California: Zimbabwe, U.S.A.
California crisis explained by Ed Morrissey:
Democrats . . . refuse to consider large-scale rollbacks of state government programs. Doing so would jeopardize their standing among key constituencies, especially public-sector unions like AFSCME and SEIU. Instead, they want to bulldoze Republicans into jacking up taxes even higher, making the state that much less competitive and forcing business relocation to increase.
“Capital flight” would be as apt as “business relocation” to describe the mass exit of investment from the West Coast Zimbabwe.
What is happening to California is very much like what Democrats and their union-goon constituency have done to many major cities, as chronicled in Chapter 8 of Donkey Cons: Sex, Crime, and Corruption in the Democratic Party. Entitled “Scene of the Crime: Creating the Urban Nightmare,” that chapter explains how Democratic politicians and public-employee unions conspired against taxpayers, as in this passage about New York City:
Meanwhile, the cost of government was further increased by public employee unions. The very existence of such unions turns the logic of the labor movement on its head. The purpose of unions is to represent the interests of workers against the interests of the owners of businesses. But government workers are ultimately employees of the taxpayers, so that government worker unions are fundamentally opposed to the public interest — in the words of one New York liberal activist, “not extracting a share of the profits but rather a share of the taxes.”
This inexorable logic has had a devastating impact on America’s cities. Under Democratic Mayor Robert F. Wagner Jr., New York became the first U.S. city to grant collective bargaining rights to city employees. The public employee unions relentlessly negotiated for higher wages, shorter hours,and more benefits, including health insurance that did not require co-payments from the workers (a policy unheard of in the private sector). Contract negotiations were a farce, since unions used membership dues to fund political campaigns to elect pro-union candidates. “During labor negotiations, the unions would be on both sides of the table.” This translated into forcing governments (which is to say, taxpayers) to pay above-market labor rates. By 2005, journalist Steve Malanga observed, “Wages average a hefty 37 percent higher in the public sector, but the differences in benefits are even more dramatic. Local governments pay 128 percent more, on average, than private employers to finance workers’ health-care benefits, and 162 percent more on retirement benefits.”
Fewer private-sector jobs, more welfare recipients, more public employees, higher government costs, higher taxes — by the mid-1960s, Democratic policies had sent the nation’s biggest cities into a downward spiral that could only end in bankruptcy. For Detroit, already devastated by deadly riots, the worst days were ahead.
Well, if you want to read the sad story of what liberal Democrats did to Detroit, you can buy the book (or buy two, and give one to a liberal friend, just to annoy them). It’s a crying shame, I’ll tell you that much. The research for Chapter 8 relied heavily on Fred Siegel’s excellent book, The Future Once Happened Here, as well as Tamar Jacoby’s Someone Else’s House.
The devastation that Democrats and their union-goon cronies wrought in America’s cities is now being visited upon the erstwhile Golden State of California. The thievish, parasitical mentality of liberals, who view taxpayers only a source of plunder, eventually runs head-on into economic reality. Capital is portable, and predatory governments will eventually cause disinvestment, as investors seek opportunites elsewhere. As investment flees, private-sector employment stagnates and declines, and smart young people leave to find someplace where they have a chance to get ahead.
First the cities were destroyed by Democrats, now a once-prosperous state succumbs to Democratic policies. What next? Well, in the 2008 election cycle, labor unions gave $63 million to Democrats, including $2.3 million from AFSCME, $2 million from NEA, $2.4 million from SEIU, and you can read more here. Barack Obama’s campaign collected $450,000 from labor unions, Nancy Pelosi got $320,000 from unions, Steny Hoyer got $290,000, and in fact, all 20 of the top recipients of Big Labor largesse were Democrats.
What the Democrats did to Detroit, what they’re now doing to California, they will eventually do to the entire United States, if they can hold power long enough. Welcome to Zimbabwe, U.S.A.
UPDATE: Latest headlines from the former Golden State:
- Budget Mire Forces Calif. Senate Lockdown (Washington Post)
- State budget crisis affects county workers (KSBY)
- California lawmakers prepare for overnight session to end budget stalemate (L.A. Times)
- Jobs terminated as California goes bankrupt (Independent, UK)
- Arnie Schwarzenegger joins the ranks of the girlie men (Times, UK)
UPDATE III: Just imagine how much revenue California could have reaped, and how many jobs could have been created, if not for the offshore drilling ban.
- 2/17: Socialist government is BAD for capitalism?
- 2/17: Viva Californication!
- 1/13: Diversity is our strength!
- 12/24: Unions vs. reality
(Cross-posted at The Other McCain.)
Robert Stacy McCain