Economist Ray Keating,
writing for
RealClearMarkets, is singing from the
COTTonLINE “California Death Spiral” songbook.
Dude, I totally get California. The weather rocks, and I love the beaches and varied coastline. (snip) In fact, if several million dollars suddenly dropped in my lap, a home on the Monterey Peninsula – one of the most beautiful locales I’ve ever visited – would make me quite happy. That’s the California dream.
I find Monterey too foggy and cold, but that’s a minor quibble. The Santa Ynez and Ojai Valleys are close to perfect year round. Like me, Keating sees much to dislike about how California is run, the decisions its politicians make.
Call it the California nightmare. That nightmare is about politicians punishing entrepreneurs, investors, businesses and workers. And when it comes to dishing out such punishment, California serves up the most sadistic elected officials among the 50 states.
Each year, I author the “Small Business Policy Index” for the Small Business Entrepreneurship Council. The index ranks the states according to assorted policy and policy-related indicators, including taxes, regulations, government spending and debt, as well as a few measures of governmental performance.
California’s elected officials batter the state’s economy with the highest state personal income and individual capital gains tax rates, along with high corporate income taxes. For good measure, California punches individuals and businesses at the pump by imposing the highest state diesel tax and second highest gas tax.
Okay, it’s a nice place badly run. Does that matter?
In terms of net domestic migration – that is, people moving among the states – California lost 556,710 people net to other states from 2010 to 2017. That came after net losses of 1.5 million from 2000 to 2009, and 2.2 million from 1990 to 1999. In terms of people voting with their feet, California excels at sending people elsewhere.
It is a nice place to live, but a lousy place to earn a living, buy things, or start a business. If your home is paid for, and you have money, it isn’t a terrible place to retire, but remains an excellent place to visit.
