Saturday, May 29, 2010

California's financial crisis

I just heard a TV discussion on the looming financial catastrophe in California and how it threatens the entire country.

The rest of the country really needs to take a long hard look at California. It is a showcase for liberalism and it shows exactly where liberal economic ideas will take us.

California is one of the worst states in the country for business. Unfortunately, they will not do what is necessary to help themselves. What is that?

They need to stimulate business. You do that but lessening government regulation, lowering taxes, and being a little less union-friendly. In other words, the exact opposite of the policies most liberals advocate.

Liberals' answer to everything is more government intervention and regulation. Their hearts may be the right place, but their brains are not functioning. Having no regulation at all would be a disaster, but the more regulation you have the more money it costs business to operate which means less expansion, lower salaries, and more unemployment. Less expansion means lower tax revenue. Lower salaries means less tax revenue. More unemployment means lower tax revenue.

The same is true with taxes. It may sound good to villainize those "evil corporations" and rich people, but the fact is that that the more they are regulated and taxed, the fewer people they can hire and the more they must charge for what they produce. If the anti-business climate gets too oppressive, the really big companies can just pack up and do business elsewhere.

The result is the financial crisis you see in California and increasingly, the rest of America as well.

No comments: