11 ms·

California Finds Economic Gloom Starting to Lift

27 points by 001sky 14y ago

w1ntermute 14y ago
Watch as the Democrats (now dominating the State Legislature) take all the credit for this.
- gyardley 14y ago
  Well, yes - they are politicians, after all.
- muzz 14y ago
  Not sure if you are implying that somehow they came into power just now-- Jerry Brown has been governor for almost two years now.
  - w1ntermute 14y ago
    As of the latest elections, Democrats have a supermajority in both houses of the state legislature, allowing them to do anything they want (including raise taxes) without Republican approval. Until now, many of California's problems have been blamed by the Democrats on Republican obstructionism. The last time any party had such a supermajority was in 1933, when it was the Republicans. The last time the Democrats did was in 1883.
- wwweston 14y ago
  It's probably true enough that improved private activity in the state has had little to do with any recent public policy changes -- at least, I can't think of any recent state level actions that seemed remarkably stimulative. But insofar as there's been an attempt to wrap California's negative trajectory around the neck of the Democratic party like an albatross -- as the article says, it's been compared to Greece and all but written off as a symbol of socialist blue state excess -- it might be fair enough to let its recovery do some buoying. And I'm not sure why they wouldn't deserve some credit for the improvement in state/public finances.
- mikeryan 14y ago
  Now dominating the state legislature? The Dems have dominated the state legislature since 1959 except for 69 to 71 when the Republicans took control of both houses and a brief period from 94-96 when the Republicans controlled the Assembly. The Democrats can pretty much take credit for everything good and bad.
  - w1ntermute 14y ago
    As of the latest elections, Democrats have a supermajority in both houses of the state legislature, allowing them to do anything they want (including raise taxes) without Republican approval. Until now, many of California's problems have been blamed by the Democrats on Republican obstructionism. The last time any party had such a supermajority was in 1933, when it was the Republicans. The last time the Democrats did was in 1883.
  - nhebb 14y ago
    What he probably means is that California requires a supermajority to raise taxes. After the last election, the Democrats have that in both houses now.
- Shivetya 14y ago
  It will be more interesting to see what they do when they no longer have the Republicans to blame for doing what they do do and specifically what they do not do. It is one thing to bemoan that the other side is in your way, it is a completely different ball game when you don't have them to blame.
daniel-cussen 14y ago
I found Romney's comparison of California to Greece mostly fair. Saying that California is like a balmy Mediterranean country with a rich culture and history is not pejorative. That it has giant public sector workforces and fiscal problems is perhaps a pejorative comparison, but one that is avowed by the color of the ink on California's balance sheet.
- rbranson 14y ago
  Note that the State of California's GDP is more than 6x that of Greece, while only holding roughly half the absolute amount of debt Greece does.
- anigbrowl 14y ago
  That claim of Romney's was one of the most annoying things in the campaign, because he is smart and educated enough to know it's bullshit. If California is so awful, why did he move back to his home in La Jolla? Greece wishes it had California's economy. Don't fall for such empty soundbites, the comparison doesn't stand up to even shallow analysis.
  - dmix 14y ago
    Politics is the Mind-Killer. http://wiki.lesswrong.com/wiki/Politics_is_the_Mind-Killer http://wiki.lesswrong.com/wiki/Politics_is_the_Mind-Killer
  - daniel-cussen 14y ago
    First, a 6x difference of GDP points out that they're in the same range of size. Further, it has about a third of the population of California, making its people about half as wealthy. Ballpark confirmed. Now on to debt: Greece owes some money. It's a nation. California owes some money; it's a state. And, the US owes money. If California were to serve in full its debt, and arrange that it no longer had to incur debt to pay its employees, or raise greater taxes to do so, I would say it became solvent--however, if the day after the United States Treasury defaulted on its multi-trillion dollar debt, California would find itself in trouble all the same. So, really, California also owes a share of the US government debt. Is the similarity enough for California to emulate Greece should the latter emerge triumphant from this shitstorm? I don't know. But it's enough for a metaphor about the current problem.
aresant 14y ago
The housing & job reports feel right and are welcome news. But did the NYTimes just point to California's current budget as a sign of our State's "economic stability"? They quote that the "California Legislative Analyst’s Office projecting . . . . [that] California might post a $1 billion surplus in 2014" That is such an irresponsible thing to publish - a "surplus" makes it sound like the government is totally on top of the situation here and a model for success. The reality is that CA would be going off the @!@W$! rails right now in 2012 if voters hadn't just passed Prop 30. Prop 30 was an EMERGENCY, retroactive (from Jan 1 2012), and "short-term" (7 year) tax on high income earners + a moderate increase in sales tax which is going to raise $6B a YEAR to pull CA's ass out of the fire. So while the gloom may be lifting, I remain pessimistic that our state gov't has any long-term solutions to their continued budgetary missteps.
- dreamdu5t 14y ago
  A surplus of $1 billion means nothing for California's $100+ billion in debt and unfunded liabilities. We would need a billion surplus every year for hundreds of years. http://www.nytimes.com/2012/09/21/us/california-debt-higher-than-earlier-estimates.html http://www.nytimes.com/2012/09/21/us/california-debt-higher-... http://www.usgovernmentspending.com/california_state_spending.html http://www.usgovernmentspending.com/california_state_spendin...
  - jfoutz 14y ago
    Well, I don't know California's interest rate on those loans, but if it's lower than inflation, you'll inevitably win. Also, if the economy keeps growing, 100 billion in a hundred years will be a lot easier to come up with than it is today. Think of Dr Evil asking for 1 million dollars. edit Just looked it up. Just shy of a 2 trillion dollar Gross State Product? 100 billion is a big number, but 5% debt is not that bad. (the state) Going into debt during the good times is stupid, going into debt in recession is probably smart.
    - ekianjo 14y ago
      The Gross State Product does NOT belong to the State, though.

27 points by 001sky 14y ago

w1ntermute 14y ago

Watch as the Democrats (now dominating the State Legislature) take all the credit for this.

gyardley 14y ago
Well, yes - they are politicians, after all.
muzz 14y ago
Not sure if you are implying that somehow they came into power just now-- Jerry Brown has been governor for almost two years now.
- w1ntermute 14y ago
  As of the latest elections, Democrats have a supermajority in both houses of the state legislature, allowing them to do anything they want (including raise taxes) without Republican approval. Until now, many of California's problems have been blamed by the Democrats on Republican obstructionism. The last time any party had such a supermajority was in 1933, when it was the Republicans. The last time the Democrats did was in 1883.
wwweston 14y ago
It's probably true enough that improved private activity in the state has had little to do with any recent public policy changes -- at least, I can't think of any recent state level actions that seemed remarkably stimulative. But insofar as there's been an attempt to wrap California's negative trajectory around the neck of the Democratic party like an albatross -- as the article says, it's been compared to Greece and all but written off as a symbol of socialist blue state excess -- it might be fair enough to let its recovery do some buoying. And I'm not sure why they wouldn't deserve some credit for the improvement in state/public finances.
mikeryan 14y ago
Now dominating the state legislature? The Dems have dominated the state legislature since 1959 except for 69 to 71 when the Republicans took control of both houses and a brief period from 94-96 when the Republicans controlled the Assembly. The Democrats can pretty much take credit for everything good and bad.
- w1ntermute 14y ago
  As of the latest elections, Democrats have a supermajority in both houses of the state legislature, allowing them to do anything they want (including raise taxes) without Republican approval. Until now, many of California's problems have been blamed by the Democrats on Republican obstructionism. The last time any party had such a supermajority was in 1933, when it was the Republicans. The last time the Democrats did was in 1883.
- nhebb 14y ago
  What he probably means is that California requires a supermajority to raise taxes. After the last election, the Democrats have that in both houses now.
Shivetya 14y ago
It will be more interesting to see what they do when they no longer have the Republicans to blame for doing what they do do and specifically what they do not do. It is one thing to bemoan that the other side is in your way, it is a completely different ball game when you don't have them to blame.

daniel-cussen 14y ago

I found Romney's comparison of California to Greece mostly fair. Saying that California is like a balmy Mediterranean country with a rich culture and history is not pejorative. That it has giant public sector workforces and fiscal problems is perhaps a pejorative comparison, but one that is avowed by the color of the ink on California's balance sheet.

rbranson 14y ago
Note that the State of California's GDP is more than 6x that of Greece, while only holding roughly half the absolute amount of debt Greece does.
anigbrowl 14y ago
That claim of Romney's was one of the most annoying things in the campaign, because he is smart and educated enough to know it's bullshit. If California is so awful, why did he move back to his home in La Jolla? Greece wishes it had California's economy. Don't fall for such empty soundbites, the comparison doesn't stand up to even shallow analysis.
- dmix 14y ago
  Politics is the Mind-Killer. http://wiki.lesswrong.com/wiki/Politics_is_the_Mind-Killer http://wiki.lesswrong.com/wiki/Politics_is_the_Mind-Killer
- daniel-cussen 14y ago
  First, a 6x difference of GDP points out that they're in the same range of size. Further, it has about a third of the population of California, making its people about half as wealthy. Ballpark confirmed. Now on to debt: Greece owes some money. It's a nation. California owes some money; it's a state. And, the US owes money. If California were to serve in full its debt, and arrange that it no longer had to incur debt to pay its employees, or raise greater taxes to do so, I would say it became solvent--however, if the day after the United States Treasury defaulted on its multi-trillion dollar debt, California would find itself in trouble all the same. So, really, California also owes a share of the US government debt. Is the similarity enough for California to emulate Greece should the latter emerge triumphant from this shitstorm? I don't know. But it's enough for a metaphor about the current problem.

aresant 14y ago

The housing & job reports feel right and are welcome news. But did the NYTimes just point to California's current budget as a sign of our State's "economic stability"? They quote that the "California Legislative Analyst’s Office projecting . . . . [that] California might post a $1 billion surplus in 2014" That is such an irresponsible thing to publish - a "surplus" makes it sound like the government is totally on top of the situation here and a model for success. The reality is that CA would be going off the @!@W$! rails right now in 2012 if voters hadn't just passed Prop 30. Prop 30 was an EMERGENCY, retroactive (from Jan 1 2012), and "short-term" (7 year) tax on high income earners + a moderate increase in sales tax which is going to raise $6B a YEAR to pull CA's ass out of the fire. So while the gloom may be lifting, I remain pessimistic that our state gov't has any long-term solutions to their continued budgetary missteps.

dreamdu5t 14y ago
A surplus of $1 billion means nothing for California's $100+ billion in debt and unfunded liabilities. We would need a billion surplus every year for hundreds of years. http://www.nytimes.com/2012/09/21/us/california-debt-higher-than-earlier-estimates.html http://www.nytimes.com/2012/09/21/us/california-debt-higher-... http://www.usgovernmentspending.com/california_state_spending.html http://www.usgovernmentspending.com/california_state_spendin...
- jfoutz 14y ago
  Well, I don't know California's interest rate on those loans, but if it's lower than inflation, you'll inevitably win. Also, if the economy keeps growing, 100 billion in a hundred years will be a lot easier to come up with than it is today. Think of Dr Evil asking for 1 million dollars. edit Just looked it up. Just shy of a 2 trillion dollar Gross State Product? 100 billion is a big number, but 5% debt is not that bad. (the state) Going into debt during the good times is stupid, going into debt in recession is probably smart.
  - ekianjo 14y ago
    The Gross State Product does NOT belong to the State, though.