CSD California Socialism Disorder

UPDATE 15 May 2009

Well, I don’t know if it’s hopeful or a “shake your head sad” moment, but I just heard on the news that California is sending a delegation to Nevada to find out why so many folks are abandoning California and heading to Nevada…

While I would hope they would find out “It’s the TAXES and SPENDING, Stupid!”, I suspect they will ‘discover’ that we need to have no moral code and go hog wild with legal casinos, prostitution, marijuana, you name it – oh, and with high taxes on them to ‘close the deficit’ (that of course will never happen as long as the bottom of the revenue bucket is full of spending holes…).

“Intelligence is limited, but stupidity knows no bounds – e.m.smith”

So, Governator, let me save you the few hundred thousand you’re spending on this junket, er, deligation trip: Cut the sales tax to 4% OR LESS, cut the income tax to nothing if possible but 4% at most. Offer a TAX HAVEN to business in the state. You will be up to your eyeballs in new businesses, new spending, new residents, new homebuilding and, yes, even new revenue. Oh, and plug the holes in the spending bucket…

So take that socialist agenda of “Free Money and Free Stuff for Everyone” and make it one of “Free Opportunity for Everyone”; OK? It has always worked in the past… (See the ’49ers gold rush and the Silicon Valley gold rush as examples. California always prospers on opportunity, not socialism.)

One suggestion on the spending side: By Law in California half of the budget must be spent on education. But take that budget and divide by the number of students in the state and you get a number higher than the cost of a very good private education. Yet that money does NOT end up in the classroom. Where does it go? How about those school district administrators that get 6 figure paychecks and BMW ‘corporate’ cars for assuring all the papers are pushed… So here’s the deal: 1) Offer a voucher system (no, not to shut down public education, to discipline it.) so each family can put pressure on the waste. 2) Have a MANDATORY ratio of money to the classroom vs administration (i.e. teachers, teaching materials, janitors get x% of budget; administration, bureaucratic paper pushing, socialist compliance mandates, etc. get 1/10x% (why 1/10? Because any decent organization ought to be able to run with a “span of control” of 10 or more. Go ask an operations research major with an MBA…) And I’d also suggest that maybe, just maybe, it doesn’t take a $125,000 salary to assure that each school has a principal and a budget. I’d even go so far as to point out that we had great folks come from “one room school houses” with nobody by a single teacher running the place. Think about it… Exactly what “value added” is coming from that 2/3 or so of the education budget that is not going to the classroom?

Oh, and stop the “game” of tearing down perfectly good schools to sell the land, then building new ones on a bond issue to replace them. It is a nice “back door” way to use a credit card (bonds) and rake in the cash (selling land off budget) but those credit card payments become a killer over time…

BTW, just so folks know, a family member is a teacher in the state system. Yes, I’m biased; yet I’m suggesting that the school budget be cut. (There isn’t really any where else, it being 1/2 the budget by law…) But the political game of not buying the things that the folks really care about (small class size, paper, pencils…) and killing programs folks care about (dance, P.E. and sports, arts) while keeping “Mr. Banana and the Raincoat” political statements MUST END. If it doesn’t, well, go ask Nevada why folks are moving there… We can always vote with our feet (and our tax check can be directed to other jurisdiction that respects us. – I’m planning to bail in 1 to 2 years at most, so the exit is not going to slow down until things are fixed…)

So, in summary, it’s pretty simple: Look to Joe and Jane Sixpack. Ask “what do they want from government?” and provide it (and not much else). Ask also “What program exists for a political agenda?” and cut there. Finally, look at the “overhead vs product delivery costs”, and cut the overhead until the ratio is right…

If you don’t, one of two things will happen: 1) We (the average Joe & Jane of the state) leave for places that treat us better. 2) There is that California initiative process…

CSD, California Socialism Disorder

Hang onto your hats, America, you are about to be subjected to a big dose of California style Socialism Disorder “CSD” (seasoned with some old school “Chicago Shakedown System” pepper…) To make America work better, we must tax it to death. That’s the motto from D.C. now that we are deciding that CO2 must have a price.

So what can a consumer do? Cut back on spending?

Consumers have already shut their wallets. Look at car sales. I don’t expect this to get better any time soon in this country. That strategy is limited in where it can go and the already strapped consumer can’t cut back much more. But it’s not just people who can spend.

Unfortunately, the government has decided to do the spending for you (either by taxing the money from you, or just spending money they print and letting inflation take the value from your money). The only real choice left to the public at that point is to stop earning what they are no longer allowed to spend for themselves. And that is what people do under socialism (but it takes a while). In California we’ve had this for about 8 years now, with venture capital leaving and jobs with it.

My car mechanic is with his wife in Brazil this week. Before leaving he was grousing about the California regs and the costs added onto any petroleum product he handles coming in or going out… and we talked about “opportunities” there.

My neighbors are waiting have closed escrow on their new property down in South America (it is in out of escrow and they own it now!) and are moving in a few months. This isn’t a hypothetical, they’ve invited me to join them on adjacent land. He has a masters in engineering. Folks with skills and money get out first…

FWIW, I had a company with a dozen employees about 8 years ago. It became too much trouble trying to keep all the governments and agencies happy and I decided to just close it down. Yes, California lost a dozen tech jobs; my income is down about 1/2, but I gained a life… I suspect that with the California Socialism Disorder (CSD) going national, this story will be coming soon to a city near you. Please accept my apologies for inflicting Pelosi, DiFi, and Boxer on you, but it wasn’t my vote that did it. (Obama is your own creation…)

From the Feds, you will hear a long litany of things that will reduce to: “Tax beatings will continue until business morale improves!”. They don’t realize that it’s easier to just fold up the business and become a leach on the system. It’s hard enough to just make a business run and turn a profit; doing it with 2 people on your back just doesn’t work. Either you quit or you die trying, but in either case, the business and tax revenue are gone. California is learning that now with a deficit that has ballooned from $4 billion, to $14 billion, to (last time I heard) a projected $40+ billion. The proposed solution? More taxes… Somehow they never learn that a successful parasite does not kill it’s host.

This is how democracy always fails. 51% decide to tax to death 49% so nobody chooses to be in that 49%. Repeat; spiral decent into poverty. “Democracy is two wolves and one sheep voting on what’s for lunch!” explains it nicely. That’s why we have historically had a Republic.

But no more. We are now a Democracy. ( Senators are no longer representatives of the States appointed by the states, they are directly elected. Almost ditto the POTUS where we still have a little bit of an isolation in the Electoral College, but they are now largely directly reflecting the popular vote anyway thanks to individual state laws. So for all intents, the POTUS is a directly elected position. You must appeal to the masses to get the votes.) Democracies are not stable.

FWIW, there is an interesting statistic that no country lasts long when the government, via taxes, takes more than 1/2 the national income. Feds at about 38% and California at 11% is 49% for income tax… then there is 8% sales tax, property tax, etc. etc. Now adding CO2 tax. Not to mention the indirect tax of inflation (we will be inflating away the few $Trillion of debt we’re piling on here.) You can make that work for a couple of years, then folks decide that home brew beer (dodging taxes) and a welfare check sounds better than 12 hour days and paperwork with taxes taking any gain. Ambition can easily turn to lethargy when beaten often enough.

The U.S.A. for decades was the shining light for this truth. Now that even the Soviet Union and the Communist Chinese have learned it, we’ve forgotten. Go figure…

Unfortunately, there is also a long history of folks repeating this experiment and thinking “This time it will be different!”; and it never is. That is why I’m not holding my breath for a tax revolt. California is your existence proof. The taxpayer is not revolting. They are either relocating or they are joining the gravy train…

I’ve also started talking with my kids about the opportunities in emerging markets. (They graduate in the next year and two.) Nice time to go shopping for a country: Fresh degrees and no roots / anchors holding them back. Don’t expect them to pick up the tab for this CSD debt festival.

I had just hoped it would take longer. These things (CSD style economic collapses) usually take 20 years or so to kill the host. Didn’t count on the socialists being elected with a mandate and both houses of congress. Oh well. So it looks like I’ll be seeing more of the world after all… at least if I can move fast enough…

Any suggestions of a good country to try? I was thinking of somewhere warm, with a beach…

About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
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5 Responses to CSD California Socialism Disorder

  1. Roger Sowell says:

    Ed, Ed, Ed….you must have missed all the official reports and news articles about how AB 32, aka California Global Warming Solutions Act of 2006, will boost the economy, and increase employment, plus pay for itself at a rate of $2 returned for every $1 invested! [sarc is definitely ON]

    Electric power costs will only increase 12 percent, with renewable energy replacing coal-based generation!

    Gasoline costs will only increase a few cents per gallon with bio-fuels mandated!

    Consumers will face smaller electric bills because the government has programs to replace inefficient appliances with new highly-efficient appliances! The long-term loans needed to install the appliances will be paid for by savings on the power bill!

    Cars with very high miles per gallon will only cost $300 more (yup, that is three hundred, not a typo), and that will easily be compensated by savings from reduced gas consumption!

    One million solar roofs will be installed, putting to work four or five people on each roof as installers! Getting all one million installed in 3 short years requires roughly one thousand roofs per calendar day, or 1330 roofs per working day (union rules, 5 days per week). So, that is roughly 6,500 installer jobs right there! And, there are roughly 3 additional jobs per installer (stores, restaurants, etc.) so the multiplier effect means there will be roughly 20,000 jobs just from that item alone!

    What? Speak up! You say that California lost 79,000 jobs just in January? Uh….

    [ok, sarc OFF]

    You are too right, in my opinion. The true death rattle will be heard when California changes its rules so that a budget may be passed on a simple majority vote. There will be no stopping the tax and spend and borrow at that point.

    Until there are no more lenders willing to lend the state money. We are very close to that point now.

    And there are no more people working who are willing to pay the new taxes and fees. The sales tax in LA county is now 10.25 percent.

  2. AEGeneral says:

    What was it that Margaret Thatcher said about socialism again?

  3. E.M.Smith says:

    “The problem with socialism is that you eventually,
    run out of other people’s money.” – Margaret Thatcher

    per:

    http://www.theslowbleed.com/tag/margaret-thatcher-socialism/

    but I’m sure had many other choice words as well…

    10.25 Percent? WOW!

    I still remember the time I drove to Oregon to buy truck tires without sales tax… tax on $1200 of tires paid the gas to go see an old friend. There is a reason their is lots of shopping just over the border in Oregon and damn near nothing for 100 miles on the California side… So what’s the sales tax rate in Mexico?…

    We had this deal worked out. I’d deliver California booze (without the Oregon State Liquor Store price bump) and pick up any big ticket items my neighbors wanted (Oregon had no sales tax). Lots of “free” trips on the tax arbitrage!

    BTW, My Texas Uncle still does something similar with Texas booze taxes. I’m likely to be buying my next TV in either Nevada or Oregon (depending on which family or friend needs a visit).

  4. jeez says:

    E.M. Smith.

    As cute as the tax savings for the trip idea is, you can probably get the best price for a TV on Amazon, pay no sales tax, and most likely get it delivered for free.

    Then you can visit your friends and not have to lug the TV back.

  5. E.M.Smith says:

    My spouse does the online buying, I do the lugging, division of labor ;-)

    California has been making noises about going back and whacking folks for sales done interstate without paying sales taxes. I generally prefer to not leave a trail…

    And finally, if I must visit relatives, it’s a ‘feature’ that some of the time is spent out shopping and not stuck visiting the whole time in their living room!

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