Krugman: California Ruined By GOP, Rest Of Nation May Follow

New York Times:

California, it has long been claimed, is where the future happens first. But is that still true? If it is, God help America.

The recession has hit the Golden State hard. The housing bubble was bigger there than almost anywhere else, and the bust has been bigger too. California's unemployment rate, at 11 percent, is the fifth-highest in the nation. And the state's revenues have suffered accordingly.

Read the whole story: New York Times

Comments

[mergina]

Watching Ahnold try to explain away his abolute ineptitude as governor of this nations largest and perhaps most important state is hilarious.

[HST]

Californians voted for prop 13 so the elderly would not have to pay high property taxes and lose their homes. Somehow big corporations and their lobbyists got in on 13 and now they don't pay much if anything in property taxes on the huge amounts of land they own. Prop 13 needs to be amended to apply only to residential property and let big business pay their fair share (which as now they are NOT).

[ywcachieve]

Californians passed prop 13 for ALL property owners. Not just the elderly.

[Gasparilla]

You have a heavily Democratic state legislature, two Democratic senators and a large Democratic House delegation. The fact is you want it all and don't want to pay the taxes. If you wanted to, you could repeal Prop 13 by changing your Constitution. On top of that, Mexico is glad to keep sending it's poor here and you go right along with it.

[never-ever-give-up]

I agree about the taxes. You immigration comment is bunk. You all blame every problem you have one immigrants. It is an old, tired meme.

[ywcachieve]

Illegal immigration is killing California. It is taking a toll on the hospital, clinics, some welfare programs, and schools.

[ywcachieve]

Oh yeah, about 40% of the inmates in the California penal system are illegal immigrants.
So when you hear people say illegal immigration is costing us big, they are right.

[Gasparilla]

You can't tell me why it's bunk. You just insist it is.

[Republicrats]

huh? Cali is liberal socialist bastion...

[EconPadawan]

Shure they are. That's why they revoked gay marriage today...

[patricksmom]

No if California were a liberal socialist bastion, the taxes would be higher; rich property owners would pay their fair share and there wouldn't be this deficit.

[nowarpleez]

Conservatism is a mental condition not an ideology.

[peacegurl48]

Amen, Mr. Krugman. Now Arnold is busy balancing the budget on the backs of public servants and the most needy of Californians.
By the time he is done regular people will not be able to live here, it is very sad.

[ywcachieve]

Exactly. By the time Arnold is through only the rich and illegal immigrants will be able to live in California. The reason I included the illegal immigrants, is because they live 10-20(adults) to a house, and can afford the high cost of living in California.

[4TJefferson]

Paul. Don't forget ENRON. That company stole $20 billion dollars from California and Arnold did nothing to try to get it back.

[nowThenzen]

spot on

[askmeificare]

Sounds like this kook does not want the government to be constrained by the voters. So much for accountability.

[PSTEN]

What this country needs are members of congress to have enough balls to stand up to big business and the public and collect the taxes necessary to cover the expenses of our Government. We have not had anybody with balls in congress for years and thats why the government is in the mess it is. That along with no balls to regulate business, no balls to regulate energy consumption, no balls to establish universal health care, no balls period.

[askmeificare]

Hint: Corporations and Businesses do not pay taxes.

Their so-called taxes are included in the cost of the products you buy. The "business" taxes are paid by the consumer.

[nowThenzen]

spot on

[frappe]

The simple truth is that Republicans, in general, are clueless about how to manage an economy. To them, to use the word "manage" when it comes to a free market economy is heresy of the first order. Hence, their inability to sustain continued growth and stability of an economy over an extended period of time. This is why they have an inherent distaste of Keynesian economics where fiscal measures are employed to effect a certain economic result.

To Republicans, their primary economic tools are either monetary policy or tax cuts, or a combination thereof. They completely ignore an essential suite of economic tools that the Democrats have successfully employed over the years. These tools involve, as previously stated, the use of fiscal policy in effectuating desirable outcomes.

Republicans refusals to acknowledge the practical benefits of such tools have resulted in a record of erratic, and largely poor economic performance while they held the reins of political control. For proof, just look at the economic depressions and recessionary periods over the past 80 years. You'll notice a clear pattern revealing the Republican party as largely ineffectual in creating sustained periods of economic growth and stability.

[jay1975]

ANd what has the Dems alternative been so far?

[frappe]

Well, right now, the Dems are doing everything that is humanly possible to avert another Depression, caused largely by a Republican emphasis on deregulation and their blind and embrace of a purist's conception of a free market ideology. I am not arguing against capitalism, far from it. What is needed is a sort of hybrid relationship -- a partnership of government and private industry. Free markets tend to focus on the short term -- the next quarter's results. The long term view is too often ignored or neglected. The federal government can encourage policies that assist private enterprise on the long view i.e. energy independence, fuel economies, green technologies, etc., etc., etc. The Democrats have been much, much more receptive to this line of thinking. Consequently, economic performance under Democratic administrations has been much, much stronger as compared to Republican administrations.

[jay1975]

The GOP ruined California? That is rich. California is the liberal bastion of welfare, taxes and illegal immigration. Their tax and spend policies to provide for those that do not work, are in the country illegally and anyone else who wants a handout is what ruined California. Arnold is as much a Republican as he is a Democrat. No, he is just trying to be popular and appease everyone and that has gotten him, and California, nowhere. California is a testament as to how well liberal policies work. They don't and they will always drive the governing body to poor house. The standard GOP policy (not Arnold's or Bush's policy but the real GOP) is less government and lower taxes. California follows neither and simply go by the liberal policy of more governmnet, taxes and spending. How's that worked out so far?

[nowThenzen]

did you vote for bush? just asking

[jay1975]

Nope, after a tour in Iraq and looking at another at the time, there was no way in hell I was voting for him.

[MacGregor57]

Wait a minute. That was around the time Raygun was the gov. He wasn't repub. was he? He was?, that means he was GOP. Wait a minute. If the GOP ruined Calif. and Raygun was GOP, that means Raygun ruined Calif.

Damn right he did. 1969- Calif. about #1 in education. Now about 49th. Just so long as the O.C. leaches got their $. Just so long as the O.C. drove everyone else (eg- uninformed repubs.) into the dirt.

[nowThenzen]

No no, repubs want to save govt and do good things, but all these nice repubs who ran the executive and legislative govt in Cali and the Fed were too nice, meek and timid to stop the bad Dems from hurting us. Don't you understand? Repubs are kind like kittens and can't fight back against the dems.

[shag11]

I live here and you are absolutely right. It really began with Reagan. What gets me about the right is that they are always talking about values, and small government. They talk that trash, until they get elected, then they give welfare, it's just to the rich. I am not making me this up, it's documented.

[InLosAngeles]

Nations can survive almost anything except runaway inflation and runaway debt. Once you can't pay your bills, or afford your bills, it's over. Neither party seems to give a damn about spending the taxpayers money. As much as we all dislike Bush, Obama made a pretty big bet on his own that even more spending was the solution. We will see.

[jinxed]

One small problem with your reasoning ... Bush looted the US Treasury to enrich the rich and powerful and Obama is trying to save America from the looting, DUH! Now all we need is a Congress that will get over its fear and cowardous engendered by the Republicants and maybe, just maybe, we'll have a chance of salvaging our country.
The downside for the Repubs in this financial mess has been the proof that they (Repubs) have no idea how to run a country profitably. Their whole philosophy has been to give away the bank, take anything not nailed down and financially rape 98% of Americans for the enrichment of the 2%ers.

[InLosAngeles]

How do you run your householdbudget? This country needs to cut government spending programs (both republican & democratic) to a level that is sustainable. Most rational people do not max their last credit card and buy lottery tickets and pray. If the money center banks were going to have to be swallowed by super regionals/regionals that did manage risk, fine. Do we really need Citibank? The govt should not have bailed out private investors and backed private debt, they should have selectively purchased it. Obamaclaimed to want to help homeowners, he did the opposite. If he had said to banks, "you have to meet certain collateral thresholds, and if you can't raise money you have to sell assets, regardless of current mkt prices".

Obama could have bought almost every mortgage in America for .35 on the dollar from crippled banks/funds (given the size of bailout/backing) and turned around and let the homeowners buy them from the govt for .37 on the dollar, and then refied them through fannie or freddie. That would have made the govt money, it would have burned the investors who were greedy w/ these predatory loans, and would have lowered the mortgage payments for millions, stabilizing the finances of the people he claimed he was trying to save. If you had a $500k mortgage, it resets to $185k. Instead, the Obama administration is backing private investors to buy these mortgages for .30-.40, and watching them turn around and squeeze people for 95-100%.

[jesseandrews]

God this guy has no idea what he is talking about. I live in Ca and it is ran by the democratic party and special interest and the unions. The gop is a small minority that use to vote with the dems but when they shut the water off to the farms for a 2 in fish they quit.

[HST]

speaking of having no idea of what you are talking about. I guess it was the special interests and the unions and whatever other conservative boggy-man you want to conjure up that was responsible for Enron bleeding CA of billions while the feds looked the other way.


PS I live in California too chucklehead.

[HesDanTheMan]

Jesse, you do know we're talking about CAlifornia and not CAnada, right? This is Arnie's doings and all his Rethug cronies in California.