Are California's financial problems due to piracy? - Tilted Forum Project Discussion Community

ASU2003 · 07-28-2010, 09:22 AM

If the recording industry would have worked with Apple back in the mid 90s to create an iTunes like marketplace, less movie piracy through torrent sites, a way for San Bernardino porn makers to actually sell porn on-line instead of having most of it for free, and no more 'Hollywood' accounting where multi-million dollar movies lose money... Would California still be facing the budget problems it has?

I'm not saying that it would be a good thing to live in a DRM world where Apple & Microsoft would have controlled the distribution of media files, but it seems like there is a lot of money that should have been made, and taxed accordingly. I know that I would have spent a few thousand dollars over the past decade on those types of files.

Pearl Trade · 07-28-2010, 10:03 AM

I think their financial problems have more to do with over spending and poor government leadership.

Your idea would definitely net them more money if they did that back at the start of everything, but in no way does it correlate to the current problems.

braisler · 07-28-2010, 10:32 AM

It also assumes that every person who downloads a movie or song would pay a retail price for the same content if the 'piracy' option was not available. This is a fallacy. This issue comes up again and again in piracy trials. In the US, the courts seem to be heavily favoring the recording industry in assessing damages based on some theoretical financial impact of lost income. In Europe, I have read of some decisions in which the court took the much more reasonable view that file-sharing is more closely akin to a taking a book out from a lending library.

I tend to think of it like this: If a friend owns a movie and offers to bring it over to watch at my place, I might agree. If I was faced with the decision of buying that movie myself, I would pass. If that movie is a porno... well, we might become even better friends... or worse.

Cynthetiq · 07-28-2010, 11:16 AM

California's issues stem from a multiple choice of reasons. First, bad government decisions, and a constant stream of them. Next, allowing voters to who had no idea about budgeting voice opinion via votes on important crucial propositions. Alienating manufacturing so that many companies moved to more business favoring states like Nevada, Arizona, and Oregon.

These are the reasons, not some downloading piracy.

RogueGypsy · 07-28-2010, 11:49 AM

Let's not mention the 10million + who use all of the state funded services and pay no taxes to support them.

snowy · 07-28-2010, 12:08 PM

Quote:

Originally Posted by RogueGypsy

Let's not mention the 10million + who use all of the state funded services and pay no taxes to support them.

I'm gonna call BS on that. Where's your evidence that that is the case?

SNAP benefits in California (food stamps) are issued to LEGAL immigrants only, and only those who meet certain requirements.

From the California Department of Social Services website:

Quote:

Certain non-citizens such as those admitted for humanitarian reasons and those admitted for permanent residence are eligible for food stamps. Eligible household members can get food stamp benefits even if other members of the household are not eligible. Food stamp eligibility is available to most legal immigrants who:

Have lived in the country for five (5) years, or
Are receiving disability-related assistance or benefits, regardless of entry date, or
Are children under 18 years of age regardless of entry date.

Eligibility and Issuance Requirements

Legal immigrants do pay taxes, and therefore have a right to social services, just as any other person in the United States does.

Almost all social services across the United States require extensive documentation to be presented in order to gain services.

roachboy · 07-28-2010, 12:38 PM

sometimes i think undocumented workers are to conservatives what the hitlero-trotskyite wrecker was to stalinism--the universal explanation for dysfunctions that are generated by the political logic itself for which the political logic has no space--so a scapegoat gets generated that is passed off as an explanation. of course at this point there's less an american gulag than there was under stalin. isn't there? what, only 10% of the us population is in prison...but i digress...

as for the op, i wonder whether you could make the same speculative argument about recreational drugs that are classified as illegal. think of the revenue that could be had from legalization and the taxation that could be derived from it.

so you could argue equally that kali's fiscal problems follow from the fact that cocaine is illegal.

Baraka_Guru · 07-28-2010, 12:56 PM

I just read this in the Wikipedia entry on the financial crisis:

Quote:

Causes of budget deficit

A major source of the deficit has been the continuous growth in salaries and benefits of state employees during economic boom times. In 2009 more than 134,000 Bay Area public employees were reported by the Contra Costa Times to have earned annual base salaries in excess of $100,000; however, many of these employees were local employees, not state employees. A database of public employee salaries was also made available by San Jose Mercury News. As per the same source over 40,000 public employees in the Bay Area alone earned over $200,000 in 2009.

In 2008 the daily news also reported six figure salaries of many public officials in LA. The Sacramento Bee maintains an updated database of state worker salaries.

In addition, since 1978 California requires a supermajority i.e. the approval of more than half the legislative body, to increase taxes. This has been a major obstacle for lawmakers who favor tax increases but have not succeeded in gaining a supermajority.

2008-10 California budget crisis - Wikipedia, the free encyclopedia

I think this is just one of several problems or "causes," but still: that's a lot of six-figure salaries.

Maybe I'm just bitter because you could triple my own salary and you'd still get only five figures.

Xazy · 07-28-2010, 12:56 PM

So following that logic legalize prostitution, pot, cocaine, heroin and ecstacy and bam US deficit will begin to shrink.

roachboy · 07-28-2010, 01:11 PM

you'd think.

the un estimates that a little under 10% of international trade is carried on via the black market for drugs.
that's a whole lot more money than is involved in downloading music or movies.

Cynthetiq · 07-28-2010, 01:47 PM

Quote:

Originally Posted by Baraka_Guru

I just read this in the Wikipedia entry on the financial crisis:

2008-10 California budget crisis - Wikipedia, the free encyclopedia

I think this is just one of several problems or "causes," but still: that's a lot of six-figure salaries.

Maybe I'm just bitter because you could triple my own salary and you'd still get only five figures.

The salary isn't the budget killer as much as the pensions. Ohhh does California have to honor some incredible pension packages.

New York has the same problem.

Baraka_Guru · 07-28-2010, 01:57 PM

So does GM.

Willravel · 07-28-2010, 05:24 PM

No.

The money lost from piracy is theoretical at best. The fact is most people that pirate pirate tv shows, and those that pirate movies generally see and buy a lot of movies.

Our money problems have to do with quite a few things, but mainly they simply have to do with a lot of spending. We tend to have more severe reactions to national economic trends, which means a recession brings a lot more welfare recipients in California than it might in say Oregon. Our prison system is heavily privatized and our prison guards make a shitload of money. If we had a public system, we could remove a good 40% of the prison budget. We have wildly inconsistent public salaries, including some recent discoveries that there are public officials pulling in 7 figures for $50,000 a year jobs. The worst problem, though, is our state legislature. We need a 2/3 majority in both houses on a budget bill, and then it has to make it past Republican governor Arnold, which means it's almost impossible to get a fucking budget passed. It's very frustrating.

Tully Mars · 07-29-2010, 03:49 AM

Quote:

Originally Posted by Willravel

No.

The money lost from piracy is theoretical at best. The fact is most people that pirate pirate tv shows, and those that pirate movies generally see and buy a lot of movies.

Our money problems have to do with quite a few things, but mainly they simply have to do with a lot of spending. We tend to have more severe reactions to national economic trends, which means a recession brings a lot more welfare recipients in California than it might in say Oregon. Our prison system is heavily privatized and our prison guards make a shitload of money. If we had a public system, we could remove a good 40% of the prison budget. We have wildly inconsistent public salaries, including some recent discoveries that there are public officials pulling in 7 figures for $50,000 a year jobs. The worst problem, though, is our state legislature. We need a 2/3 majority in both houses on a budget bill, and then it has to make it past Republican governor Arnold, which means it's almost impossible to get a fucking budget passed. It's very frustrating.

Not sure I buy all that. Most state prison systems privatize in order to save money. Private companies tend to offer less health care, pensions and honestly training. I was on a board considering privatizing some facilities in Oregon. Several bids were reviewed and the cost per prisoner per day dropped around $25-$30 a day depending on the bid. Times that by the number of inmates and you stand to save millions.

As Cyn points out above, correctly in my opinion, the pension obligations of many states are killing them. In Oregon they negotiated several times/years for no cost of living increase but instead an increase in retirement benefits. Not only an increase but a change in the way they calculate those benefits and retirement age. Sick time accrued was at one time lost (I think) when you retire, then it was added in at 50% and finally %100 (I think it's back to 50% now). Plus if you have prior military service you can "buy" that time and have it added to your account as if you worked in your state job. It counts both as funds and as time in service. So if you're under the police/fire system which is 25yrs and out you can actually retire with 80% full benefits after 21 years. So after 21 years of service the state would be required to pay a person for the rest of their life, not only their life but if they die they have to pay the person's spouse until they pass away. You end up possibly paying someone who worked 21-25 yrs for another 30 or 40 years.

They also used to have 5 pay grades, then 6 and I believe now it's 7 in some occupations. So you have people just starting out making 35-40K a year and 10 years later nearly 70K. And when those top end people retire often they make more then their take home pay when working. Under Oregon PERS system it's called "money match." Which basically means when you retire we'll double the amount in your account and pay you monthly based on that inflated amount.

Now this sounds a little crazy, right? So why would a state make such a deal? In my opinion several factors were at play. One, like all governments anymore, there was a thought process of "why pay now? We don't have the money, so lets pay later." As if some magical event was going to occur and they'd be in a better position to pay later. Two you had powerful unions threatening to shut down the entire state if they didn't get something. Those unions were smart enough to see a good deal when they saw one. And lastly, probably most importantly, all the people at the collective bargaining table were either state employees or union officials. No one solely had the interest of the taxpayer at the table.

Now Oregon has a two tier system and people hired after a certain date, I'd have to look up that date but I think it was around 1993, do not have the same benefits as people hired prior to that date. Seems someone looked at the numbers and realized it had become unsustainable. Imagine that.

ASU2003 · 07-29-2010, 04:05 AM

Quote:

Originally Posted by Willravel

No.

The money lost from piracy is theoretical at best. The fact is most people that pirate pirate tv shows, and those that pirate movies generally see and buy a lot of movies.

I have gone out and bought/saw some movies, but I would have done that regardless of if I downloaded or had to pay $$ for other media types.

And while I don't believe the numbers the industry throws out about the lost revenue, but I know that there are tens of millions of people who haven't given any money for music, movies, or porn in the past decade.

RogueGypsy · 07-29-2010, 11:15 AM

Quote:

Originally Posted by snowy

I'm gonna call BS on that. Where's your evidence that that is the case?

SNAP benefits in California (food stamps) are issued to LEGAL immigrants only, and only those who meet certain requirements.

From the California Department of Social Services website:

Eligibility and Issuance Requirements

Legal immigrants do pay taxes, and therefore have a right to social services, just as any other person in the United States does.

Almost all social services across the United States require extensive documentation to be presented in order to gain services.

Fire, police, medical, utilities, roads...............................

All tax funded services

---------- Post added at 12:15 PM ---------- Previous post was at 12:14 PM ----------

Quote:

Originally Posted by roachboy

sometimes i think undocumented workers are to conservatives what the hitlero-trotskyite wrecker was to stalinism--the universal explanation for dysfunctions that are generated by the political logic itself for which the political logic has no space--so a scapegoat gets generated that is passed off as an explanation. of course at this point there's less an american gulag than there was under stalin. isn't there? what, only 10% of the us population is in prison...but i digress...

as for the op, i wonder whether you could make the same speculative argument about recreational drugs that are classified as illegal. think of the revenue that could be had from legalization and the taxation that could be derived from it.

so you could argue equally that kali's fiscal problems follow from the fact that cocaine is illegal.

sometime I think Liberals dreams are so vivid they have a hard time seeing through them to reality.

Willravel · 07-29-2010, 11:55 AM

Quote:

Originally Posted by Tully Mars

Not sure I buy all that. Most state prison systems privatize in order to save money. Private companies tend to offer less health care, pensions and honestly training. I was on a board considering privatizing some facilities in Oregon. Several bids were reviewed and the cost per prisoner per day dropped around $25-$30 a day depending on the bid. Times that by the number of inmates and you stand to save millions.

Private prisons don't allow maximum-security prisoners, death row prisoners, female prisoners, juveniles or prisoners with serious mental health or medical conditions, and they're by far the most expensive, so they seem less expensive but are actually just shifting part of the cost to public facilities. (I'll find a link for this when I can, the information is from a friend of the family that retired from the Cal prison system a few years back). They're hiding the true cost of for-profit prisons, in other words.

Not only that, but non-union private prisons more often have issues of abuse, neglect, and such, because there's less oversight and less training. Those costs, like the ones above, are hidden but eventually do find their way back to society.

The main problem with California's prisons system, though, is judicial. Mandatory minimums, the failed war on drugs, excessive jailing for non-violent crimes, and prosecutors wanting to build a strong conviction rate instead of pursuing justice all lend themselves to a broken and overcrowded system. That's the main reason I'm fighting so hard for the legalization of marijuana, as it would remove a huge burden on the state's budget for our prisons.

Lindy · 07-29-2010, 10:30 PM

Quote:

Originally Posted by snowy

I'm gonna call BS on that. Where's your evidence that that is the case?

SNAP benefits in California (food stamps) are issued to LEGAL immigrants only, and only those who meet certain requirements.

Oh really??? Isn't it illegal to even ask someone's status? Profiling and all that? Or is it somehow legal to ask in California, but not in Arizona?

Quote:

Originally Posted by snowy

Legal immigrants do pay taxes, and therefore have a right to social services, just as any other person in the United States does.
Almost all social services across the United States require extensive documentation to be presented in order to gain services.

I'll call BS on that. No state can deny social services on the basis that someone doesn't pay taxes. People on this board regularly complain that the rich don't pay enough taxes. But there are many people who -other than sales tax- pay absolutely no taxes at all. Not even a token amount. And they often receive social services from the state.

Lindy

---------- Post added at 01:30 AM ---------- Previous post was at 12:36 AM ----------

Quote:

Originally Posted by roachboy

sometimes i think undocumented workers are to conservatives what the hitlero-trotskyite wrecker was to stalinism--the universal explanation for dysfunctions that are generated by the political logic itself for which the political logic has no space--so a scapegoat gets generated that is passed off as an explanation. of course at this point there's less an american gulag than there was under stalin. isn't there? what, only 10% of the us population is in prison...but i digress...

i don't know how you neo-marxist folk even come up with a 10% figure. other than to make it up out of whole cloth. what leninist-stalinite hogwash!

and proto-casually mentioned so it could easily slide right into a neo-liberal mind and be accepted as truth and...

Oops! Sorry! I inadvertently slipped into roachwrite for a moment

.

Wait! Lenin and Stalin (admitted experts on incarceration and prisons) could not have made that up, they've been dead for too long!

While the United States may indeed have the highest documented incarceration rate in the world, it is still well under 1% according to the U. S. Bureau of Justice Statistics. The U.S. incarceration rate on December 31, 2008 (the latest figure available) was 754 inmates per 100,000 U.S. residents, or 0.75%.

Bureau of Justice Statistics (BJS) - Prisoners in 2008

Lindy

dippin · 07-29-2010, 10:59 PM

Quote:

Originally Posted by Lindy

Oh really??? Isn't it illegal to even ask someone's status? Profiling and all that? Or is it somehow legal to ask in California, but not in Arizona?

I'll call BS on that. No state can deny social services on the basis that someone doesn't pay taxes. People on this board regularly complain that the rich don't pay enough taxes. But there are many people who -other than sales tax- pay absolutely no taxes at all. Not even a token amount. And they often receive social services from the state.

Lindy[COLOR="DarkSlateGray"]

Huh? What the hell does the Arizona law on having to provide proof of citizenship on "legal stops" have to do with the California issue?

California (or any other state) has the right to ask for proof of citizenship as a requirement for services (which it does). The Arizona issue is about stopping people on the street.

roachboy · 07-31-2010, 04:29 AM

gee lindy, i'm wicked sorry i transposed the percentage of the african-american male population that's incacerated onto the general population.

Incarceration in the United States - Wikipedia, the free encyclopedia

and i sure did deserve that little rant of yours.

never make a mistake in a post, lindy.
i'll be waiting.

Xerxys · 07-31-2010, 03:36 PM

Quote:

Originally Posted by roachboy

never make a mistake in a post, lindy.
i'll be waiting.

Tully Mars · 08-01-2010, 10:18 AM

Quote:

Originally Posted by Willravel

Private prisons don't allow maximum-security prisoners, death row prisoners, female prisoners, juveniles or prisoners with serious mental health or medical conditions, and they're by far the most expensive, so they seem less expensive but are actually just shifting part of the cost to public facilities. (I'll find a link for this when I can, the information is from a friend of the family that retired from the Cal prison system a few years back). They're hiding the true cost of for-profit prisons, in other words.

You need to have another talk with your family friend. This is from the CCA (Corrections Corporation of America) web site-

Quote:

* CCA manages approximately 75,000 inmates including males, females, and juveniles at all security levels, in more than 60 facilities under contract for management in 19 states and the District of Columbia.

Company site here

I'll concede I'm unaware of any death row inmates being housed privately but the rest certainly are- Max, females, juvies, mentally ill... you name it the private companies will happily scoop them up for a price.

Quote:

Originally Posted by Willravel

Not only that, but non-union private prisons more often have issues of abuse, neglect, and such, because there's less oversight and less training. Those costs, like the ones above, are hidden but eventually do find their way back to society.

Agree

Quote:

Originally Posted by Willravel

The main problem with California's prisons system, though, is judicial. Mandatory minimums, the failed war on drugs, excessive jailing for non-violent crimes, and prosecutors wanting to build a strong conviction rate instead of pursuing justice all lend themselves to a broken and overcrowded system. That's the main reason I'm fighting so hard for the legalization of marijuana, as it would remove a huge burden on the state's budget for our prisons.

Agree

---------- Post added at 01:18 PM ---------- Previous post was at 01:07 PM ----------

Anyone else find this graph alarming?

Xazy · 08-01-2010, 10:44 AM

After searching I have found a number of articles stating that illegal immigrants cost 9 BILLION a year in California.

One article

Quote:

California's nearly 3 million illegal immigrants cost taxpayers nearly $9 billion each year, according to a new report released last week by the Federation for American Immigration Reform, a Washington, D.C.-based group that promotes stricter immigration policies.

Educating the children of illegal immigrants is the largest cost, estimated at $7.7 billion each year, according to the report. Medical care for illegal immigrants and incarceration of those who have committed crimes are the next two largest expenses measured in the study, the author said.

Pro-immigrant groups and Latino researchers dispute the federation's findings, calling them biased and incomplete.

Jack Martin, who wrote the report, said Thursday that the $9 billion figure does not include other expenses that are difficult to measure, such as special English instruction, school lunch programs, and welfare benefits for American workers displaced by illegal immigrant workers.

"It's a bottom of the range number," Martin said.

The federation is one of the nation's leading lobbying groups aimed at curbing immigration into the country.

Authors of the report say it culls information from the U.S. Census and other studies addressing the cost of illegal immigration into the country to draw its conclusions.

Gerardo Gonzalez, director of Cal State San Marcos' National Latino Research Center, which compiles data on Latinos, criticized the report. He said it does not measure some of the contributions that immigrants make to the state's economy.

"Beyond taxes, these workers' production and spending contribute to California's economy, especially the agricultural sector," Gonzalez said.

Immigrants, both legal and illegal, are the backbone of the state's nearly $28 billion-a-year agricultural industry, Gonzalez and other researchers say.

More than two-thirds of the estimated 340,000 agriculture workers in California are noncitizens, most of whom are believed to be illegal immigrants, according to a 1998 study on farmworkers prepared for the state Legislature.

Local farmers say migrant farmworkers are critical to their businesses, and without them they would have to close their farms or move their operations overseas.

Martin disagrees. He said illegal immigrants displace American workers by taking low-skilled jobs, keep wages low by creating an overabundance of workers and stifle innovation by reducing the need for mechanized labor.

"The product of the illegal immigrant is not included (in the report) because if that is an essential product it will get done one way or another," Martin said. Employers "would have to pay better wages or invest money on mechanization."

Martin's study looks specifically at the costs of educating illegal immigrants' children, providing medical care to illegal immigrants and jailing those convicted of committing crimes. The report estimates the total cost at $10.5 billion each year, but that is offset by about $1.7 billion in taxes that illegal immigrants pay.

The study assumes that there are about 1 million children of illegal immigrant parents in California, or about 15 percent of the state's K-12 school enrolled population. The estimate is based on a 1994 study by the Urban Institute that concluded there were 307,000 illegal immigrant children enrolled in the state's public schools.

Martin also added an estimate of 597,000 U.S.-born children whose parents are illegal immigrants arriving at a total of 1,022,000 children. Multiplying the number of children by the estimated $7,577 the state spends on average per pupil, the study arrived at the $7.7 billion figure.

Including the number of U.S.-born children in the study is one of the reasons pro-immigrant groups said the study is biased.

"I think FAIR is without doubt an extremist organization that tries to portray itself as a mainstream group," said Christian Ramirez, director of the San Diego office of the American Friends Service Committee, an advocate group for legal and illegal immigrants.

The study's author defended the report, saying that the children were born in the United States as a result of their parents' illegal entry into the country.

"In no way does the report identify them as different kinds of citizens, because they would not have been born in the U.S. had their parents not come into the country illegally," Martin said.

To arrive at the cost of providing health care to illegal immigrants, the federation's study used an earlier 2000 analysis of health expenses paid by border counties that concluded the state spent $908 million on medical care for immigrants.

Martin said he adjusted the 2000 figure for increases in the population and inflation on the cost of providing health care and estimated that the state will spend about $1.4 billion in 2004.

The report also estimated that the state will spend another $1.4 billion to jail the 48,000 illegal immigrants in state prisons. California is compensated by the federal government to offset the cost of housing this population, but the federal payments were a fraction, about $111 million, of the total cost, Martin said.

To figure out the contributions that this immigrant population makes in taxes, the federation's study said it adjusted the Urban Institute's study estimates of $732 million for population increases and concluded that they contribute about $1.7 billion in sales, income and property taxes.

A similar study conducted by the Center for Immigration Studies in Washington, D.C., and released in August, said that illegal immigrants cost the federal government $10 billion more than they pay in taxes.

The federal government pays about $2.2 billion in medical treatment for uninsured immigrants, according to the report. It pays $1.9 billion in food assistance programs, such as food stamps and school lunches, for low-income families. And it pays $1.4 billion in aid to schools that educate illegal immigrant children.

Martin said states bear most of the cost of illegal immigration.

"State costs are much higher on a per capita basis because of the fact that the largest expenses are medical care and education and those are borne at the local level, not the federal," Martin said.

Baraka_Guru · 08-01-2010, 11:57 AM

Quote:

Originally Posted by Xazy

After searching I have found a number of articles stating that illegal immigrants cost 9 BILLION a year in California

I think it's interesting how a lot of that is viewed as the cost of doing business. I'd like to see figures relating how much wealth is generated by illegal immigrants, but that sort of things is difficult to measure.

I don't think you'll see a profit margin so great as what you get whilst managing the payrolls of your illegal immigrant.

Lindy · 08-01-2010, 10:25 PM

Quote:

Originally Posted by roachboy

gee lindy, i'm wicked sorry i transposed the percentage of the african-american male population that's incacerated onto the general population.

Transposed percentage?

No. Mere transposition does not change a statistic by a factor of .463 (or 21.6 if you go the other direction...) Not even neo-marxo math works that way. The most recent figures I could find show black males incarcerated at a rate of 4,630 per 100,000 of the African-American population. The correct percentage (4.63%) is less than half of even the figure you state in your retreat from the wildly overstated first assertion.
United States - Punishment and Prejudice: Racial Disparities in the War on Drugs
see also Race and Prison | Drug War Facts

Quote:

and i sure did deserve that little rant of yours.

Hardly a rant. I was correcting an egregious misstatement of fact. You're just pissed that somebody called you on it. I attempted a little humor by mocking your posting style, did you not like that? Do you like to dish it out, but not like it when it gets thrown back at you?

Quote:

never make a mistake in a post, lindy.
i'll be waiting.

How typical! Send me off to the gulag, never to be heard from again.

If my little post was a rant, this sure looks like a threat. And from a TFP Super Moderator even.

Is it appropriate to ask who will watch the watchers?

Lindy
There's a mistake in this thread. Can anyone find it?
Edit: Oops! I mean that there's a mistake in this post. Can anyone find it?

roachboy · 08-02-2010, 08:12 AM

lindy, dear, i can't for the life of me figure out what your problem is.
i explained my mistake.
i don't recall signing up for a game in which you get to determine what is and is not an "egregious error"---but if you want to tighten up the standards of proof, i'm fine with that.
just remember that it goes two ways.

i think this is enough of a threadjack though.

if you have a problem with roachboy, pm me.
if you think there's an actual rule violation, pm another mod.

o and to address the other cheap implication from above:

i am not moderating this thread.
i did not post to it in my capacity as moderator.
i'm not posting in that capacity now.
i am quite clear about when i shift from one role into the other. if you miss it, look for yellow font.

Cynthetiq · 08-09-2010, 08:48 PM

Someone linked this to me an excellent read.

The Golden State's War on Itself by Joel Kotkin, City Journal Summer 2010

Quote:

Joel Kotkin
The Golden State’s War on Itself
How politicians turned the California Dream into a nightmare

California has long been a destination for those seeking a better place to live. For most of its history, the state enacted sensible policies that created one of the wealthiest and most innovative economies in human history. California realized the American dream but better, fostering a huge middle class that, for the most part, owned their homes, sent their kids to public schools, and found meaningful work connected to the state’s amazingly diverse, innovative economy.

Recently, though, the dream has been evaporating. Between 2003 and 2007, California state and local government spending grew 31 percent, even as the state’s population grew just 5 percent. The overall tax burden as a percentage of state income, once middling among the states, has risen to the sixth-highest in the nation, says the Tax Foundation. Since 1990, according to an analysis by California Lutheran University, the state’s share of overall U.S. employment has dropped a remarkable 10 percent. When the state economy has done well, it has usually been the result of asset inflation—first during the dot-com bubble of the late 1990s, and then during the housing boom, which was responsible for nearly half of all jobs created earlier in this decade.

Since the financial crisis began in 2008, the state has fared even worse. Last year, California personal income fell 2.5 percent, the first such fall since the Great Depression and well below the 1.7 percent drop for the rest of the country. Unemployment may be starting to ebb nationwide, but not in California, where it approaches 13 percent, among the highest rates in the nation. Between 2008 and 2009, not one of California’s biggest cities outperformed such traditional laggards as New York, Pittsburgh, and Philadelphia in employment growth, and four cities—Los Angeles, Oakland, Santa Ana, and San Bernardino–Riverside—sit very close to the bottom among the nation’s largest metro areas, just slightly ahead of basket cases like Detroit. Long a global exemplar, California is in danger of becoming, as historian Kevin Starr has warned, a “failed state.”

What went so wrong? The answer lies in a change in the nature of progressive politics in California. During the second half of the twentieth century, the state shifted from an older progressivism, which emphasized infrastructure investment and business growth, to a newer version, which views the private sector much the way the Huns viewed a city—as something to be sacked and plundered. The result is two separate California realities: a lucrative one for the wealthy and for government workers, who are largely insulated from economic decline; and a grim one for the private-sector middle and working classes, who are fleeing the state.

The old progressivism began in the early 1900s and lasted for half a century. It was a nonpartisan and largely middle-class movement that emphasized fostering economic growth—the progressives themselves tended to have business backgrounds—and building infrastructure, such as the Los Angeles Aqueduct and the Hetch Hetchy Reservoir. One powerful progressive was Republican Earl Warren, who governed the state between 1943 and 1953 and spent much of the prospering state’s surplus tax revenue on roads, mental health facilities, and schools. Another was Edmund G. “Pat” Brown, elected in 1958, who oversaw an aggressive program of public works, a rapid expansion of higher education, and the massive California Water Project.

But by the mid-1960s, as I noted in an essay in The American two years ago, Brown’s traditional progressivism was being destabilized by forces that would eventually transform liberal politics around the nation: public-sector workers, liberal lobbying organizations, and minorities, which demanded more and more social spending. This spending irritated the business interests that had formerly seen government as their friend, contributing to Brown’s defeat in 1966 by Ronald Reagan. Reagan was far more budget-conscious than Brown had been, and large declines in infrastructure spending occurred on his watch, mostly to meet a major budget deficit.

The decline of progressivism continued under the next governor: Pat Brown’s son, Edmund G. “Jerry” Brown, Jr., who took office in 1975. Brown scuttled infrastructure spending, in large part because of his opposition to growth and concern for the environment. Encouraged by “reforms” backed by Brown—such as the 1978 Dill Act, which legalized collective bargaining for them—the public-employee unions became the best-organized political force in California and currently dominate Democrats in the legislature (see “The Beholden State,” Spring 2010). According to the unions, public funds should be spent on inflating workers’ salaries and pensions—or else on expanding social services, often provided by public employees—and not on infrastructure or higher education, which is why Brown famously opposed new freeway construction and water projects and even tried to rein in the state’s university system.

The power of the public-employee lobby would come to haunt the recall-shortened gubernatorial reign of Gray Davis, Brown’s former chief of staff. The government workers’ growing demands on the budget, green groups’ opposition to expanding physical infrastructure, and Republican opposition to tax increases made it impossible for either Davis or his successor, Arnold Schwarzenegger, to expand the state’s infrastructure at a scale necessary to accommodate its growing population.

The new progressives were as unenthusiastic about welcoming business as about building infrastructure. Fundamentally indifferent or even hostile to the existing private sector, they embraced two peculiar notions about what could sustain California’s economy in its place. The first of these was California’s inherent creativity—a delusion held not only by liberal Democrats. David Crane, Governor Schwarzenegger’s top economic advisor, once told me that California could easily afford to give up blue-collar jobs in warehousing, manufacturing, or even business services because the state’s vaunted “creative economy” would find ways to replace the lost employment and income. California would always come out ahead, he said, because it represented “ground zero for creative destruction.”

The second engine that could supposedly keep California humming was the so-called green economy. Michael Grunwald recently wrote in Time, for example, that venture capital, high tech, and, above all, “green” technology were already laying the foundation of a miraculous economic turnaround in California. Though there are certainly opportunities in new energy-saving technologies, this is an enthusiasm that requires some serious curbing. One recent study hailing the new industry found that California was creating some 10,000 green jobs annually before the recession. But that won’t heal a state that has lost 700,000 jobs since then.

At the same time, green promoters underestimate the impact of California’s draconian environmental rules on the economy as a whole. Take the state’s Global Warming Solutions Act, which will force any new development to meet standards for being “carbon-neutral.” It requires the state to reduce its carbon-emissions levels by 30 percent between 1990 and 2020, virtually assuring that California’s energy costs, already among the nation’s highest, will climb still higher. Aided by the nominally Republican governor, the legislation seems certain to slow any future recovery in the suffering housing, industrial, and warehousing sectors and to make California less competitive with other states. Costs of the act to small businesses alone, according to a report by California State University professors Sanjay Varshney and Dennis Tootelian, will likely cut gross state product by $182 billion over the next decade and cost some 1.1 million jobs.

It’s sad to consider the greens such an impediment to social and economic health. Historically, California did an enviable job in traditional approaches to conservation—protecting its coastline, preserving water and air resources, and turning large tracts of land into state parks. But much like the public-sector unions, California’s environmental movement has become so powerful that it feels free to push its agenda without regard for collateral damage done to the state’s economy and people. With productive industry in decline and the business community in disarray, even the harshest regulatory policies often meet little resistance in Sacramento.

In the Central Valley, for instance, regulations designed to save certain fish species have required 450,000 acres to go fallow. Unemployment is at 17 percent across the Valley; in some towns, like Mendota, it’s higher than 40 percent. Rick Wartzman, director of the Peter Drucker Institute, has described the vast agricultural region around Fresno as “California’s Detroit,” an area where workers and businesspeople “are fast becoming a more endangered species than Chinook salmon or delta smelt.” The fact that governments dominated by “progressives” are impoverishing whole regions isn’t merely an irony; it’s an abomination.

So much for the creative green economy. As for the old progressives’ belief that government shouldn’t scare away productive, competitive, long-term enterprise, that, too, has been abandoned by their successors. “Our economy is not inducing the right kind of business,” says Larry Kosmont, a prominent business consultant in Los Angeles. “It’s too expensive to operate here, and managers feel squeezed. They feel they can’t control the circumstances any more and have to look somewhere else.” The problem isn’t just corporate costs, either. The regulatory restraints, high taxes, and onerous rules enacted by the new progressives lead to high housing prices, making much of California too expensive for middle- and working-class employees and encouraging their employers to move elsewhere.

Silicon Valley, for instance—despite the celebrated success of Google and Apple—has 130,000 fewer jobs now than it had a decade ago, with office vacancy above 20 percent. In Los Angeles, garment factories and aerospace companies alike are shutting down. Toyota has abandoned its Fremont plant. California lost nearly 400,000 manufacturing jobs between 2000 and 2007, according to a report by the Milken Institute—even as industrial employment grew in Texas and Arizona. A sign of the times: transferring factory equipment from the Bay Area to other locales has become a thriving business, notes Tom Abate of the San Francisco Chronicle.

Optimists sometimes point out that “new economy” companies like Disney, Google, Hewlett-Packard, and Apple, as well as scores of smaller innovative firms, continue to keep their headquarters in the state. But this is to ignore the fact that many of these companies are sending their middle- and working-class employees to other locales. Evidence of middle-class flight: since 1999, according to California Lutheran University, the state has seen a far steeper decline in households earning between $35,000 and $75,000 than the national average. And blue-collar areas—Oakland, the eastern expanses of greater Los Angeles, and much of central California—have been hit even harder. California’s overall poverty rate has been consistently higher than the national average. In Los Angeles County alone, some 20 percent of the population—2.2 million people—receives some form of public aid.

In short, the economy created by the new progressives can pay off only those at the peak of the employment pyramid—top researchers, CEOs, entertainment honchos, highly skilled engineers and programmers. As a result, California suffers from an increasingly bifurcated social structure. Between 1993 and 2007, the share of the state’s income that went to the top 1 percent of earners more than doubled, to one-quarter—the eighth-largest share in the country.

For these lucky earners, a low-growth or negative-growth economy works just fine, so long as stock prices rise. For their public-employee allies, the same is true, so long as pensions remain inviolate. Global-warming legislation may drive down employment in warehouses and factories, but if it’s couched in rhetoric about saving the planet, these elites can even feel good about it.

Under the new progressives, it’s always hoi polloi who need to lower their expectations. More than four out of five Californians favor single-family homes, for example, but progressive thinkers like Robert Cruickshank, writing in California Progress Report, want to replace “the late 20th century suburban model of the California Dream” with “an urban, sustainable model that is backed by a strong public sector.” Of course, this new urban model will apply not to the wealthy progressives who own spacious homes in the suburbs but to the next generation, largely Latino and Asian. Robert Eyler, chair of the economics department at Sonoma State University, points out that wealthy aging yuppies in Sonoma County have little interest in reviving growth in the local economy, where office vacancy rates are close to those in Detroit. Instead, they favor policies, such as “smart growth” and an insistence on “renewable” energy sources, that would make the area look like a gated community—a green one, naturally.

California’s supposedly progressive economics have had profound demographic consequences. After serving as a beacon for millions of Americans, California now ranks second to New York—and just ahead of New Jersey—in the number of moving vans leaving the state. Between 2004 and 2007, 500,000 more Americans left California than arrived; in 2008, the net outflow reached 135,000, much of it to the very “dust bowl” states, like Oklahoma and Texas, from which many Californians trace their origins. California now has a lower percentage of people who moved there within the last year than any state except Michigan. Even immigration from abroad seems to be waning: a recent University of Southern California study shows the percentage of Californians who are foreign-born declining for the first time in half a century. For the first time in its history as a state, as political analyst Michael Barone has noted, California is not on track to gain a new congressional district after the 2010 census.

This demographic pattern only reinforces the hegemony of environmentalists and public employees. In the past, both political parties had to answer to middle- and lower-middle-class voters sensitive to taxes and dependent on economic growth. But these days, with much of the middle class leaving, power is won largely by mobilizing activists and public employees. There is little countervailing pressure from local entrepreneurs and businesses, which tend to be poorly organized and whose employee base consists heavily of noncitizens. And the legislature’s growing Latino caucus doesn’t resist regulations that stifle jobs—perhaps because of the proliferation of the California equivalent of “rotten boroughs”: Latino districts with few voters where politicians can rely on public employees and activists to dominate elections.

Blessed with resources of topography, climate, and human skill, California does not need to continue its trajectory from global paragon to planetary laughingstock. A coalition of inland Latinos and Anglos, along with independent suburban middle-class voters in the coastal areas, could begin a shift in policy, reining in both public-sector costs and harsh climate-change legislation. Above all, Californians need to recognize the importance of the economic base—particularly such linchpins as agriculture, manufacturing, and trade—in reenergizing the state’s economy.

The changes needed are clear. For one thing, California must shift its public priorities away from lavish pensions for bureaucrats and toward the infrastructure critical to reinvigorating the private sector. The state’s once-vaunted power system routinely experiences summer brownouts; water supplies remain uncertain, thanks to environmental legislation and a reluctance to make new investments; the ports are highly congested and under constant threat of increased competition from the southeastern United States, the Pacific Northwest, and eventually Mexico’s Baja California. Fixing these problems would benefit the state’s middle and working classes. Lower electrical costs would help preserve industrial facilities—from semiconductor and aerospace plants to textile mills. Reinvestment in trade infrastructure, such as ports, bridges, and freeways, would be a huge boon to working-class aspirations, since ports in Southern California account for as much as 20 percent of the area’s total employment, much of it in highly paid, blue-collar sectors.

Another potential opportunity lies in energy, particularly oil. California has enormous reserves not just along its coast but also in its interior. The Democrats in the legislature, which seems determined to block expanded production, have recently announced plans to increase taxes on oil producers. A better solution would be a reasonable program of more drilling, particularly inland, which would create jobs and also bring a consistent, long-term stream of much-needed tax revenue.

These shifts would likely appeal to voters in the areas—such as the Central Valley and the “Inland Empire” around Riverside—that have been hurt most by the recession and the depredations of the hyper-regulatory state. Indeed, the disquiet in the state’s interior could make the coming gubernatorial election the most competitive in a decade. Jerry Brown, the Democratic candidate, certainly appears vulnerable: his campaign is largely financed by the same public-sector unions whose expansion he fostered as governor; more recently, serving as state attorney general, he was the fiercest enforcer of the Global Warming Solutions Act, which opens him to charges that he opposes economic growth. One hopeful sign that pragmatism may be back in fashion: a new proposed ballot measure to reverse the act until unemployment drops below 5.5 percent, where it stood before the recession. Since unemployment is currently near 13 percent, that would take radical change off the table for quite a while.

Still, it isn’t certain that California’s inept and often clueless Republicans will mount a strong challenge. For them to do so, business leaders need to get back in the game and remind voters and politicians alike of the truth that they have forgotten: only sustained, broadly based economic growth can restore the state’s promise.

Joel Kotkin is a fellow at Chapman University in Orange, California. He thanks the Economic Research and Forecasting Project at California Lutheran University for providing analysis and charts.

Willravel · 08-09-2010, 09:14 PM

Quote:

During the second half of the twentieth century, the state shifted from an older progressivism, which emphasized infrastructure investment and business growth, to a newer version, which views the private sector much the way the Huns viewed a city—as something to be sacked and plundered.

This reads more like partisan finger-pointing than actually getting down to what really happened. I've read stuff by Joel Kotkin before and it seems like he thinks there's a war on between the suburbs and urban centers. He's also an anti-environmentalist, which you can see in the article.

The last thing California needs is more partisanship.

Cynthetiq · 08-09-2010, 09:20 PM

Quote:

Originally Posted by Willravel

This reads more like partisan finger-pointing than actually getting down to what really happened. I've read stuff by Joel Kotkin before and it seems like he thinks there's a war on between the suburbs and urban centers. He's also an anti-environmentalist, which you can see in the article.

The last thing California needs is more partisanship.

I don't think so, may places tried like California, especially LA tried very hard to gentrify it's neighborhoods with mixed to little success. Shit, NYC is more gentrified than any other place and in my opinion ruined much of what made this city so diverse and great.

Stalled gentrification makes for a more authentic downtown L.A., critic says | L.A. NOW | Los Angeles Times

ASU2003 · 08-10-2010, 07:36 PM

Quote:

David Crane, Governor Schwarzenegger’s top economic advisor, once told me that California could easily afford to give up blue-collar jobs in warehousing, manufacturing, or even business services because the state’s vaunted “creative economy” would find ways to replace the lost employment and income.

But, the article never touched on my initial question. I know that pirated mp3's, porn, and movies don't come close to the actual amount they would had sold for. But, if there had been a way for music, movie and porn companies to sell their product instead of fighting Napster, iMesh, eMule,and Bit Torrent for years and years (and if the users around the world would have supported it and paid for what they did want), how much money would have California raked in?

And I like the comparison of the unemployment rate during the DotCom craze, and now. Why didn't they look at the unemployment rate of gold prospectors between 1849 and 2010... or 1849 and 1859.

Baraka_Guru · 08-14-2010, 06:12 AM

But, ASU2003, you'd think that Silicon Valley would generally more than make up for a realistic estimate of lost retail sales from movie piracy.

07-28-2010, 09:22 AM	#1 (permalink)
ASU2003 immoral minority Location: Back in Ohio	Are California's financial problems due to piracy? If the recording industry would have worked with Apple back in the mid 90s to create an iTunes like marketplace, less movie piracy through torrent sites, a way for San Bernardino porn makers to actually sell porn on-line instead of having most of it for free, and no more 'Hollywood' accounting where multi-million dollar movies lose money... Would California still be facing the budget problems it has? I'm not saying that it would be a good thing to live in a DRM world where Apple & Microsoft would have controlled the distribution of media files, but it seems like there is a lot of money that should have been made, and taxed accordingly. I know that I would have spent a few thousand dollars over the past decade on those types of files.

07-28-2010, 10:03 AM	#2 (permalink)
Pearl Trade Addict Location: Houston, Texas	I think their financial problems have more to do with over spending and poor government leadership. Your idea would definitely net them more money if they did that back at the start of everything, but in no way does it correlate to the current problems. __________________ Our revenge will be the laughter of our children. Give me convenience or give me death!

07-28-2010, 10:32 AM	#3 (permalink)
braisler Addict Location: Midway, KY	It also assumes that every person who downloads a movie or song would pay a retail price for the same content if the 'piracy' option was not available. This is a fallacy. This issue comes up again and again in piracy trials. In the US, the courts seem to be heavily favoring the recording industry in assessing damages based on some theoretical financial impact of lost income. In Europe, I have read of some decisions in which the court took the much more reasonable view that file-sharing is more closely akin to a taking a book out from a lending library. I tend to think of it like this: If a friend owns a movie and offers to bring it over to watch at my place, I might agree. If I was faced with the decision of buying that movie myself, I would pass. If that movie is a porno... well, we might become even better friends... or worse. __________________ --- You do not really understand something unless you can explain it to your grandmother. - Albert Einstein ---

07-28-2010, 11:16 AM	#4 (permalink)
Cynthetiq Tilted Cat Head Administrator Location: Manhattan, NY	California's issues stem from a multiple choice of reasons. First, bad government decisions, and a constant stream of them. Next, allowing voters to who had no idea about budgeting voice opinion via votes on important crucial propositions. Alienating manufacturing so that many companies moved to more business favoring states like Nevada, Arizona, and Oregon. These are the reasons, not some downloading piracy. __________________ I don't care if you are black, white, purple, green, Chinese, Japanese, Korean, hippie, cop, bum, admin, user, English, Irish, French, Catholic, Protestant, Jewish, Buddhist, Muslim, indian, cowboy, tall, short, fat, skinny, emo, punk, mod, rocker, straight, gay, lesbian, jock, nerd, geek, Democrat, Republican, Libertarian, Independent, driver, pedestrian, or bicyclist, either you're an asshole or you're not. What's the best nation in the world? DO-NATION!

07-28-2010, 11:49 AM	#5 (permalink)
RogueGypsy Insane Location: The Great NorthWet	Let's not mention the 10million + who use all of the state funded services and pay no taxes to support them. __________________ Methods, application and intensity of application vary by the individual. All legal wavers must be signed before 'treatment' begins. Self 'Medicating' is not recommend. However, if necessary, it is best to have an 'assistant' or 'soft landing zone' nearby. Any and all legal issues resulting from improperly applied techniques should be forwarded to: Dewy, Cheatum & Howe, Intercourse, PA 17534. Attn: Anonymous.

07-28-2010, 12:38 PM	#7 (permalink)
roachboy Super Moderator Location: essex ma	sometimes i think undocumented workers are to conservatives what the hitlero-trotskyite wrecker was to stalinism--the universal explanation for dysfunctions that are generated by the political logic itself for which the political logic has no space--so a scapegoat gets generated that is passed off as an explanation. of course at this point there's less an american gulag than there was under stalin. isn't there? what, only 10% of the us population is in prison...but i digress... as for the op, i wonder whether you could make the same speculative argument about recreational drugs that are classified as illegal. think of the revenue that could be had from legalization and the taxation that could be derived from it. so you could argue equally that kali's fiscal problems follow from the fact that cocaine is illegal. __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite

07-28-2010, 12:56 PM	#9 (permalink)
Xazy People in masks cannot be trusted Location: NYC	So following that logic legalize prostitution, pot, cocaine, heroin and ecstacy and bam US deficit will begin to shrink.

07-28-2010, 01:11 PM	#10 (permalink)
roachboy Super Moderator Location: essex ma	you'd think. the un estimates that a little under 10% of international trade is carried on via the black market for drugs. that's a whole lot more money than is involved in downloading music or movies. __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite

07-28-2010, 01:57 PM	#12 (permalink)
Baraka_Guru warrior bodhisattva Super Moderator Location: East-central Canada	So does GM. __________________ Knowing that death is certain and that the time of death is uncertain, what's the most important thing? —Bhikkhuni Pema Chödrön Humankind cannot bear very much reality. —From "Burnt Norton," Four Quartets (1936), T. S. Eliot

07-28-2010, 05:24 PM	#13 (permalink)
Willravel ... a sort of licensed troubleshooter.	No. The money lost from piracy is theoretical at best. The fact is most people that pirate pirate tv shows, and those that pirate movies generally see and buy a lot of movies. Our money problems have to do with quite a few things, but mainly they simply have to do with a lot of spending. We tend to have more severe reactions to national economic trends, which means a recession brings a lot more welfare recipients in California than it might in say Oregon. Our prison system is heavily privatized and our prison guards make a shitload of money. If we had a public system, we could remove a good 40% of the prison budget. We have wildly inconsistent public salaries, including some recent discoveries that there are public officials pulling in 7 figures for $50,000 a year jobs. The worst problem, though, is our state legislature. We need a 2/3 majority in both houses on a budget bill, and then it has to make it past Republican governor Arnold, which means it's almost impossible to get a fucking budget passed. It's very frustrating.

07-31-2010, 04:29 AM	#20 (permalink)
roachboy Super Moderator Location: essex ma	gee lindy, i'm wicked sorry i transposed the percentage of the african-american male population that's incacerated onto the general population. Incarceration in the United States - Wikipedia, the free encyclopedia and i sure did deserve that little rant of yours. never make a mistake in a post, lindy. i'll be waiting. __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite

08-02-2010, 08:12 AM	#26 (permalink)
roachboy Super Moderator Location: essex ma	lindy, dear, i can't for the life of me figure out what your problem is. i explained my mistake. i don't recall signing up for a game in which you get to determine what is and is not an "egregious error"---but if you want to tighten up the standards of proof, i'm fine with that. just remember that it goes two ways. i think this is enough of a threadjack though. if you have a problem with roachboy, pm me. if you think there's an actual rule violation, pm another mod. o and to address the other cheap implication from above: i am not moderating this thread. i did not post to it in my capacity as moderator. i'm not posting in that capacity now. i am quite clear about when i shift from one role into the other. if you miss it, look for yellow font. __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite Last edited by roachboy; 08-02-2010 at 08:14 AM..

08-14-2010, 06:12 AM	#31 (permalink)
Baraka_Guru warrior bodhisattva Super Moderator Location: East-central Canada	But, ASU2003, you'd think that Silicon Valley would generally more than make up for a realistic estimate of lost retail sales from movie piracy. __________________ Knowing that death is certain and that the time of death is uncertain, what's the most important thing? —Bhikkhuni Pema Chödrön Humankind cannot bear very much reality. —From "Burnt Norton," Four Quartets (1936), T. S. Eliot