California: America’s Zimbabwe

If you’re one of those who believe that the world economy can’t get any worse, you had better take a good, long, and hard look at the Golden State. California is a mess. Like Canadians, Californians are rather self absorbed, and like to think of their homes as a real country, a sort of model nation state for the less enlightened of the world to emulate. Nothing could be further from the truth. Neither, of course, is a real country but a least Canada is a nice place. California, on the other hand, is not nice and getting worse by the day. And, if the opinion polls are correct, on May 19, the voters are going to send their state careening on a path to only God knows where, but ending up as America’s Zimbabwe is as good a guess as any.

California is hemorrhaging cash and bleeding to death. Revenue from taxes is coming in far below the projections needed to meet its financial obligations for the fiscal year beginning July 1 2009, but the state may have trouble borrowing money to make up the difference because its bond rating is the lowest of the fifty states. Unlike Zimbabwe, however, California cannot print its own money to pay the bills. The market value of its public and private corporations has plummeted, and the value of real estate, housing and commercial, is in free fall. Unemployment is the highest since 1939 but the state has been stripped of its manufacturing base, making any quick recovery based on rebuilding inventories somewhat problematic. Even worse, corporations and productive citizens are fleeing the state, with its high taxes and web of Marxist inspired regulations, in droves, while the only part of the economy that continues to grow is state and local government.

At the local level, Los Angeles is a great example of the problems facing California. The president of the University of Southern California recently declared the city, which is a seething cauldron of unassimilated immigrants ( most of whom arrived illegally), has an unemployment rate of 13%, and contains some of the world’s most vicious and violent gangs, with a membership estimated at around 250,000, to be the capital of the Pacific Rim. (As an aside, whether any of the gang members have absorbed the lessons of the Iraq insurgent’s successful fight against the American army remains to be seen.) Somehow all this, and the fact that if any American city has a claim to being the Pacific Rim capital it is San Francisco, seems to have escaped the university president’s attention.

The point is, he is not the only prominent Californian who apparently has lost his grip on reality. The Democrat controlled Legislature and the Republican governor, after protracted and acrimonious negotiations, cobbled together a temporary financial package, in the form of five propositions, which need voter approval to take affect. Their wording renders the intent of the propositions murky and unintelligible, and a deeply suspicious electorate, fearing the politicians are up to no good, appears likely to reject them. Now, just a week before the vote, Gov. Arnold Schwarzenegger is predicting the state will begin the fiscal year with a $21.3 billion deficit, and may have to ask the federal government for a bailout.

Fifty year ago, California, like Zimbabwe, was a wealthy place; but, inspired by dreamy Marxist utopianism, and plundered by lawyers reminiscent of Somali pirates, and thuggish labor unions, the people are in pretty bad shape with not much to look forward to. It’s enough to make you want to move to Canada, even with its lousy climate and thought police.