Click here to listen to the broadcast of You Tell Me on KTBB AM 600, Friday, July 13, 2012.
Two items hit the news on the same day this week. First, San Bernadino became the third California city in less than a month to file for Chapter 9 bankruptcy protection. (See the story here.) Citing a looming inability to cover payroll, the city of 210,000 surrendered to the inevitable in the wake of a $46 million revenue deficit.
Filing for bankruptcy protection has become the thing to do among California cities. In just the past few weeks, Stockton, California filed for bankruptcy, becoming the largest municipal bankruptcy in U.S. history. That was followed shortly by the bankruptcy filing of Mammoth Lakes, California, a town of about 7,700.
In the cases of Stockton and San Bernadino, the reasons cited for their financial failure follow the well-worn paths of excessive spending, unsustainable employee health and pension costs, plummeting tax revenues and declining property values.
The state of California has, of course, been in the news on a frequent basis going back to at least 2003 when the state’s parlous finances led to the recall of then-Governor Gray Davis and the election of Arnold Schwarzenegger.
Things didn’t improve on Schwarzenegger’s watch. Partly due to Schwarzenegger’s fecklessness but mostly due to deeply entrenched public employee unions, the state of California’s finances have only gotten worse since 2003 when they were sufficiently bad to make Gray Davis only the second state governor in U.S. history to be recalled.
California is a fiscal basket case, a fact that is underscored by the back-to-back-to-back bankruptcy filings of three California cities.
Meanwhile, on the same day that the San Bernadino bankruptcy story was being reported, financial cable channel CNBC released its annual “Top States for Business” rankings. For the third straight year Texas tops the list. (Story here.)
According to the CNBC report, Texas ranked first overall among the fifty states after factors such as the cost of doing business, access to capital, taxation, workforce quality, infrastructure, transportation and technology were taken into account.
Gov. Rick Perry’s presidential bid, deeply flawed as it was, did correctly make the point that the state of Texas has created more net jobs since 2008 than all of the other 50 states combined. For all of his failings as a national candidate, Gov. Perry has been very successful at positioning Texas as a state that is friendly to business and has reaped the reward of several high-profile corporate relocations, some of which were from California.
And thus, in the juxtaposition of these two stories, is the choice facing voters in the November election neatly encapsulated.
On the one hand is California. California, once the richest state in the union is now the brokest. California is rapidly becoming a vivid illustration of liberalism’s end game. Decades of onerous taxes, overweening regulation, overly generous welfare entitlements and cosmically lavish public employee pension plans – coerced from California taxpayers by the almost total seizure of government at every level by public employee unions – has left the state destitute.
On the other hand is Texas, looked down upon and sneered at by liberal elites on both coasts as a Neanderthal backwater. This even as thousands of former Californians flock to Texas for its business-friendly environment, its low taxes, its light regulatory burden, its lack of public employee unions, its status as a right-to-work state and its resulting entrepreneurial and employment opportunities.
The November election is not simply a choice between Romney and Obama; between a challenger Republican and an incumbent Democrat.
The choice is between competing visions for the future.
A California future or a Texas future. That’s what’s on offer come November.
Which future will you choose?