Austin Hill

“Failed state.”

That sounds harsh, doesn’t it? Do a web search with the words “failed state” and names like Somalia, Haiti, and Sudan will appear on your computer screen.

Unfortunately, the 31st state in our union – California – is looking more and more like a “failed state” as well. And this should matter to every American, because like it or not, California is both a global economic epicenter and a spectacular place in the world.

My native homeland of California is home to the highest mountain in the contiguous forty-eight states (Mount Whitney), the lowest valley (Death Valley), Facebook, “Surf City, U.S.A.”(Huntington Beach), Apple Computers, The World Champion San Francisco Giants, the most fertile farm land in the world (San Joaquin Valley), eBay, Legoland, Cisco Systems, “the entertainment capitol of the world” (Hollywood), three U.S. Presidents (Richard Nixon by birth, and Herbert Hoover and Ronald Reagan by “adoption”), and Mitsubishi Motors of North America. It remains a global leader in the agricultural, information technology, and aerospace sectors. If it were its own country, it would comprise the eight largest national economy in the world.

This is to say that California can be and should be a place of robust economic opportunity across multiple sectors. But politicians and government employee labor unions have a stranglehold on the state (sound familiar?). Businesses and capital are now leaving while actual economic output is slumping.

Most academicians and government bureaucrats who keep track of the world’s “failed states” still won’t admit that Greece belongs on their lists, so the idea that California has in any sense “failed” isn’t even considered. But if we take seriously the criteria for determining a “failed state,” then the sad truth about California becomes painfully clear.

One of the most often quoted authorities on failed states is The Fund for Peace, a Washington, DC-based non-profit think tank organization, and among the many indicators of a failed state that “FFP” notes is “uneven economic development among group lines.” This notion of “uneven economic development” often has “life or death” implications in places like Zimbabwe or the Democratic Republic of the Congo, yet the idea is every bit as real in California as it regards the disparity between the government, and the private sector economy.

For the record, the government of California presently entails a budget deficit of somewhere between $10 and $15 billion – a deficit that is expected to swell to about $25 billion by the middle of 2012. With this as his backdrop, Governor Jerry Brown took office in January noting at the time that California had a history of “kickin’ the can down the road” with its budget woes, and that his plan to solve California’s dreadful fiscal problems would involve both cuts in government spending, and – if California voters approved – tax increases.

Yet Governor Brown is a life-long government employee, and will have nothing to do with cutting state spending where it is most problematic – in the arena of government employee salaries, benefits, and retirement pensions. In fact, while he has been completely unable to implement his plan of “temporarily extending” certain “temporarily inflated tax rates” (which de facto amounts to a tax increase plan), he has continued lining the pockets of unionized government employees with more lavish expenditures on their salaries, benefits, and retirement pensions.

In April, for example, Brown approved a new contract for the California Prison Guard’s union, which allows guards to accrue unlimited numbers of un-used paid vacation days each year. When a guard retires, the un-used vacation time can now be “cashed-in” at the guard’s highest salary rate- a sweet pay-off from Governor Brown to a labor union that spent nearly $2 million on his campaign last year.

And here’s where yet another set of criteria comes in to play for determining a “failed state.” According to the Fund for Peace, failed states often exhibit “a disappearance of basic state functions that serve the people, including a failure to protect citizens from terrorism and violence…” The high-minded folks at the FFP may not know this, but – shocking news! – California has so horribly mismanaged its prison system that it can’t afford to facilitate all of its prisoners.

After being taken to court over the conditions in which they were detaining convicts – which included as many as 54 prisoners sharing one toilet – the California government was ordered by the U.S. Supreme Court in May of this year to release huge numbers of prisoners. This is to say that California’s leaders had plenty of money to spend on their unionized prison guards, yet it doesn’t have enough money to properly facilitate prisoners so as to comply with federal requirements.

Is this “failure enough” to get anybody’s attention? By the FFP’s own criteria, California has failed to fulfill a “basic state function” and to protect “citizens” from “violence.”

The Fund for Peace needs to sound the alarm bells over the California government’s failures, but they probably won’t. It’s up to the state’s citizenry to demand better leadership in Sacramento – before it’s too late.


Austin Hill

Austin Hill is an Author, Consultant, and Host of "Austin Hill's Big World of Small Business," a syndicated talk show about small business ownership and entrepreneurship. He is Co-Author of the new release "The Virtues Of Capitalism: A Moral Case For Free Markets." , Author of "White House Confidential: The Little Book Of Weird Presidential History," and a frequent guest host for Washington, DC's 105.9 WMAL Talk Radio.