National attention has again been focused on California. President Obama was recently in Los Angeles fundraising with celebrities and movie stars. This past weekend, those same movie stars celebrated the recession and their cultural contributions by throwing lavish parties and exchanging golden statues at the Oscars. Outside of Hollywood, however, there is not much to celebrate.
The film industry thrives on the suspension of disbelief. The same is true of Democratic governance of California. Democratic political leaders claim the state is on the rebound, but the facts are otherwise. The state’s true unemployment rate is between 14% - 18%. According to UCLA’s Anderson School of Management, California’s “official” unemployment rate of 12% is forecasted to remain constant in 2012. Said UCLA senior economist David Shulman, “You could make a reasonable argument that we never had a recovery and we're, in fact, in one long slump.” And this stagnation persists even though, as the Orange County Register reports, California distributed around $1.3 billion in unemployment benefits in December of 2011.
Businesses are leaving in droves, Governor Jerry Brown pleads for yet another “temporary” tax increase, and the state boasts the nation’s highest deficit. The state is literally dying economically. Yet Los Angeles leaders found time recently to ban Frisbees and footballs on public beaches. No joke. And if President Obama has his way, and four more years, the nation will soon share California’s fate because California’s ills mirror Obama’s priorities: increased regulation, progressive pipe dreams, and union hegemony.
First, California’s regulatory climate has effected a business migration from California that rivals John Steinbeck’s dustbowl migrations. The American Enterprise Institute has noted that in 2011, an average of 5.4 companies left California per week, up from 1.0 in 2009. Ask local business leaders what’s driving them away and they’ll quickly blame the alphabet soup from hell: CARB, CEQA, CPUC, EDD, EPA, Cal-OSHA, etc. Navigating this bureaucratic morass is challenging enough for large businesses like Amazon (which has relocated thousands of jobs), but is especially so for small businesses, which even President Obama believes drive job growth.