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How not to run an economy

In our continuing series on why Obama's policies will be ruinous for America, an article that shockingly reports the Detroit metro area is the worst big city for jobs. Funny how a friendly-with-the-unions state and local government, an unfriendly-to-taxpayers economic climate, and ever increasing federal mandates have decimated an industry that was once the envied across the globe.

The Sun Belt just might recover, but employment prospects look grim in Michigan, Ohio and California.
First let's deal with the perennial losers, the sad sacks of the American economy. Mostly cities in the nation's industrial heartland, these places have ranked toward the bottom of our list for much of the past five years. Eleven of the bottom 16 regions on our list are in two states, Ohio and Michigan. In fact, the Wolverine State alone accounts for bottom four cities: Jackson, Michigan, Detroit, Saginaw and Flint.
One easy prediction is that Ford will soon be the #1 US automaker by a wide margin. Washington will try to choke the life out of them with increasingly burdensome environmental mandates, but being free (for now) from direct management by the government will spare them the slow death of heavily subsidized, impractical little clown cars no one wants to buy. Should Ford run the gauntlet they'll have huge PR leverage in the market. Now if they only have the balls to run an ad with one family pulling into the driveway in a comparatively spacious Ford while his neighbor is tying the dog and grandma onto the roof rack of their new Chrysler Persephone sub-compact plug-in hybrid...

Things look grim in Michigan, Ohio, and California. Interestingly, one of these things is not like the other. California is hardly the rust belt. Yet as I previously posted they have only one city - Bakersfield - in the top 1/3 of the Best Cities for Jobs and now things look "grim".

Much of the problem lies with the state's notoriously inept government. The enormous budget deficit will almost certainly lead to tax increases, which will fall mostly on the state's vaunted high-income entrepreneurial residents. Stimulus funds won't do much good either, Adibi notes, since "the state is grabbing all of the federal stimulus money" to keep itself afloat.

A draconian regulatory environment also could dim California's prospects for growth. Despite double-digit unemployment, the state seems determined not only to raise taxes but also to tighten its regulatory stranglehold.
But an even deeper recession, it seems, hardly troubles today's dominant players--public employees, environmental activists and gentry liberals who largely live along the coast. The state has recently passed a draconian Assembly bill aimed to offset global warming by capping greenhouse gas emissions--a measure that seems designed to discourage productive industry.

"This is becoming a horrible place to produce anything," says Watkins, who is executive director of the Economic Forecast Project at the University of California, Santa Barbara.

California's lawyers, though, might stay busy. Attorney General Jerry Brown has threatened to sue anyone who grows their business in unapproved, environment-threatening ways. To be sure, this promise may have relatively little impact on the more affluent, aging coastal communities--but it could wreak havoc on younger, less tony areas in the state's interior. Many of the local economies there still reply on resource-dependent industries like oil, manufacturing and agriculture.
The desire to increase regulation reflects a peculiar narcissism and arrogance of the state's ruling elites, who believe the genius of San Francisco's venture capitalists and Los Angeles' image-makers alone are enough to spark a powerful recovery.

This is delusional. True, California still has a lead in everything from farm products to films to high-tech manufacturers. But it has been slowly losing ground--to both other states and overseas competitors. CEOs and top management might stay in the Golden State, but they increasingly send outside its borders all jobs that don't require access to the local market, genius scientists or talented entertainers.

"There's a feeling in California that we will come back, no matter what, because we are California," Watkins says. "The leadership is swallowing Panglossian Kool-aid. Some very smart people, a beautiful climate and nice beaches is not enough to guarantee a strong recovery."

Democrats in Washington - and Obama in particular - have narcissism and arrogance in abundance. California is their blueprint and they will stick to the plan even though it will produce a new Tacoma Narrows Bridge. As bad as things are in Michigan, California is Exhibit A in how not to run a government and an economy - yet it's Plan A for Obama, Nancy, and Harry.


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Comments (13)

Why does it feel like 1979 ... (Below threshold)

Why does it feel like 1979 again? Welcome back Carter!

Kalifornia is what the rest... (Below threshold)

Kalifornia is what the rest of the nation can look forward to with the 'elites' running everything. In 2 weeks, the bastards in Sacramento will get a wake up call. Their 'budget saving' propositions up for a vote are going to get crammed right up their collective asses, resulting in a $14 BILLION budget shortfall. And that's taking their pie-in-the-sky rosy forecasts into account (starting to sound familiar). The states "Air Resources Board" takes great delight in imposing the most draconian measures they can think of so that we'll have 'clean air'. (NOTE TO BOARD: East winds blow from CHINA...and it ain't clean!). But no matter, the eco-twits what a state with 'green industries', no one else need apply. Anything made here will be 'green'. No need for nasty factories, nasty chemicals, terrible odors, etc etc. Solar cells will grow on trees, lubricants will come from plants, metals will magically surface all ready for paint and assembly. Unicorns will dance in the meadows under multi-hued rainbows. In the meantime, unemployment is closing in on 12%. Have a nice day!

Many of the local economies... (Below threshold)

Many of the local economies there still reply on resource-dependent industries like oil, manufacturing and agriculture.

In the minds of Obama, Pelo... (Below threshold)

In the minds of Obama, Pelosi, et al, California is failing because there's no way to keep people from fleeing the state.

To "fix" that "problem", they will turn the whole country into one giant Michiforniachusetts. Nowhere to run.

In fact, the Wolverine S... (Below threshold)

In fact, the Wolverine State alone accounts for bottom four cities: Jackson, Michigan, Detroit, Saginaw and Flint.

Um, isn't that *5* cities?

Three letters, I tells ya... J-O-B-S!

NFA -You are aware... (Below threshold)


You are aware, I take it, that there's a Jackson, Michigan - but no Michigan, Michigan. Looks like someone left in a spare Michigan... but it doesn't take away from the point being made.

You're looking at a state that's controlled by Democrats and unions. By 'progressive' thinking, it ought to be a friggin' paradise. And it is - for... um... uh... the union hierarchy? Seems like pretty much everyone else is screwed, and there's little they can do about it. But the Dems make sure they get their pound of flesh from the unions, and the unions make sure they get their pound from the workers... at least, for now.

And California is going the same way. 'Progressive' ideology is running the state - and it's running it into the ground.

Yes, it's easier to snark about a cut&paste that went awry - but pretty soon snark isn't going to cover the fact that there's a real problem with 'progressive' thinking, and it's simple - government can't be everything to all people, controlling every aspect of life from birth to death... much as some would like it to be. People HAVE to take responsibility for their own choices, their own actions, their own failures or successes. Give them the education to succeed, give them the opportunity - then government needs to step back.

GOPosaurs are telling us ho... (Below threshold)
Larry Dickman:

GOPosaurs are telling us how to not run an economy?

Please, trot out (Not) Joe the (Not) Plumber. Maybe he can provide some insight.

Larry Dicksmack its apparen... (Below threshold)

Larry Dicksmack its apparent you have'nt a clue. So STFU

dickman - "GOPosaurs ar... (Below threshold)

dickman - "GOPosaurs are telling us how to not run an economy?"

No the dems that have been in control of Michigan politics at the State level and in Detroit to cite one city are telling us how. BY EXAMPLE!

But Heaven forbid you even approach that part of the post. It's just another example of zero effort, and zero thought process on your part.

So what's next after the RI... (Below threshold)
Larry Dickman:

So what's next after the RINO Listening Tour? A Salad Tossing Party?

The Party of NO disentigrates into the Party of 0.

I live in California and I ... (Below threshold)

I live in California and I agree that things are bad here. However, unlike Michigan, things can be fixed here quickly.

I don't thing the state govt. has the balls to pull this off but it would work.

What would? Declare Bankruptcy! The whole state govt. - Chapter 11. (actually, I don't think chap 11 applies to govts, but I'm sure there's an appropriate chapter elsewhere in the bankruptcy code)


The problem is that there are tons of entitlements (insanely generous pensions*, mandatory 40% of budget MUST be spent on schools and so on)

*A friend of mine got a job in the Cal State university system just because he would get a state pension after five years.

Plus you have bloated govt., staffed by people making outrageous salaries. Bond Interest! And so on, and so on.

And all that stuff is off the table when it comes to writing the state budget. It's mandatory spending!

Bankruptcy gives you a chance to re-negotiate those contracts. Smaller pensions. Fire 10-15% of the state govt. And so on. (Tough on the bond holders. But, come on. If you bought a California State bond in the last 2-3 years how could you seriously expect to get paid 100 cents on the dollar?)

It's important to remember that the money problem in California isn't a shortage of income for the govt. They're raking in record amounts almost every year. The problem is they're spending

Arrrgh. Something happened... (Below threshold)

Arrrgh. Something happened and I didn't finish the post.
The problem is they're spending at an even faster rate. If you could just get the spending under control, the budget would be easily balanced and you could cut taxes and bring the businesses back.

And the good times would roll again!

But you can't do that now because so much of the spending has been locked in. Therefore, bankruptcy so you can unlock that spending.

The next governor of this state might run on a campaign promise to put the state in bankruptcy! Boggles the mind.

But I think it would work!

So now, Governor/AG Moonbea... (Below threshold)
Glenn Cassel AMH1(AW) USN Retired:

So now, Governor/AG Moonbeam can now be referred to as Galloping Gertie?
Just for laughs:
In the spring of 1988, I was on a detachment to USS Nimitz out of Bremerton WA. When the Navy airlift landed at McChord AFb, we had a bus to Bremerton waiting. When we got to the Tacoma Narrows Bridge, I stood up and gave a short history lesson. The question was, had any of you seen the footage of the bridge rolling, bending and collapsing? Blank stares from some, but to those who new what it was, the reaction to, you are on it's replacement was priceless! Some of the Filipinos actually turned ghost white.






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