Posts tagged with: california

New York Post illustration

New York Post illustration

In the New York Post, Acton Research Director Samuel Gregg looks at “the spread throughout America of economic expectations and arrangements directly at odds with our republic’s founding” and asks what the slow walk to “Europeanization” means for the long term. Gregg:

Unfortunately there’s a great deal of evidence suggesting America is slouching down the path to Western Europe. In practical terms, that means social-democratic economic policies: the same policies that have turned many Western European nations into a byword for persistently high unemployment, rigid labor markets, low-to-zero economic growth, out-of-control debt and welfare states, absurdly high tax levels, growing numbers of well-paid government workers, a near-obsession with economic equality at any cost and, above all, a stubborn refusal to accept that things simply can’t go on like this.

It’s very hard to deny similar trends are becoming part of America’s economic landscape. States like California are already there — just ask the thousands of Californians and businesses who have fled the land of Nancy Pelosi.

Europeanization is also reflected in the refusal of so many Americans to take our nation’s debt crisis seriously. Likewise, virtually every index of economic freedom and competitiveness shows that, like most Western European nations, America’s position vis-à-vis other countries is in decline.

Is there a way out, even as the “fiscal cliff” negotiations vividly illustrate the inability of Washington’s political elites to take spending and tax problems seriously? Gregg holds out hope: (more…)

Writing on The American Spectator website, Acton Research Director Samuel Gregg looks at the strange notion of European fiscal “austerity” even as more old continent economies veer toward the abyss. Is America far behind?

Needless to say, Greece is Europe’s poster child for reform-failure. Throughout 2011, the Greek parliament passed reforms that diminished regulations that applied to many professions in the economy’s service sector. But as two Wall Street Journal journalists demonstrated one year later, “despite the change in the law, the change never became reality. Many professions remain under the control of professional guilds that uphold old turf rules, fix prices and restrict opportunities for newcomers.” In the words of one frustrated advisor to German Chancellor Angela Merkel, “Even when the Greek Parliament passes laws, nothing changes.”

Politics helps explain many governments’ aversion to reform. Proposals for substantial deregulation generates opposition from groups ranging from businesses who benefit from an absence of competition, union officials who fear losing their middle-man role, to bureaucrats whose jobs would be rendered irrelevant by liberalization. The rather meek measures that Europeans call austerity have already provoked voter backlashes against most of its implementers. Not surprisingly, many governments calculate that pursuing serious economic reform will result in ever-greater electoral punishment.

In any event, America presently has little to boast about in this area. States such as Wisconsin have successfully implemented change and are starting to see the benefits. But there’s also fiscal basket-cases such as (surprise, surprise) California and Illinois that continue burying themselves under a mountain of debt and regulations.

Read “Why Austerity Isn’t Enough” by Samuel Gregg on The American Spectator.

Religion & Liberty’s summer issue featuring an interview with Metropolitan Jonah (Orthodox Church in America) is now available online. Metropolitan Jonah talks asceticism and consumerism and says about secularism, “Faith cannot be dismissed as a compartmentalized influence on either our lives or on society.”

Mark Summers, a historian in Virginia, offers a superb analysis of religion during the American Civil War in his focus on the revival in the Confederate Army. 2011 marks the 150th anniversary of America’s bloodiest conflict. With all the added attention the conflict is receiving, a piece focusing on faith is especially poignant. “The Great Harvest” by Summers notes that the revival was “homespun,” meaning one that was organic in nature and spread among the common soldier.

I offer a review of Darren Dochuk’s new book From Bible Belt to Sunbelt. Dochuk tells the tale of the great migration from the American South to Southern California. This development ultimately transformed evangelicalism and national politics. It also helped in wedding many religious conservatives to economic conservatism.

“The Separation of Church and Art” is an excerpt from the forthcoming book, Wisdom & Wonder: Common Grace in Science & Art by Abraham Kuyper. Available for the first time in English, Christian’s Library Press will publish Kuyper’s work in November. The Acton Institute has played a tremendous role in the translation project. You can find out more about that role here.

The “In The Liberal Tradition” figure is American Founder Oliver Ellsworth. Ellsworth, a strong proponent of federalism was instrumental in the shaping of our Republic. American President John Adams called Ellsworth “the firmest pillar” of the federal government during its earliest years. In a new biography about Ellworth, author Michael C. Toth argues that Ellsworth’s Reformed faith not only shaped his personal life but the model of federalism he supported also had deeply religious roots within Connecticut.

There is more content in this issue. Past issues of Religion & Liberty are also available online.

In his New Geographer column on Forbes, Joel Kotkin looks at the “profound gap between the cities where people are moving to and the cities that hold all the political power” in California. Those living in the growing “Third California” — the state’s interior region — are increasingly shut out by political elites in San Francisco and other coastal cities.

Kotkin observes that the “progressives” of the coast are “fundamentally anti-growth, less concerned with promoting broad-based economic growth — despite 12.5% statewide unemployment — than in preserving the privileges of their sponsors among public sector unions and generally affluent environmentalists. This could breed a big conflict between the coastal idealists and the working class and increasingly Latino residents in the more hardscrabble interior, whose economic realities are largely ignored by the state’s government.”

He interviews economist John Husing who describes San Francisco as “a bastion of elitist thinking due to a large ‘trustifarian’ class who have turned the city into favorite spot for green and fashionably ‘progressive’ think tanks.”

Trustifarians, apparently, don’t like to get their hands dirty in factories and fields. More:

This thinking is increasingly influential as well in a rapidly changing Silicon Valley. In the past the Valley was a manufacturing powerhouse and had to worry about such things as energy prices, water availability and regulatory relief. But the increasingly dominant information companies such as Apple, Facebook, Twitter, Google and their wannabes are widely unconnected to industrial production in the region. To be sure, they have created a financial bubble in the area that has made some fantastically rich, but according to researcher Tamara Carleton they have contributed very little in new net job creation, particularly for blue-collar or middle-class workers.

There’s a bit of a snob factor here. Fashionable urbanistas extol San Francisco as a role model for the nation. The City, as they call it, has adopted the lead on everything from getting rid of plastic bags and Happy Meals is now considering a ban on circumcision. When it comes to everything from gay rights to bike lanes, no place is more consciously “progressive” than San Francisco. So why should that charmed city care about what happens to farmworkers or construction laborers in not-so-pretty Fresno?

Class and occupational profile also has much to do with this gap between the Californias. Husing notes that the Bay Area has far more people with college degrees (42%) than either Southern California (30%) or the Central Valley (where the percentage is even lower). Green policies that impact blue-collar workers — restraining the growth of the LA port complex, restricting new single-family home construction or cutting off water supplies to farmers — mean little distress for the heavily white, aging and affluent Bay Area ruling circles.

But such moves could have a devastating impact on the increasingly Latino, younger and less well-educated populace of the interior. Outside of the oft-promised green jobs — which Husing calls “more propaganda than economics” — it is these less privileged residents’ employment that is most likely to be exported to other states and countries, places where broad-based economic growth is still considered a worthy thing. “By our ferocious concentration on the environment, we have created a huge issue of social justice,” Husing points out. “We are telling blue collar workers we don’t want you to have a job.”

Read “California’s Demographic Dilemma: A Class And Culture Clash” on the Forbes website. (HT: RealClearMarkets)

Blog author: jballor
Tuesday, January 27, 2009

On the first half of today’s installment of The Diane Rehm Show, Jerry Taylor, a senior fellow at the Cato Institute got off a good line in the midst of a discussion concerning federal regulation of emission standards.

Concerning the performance of the American car manufacturers in comparison to that of foreign automakers, and the moral hazard involved in the various bailouts, Taylor said, “Capitalism without the threat of bankruptcy is like Christianity without the threat of hell. It doesn’t work very well.”

Other guests included Mary Nichols (Chairman of the California Air Resources Board), Phyllis Cuttino (director the Pew Environment Group’s U.S. Global Warming Campaign), and David Shepardson (Washington Bureau Chief for The Detroit News). The discussion focused in large part on the attempts by California to regulate emissions within its own borders more strictly than allowed by the federal EPA.

Arguments that California is “too large” of a state and has too big of an economy to enjoy certain rights doesn’t strike me as very convincing. That’s simply a consequentialist argument: that the nationwide effects of allowing California to do this will be bad, and therefore we shouldn’t recognize the state’s right to handle its own regulation. If it really is an issue of federalism and state’s rights, the issue shouldn’t in the first place be whether or not recognition of a right will presumably have a negative economic impact. There are a lot of assumptions wrapped up in that argument.

No state is an economic island unto itself. The mere fact that the national economy is largely integrated doesn’t by itself mean that states do not have the right to make decisions about how to regulate things within their own borders. Just what is the line between acceptable and unacceptable national economic impact? Adverse feelings to this particular action on the part of California isn’t sufficient to draw lines too hastily. How might this apply to other industries and commodities?

Indeed, we can discuss whether CO2 emissions ought to be regulated at the federal level under the commerce clause, but I don’t think the size of a state should determine what rights it does or does not have. Maybe the consequentialist line of reasoning is inherently wrapped up in the commerce clause (I’m certainly no constitutional expert). But the clause has been stretched so much (e.g. it applies to a farmer consuming what he grows on his own farm) that a little pullback seems warranted, and without the creation of a(n) (inter)national carbon market (a remarkably bad idea) the clause doesn’t seem to me to be directly relevant to emissions.

Blog author: jballor
Wednesday, October 29, 2008

There’s a lingering issue that continues to bother me about the so-called “global warming” Supreme Court case from 2007, Massachusetts v. EPA (05-1120), and that is a nagging concern about federalism and environmental standards.

As it stands currently, individual states are often prevented from enacting tougher legislation or regulation regarding some forms of pollution than the federal EPA standards. In order for a state EPA to partner with the federal EPA, be “authorized,” and thus receive funds, “a state must have enforcement programs and statutes that are essentially as stringent as the federal programs.”

One basic argument that the court found cogent in the Mass. v. EPA case was that individual states were prevented from creating standards that were more stringent regarding CO2 emissions than the EPA, and that since the EPA had not enacted any serious level of restriction, the states were unable to protect their environment.

This bothers me in part because one of my basic political impulses is a federalist one, an emphasis on the rights and sovereignty of individual states. The relationship between the federal and state environmental agencies seems to me to be fundamentally tyrannical, in that it overrides the ability of states to regulate themselves on these matters.

If you coopt the sovereignty of someone and then let your responsibilities lapse, then you have committed a pretty serious injustice. In 2007, the state of California sued to get the EPA to allow it to enact cleaner air standards, a right supposedly granted under the Clean Air Act. The EPA needed to agree to the tougher standards by granting a waiver, which it declined to do.

So there’s that political concern. But there’s also an economic concern, and this cuts both ways. Most often the federal government invokes the commerce clause to argue that it is within its rights and responsibilities to promote economic trade and stability by enacting nationwide standards. But in the case of environmental standards, that economic argument might not always be salient.

In a recent New York Times column, Tom Friedman calls for “a national renewable energy standard that would require every utility in the country to produce 20 percent of its power from clean, non-CO2-emitting, energy sources — wind, solar, hydro, nuclear, biomass — by 2025.” Friedman repeats the typical argument justifying national standards: “About half the states already have these in place, but they are all different. It would create a huge domestic pull for renewable energy if we had a uniform national mandate.”

John Whitehead, blogging at Environmental Economics, gives expression to the basic economic and political concern I had about the Massachusetts v. EPA decision as well as proposals for national mandates on environmental standards:

Most every environmental economics textbooks explain why uniform national standards are inefficient. Since benefits and costs are regionally different, it makes sense to adopt non-uniform standards — if standard adopting is a must.

Why not give federalism free reign on environmental issues, let states compete against each other, and see how things play out? If California wants to experiment with enacting tougher restrictions while attempting to remain economically competitive, why not see if the state is able to pull it off?

Lawrence J. McQuillan offers a less than surprising economic assessment for the Golden State in the City Journal, causing people to flee for better opportunities elsewhere. McQuillan states:

California continues to be burdened with high taxes, punitive regulations, huge wealth-transfer programs, out-of-control spending, and lawsuit abuse. And there’s no end in sight to the state’s fiscal madness.

Some entrepreneurial minded residents are finding states like Nevada more hospitable for economic opportunity. Nevada ranks second when it comes to inbound migration. The Pacific Research Institute’s 2008 U.S. Economic Freedom Index ranked Nevada sixth in the country in “economic freedom.” South Dakota secured the top spot for 2008.

The rankings and report PRI has compiled is worth studying. It’s not a bland read either, for example thoughts and quotes concerning the relationship between political and property rights by leaders like James Madison are included.

Undoubtedly the report would be very beneficial for state legislators to use as a tool for serving their constituents. McQuillan also notes in his piece:

Economic freedom—or the lack thereof—affects states in multiple ways. Migration alters the political map through congressional apportionment. Current projections suggest that California’s mass exodus will deprive it of a seat in the U.S. House of Representatives after the 2010 census. Economic freedom also impacts pocketbooks. In 2005, per-capita income in the 15 most economically free states grew 31 percent faster than in the 15 states with the lowest levels of economic freedom. Policies friendly to economic freedom help states shore up their finances, too. The 15 freest states saw their general-fund tax revenues grow at a rate more than 6 percent higher than the 15 states with the least economic freedom.