lately.
"Democracy is the theory that the common people know what they want and deserve to get it good and hard."
-- Henry Mencken
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#15
Dan Mitchell, who is having great great told ya so, comments further on the plight of the Kalifornia Kleptocrats, and their idea of GetEvenWithEmIsm. No wonder there are so many Kooks rising to the surface out there,.....because so many of the sane people are voting with their feet.

Quote:The Continuing Exodus of Jobs – and Taxable Income – from California

Like most people, I’m a sucker for a heartwarming story around the holidays.

Sometimes, you get that nice feeling when good things happen to good people, like you find at the end of a classic movie like “It’s a Wonderful Life.”

But since I’m a bit of a curmudgeon, I also feel all warm and fuzzy when bad things happen to bad people.

That’s why I always smile when I read stories about taxpayers moving across borders, thus preventing greedy tax-hiking politicians from collecting more revenue.

I’m glad when that happens to French politicians. I’m glad when it happens to Italian politicians. I’m glad when it happens to Illinois politicians. And British politicians. And Spanish politicians. And Maryland politicians. I could continue, but I think you get the point.

I’m even glad when it happens to the politicians in Washington.

I smile because I envision the moment when some budget geek tells these sleazy politicians that projected revenues aren’t materializing and they don’t have more money to spend.

So I wish I could be a fly on the wall when this moment of truth happens to California politicians. They convinced voters in the state to enact Prop 30, a huge tax increase targeting those evil, awful, bad rich people.

Governor Brown and his fellow kleptocrats in Sacramento doubtlessly are salivating at the thought of more money to waste.

But notwithstanding a satirical suggestion from Walter Williams(see above article at head of thread), there aren’t guard towers and barbed-wire fences surrounding the state. Productive people can leave, and that’s happening every day. And they take their taxable income with them.

Usually in ways that don’t attract attention. But sometimes a bunch of them leave at the same times, and that is newsworthy. Here’s an example of that happening, as reported by the San Francisco Chronicle.

Quote:Chevron Corp. will move up to 800 jobs – about a quarter of its current headquarters staff – from the Bay Area to Houston over the next two years but will remain based in San Ramon, the oil company told employees Thursday. …The company already employs far more people in Houston – about 9,000 full-time employees and contractors – than it does in San Ramon.

We don’t know a lot of details, but these were positions at the company’s headquarters and they were “technical positions dealing with information and advanced energy technologies…tied to Chevron’s worldwide oil exploration and production business.”

Let’s assume these highly skilled employees earn an average of $250,000. I imagine that’s a low-ball estimate, but this is just for purposes of a thought experiment. Now multiply that average salary by 800 workers and you get $200 million of income.

And every penny of that $200 million no longer will be subject to tax by the kleptocrats in the state’s capital.

In other words, we’re seeing the Laffer Curve in action.

Politicians can raise tax rates all day long, but that doesn’t automatically translate into more tax revenue. Politicians keep forgetting that taxable income is not a fixed variable.

What’s happening in a big way with Chevron is happening in small ways every single day with investors, entrepreneurs, small business owners, and other “rich’ people.

That’s good for the people escaping. And it also will warm my heart when California’s despicable politicians discover next year that there’s an “unexpected” revenue shortfall.

P.S. It’s just an anecdote that the Chevron jobs are going to Texas. But when you add together a bunch of anecdotes, you get data. And according to the data, Texas is kicking the you-know-what out of California. Maybe there’s a lesson to be learned?
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#16
Here is a good article by Wesley Pruden, which just arrived in my email today. What is perhaps even more illustrative of what is to come, perhaps more so than Greece, it is California. As long as the Bamster does not manage to give California a bailout, we will be able to see, in slow motion, what we can expect nationally. The only thing the US has in its arsenal is the ability to ruin the currency through extreme inflation.

Quote:California dreamin’ in Gruesome Gulch
By Wes Pruden

LOS ANGELES—Californians take pride in the notion that everything in America starts here – the music, the clothes, the food, the fun and games of the celebrity culture. Now California is showing the nation something else, a view from the bottom of the fiscal cliff. Life from Gruesome Gulch, you might say.

It’s not pretty: Higher taxes, reduced public services, cuts in money for schools, crumbling bridges and highways, all the ills endemic to out-of-control welfare states.

Californians are still besotted with the dream of living off the lotus, though growing numbers of them are concluding that the game will be up soon. Thousands continue to flee California every year. Texas, Nevada, Arizona, Oregon and Washington are collecting most of the disillusioned emigrants, though thousands have made it to Georgia and South Carolina. There’s no John Steinbeck to tell a story of a trek very different from the journey taken in the opposite direction by the Joads of Oklahoma, but a study by the Manhattan Institute finds prosperous Californians fleeing dramatically higher taxes, tightening regulations, union power that pushes up high labor costs, more expensive electricity and ever more costly housing and commercial real estate. California is not quite the golden state it used to be.

The escape is not new; more Californians have left the state than newcomers have arrived every year since 2005. What is new is the accelerating trend. More than 4 million new residents arrived here in the go-go years between 1960 and 1990, attracted by mild and sunny weather, a lush and varied geography, and most of all by the fervent belief of nearly everyone that “anything goes” and “everything’s possible.” The future looked to bear no limit.

Now the future is here. Persuaded by Gov. Jerry Brown, Californians have adopted a number of new tax initiatives, including Proposition 30, which would raise the state sales tax to 8.25 percent, and an increase in the state income tax on taxpayers earning more than $250,000. Resistance to cutting entitlement to the lotus is great.

California has become radioactive in much of the West. You can still see an occasional frayed bumpersticker on the back roads of Colorado, pleading “Don’t Californicate Colorado.” The state’s politics would hardly be recognizable to Howard Jarvis, a perennial candidate for various offices whose Proposition 13, slashing property taxes by nearly 60 percent, set off the national tax revolt in 1978. Prop 13, opposed by most of the politicians and the big newspapers, was enacted in a landslide.

But lately Californians have returned to a diet of the lotus, the fruit in Greek mythology that delivers dreamy contentment and idle forgetfulness. The lotus is the unofficial state fruit. A new study by the Howard Jarvis Taxpayers Foundation blames the remarkably generous pay and pensions of state employes for California’s budget problems, now speeding toward terminal. The per capita salary of state employes, including benefits, is about twice the per capita salary of everybody else.

Nevertheless, Californians eagerly approved the $6 billion dollar bundle of tax increases in November, sold to voters as politicians from City Hall to the White House always sell taxes, as the only way to avoid closing the orphanages and throwing little match girls into the street.

“I know a lot of people had some doubts and some questions,” the governor told an election-night rally, “‘Can you really go to the people and ask them to vote for a tax?’ Here we are. We have a vote of the people. I think we are the only state in the country that says, ‘Let’s raise our taxes, for our kids, for our schools, and for our California dream.’”

The cost of delivering state services exceeds by a wide margin the per-worker costs in other highly unionized states, including New York, New Jersey and Illinois. In one remarkable case, an Afghanistan-educated psychiatrist arrived in California six years ago and got a state job paying $90,682 a year. Now he’s making $822,302 a year. He worked weekends and even performed some of his duties from home. The state is investigating how he piled up so much pay. “I’ve been put on leave for working too hard,” he told an interviewer.

California’s unemployment rate, above 10 percent for most of this year, is one of the highest in the nation, and the state has lost 855,200 private-sector jobs since 2008. Living here can still be golden indeed. The lush farms in the San Joaquin Valley can feed half the nation, the Napa and Sonoma vineyards produce some of the world’s best wines, and the high-tech corridor is thriving. A gulch will be a gruesome substitute.

Wesley Pruden is editor emeritus of The Washington Times.

It is going to be very interesting to see how this all shakes out. Its almost certain that California will go begging for a bailout. And its almost certain the Bamster will do his best to accommodate.

And the states that are paying their own way will almost certainly scream bloody murder. But of course almost all of those states are run by state GOPs. But will the DC GOP elites also fight this? I'm not going to hold my breath, thats for sure. Perhaps Bill can hold it for me. S5
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#17
Since in fact we did go over the fiscal cliff, but the government voted to raise the debt limit yet again before the business week really started, I guess what happened was we did a bungee chord jump with the national economy. But will the Chinese buy our additional debt? Too bad if the bungee chord breaks.
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#18
Quote:But will the Chinese buy our additional debt?

This one is easy: the Chinese have not been buying US debt since 2009. And I don't think anyone is buying US debt anymore besides the Feds.
Sodomia delenda est

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#19
When is the FMI stepping in to impose austerity on California?
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#20
(01-07-2013, 03:52 PM)Fredledingue Wrote: When is the FMI stepping in to impose austerity on California?

I'm sorry Fred, but what does that stand for; "Food Marketing Institute", "Franklin Mutual Group", or something else?

You know how acronyms can confuse my tiny brain. S5
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