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When did California’s downturn begin?

Posted by B. Daniel Blatt at 3:18 pm - November 14, 2011.
Filed under: Big Government Follies,California politics

Apologies for slower than usual blogging, having finally returned to working on the proofreading of my dissertation.   Have a backlog of topic about wish I’d like to blog, including my concerns about the Republican presidential field and general and Mitt Romney in particular (may just excerpt this Roger Kimball post where that astute blogger pretty much sums it up), the notion of “equality”, liberal voting patterns among high tech entrepreneurs, media bias and a number of other issues, including the California economic crisis.

Just a few minutes ago, caught Wendell Cox’s most excellent article (via Instapundit) which helps us pinpoint the moment when California’s downturn began:

Economists usually see business start-ups as the most important long-term source of job growth, and California has long had a reputation for nurturing new companies—most famously, in Silicon Valley. As Chart 1 shows, however, this dynamism utterly vanished in the 2000s. From 1992 to 2000, California saw a net gain of 776,500 jobs from start-ups and closures; that is, the state added that many more jobs from start-ups than it lost to closures. But during the first eight years of the new millennium, California had a net loss of 262,200 jobs from start-ups and closures. The difference between the two periods is an astounding 1 million net jobs.

Emphasis added.   So, it seems the turning point was about the time of the turn of the century.  Were there any big changes in California about that time?  Well, starting in 1999, for the first time since 1982 (when the state’s once and current governor left office), the then-Golden State had a Democratic governor and Democratic legislature.  A year after the current governor’s one=time chief of staff took office, the state started hemorrhaging start-up jobs.

Coincidence, as the sage often says, “I don’t think so.”

Later in the piece (which is replete with statistics and analysis, meriting your time particularly if you live in the (once-)Golden State), Cox asks, “What is behind California’s shocking decline—its snuffed-out start-ups, unproductive big cities, poorer jobs, and tinier, weaker, or fleeing companies—during the 2000–2008 period?”

Steven Malanga’s “Cali to Business: Get Out!” identifies the major villains: suffocating regulations, inflated business taxes and fees, a lawsuit-friendly legal environment, and a political class uninterested in business concerns, if not downright hostile to them.

SOMEWHAT RELATED:  Governor Brown will request billions for high-speed rail project.  Why is the governor of a cash=strapped state asking the legislature to fork out a few extra billion dollars on a project which has already seen its cost estimate triple?  How is the state going to come up with the cash?


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