By Paul R. Hollrah, Guest Blogger
By now, almost every living American, other than public employees and their union officials, is aware that state governments across the nation are on the verge of fiscal collapse.
According to a February 2010 Washington Post report, “Even before financial markets crashed in fall 2008, state governments nationwide had promised to deliver $1 trillion more in retirement benefits than they had in their pension investment funds.” In addition to a $587 billion shortfall in retiree healthcare costs, the states owed an additional $452 billion in retiree pension payments.
A study published by the Pew Center on the States raises questions about the “rosy assumptions” state pension fund administrators make in predicting how much their investments will earn. While the S&P 500 index fell by 20 percent over the previous decade, states continue to predict a grossly unrealistic 8 percent annual return on their investments.
Writing in his Market Watch newsletter, Robert Powell warns that, “State policymakers who ignore the current shortfall do so at their own peril. Indeed, states that fail to address under-funded retirement systems face the very real possibility of raising taxes or taking taxpayer money that could be used for education, public safety, and other necessary services just to pay public sector retirement benefit obligations.”
Gov. Jerry Brown (D-Calif.)
Try telling that to newly-elected California Governor Jerry Brown, the man Californians might see as the personification of the old adage, “Be careful what you wish for… you just might get it.” After serving one term as California secretary of state, 1971-75; two terms as governor, 1975-83; two terms as mayor of Oakland, 1999-07; and one term as California attorney general, 2007-11, one might think that somewhere along the way Brown might have concluded that his approach to government regularly produces nothing but unpleasant results.
Now, he returns to the governor’s mansion at a time when, as historian Victor Davis Hansen describes it, California has “the highest sales and income taxes, the most lavish entitlements, the near-worst public schools, and the largest number of illegal aliens in the nation, along with an over-regulated private sector, a stagnant and shrinking manufacturing base, and an elite environmental ethos that restricts commerce and productivity without curbing consumption.”
The most telling picture of where California is today, and where it is headed tomorrow, comes from a series of 20-mile bicycle excursions that Hansen took through the cities and towns of the Central Valley… an effort to witness, “even superficially,” what is happening to the region of California that he has called home.
On the western side of the Central Valley, which formerly produced a quarter of the nation’s fruits and vegetables, some 100,000 acres went unplanted in 2008. That number was expected to grow to 750,000 acres by the end of 2009. The drop in food production was a direct result of a drought, accompanied by the cutoff of irrigation water by a federal court order favoring a tiny fish, the delta smelt, which is protected by the federal Endangered Species Act. Economists estimate that the shortage of irrigation water will mean $1.5 billion in lost income and the elimination of 40,000 jobs.
The impression that most non-Californians have of the Golden State is one of movie studios, movie stars, beautiful sandy beaches, palm trees, orange groves, and vineyards. But that’s not what Hansen found as he made his three-times-a-week bicycle tours of the once-lush Central Valley.
He says, “Many of the rural trailer-house compounds I saw appear to the naked eye no different from what I have seen in the Third World. There is a Caribbean look to the junked cars, electric wires crisscrossing between various outbuildings, plastic tarps substituting for replacement shingles, lean-tos cobbled together as auxiliary housing, pit bulls unleashed, and geese, goats, and chickens roaming the yards.”
As a state with a reputation for heavy-handed business regulation, tough zoning laws, and strict building codes, Hansen was forced to conclude that none of that reputation was earned outside the coastal megalopolis from San Diego to San Francisco. He was appalled at the number of rented-out rural shacks and stationary Winnebagos parked on what once were small farms… the vineyards overgrown with weeds, or torn out with the ground lying fallow… Apparently it is not worth the gamble of investing $7,000 to $10,000 an acre in a new orchard or vineyard…”
Hansen’s visit to two supermarkets, 50 miles apart, was most instructive. In both instances, he found that he was the only customer in line who did not pay for groceries with a social-service plastic card… the electronic cards that have replaced the paper “food stamps,” the use of which proved to be so embarrassing for the poor and “disadvantaged.” Of particular note to
Hansen was the disparity between the implied poverty of the card users and their automobiles and electronic gadgetry. While most card users purchased groceries with public assistance credit cards, they carried iPhones, Bluetooths, and Blackberries and loaded their groceries into late-model Accords, Camrys, and Tauruses.
The closest that the rich and famous of Palm Beach, Beverly Hills, and Carmel will ever get to any of this politically self-imposed squalor is what they might see from the windows of their private jets as they head for their condos in New York or their estates in the Hamptons. But if they really wanted to see what is in store for California, after generations of Democrat control of state and local government, they can get a pretty accurate picture by arranging a brief stopover in Detroit. Like California in the years ahead, Detroit is a showcase of what liberal social policies and uninterrupted Democratic political control can do to a city or a state.
In a recent article by journalist Frosty Wooldridge, he describes Detroit, the city he called home for fifteen years, from the mid-1970s until 1990. He writes, “I watched it descend into the abyss of crime, debauchery, gun play, drugs, school truancy, car-jacking, gangs, and human depravity. I watched entire city blocks burned out. I watched graffiti explode on buildings, cars, trucks, buses, and school yards. Trash everywhere!”
Wooldridge tells us, “Detroiters walked through it, tossed more onto it, and ignored it. Tens of thousands, and then hundreds of thousands today, exist on federal welfare, free housing, and food stamps. With Aid to Dependent Children, minority women birthed eight to ten, and in one case reported by the Detroit Free Press, one woman birthed 24 children… all on American taxpayer dollars. A new child meant a new car payment, new TV, and whatever mom wanted. I saw Lyndon Baines Johnson’s ‘Great Society’ flourish in Detroit. If you give money for doing nothing, you will get more hands out, taking money for doing nothing.”
Wooldridge points out that Detroit’s population has declined by 50 percent, from 1.8 million to 912,000, while legal and illegal immigrants flock to the city, attracting more than 300,000 Muslims and 400,000 Mexicans. The crime rate soars and 7 out of 10 murders go unsolved.
According to Wooldridge, Detroit is now a city on “life support.” As the once-great automobile industry hurtled toward bankruptcy, the steadily worsening unemployment rate hit 28.9 percent in 2009 and the city finds itself $300 million short of what is needed to provide even the most basic municipal services. The school system, with a dropout rate of 76%, is now in receivership. Yet, just six years ago, the politically powerful teachers union forced school administrators to reject a philanthropist’s offer of $200 million to build fifteen independent charter schools.
What is important for the American people to understand is that what has happened to Detroit is happening in all of our major cities and in all of our most populous states… California, Illinois, and New York… where Democratic political machines are in control. But none of this was unpredicted. Conservatives and Republicans have been warning for generations of what happens when an unprincipled political party, with access to large voting blocs who want something from government at the expense of everyone else, gains control of government. What is Detroit today is Los Angeles, San Diego, and San Francisco of tomorrow.
To return California government to the hands of a free-spending, union-friendly Democrat like Brown, at a time when the only useful prescription for California’s future is strict austerity, makes no more sense than to put Dr. Jack Kevorkian in charge of the “suicide watch” unit at the local psychiatric hospital. But that’s exactly what California voters did on November 2. They had a chance to elect a successful businesswoman, Meg Whitman, who could have put their state on a path to economic salvation, but they chose to do otherwise. They chose, instead, a course that will ultimately result in bankruptcy and the abrogation of public employee union contracts.
When that happens, the public employee unions and their Democrat enablers will expect the American taxpayer to come to their rescue, but that’s not going to happen. To suggest that the American people will increase their indebtedness by another trillion dollars, just to save the states and their public employee unions from decades of bad decisions, is foolhardy at best.
Yes, Dr. Jack Kevorkian lives… and he resides in Sacramento, in Chicago, in Detroit, in New York, and in every city and state in America where Democrats promise something for nothing, if only the uneducated masses will continue to pull the Democrat lever on Election Day. How long will it take for the great cities of California to become just like Detroit? It’s hard to say, but their fate is certain.
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